LANSING, Mich. (Michigan News Source) – Michigan’s economy is recovering better than many expected from the UAW strikes, according to a new economic forecast from the University of Michigan.

“The UAW’s strategy of starting with a limited number of strike targets, the generally strong economy, and the strike’s relatively timely resolution all combined to limit its spillover effects into the broader economy,” researchers wrote in the report. “If tentative agreements are ratified as expected, the signing bonuses and higher wages should more than offset the loss of personal income due to the strike.”

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Despite the quick recovery, researchers estimated that the UAW strike cost the U.S. economy nearly 70,000 jobs. 37,000 of those occurred in Michigan, leading to estimated personal income loss of $114 million.

The report also drew attention to the effect of high inflation on real per capita disposable income, which is expected to be just 1.3% higher in 2025 than it was before the pandemic.

According to the recent Bureau of Labor Statistics report, a falling consumer price index shows a decline in prices of some goods over the past two months, including energy, travel lodging, recreation, apparel, and used vehicles. The report found a slight increase in food prices due to a rise in the cost of eating out. Over the past year, prices in four of the six major grocery store categories have declined.

As a general category, food prices have increased steadily since the start of the pandemic, swelling to nearly 25% higher overall than pre-pandemic levels. But some experts, including Walmart CEO Doug McMillon, are predicting a period of deflation in food prices.

“We welcome [deflation] because it’s better for our customers,” McMillan said.

While lower prices may be welcome news for consumers, economists often associate deflation with lower consumer spending and reduced economic growth for the economy at large. Depending on which sectors of the economy are affected, deflation can cause the real burden of debts to worsen. Wages, production, and demand tend to fall with prices.

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Despite these concerns, McMillan said during a recent earnings call that reduced prices could help consumers throughout the holiday season.

“If the food prices come down … and we start seeing deflation in those categories, that’ll free up dollars to be spent in general merchandise,” McMillan told Walmart investors. “We’ll just manage it as the weeks and months play out and are as fascinated to watch it as you are.”