Updates About Economy

Recently, The Senate Fiscal Agency (SFA) released the Monthly Revenue Report for August 2026. The state brought in $3.0 billion, $150 million higher than the projected number, and 0.5% more than August 2025. The $150 million better-than-expected collections were fairly divided between the General Fund and School Aid Fund, coming in at $73.1 million and $68.8 million respectively, with the remaining being directed into other funds.

For August 2026, the largest source of revenue was the combined sales and use tax collections, which came in at $1.2 billion. Despite being atop all other revenue streams, the combined receipts were down 5.6% from August 2025, partly due to the removal of the sales tax for motor fuel. Trailing just behind were revenues from the net income tax coming in at $1.1 billion, 9.2% higher than August of last year. Together, the two collections beat expectations by $123.6 million. Strong income tax withholding was also a major contributor, increasing 11.5% from August 2025 and coming in $92.8 million above forecast.

So far, the revenue collections in 2026 for the General Fund have been $532.4 million higher than expected and the School Aid Fund has beaten projections by $263.3 million. These numbers indicate that, for now, Michigan’s current fiscal situation for 2026 is surprisingly healthy.

Recently, the Michigan Department of Technology, Management and Budget released the latest unemployment and jobs report that shows data from the month of August. The data shows that Michigan’s unemployment rate increased by 0.1 percentage points to 5.0%. Comparatively, the national unemployment rate for August was 4.1%.

The unemployment rate increase occurred alongside a shrinking labor force, as Michigan’s employment number decreased by 25,000 while the number of unemployed people remained unchanged.Payroll jobs saw a slight reduction with employers reporting approximately 2,000 payroll jobs lost. Michigan’s labor force participation has also decreased 0.3% to 58.8%.

The manufacturing sector experienced the largest monthly employment decline, shedding approximately 2,000 jobs. The sector with the most growth was private education and health services, with employment increasing for the fourth consecutive month and adding 6,000 jobs since April 2026.

Looking at the over-the-year numbers, the biggest gain has been in government, which added 16,000 jobs, followed by private education and health services, which added 8,000 jobs. The biggest loser has been the professional and business services sector which has lost 6,000 jobs since August of last year.

Recently, The Senate Fiscal Agency (SFA) released the Monthly Revenue Report for July 2026. Total tax collections totalled $3.1 billion, $174 million above what was expected and 6.9% higher than July 2025.

The revenue for both the net income tax and the combined sales and use tax came in at $1.2 billion. The combined sales and use tax number beat expectations by $106.9 million, whereas net income tax was slightly behind beating expectations by $93.3 million.

The repealed Single Business Tax, Michigan Business Tax (MBT), and Corporate Income Tax (CIT) generated $140.0 million in net revenue. The combined collections were $39.6 million below the predicted number. Revenue from CIT collections caused most of the drag, as it lagged behind the predicted number by $43.1 million.

General Fund (GF) collections were $75.3 million above the forecasted number, and the School Aid Fund exceeded expectations by $82.2 million. So far, the year-to-date collections for the GF sits at $459.3 million, and for the School Aid Fund, $194.5 million.