Monday, June 22, 2015

Wisconsin economy back to the end of the line

I wanted to revisit the awful jobs numbers that came out for Wisconsin in May (8,600 jobs lost, 6,100 in the private sector, and April revised down by more than 3,000) now that the Bureau of Labor Statistics has also released the state-by-state jobs report for May. This will show that Wisconsin is largely isolated in its awful performance in jobs for 2015, and the gap between us and the rest of the Midwest has grown even more in recent months.

It's bad enough that there's this passage in the state-by-state report .
In May 2015, nonfarm payroll employment increased in 37 states and the District of Columbia, decreased in 12 states, and was unchanged in Montana. The largest over-the-month increases in employment occurred in California (+54,200), New York (+42,700), and Texas (+33,200). The largest over-the-month decrease in employment occurred in Wisconsin (-8,600), followed by North Dakota (-5,300) and South Carolina (-4,900).
But job losses in March, flatlining in April and additional losses in May mean that Wisconsin has barely added anything during 2015, while our Midwestern neighbors have still been seeing benefits of the Obama Recovery.

Private sector job growth, Dec 2014- May 2015
Ohio +41,400
Mich +33,500
Ind. +29,400
Ill. +26,000
Minn +20,700
Iowa +9,800
Wis. +7,200

If you put together those figures with the recently-released "gold standard" QCEW jobs report, Wisconsin doesn't just stay in last place for private sector job growth, but we fall further behind everyone else.

These recent job declines also have driven down Wisconsin standing in today's release of the Philadelphia Federal Reserve's Coincident Index of all 50 states. This index looks at numerous economic statistics to evaluate the strength of the economies in all 50 states, and you'll see that while Wisconsin has not had its economy contract in the last 3 months, like the (GOP-voting) states in red, we're not too far above 0 either.

In fact, Wisconsin's economy is clearly the worst in the Midwest in the three months since Scott Walker introduced his budget earlier this year.

Change in coincident index, Feb-May 2015
Mich +1.56%
Ind. +1.00%
Iowa +0.82%
U.S +0.68%
Minn +0.59%
Ill. +0.36%
Ohio +0.26%
Wis. +0.12%

So we've got the worst job growth in the Midwest over the 4 1/2 years of the Age of Fitzwalkerstan, the worst economy in the Midwest in the last 3 months, and a state budget that's so screwed up that Scott Walker's own party cannot get a budget done on time, and may not have one for quite a while. Go ahead Scott Walker, you run for president on your record of "turning the state around." Because you sure have, but not in a way you want people to think.


  1. Let's not forget though that the monthly stats overestimated the December 2014 private sector numbers.

    QCEW, September 2013 - September 2014: +31,474
    Now-benchmarked CES, September 2013 - September 2014: +28,700 (2,774 lower)
    QCEW, December 2013 - December 2014: +35,759
    Partially-benchmarked-but-for-Q4 CES, December 2013 - December 2014: +44,900 (9,141 higher).

    The question is, is it that the May 2015 CES numbers have returned to accuracy with the December 2014 highballing making the 2015 growth to date look lower than it is, or has CES gone off on its own direction and May 2015's data is just as off as December 2014's were?

    Having said that, even if the former is the case things still look miserable.

    1. It's a good question Geoff, maybe it's nothing more than "revision to the mean", and we see the end of 2014's CES figures be revised down in early 2016.

      But as you mention, even if that lower 2014 figure makes 2015's job growth a bit better (by starting from a lower base), Wisconsin still would lag behind everyone in the Midwest.

      What I'm curious to see is if these bad stats drop May's revenues, which would mean there's an end-year deficit looming. Could that be one of the sources of delay in the budget? You gotta wonder.

    2. "What I'm curious to see is if these bad stats drop May's revenues, which would mean there's an end-year deficit looming."

      With Walker Administration taking a bunch of extra-legal steps to hang on to cash and only projecting itself to be $0.3 million above water despite all that, a bug going around the DoA making employees use more state-funded toilet paper would sink the FY15 budget. Or cooler than expected weather making Walker's motorcade use a touch more gas.

      Tax withholding is a very noisy series anyway, Walker was really flipping a coin in February with this.

      Regarding the 2015-17 budget, Walker's version was only meant to end FY16 with a net balance of $27m. Scrambling to make up another c.$26m more than expected in FY15 would fubar the upcoming budget, but there's no need to wait for the FY15 revenues to be finalized in order to pass it then hope for the best. If delay past June 30th for about two weeks is considered inevitable at this point then the revenue data would have a chance to screw things up more than they already are for the GOP Legislature and Wisconsin.