Sunday, March 24, 2019

The economic outlook is back! And tells a tale of Wisconsin's subpar record

Among many improvements with the start of the Evers Administration was one that came out on Friday- the return of The Wisconsin Economic Outlook from the Department of Revenue! As the state continued to fall farther behind during the Age of Fitzwalkerstan, the Walker Administration stopped distributing this quarterly report 4 years ago. But now that Evers is in office, this analysis has returned.

In addition to a look ahead at what it thinks Wisconsin's economy will look like for the next two years, the DOR's Economic Outlook also looks at the state's recent economic history. And it's not so good.
Wisconsin personal income grew  3.6% in 2017, just above the 3.5%  growth in the Great Lakes region and below the 4.4% growth nationwide.  Wisconsin personal income should post growth of 3.8% in 2018 and 3.9% in 2019,  compared to 4.5% growth  nationwide in both years.     

Wisconsin employment grew at  slightly less than half the pace of  the U.S. in the last two years. Wisconsin added just 21,500 jobs  in 2017 and 23,000 in 2018, after  adding an average of 33,700 jobs  per year between 2011 and 2016.  Wisconsin employment posted  year‐over‐year growth of 0.7% in  2017 and 0.8% in 2018, compared  to growth of 1.6% nationwide.   The forecast calls for similar  growth in 2019 and 2020, while  U.S. employment growth slows to  1.4% in 2019 and 1.0% in 2020. 

On the positive side, the DOR report indicates that Wisconsin's unemployment rate will continue to be around 1% below the US rate, as it has been for most of the last 10 years. But the trend of lower wage growth is also expected to continue (and yes, I find this to be an oddity).
Wisconsin wages and salaries  grew 3.4% in 2017 in Wisconsin  and 4.6% nationwide.  Wisconsin's  forecast calls for total wage  growth of 3.9% in 2018 and 3.6%  in 2019, compared to 4.7% and  4.6% nationwide.  The share of  wages and salaries relative to total  personal income stands at around  50% in 2017 and shows a  continuing declining trend since its  peak at 63% in the '60s. 
Despite those lagging numbers, the DOR's Economic Outlook says that the state's revenue picture is in line with expectations, with 4 months left in the 2019 Fiscal Year.

Lastly, the Economic Outlook also notes that Wisconsin has fallen behind the country on it's growth in economic output, and that situation isn't expected to change much either.
State Gross Domestic Product  (GDP) shows Wisconsin real GDP  growth of 1.2% and 1.8% in 2016  and 2017, respectively, compared  to 1.6% and 2.2% nationwide.  As seen at the national level, the tax  cut and fiscal stimulus passed in  2017 will boost 2018 growth to  2.4% in Wisconsin and 2.9% in the  U.S.  The forecast expects  Wisconsin real GDP to grow 2.0%  in 2019 and then decelerate to  1.5% in 2020 and 1.1% in 2021, as  the federal stimulus fades out. 
Given that we reached an interest rate inversion on Friday, which has reliably called every recession in the last 40 years, I'd say those GDP predictions may be a bit, ahem, aggressive.

But it's nice to see honest analysis return to state government, instead of campaign propaganda at taxpayer expense, and bad news being hidden. Let's hope it's yet another sign that Wisconsin is taking steps back toward the decent, open governance that we deserve.

No comments:

Post a Comment