A few reports in the past week have given us a bit more insight on where the economy's going, or not going. First of all, US economic growth wasn't as good in the first quarter as we originally thought, as GDP was revised down from 2.4% to 1.8% for Q1 2013, largely due to lower-than-previously-thought levels of consumer spending, exports, and inventories.
When you plug those numbers in, I see a bit of a cause for concern, as year-over-year growth has now been at 1.7% and 1.6% the last 2 quarters, and private GDP growth a hair under 2.5%. Those are the lowest levels in back-to-back quarters that we've had in over 3 years, when we just pulling ourselves out of the Great Recession. So we might need to keep our eye on it when the 2nd Quarter figures come out in a month, because a third straight quarter of stalling growth means we have a real trend on our hands, and could start popping some of the stock market and real estate bubbles we're seeing.
But for the long view, it still looks like a slowly-growing economy, as slower growth is still better than contraction, and the GDP numbers are still climbing as they have the last 3 1/2 years.
And despite the GDP slowdown, the job market has stayed on the same upward path- jobs keep getting added in the 175,000-200,000 a month range, and the unemployment rate has slowly declined from 9.0% in May 2011 to 8.2% in May 2012 to 7.6% in May 2013. Now, I have little doubt we'd be doing a lot better if the dingbats in DC weren't clinging to a semi-austere strategy and concentrated on job growth over our shrinking deficit, but there's also no question we're better off than we were a couple of years ago, and a couple of years before that (when unemployment was 9.4%).
Unemployment claim numbers also indicate this, as US claims keep falling by 7-10% on a year-over-year basis, with the most recent report showing the 4-week average just under a seasonally-adjusted 346,000. In Wisconsin, the unemployment claim story isn't quite as rosy. While not as bad as the year-over-year increases we saw earlier this year (which coincided with the horrible March and April jobs reports), we also aren't seeing drops to the levels we've seen in the rest of the country- more like 4-6% year-over-year instead of 7-10%. This explains why the change in the Wisconsin numbers have generally been below the rate of the US, as shown by the purple line above 0% in this chart.
And despite a strong bounce-back jobs report in May, the last 3 months are still dismal here in Wisconsin, as we've lost a total of 18,400 jobs in those three months. This awful performance was reflected in this week's release of the Philly Fed coincident index for states, which showed Wisconsin as one of only 5 states with a shrinking economy for those 3 months, and the only one in the Midwest.
And when you go back to the start of the Fitzwalkerstani era in January 2011 and compare it with our Midwestern neighbors, Wisconsin remains the clear laggard...with no growth at all for 2013, unlike the US's steady growth.
So as Governor Walker signs his budget continuing and expanding the same "cut and divert funds to cronies" policies that have put us in this spot for the last 2 years, ask yourself- why would you expect a different result? And even more so, what happens if the decline of US economic growth isn't just a blip, but instead a sign of things to come in the next few months, especially as we come upon another budget and debt ceiling showdown in the next 3 months? Ruh roh.