Detroit is expected to see an increase in jobs, wages and resident employment in the next five years—encouraging signs for a city that emerged from bankruptcy just over a decade ago and has been in recovery mode for the past few years from the COVID-19 pandemic.

University of Michigan economists say they “remain upbeat about the trajectory of wages and salaries” in the City of Detroit Economic Outlook for 2024-2030.

Among the highlights:

• Wage growth at jobs located in the city averages 3.2% annually from 2025 through 2030, faster than the state of Michigan overall. After adjusting for local inflation, Detroit residents’ average real wages are expected to climb to 4.9% higher in 2030 than in 2019. Although that may seem modest, it outpaces the growth in average real wages at Michigan and Detroit establishments.
• Detroit is expected to add an average of 1,500 payroll jobs per year during the forecast period, an annual growth rate of 0.6%. Economists forecast resident employment to rise by an average of 0.4% annually. The slightly slower average growth of resident employment reflects its stronger recovery since the pandemic, which leaves less room for catch-up growth.
• Detroit’s unemployment rate is expected to continue rising through the first half of 2026, reaching 10.2% in the second quarter. Michigan’s unemployment rate is projected to peak at 6% in the same period. The forecast calls for the city and state unemployment rates to decline in the following years as lower interest rates work their way through the economy. By 2030, Detroit’s jobless rate should decline to 8.9%, while Michigan’s rate falls to 5.6%.
• The number of jobs at Detroit establishments will recover to its pre-pandemic level by the second quarter of 2026 and researchers project it to rise to 3.1% above that level by the end of 2030. Resident employment is projected to surpass its pre-pandemic level by 4.5% at the end of 2030 and exceed its 2023 peak by 1.4%.
• Higher tariffs will weigh on employment in Michigan’s transportation equipment manufacturing sector over the next several years. Subdued expectations for statewide growth in the auto sector feed into the forecast for Detroit’s economy. Industries expected to see job gains over the forecast years include finance, leisure and hospitality, and public administration.

Another promising sign noted by the researchers is more traditionally demographic than economic: Detroit’s population climbed 1.7% over 2022-24, faster than the state’s overall rate of 0.9%. The city had the fourth-fastest growth over the past two years of all large cities in the Midwestern Great Lakes region, outpacing Pittsburgh, Chicago, Cincinnati, Indianapolis and Minneapolis-St. Paul.

“We believe Detroit’s firmer footing augurs well for its economic performance over the next several years,” the economists say in their report. “But the outlook is clouded by a high degree of uncertainty over the course of economic policy.”

The forecast was produced by the university’s Research Seminar in Quantitative Economics as part of the City of Detroit-University Economic Analysis Partnership between U-M, the city of Detroit, Michigan State University and Wayne State University.