Thursday, December 11, 2014

U.S. economy strong through November. Wisconsin not so much

More reports were out today indicating that the U.S. economy is staying on a good growth track as 2014 draws to a close.There was good news on the retail sales front, as they rose by 0.7% in November even with falling gas prices dragging the number down a bit. So despite the worries about weak Black Friday sales, maybe this means the important Holiday shopping season was off to a better start than people thought. The labor market also is staying strong, as weekly jobless figures from the U.S. Department of Labor had seasonally-adjusted unemployment claims under 300,000 for the 12th time in the last 13 weeks, at 294,000.

But while the economic data is going up, and jobless claims are dropping throughout the rest of the nation, Wisconsin seems to be going the other direction for November. The unemployment claims report says that in the holiday-shortened week of Thanksgiving, Wisconsin stands out as an anomaly.
The largest increases in initial claims for the week ending November 29 were in New York (+2,979), Wisconsin (+2,293), Arkansas (+484), Vermont (+417), and Kentucky (+145), while the largest decreases were in California (-13,819), Texas (-6,313), Ohio (-4,284), Pennsylvania (-4,199), and Illinois (-3,359).
And yes, while some of the Wisconsin figures could be related to it being the full week of deer hunting season, the state had seen rises in unemployment claims throughout the month of November, with new claims doubling over the past four weeks. As this chart shows, this is an increase that goes well beyond the typical seasonality effects for November. This comes after year-over-year decreases of 10-20% being the rule for much of the year, matching the drops seen in the rest of the country. As you can see the last 2 weeks measured have had increases in unemployment claims in Wisconsin compared to the same time in 2013, in notable contrast to the continued decrease in year-over-year claims in the rest of the nation.

Wisconsin’s rise in unemployment claims for the week of Thanksgiving is especially noteworthy when you look at the same stat for that week among our Midwestern bretheren – many of whom also had deer hunting season around Thanksgiving. Which one of these is not like the other?

Change in unemployment claims, week ending Nov 29
Wis. +2,293
Ind. -1,507
Iowa -1,880
Mich -2,526
Minn -2,940
Ill. -3,359
Ohio -4,284

Total unemployment claims, week ending Nov 29
Wis. 15,336
Ill. 14,741
Ohio 11,224
Mich 10,824
Minn 7,347
Ind. 5,052
Iowa 4,108

With these recent increases in jobless claims, it makes me very intrigued by what Wisconsin’s November and December jobs figures may say as they come out in the next handful of weeks. Those months typically lose a few thousand jobs on a non-seasonally adjusted basis, but the spike in unemployment claims over the last few weeks may indicate that it could be more than that, unless we had a large increase in Holiday hiring to go with the extra layoffs.

Keep tuned, as there are plenty of jobs, revenue and other data reports to come in the next week. And they will go a long way toward defining what already looks to be a very difficult state budget in early 2015.

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