Jobs, income and three key factors that could change the forecast.

Michigan’s economy is poised for modest growth through 2028, according to a recent report from the University of Michigan. The Michigan Economic Outlook 2026-2028 shares what economists Jacob T. Burton, Gabriel M. Ehrlich and Michael R. McWilliams project for jobs and income, as well as the factors that could change their outlook.

Projected growth in jobs and pay

After a slower year in 2026, when Michigan is expected to add 3,200 payroll jobs, job growth is projected to rebound to 15,400 in 2027 before moderating to 4,200 in 2028. Unemployment is expected to remain near 5%.

What to expect for Michigan incomes and inflation

Two measures that help explain how Michigan residents are faring financially are income per capita and real disposable income.

Disposable personal income, commonly known as after-tax income, is the amount people have to spend, save or invest. The descriptor “real” means the figure has been adjusted for inflation.

Personal income per capita is the total personal income of a population divided by the number of people. This figure is used to compare income levels across states, regions and the nation.

The U-M economists report that personal income per capita rose by 4.1% in 2025. They project it will grow by an average of 3.6% per year from 2026 through 2028, reaching $74,000 in 2028—more than 50% above its 2019 level.

Growth in real disposable income per capita is expected to slow in 2026 as local inflation rises. As local inflation eases, the economists project annual growth of 1.2% to 1.3% in both 2027 and 2028.

Three factors that could affect the 2026-2028 projections

The projections for Michigan’s continued growth rest on the authors’ assumptions about tariffs, crude oil prices and inflation. Specifically, they assume:

• Trade tensions with Canada will remain contained and threatened 50% tariffs on Canadian cars, trucks and auto parts, “do not become a reality, at least for any substantial length of time.”
• The war with Iran de-escalates soon and crude oil prices will decline to pre- conflict levels by the end of 2028.
• Inflation will cool and the Federal Reserve can avoid rate hikes.

Read the full Michigan Economic Outlook 2026-2028 here.

 

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