Good jobs reports, bad income reports Wisconsin for late 2017. Which are true?

Late last week, the Wisconsin jobs report for November came out. This report showed a third straight month of growth (albeit lower than the strong jobs reports of August and September), and a drop in the state's unemployment rate.

Place of work data: Based on preliminary data, Wisconsin added a significant 40,600 total non-farm jobs and 42,900 private-sector jobs from November 2016 to November 2017, with a significant year-over-year gain of 16,900 manufacturing jobs. The state also gained 2,500 total non-farm, 2,800 private sector jobs and 2,000 manufacturing jobs from October to November 2017. The number of total non-farm and private-sector jobs in Wisconsin reached all-time highs, according to the preliminary numbers.

• Place of residence data: A preliminary seasonally adjusted unemployment rate of 3.2 percent in November 2017, down 0.2 percent from 3.4 percent in October and below the national unemployment rate of 4.1 percent. Wisconsin's 3.2 percent unemployment rate is the lowest November rate since November 1999. Wisconsin's labor force participation rate increased in November to 68.9 percent and continues to be above the U.S. rate of 62.7 percent. Wisconsin's total labor force also reached an all-time high in November, based on preliminary estimates.

That's pretty good, although as I've mentioned before, I'm skeptical that 40% of our state's job growth has been in manufacturing, given that about 1/6 of our jobs are in that field, and that Walker's Department of Workforce Development has consistently overestimated manufacturing job growth over the last 3 years.

But these are solid numbers, with job growth nearly double what we saw this time last year, and back to the levels that we have largely seen throughout the last 6 years (even if those levels still lag the rest of the country).



In another bit of data from last week, the US Bureau of Economic Analysis released its estimates for 3rd Quarter income for all 50 states. Wisconsin had an OK boost in incomes from June to September of 0.6%, which was a nice bounce-back from Wisconsin's lousy income Q2 growth of 0.1%. Perhaps some of that reflects the reported improvement in the job market.

But even the 0.6% increase in income was below the US rate of 0.7%, and Wisconsin only ranked 33rd in the nation for Q3. Worse, Wisconsin had an awful end of 2016, and that along with the lame Q2 explains why Wisconsin has the 2nd-worst income growth in the Midwest over the last 12 months.

Change in income 2016 Q3 - 2017 Q3
U.S. +2.64%
Minn +2.35%
Ind. +2.24%
Mich +2.14%
Ohio +2.01%
Ill. +1.34%
Wis. +1.22%
Iowa -0.07%

UW-Madison Economics professor Menzie Chinn notes in the Econbrowser blog that Wisconsin continues to lag our neighbors to the west in income growth, and that the gap has grown larger in the last 4 years as Republican-run Wisconsin and Democratic-governed Minnesota have had very different approaches to economic and social policy.



And when adjusted for inflation Professor Chinn points out that Wisconsin's total income hasn't really grown since the end of 2015, and our overall economy has barely gotten bigger.



Which leads me to wonder which indicators are more accurate when it comes to what's really happening with Wisconsin's economy. Is it a thriving place with increased job growth and better wages to come? Or is it a low-wage, stagnant place that'll have those rosy job numbers be revised down over the coming months? I suspect the latter, but the real answer (as well as the perception of the answer) is what'll go a long way toward determining whether Republicans will stay in power in both Madison and in Washington DC.