Sunday, July 22, 2018

June Wis jobs bounce back, but still a lousy 2nd quarter

Late last week, we got the Wisconsin jobs report for June. And the numbers were pretty good.
Place of Residence Data: Wisconsin's preliminary seasonally adjusted unemployment rate for June 2018 increased slightly from the record-low of 2.8 percent in April and May, to 2.9 percent in June, due to 3,300 individuals entering the labor force. Wisconsin's labor force participation rate remained at 68.9 percent in June, a full 6 percentage points higher than the national rate of 62.9 percent. A significant 41,500 more people were employed in June 2018 when compared to June 2017. Wisconsin again set a new state record for number of people employed in June 2018, with 3,092,100 people employed. (They always leave out “Thanks Obama!” for the non-accomplishment of “most people employed”).

• Place of Work Data: From June 2017 to June 2018, Wisconsin added 25,900 private-sector jobs, a significant 30,000 total non-farm jobs and a significant 17,600 manufacturing jobs. Over the month, Wisconsin added 5,500 private sector jobs and 7,400 total non-farm jobs. Through the first six months of 2018, Wisconsin has added 12,100 manufacturing jobs.
Do we really believe that nearly 70% of the private sector jobs added in the last 12 months were in manufacturing? Yeah, me neither.

But outside of that sketchiness, the jobs report is a needed bounce-back after two bad jobs reports in April and May. Also not mentioned is an upward revision for May of 4,800 private sector jobs and 4,900 jobs overall, which means that we merely flatlined in that month instead of falling far behind (as was originally reported).

Of course, one decent month doesn’t cover for the bad results of the prior 7 years in the Age of Fitzwalkerstan, and despite a bit of narrowing in June, the Walker jobs gap still sits at more than 140,000.

And even with the good June jobs report, Wisconsin still is a laggard among the Midwest over recent time periods. For the last completed quarter, Wisconsin dug itself out of its “50 out of 50” status it was in after the first two months, but it still doesn’t look good.

Private sector jobs change March 2018 - June 2018
Ohio +29,900
Ill. +20,400
Minn +14,500
Mich +8,800
Iowa +2,700
Wis. -900
Ind. -6,400

And the story is similar for the 12 months that made up State Fiscal Year 2018, although at least in this time period we end up above water and end up beating the FIBs.

Private sector jobs change June 2017 - June 2018
Ohio +1.45%
Mich +1.35%
Iowa +1.09%
Minn +1.07%
Wis. +1.02%
Ill. +0.87%
Ind. +0.62%

The question going forward is when will the slate of store closings that happened in late June and will happen in the near future show up in the jobs report in this state. The Wisconsin WARN notices associated with those store closings gave layoff dates in June, but at least in Madison, Toys R’ Us and Boston Store still had their locations open at that time, and many aren't anymore.

We also haven’t seen much in terms of dairy businesses closing in light of plunging prices as a result of the Trump Trade Wars, but I wonder if the recent notice of 51 layoffs at Schuman Cheese in Fall Creek is a bad sign of things to come.

However, for at least one month the bad trend of layoffs that we saw in the Spring 2018 didn’t continue, as we went into Summer in Wisconsin. But the big picture shows a state still well behind the rest of the county, and many of its Midwestern neighbors.

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