Detroit Literacy

Analysis

Dom Groenveld

domgroenveld@yahoo.com

4/7/09
1.

Population and Growth Rates for Detroit MSA & United States

2000 2008
Detroit MSA
Population 4,452,558 4,425,110
Detroit MSA
Growth Rate -.616%

USA Population 282,171,936 304,059,724 (U.S. Census,

USA Growth Rate 7.76% 2009)

The population of the metro area of Detroit did not grow faster than the population growth

rate of the USA. The Detroit area saw a loss of people around -.616% due to the atmosphere of

rust belt cities today in the new millennium. The economic factors around the Detroit area make

a loss of population a reasonable expectation. However; the U.S.A. has a whole grew around

7.76% the main source of this growth is the fact that the elderly are living longer.

The census, which is overseen by the United States Census Bureau, is a mandatory

“headcount” of Americans established by the U.S. constitution. The census takes place every ten

years with the first taking place in the year of 1790. The census has the important role of not only

looking at socioeconomic patterns throughout the United States, but also the census dictates how

many seats are available to which states in the house of representatives. Also, the Electoral

College voting numbers are based off of the census. The main tool of the U.S. census is a mail

survey to collect data (Capt, 1946).

2.

Detroit MSA & U.S. GDP Growth from 2001 to 2006

Total GDP
Year 2001 2002 2003 2004 2005 2006 Growth from
2001 to 2006
Detroit GDP (in 183,22 189,32 193,58 194,36 199,73 199,28
millions) 2 3 9 5 5 8
Detroit GDP 3.33% 2.25% 0.40% 2.76% -0.22%
Growth 8.77%

USA GDP (in 9,89 10,04 10,30 10,67 10,98 11,29

billions) 0.7 8.8 1.0 5.8 9.5 4.8
1.60% 2.51% 3.64% 2.94% 2.78%
USA GDP Growth 14.20%

(U.S. Bureau, 2009)

The Detroit metro area only grew faster than the USA in the year of 2002 and the rest of

data shows that Detroit grew slower and in 2006 the GDP growth was negative. The U.S.A. GDP

grew by 14.2% between the years of 2001 and 2006 while Detroit grew by 8.77% between those

same years. Population and GDP growth do have a positive correlation. Less people to do work

ultimately means less GDP output.

The BEA stands for Bureau of Economic Analysis, and along with the Census and other

agencies it makes up the country’s Economic and Statistical Administration. The BEA is a

government agency that produces a massive amount of information based on the economy of the

country to help decision makers make better decisions. The BEA provides key facts on the

forever changing economic landscape of the United States. The BEA has information at the

country, region, and industry level (U.S. Bureau, 2008).

3.

(Office,
2009)

The HPI stands for Housing Price Index and it measures the difference on home prices

based on repeat sales or refinances. The data for the HPI is obtained when a mortgage is

purchased or securitized by Fannie or Freddie Mac. The data area is the entire United State

including the District of Columbia (Office, 2009). The Detroit MSA had a major fall off around

the year of 1983 resulting in an 18% decline in the HPI. The Detroit area took about 2.5 years to

recover from that drop off and the Detroit MSA HPI surpassed the United States around the

middle of 1985. Since the middle of 1985 until the beginning of 2001 the MSA of Detroit had a

greater percentage change than the United States. However, since 2001 the Detroit area has

experienced a greater lose, faster, than that of the United States. The Office of Federal Housing

Enterprise Oversight is an independent entity established by the United States to look after

Freddie Mac and Fannie Mae. OFHEO wants to promote a strong national housing financial

system. The OFHEO is funded through Freddie Mac and Fannie Mae, and does not directly cost

the taxpayer any money for operations (Office, 2009).

4.

The CPI, consumer price index, is a measure of the prices paid by a consumer for a

selected amount of goods. The baskets of good’s prices are closely watched because the CPI is a

good measure of inflation. The prices are always moving and adjusting for the economic

environment, but when the prices go up or down by too much this draws concern about the

health of the economy. A decrease represents deflation and this is bad for the economy because

people will not buy goods rapidly hoping for the price to decrease on the near future. This puts
pressure on the margins of corporations because to sell goods the price must be adjusted

downward according to the deflation. A substantial increase in prices represents major inflation.

Inflation, at low levels, is a good thing, while at high levels mean prices of goods are probably

going up faster than income. This puts pressure on the consumer because the cost of living is

rising faster than the income received.

A change in real HPI represents home prices adjusted for inflation. All goods will rise

and fall with inflation but to truly see the difference of price based on supply and demand then

inflation needs to be discounted, and the real HPI does that. An increase in the real HPI represent

the actual value of housing was increasing while a decrease represents a decrease in home values

with both be adjusted and discounted for inflation. In the early to mid 1980s the real HPI was

decreasing for the Detroit MSA. From about 1988 to about 1997 the home values in Detroit

remained relatively flat. From 1997 up until 2005 the home values were rising creating a bubble,

and the bubble popped in 2005 creating a negatively sloped curve for Real HPI that is current

today.

5.

Works Cited

Capt, J. (1946). The History, Operations, and Organization of the Bureau of the Census.

Retrieved March 4, 2009 Last Revised by the U.S. Census Bureau January 14th 2003

Office of Federal Housing Enterprise Oversight (2009, February 12). Home Price Index &

Overview. Retrieved April 5, 2009, http://www.ofheo.gov/

U.S. Bureau of Economic Analysis (2009, April 1). Regional & National Economic Accounts.

Retrieved April 5, 2009, http://bea.gov

U.S. Census Bureau (2008, August 8). Missions, Vision, and Values. Retrieved March 7, 2009,

http://www.bea.gov/about/mission.htm
U.S. Census Bureau (2009, March 18). Population Estimates, National & Metropolitan.

Retrieved April 5, 2009, http://www.census.gov/popest/estbygeo.html