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UM report forecasts moderate economic growth in Michigan, nation in 2025-26

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UM report forecasts moderate economic growth in Michigan, nation in 2025-26


As the Federal Reserve continues to cut interest rates amid a cooling job market, the economy is poised for moderate growth in Michigan and nationally over the next two years, according to University of Michigan economists.

The national economy is projected to grow 2.3% in the fourth quarter of 2024 with the unemployment rate averaging 4.2%, while growth may ease slightly in the near future due to a slowing labor market, the UM economists said in a U.S. Economic Outlook for 2025–2026.

Meanwhile, Michigan’s economy has slowed since spring, with heightened uncertainty due to the recent elections, the economists wrote in a Michigan Economic Outlook for 2025–2026. Both reports were written by Jacob T. Burton, Gabriel M. Ehrlich, Kyle W. Henson, Daniil Manaenkov, Niaoniao You and Yinuo Zhang.

“The U.S. economy has gone through times of great uncertainty before and emerged intact,” the economists wrote. “We are projecting that both Michigan and the nation will follow that path over the next two years.”

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Job growth in Michigan is expected to decline in the second half of the year, but grow moderately in 2025 and 2026.

“We believe the election results have amplified the uncertainty surrounding Michigan’s economic outlook,” the economists wrote. “We project a small dip in Michigan’s job count in the back half of 2024 to give way to moderate job gains in 2025 and 2026, but the outlook depends critically on uncertain policy decisions and the subsequent market responses.”

The economists expect job growth in the state to be strongest in health care, leisure and hospitality and government, while sectors including manufacturing and professional services are expected to remain stable.

“We are projecting the state economy to return to growth over the next two years as easier monetary policy and another round of tax cuts boost medium-term growth,” the economists wrote. “Michigan adds 19,000 payroll jobs next year and an additional 26,700 in 2026. The unemployment rate in Michigan is projected to fall from 4.6% in late 2024 to 4.3% by the end of 2026.”

The Detroit, Grand Rapids and Ann Arbor metro areas showed a downward trend in job growth, with Detroit and Grand Rapids seeing 0.1% growth during the past year. Ann Arbor saw relatively stronger job growth of 1.3% as of September, according to the report. Metro-level data for October was not available for the report, officials said.

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The report attributes the underlying cause of the slowdown in Michigan’s job market as the Federal Reserve’s policy of monetary tightening to control inflation.

“Although the Fed has recently pivoted toward reducing short-term interest rates, we believe that real interest rates remain at a restrictive level and that the effects of the Fed’s past tight monetary policy continue to impact Michigan’s economy,” the economists wrote. “Indeed, in many ways, the national rebalancing in the labor market is precisely what the Fed hoped to engineer with its policy actions. Unfortunately for Michigan, our relatively rate-sensitive industry mix means that higher interest rates have taken a larger economic toll than nationally.”

The Michigan outlook points to stronger personal income growth, with per capita income increasing to $64,000 in 2024 and reaching around $68,500 by 2026, up 41% from 2019.

Inflation is expected to slow to 3.3% in 2024 and 2.2% in 2025 before increasing to 2.7% in 2026 due to new tariffs that the incoming Trump administration is expected to impose.

The U.S. and Michigan economic outlook reports follow the presidential election, which economists say will result in significant changes in U.S. economic policies. In the reports, the economists shared their thoughts on about the impacts of a second Trump administration.

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The recent election of Donald Trump as well as the Republican majorities in the U.S. Senate and House will likely to result in a continuation of tax cuts Trump enacted during his first term, the economists said. Also expected is a sharp rise in tariffs on imports from China to take effect by 2026. 

While rising tariffs on Chinese imports and tax cuts for corporations and individuals are expected in upcoming years, revenue increases from tariffs are unlikely to offset revenue losses generated by tax cuts, according to the report. This could result in slower revenue growth and a sharp increase in federal deficits.

“As the stimulative effects of the expected tax cuts dominate the drag from the anticipated new tariffs, we project quarterly GDP growth to accelerate modestly during 2026, reaching a 2.5 percent annualized pace by 2026 Q4,” the economists wrote.

The report notes that the Federal Reserve has started cutting interest rates after keeping them at a 23-year high of 5.25% to 5.5% for 14 months. The rate was reduced by 50 basis points in September and 25 basis points in November, bringing it to 4.5% to 4.75%.

Additional cuts will depend on economic data, with the economists expecting another 25 basis point cut in December.

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Looking ahead at next year, the economists say they expect the Fed to make four more 25-basis-point cuts in 2025 and reach a range of 3.25–3.5% by the end of the year.

“In our view, the temporary uptick of inflation related to tariffs will not prompt the Fed to tighten policy in 2026,” economists wrote. “We believe that risk management concerns related to the potential negative growth effects of tariffs, which played a role in the 2019 rate cuts, will balance the upside risks from new tax cuts, prompting the Fed to stand pat.”

cwilliams@detroitnews.com

@CWilliams_DN



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“Trustworthy” AI consortium focused on ethics, security launches in West Michigan

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“Trustworthy” AI consortium focused on ethics, security launches in West Michigan


Artificial intelligence is rapidly reshaping everything from classroom conversations to social media, and leaders at Grand Valley State University (GVSU) say West Michigan is positioning itself to help determine how the technology is used, responsibly.

The university’s College of Computing is launching the West Michigan Trustworthy Artificial Intelligence (AI) Consortium, aimed at helping businesses, researchers and the community better understand how to use artificial intelligence.

Right in the heart of Grand Rapids, along the Medical Mile, the consortium will meet at the Daniel and Pamella DeVos Center for Interprofessional Health (DCIH) every week, with quarterly meetings open to the general public.

The effort is aimed at helping West Michigan industries adopt AI that fits their specific needs, while problem-solving for security, bias, privacy, and ethical concerns.

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Right in the heart of Grand Rapids, along Medical Mile, the consortium will meet at the Daniel and Pamella DeVos Center for Interprofessional Health (DCIH) every week, with quarterly meetings open to the general public. (Abigail Taylor/WWMT)

Marouane Kessentini, Ph.D, Dean of the GVSU College of Computing told News Channel 3 that a wide range of companies in the region are bringing forward questions of where, and how, to ethically integrate artificial intelligence into their practices.

“Here in West Michigan, we have a high concentration of many industries, health, manufacturing, and of course high-tech companies,” said Kessentini. “The first questions are about security, privacy, ethics and bias. It’s not just about deploying tools. It’s about deploying them responsibly.”

Kessentini said the consortium will focus on training, research and community education, with a heavy emphasis on data privacy, cybersecurity and misinformation.

“There are many examples where AI systems were trained on data that wasn’t diverse,” he said. “That can lead to inaccurate results. That’s why testing and training are critical.”

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The consortium will bring together faculty researchers, students, and industry leaders, with weekly meetings planned to develop guidance for using AI at scale.

The goal is to help companies validate AI outputs, clean and manage data, and identify bias before systems are put into real-world use, especially in high-risk industries like healthcare and manufacturing.

Some projects will involve software design, others will focus on creating public data sets that are reliably sourced, but anonymized for safe use, and many more are yet to be ideated.

Some projects will involve software design, others will focus on creating public data sets that are reliably sourced, but anonymized for safe use, and many more are yet to be ideated. (Abigail Taylor/WWMT)

Some projects will involve software design, others will focus on creating public data sets that are reliably sourced, but anonymized for safe use, and many more are yet to be ideated. (Abigail Taylor/WWMT)

The initiative is backed by $1,031,000 in federal support, through the Community Project Funding (CPF) process, resources that U.S. Representative Hillary Scholten (D-MI-03) said she advocated for among members of congress in Washington.

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“West Michigan should be leading the way in how artificial intelligence is developed and used, and that starts with investing in people and institutions we trust,” said Rep. Scholten. “This funding will help GVSU bring together educators, industry, and public partners to build AI systems that are ethical, secure, and transparent while preparing students for good-paying jobs and strengthening our region’s economy. I’m proud to support this work and to continue delivering federal investments that ensure West Michigan remains at the forefront of responsible innovation.”

It’s important that AI is useful, but also safe…

GVSU also launched an online certificate portal that is open for community members interested in learning about ethical AI use, for free.

Kessentini said the training is for the general public to learn how to navigate the technology, including the risks and limitations.

“It’s important that AI is useful, but also safe,” said Edgar Cruz, master’s student with a badge in cybersecurity.

Cruz is currently researching how AI systems can be attacked or manipulated with poisoned data, specifically as it relates to vehicle-to-vehicle communication, where AI helps self-driving cars exchange information like speed and position.

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“We want to ensure that the system is robust and safe,” he said. “Because obviously people are involved.”

Kessentini said the consortium is designed to be a public resource, not just an academic project.

Quarterly community meetings will be open to the public, and training materials are available online through the College of Computing website.

“This is innovation with purpose,” he said. “We want to start here in Grand Rapids, but we want to make a global impact.”



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New Michigan O-line coach Jim Harding has one goal for spring practice

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New Michigan O-line coach Jim Harding has one goal for spring practice


Jim Harding, Michigan’s new offensive line coach, has one goal coming out of spring practice: he wants to have a set starting five plus a solid sixth lineman for good measure.

Michigan begins spring practice March 17 and concludes with the spring game on April 18.

Harding, appearing on the Michigan in-house podcast, “In the Trenches” hosted by Jon Jansen, joined new Michigan head coach Kyle Whittingham’s staff from Utah, where Whittingham was head coach the last 21 years. Harding spoke about a number of topics, including returning to the Midwest — he grew up in Maumee, Ohio, and his wife is from Farmington Hills — and his love for the Detroit Tigers, but most important was his discussion about building the Wolverines’ offensive line.

“I’d like to establish the starting five where you feel good that when you go into fall camp,” Harding said on the podcast that posted Wednesday. “Those are the guys that are working together immediately from Day 1.”

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Harding said he uses a sixth lineman — he terms that player the “rhino” — quite a bit and would like to have at least two ready to go. The Wolverines also need depth at center considering only Jake Guarnera has snapped in a game.

“And then just having that physicality, nastiness of the offensive line,” Harding said. “Just kind of develop that.”

Since arriving earlier this year at Michigan, Harding said he’s been impressed by the linemen and their desire to work hard on conditioning and developing their craft by asking questions and wanting feedback. They have gone to dinner as a group to get to know each other away from the facility, and Harding has enjoyed the process.

“The things that you can’t measure right now is our physicality or our toughness, things like that,” Harding said. “I’m confident that it won’t be an issue, but that’s kind of the next step once we get pads on, (finding out) who are kind of the Alpha dogs in the room that are going to set the tone for the unit, and then, obviously, the offense. But really pleased with what I’ve seen so far.”

Harding shared offensive coordinator Jason Beck’s approach to installing the offense.

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“The way (Beck) runs it, everything’s on the table Day 1 in practice,” Harding said on the podcast. “So we’ll get a script with, if you count red zone, probably 60 or so plays, and any play can be called. It’s really unique, and I’d never done it this way, but Coach Beck, actually calls it like he does in the game. There are no scripts, and so we’ll just move the ball down the field, and if it’s a third play and it’s third and 3, well he’s going to call a third-and-3 call.

“So you really have to have the kids prepared for all 60 of those. And then the next day there’ll be maybe different formations and things like that once we get the concepts down in the O-line room for the run game. Now it’s just a matter of dressing up different things. It’s a lot of stuff early on, because every run scheme we have could be called on that first day, every pass protection we have could be called on that first day. So it’s a front-loaded installation.”

achengelis@detroitnews.com

@chengelis



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Bills to end concealed carry permit requirement introduced in Michigan House

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Bills to end concealed carry permit requirement introduced in Michigan House


A group of Republicans in the Michigan House say Michiganders’ second amendment rights are being infringed, as they introduce legislation to end requirements for concealed carry permits.

Right now, Michiganders must obtain a permit to carry a concealed gun, with a base fee of $100.

As part of the process, applicants must also receive training.

“The first thing they do is put you in a classroom, make sure you know all proper range and safety procedures, run you over what the law states about when and if you’re allowed to use your firearm,” Jonathan Hold, president of the Michigan chapter of Giffords Gun Owners for Safety and a firearms instructor, said. “It gives a really good grounding.”

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Applicants must demonstrate four hours of range time as well.

The group of House Republicans feel this is an undue burden, noting many gun owners are already knowledgeable.

They also believe the current five-year felony for carrying without a permit is too steep.

“For the government of the state of Michigan to tell that that we have to be qualified under the guise of their rules in order to protect ourselves is a far cry from what the constitution provides for us,” Rep. Jay DeBoyer, (R- Clay) said.

The package of bills wouldn’t abolish permits, as they are necessary to take guns outside of the state, but it would institute what’s called “constitutional carry.”

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That means Michiganders can carry a gun on them without a permit.

Twenty-nine other states already adopted such policies.

“When we exercise other first amendment rights like our right to speak, we do not have to get a permit or permission from the government to speak,” Rep. Jim DeSana (R- Carleton) said. “When we exercise our right to worship, we do not have to go get a permit or permission to go worship.”

Supporters say concealed guns are important for self-defense, and can also help stop crime.

“It’s going to encourage and increase safety for all,” Rep. Joseph Fox (R- Fremont) said. “It’s about protecting everybody because if there are guns in this situation, and people are worried for their lives, they’re gonna stay back away from evil and making bad choices.”

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Gun control advocates like Gold, however, say it’s “ridiculous” not to have guardrails.

“We’re talking about the power of life and death at a distance,” Gold said. “To send an untrained user out into the world with a firearm is a mistake.”

He also takes issue with the constitution argument.

“The constitution says as part of a well regulated militia, if you read the second amendment, and we don’t have well regulated militias in this country,” Gold said. “At the very least, what we should have are trained firearms users.”

A similar effort to end concealed carry permits failed to gain traction last year in the Michigan Senate, and with the landscape unchanged, the bills likely have an uphill battle to become law.

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