As 2020 ends, Wisconsin's jobs recovery has stalled out, and there's a huge hole to fill

I was going to give a mention to how the jobs situation has developed in Wisconsin as the COVID Winter has closed in. And then the Journal-Sentinel beat me to it.

"The recovery has been losing steam over the past several months; employment increased by over 170,000 during May and June but we've only gotten back another 75,000 since then," Ryan Long, labor market economist for the state Department of Workforce Development, said in an email. "Total employment in the state is actually down by 16,000 since September."

And while, you may have heard that unemployment dropped from 6.0% to 5.0%, I’m not going to buy that large drop over the courswe of one month. Especially since the drop was driven by a 22,700 decline in the labor force, which covered for a decline in employed Wisconsinites by nearly 10,000.

Now, the decline in Wisconsin's unemployment rate from 5.4% to 5.0% between September and November might reflect reality, because it seems to represent a normality that levels out a big labor force increase in late Summer. It also indicates that there's still a lot of slack in the work force, with unemployment rate is far worse in some parts of the economy compared to others.

In Wisconsin, the two-sided nature of the economy is even more apparent. There actually has been job growth in construction in our state over the last year, and about half of the state’s manufacturing’s losses in the early part of 2020 have been recovered, with a sizable jump of 4,200 jobs recorded in November.

But the state has seen heavy losses in bars and restaurants, and state and local governments have also seen cutbacks.

November already indicated that the jobs market was stalling out, but the next jobs report that drops in a couple of weeks will likely be more alarming.

"The bulk of the impact from the most recent spike in COVID cases will show up in the December data, which will likely be dragged down further by the lack of hiring at retailers and renewed shutdowns at restaurants and entertainment venues," [Marquette econ professor Abdur] Chowdhury said. Concerns are widespread. “Before trends improve on both the pandemic and the economy, we’re in for a rocky ride," said Mark Hamrick, a senior economic analyst at bankrate.com. "Data on jobless claims and retail sales raise alarm about the near-term outlook."

While new jobless claims did fall by a seasonally adjusted 89,000 last week, the figure was still above 800,000 for the 3rd straight week after being below 800K for the 7 weeks before that. And a decline in both incomes and consumer spending for November gives serious warning signs about the Holiday shopping season in sectors that have already taken a lot of hits in 2020.

This is why I think we're in an arguably more dangerous economic situation than we were in as COVID first broke out this Spring. We could comprehend a lockdown of 6-8 weeks, save money, and then rely on a good amount of the jobs coming back as stimulus kicked in and people headed back out to spend money.

But in Winter 2020, we're now seeing that many jobs in certain service sectors are never coming back, people are still social distancing, the stimulus is much less (if it even happens at all), and COVID is as pervasive as ever. So how does Wisconsin get back the 227,000 jobs that we are still down compared to where we were in February?