A couple of reports in the last week give us an indicator where things are in terms of the U.S. and Wisconsin economy. And it appears that growth continues for both, but with some warning clouds on the horizon.
First up is the strong upward revision to 2nd Quarter 2013 GDP, which rose from 1.7% on first reading, to 2.5% on the second. The biggest reason behind that revision seems to be a higher amount of exports than first thought, and slightly smaller imports. Good sign if you're in one of those industries, and consumption and private investment seemed to hold up well in 2nd quarter.
It also means that GDP remains on the continual increase that's been the pattern over the last 2 1/2 years.
That being said, the rate of growth over the last 12 months is less than we saw in 2012, and is back down in the levels of the middle of 2011- the last time we were facing a showdown over the debt ceiling.
In late 2011 and early 2012, we had strong GDP quarters, and bounced off of the sub-2% level. But third quarter isn't off to the best start, as personal income and consumer spending was tepid, and the new housing bubble showed signs that it may be starting to deflate. The stock market bubble is also indicating signs of popping, as August was the worst month for stocks since May 2012, with the S&P down over 3%.
Now, these weak reports are on the heels of strong reports earlier this summer, so it could be a one-time blip, with growth set to continue. But it's worth keeping an eye on, especially if Congress fucks around with the debt ceiling and federal budget in September (and they have to do something- the fiscal year ends on Sept. 30). It won't take much for this slowing to turn into a stall and a downturn.
That being said, the labor market remains strong, as unemployment claims are staying at their lowest levels in 6 years. Unadjusted claims have been down around 280,000 for the last 3 weeks, and are continuing to be down 10% year-over-year.
Wisconsin has been acting in tandem with this drop in claims, also down around 10% year-over-year, with claims under 8,000 in the time of year when they are traditionally the lowest. That being said, the numbers compared to the rest of the nation are sliding back up to the levels we had last year, as shown by the purple line in this graph.
And given that job growth this time last year was basically zero (1,700 private sector jobs total between June and November), and that a lot of the job "growth" in June and July was in seasonal jobs that are ending with the Summer, don't count on a blowout August Wisconsin jobs report. September probably won't be any great shakes either unless there's a radical change some time soon.
So while we're not in recession danger quite yet, I'm also not convinced the decent growth we've seen in the first part of 2013 will continue. Especially if the TeaBagger goofballs in D.C. try to do the bubble-world stupidity of screwing over Obamacare and/or shutting down the government in a budget battle. We're in a precarious spot in this recovery, without enough income or non-bubble growth to withstand an outside shock, and I'm worried it won't take much to end this 4-year-old recovery.
I don't want that, and I sure bet Scott Walker doesn't want that. Heck, he's already backing off on his 250,000 job pledge (with his staff hilariously trying to convince media outlets not to run the story, earning Walker nationwide ridicule). If this country falls into recession, Walker's claims of job growth and a balanced budget will both go completely down the drain, and his already-iffy re-election becomes very unlikely.
Hell, I wouldn't be surprised if that dope pulled the ripcord and decided not to run in 2014 if the economy turned bad in late 2013 and early 2014, because he knows a loss in the guv election would destroy his (delusional) chances of the 2016 GOP nomination, and a lifetime of wingnut welfare. Quitting would at least get him years on Faux News as a "contributor" and speeches among fellow oligarchs as part of the Sarah Palin Career Development Plan.