June had more jobs in Wisconsin. But we were still far in the hole

Today we got another update on the jobs picture in Wisconsin, as we try to climb out of the depths of the COVID-19 induced recession that hit in the Spring. And the numbers ended up being pretty good.

Wisconsin's unemployment rate dropped to 8.5% in June — a bit of good news that came Thursday as Democratic lawmakers released proposals to remove obstacles and broaden access to unemployment benefits.

The jobless numbers also came as Gov. Tony Evers' administration temporarily reassigned 100 state workers to help address a backlog in claims.

Wisconsin's unemployment rate last month was far below the national rate of 11.1% and was down from the state's high of 13.6% in April. That figure reflected the height of businesses closing across the state in response to a “safer at home” order issued by Evers to slow the spread of the virus. Wisconsin's unemployment rate was 12.1% in May.

It’s definitely good news to see Wisconsin’s unemployment rate drop by as much as it did in June. But if you look at the numbers in the report, you’ll notice this stat.

Wisconsin labor force
May 2020 3,103,200
June 2020 3,056,900 (-46,300)

That means it’s almost a 50-50 split for why the unemployment rate went down in Wisconsin. Half was due to people getting back to work, but the other half was due to people dropping out of the labor force. Some of this "reduction" is likely due to fewer people heading into Wisconsin for Summer tourism jobs because outside travel has been greatly reduced in the COVID world. In fact, 12,200 more people were listed as being in the Wisconsin work force in June 2020 vs May on a raw number basis, but that's way below the additional workers that come in for a normal year, so it becomes a seasonally-adjusted loss.

Interestingly, Wisconsin’s drop in the labor force was different than what was happening nationwide, where 1.7 million were listed as returning to the labor force. This could simply be the national survey correcting in June as things (temporarily) settled down, because Wisconsin’s participation rate is still well higher than the US’s – we were 4.2% above the US rate in June 2020 and 4.0% above the US rate in June 2019.

On the payrolls side, we also bounced back, with a bigger increase from May's jump of 71,400 jobs.

The report shows that Wisconsin added 99,300 private sector jobs in June.

Winters said industries hardest hit earlier in the pandemic, such as leisure and hospitality, were the ones driving the recovery as businesses began to reopen.

But the leisure and hospitality sector was still down more than 88,000 jobs compared to its February peak. And that underscores the jobs hole that this state and this country is still in. Nearly 1 in 10 private sector jobs are gone compared to what we had in Feburary, and Wisconsin has a higher rate of job loss than the rest of the US has.

The other is that goods-producing industries hadn't done as much seasonal hiring as they usually would for June in Wisconsin. Which translates into a seasonally-adjusted LOSS of jobs in this jobs report.

Job change, Wisconsin June 2020
Construction
Non-seasonally adjusted +6,800
Seasonally adjusted -200

Manufacturing
Non-seasonally adjusted +7,400
Seasonally adjusted -400

And remember that this survey was taken in a time period in mid-June when new COVID-19 infections were at their lowest since the pandemic first broke out and businesses were reopening. Things look a lot different a month later, both in Wisconsin and in America, and I have to wonder if June is the last month of significant rebound in the job market for a while.

If that's true, then things will get dark very quickly for a lot of Wisconsinites, especially if there's no help coming down from DC to keep people afloat like there was in March. As these numbers show, even with 2 months of sizable job gains, there is still a massive gap in the Wisconsin jobs market.