Thursday, August 20, 2020

Wisconsin kept recovering in July. But don't let the lower unemployment fool you

Much like the rest of the country in July, Wisconsin continued to gain back some of the massive amount of jobs that they lost in March and April.

In fact, it's slightly better than that, as the increase in July was 25,500 private sector jobs, and 30,500 seasonally-adjusted jobs in all.

However, that 30,500 gain is much less than May's gain of 71,400 and June's increase of 101,700. And we still have a lonnng road back until we get to where we were before COVID-19 became a thing, as UW-Madison's Menzie Chinn notes in Econbrowser.

The 7.0% unemployment decline also isn't as great as you may think, because if you look at the report from the Wisconsin Department of Workforce Development, most of the decline is due to Wisconsinites dropping out of the labor force.

Combined with June's decline, more than 80,000 people have left Wisconsin's work force on a seasonally adjusted basis in the last 2 months. That feels like some kind of odd seasonal quirk based on no Summerfest, no Brewers games and other work that isn't happening in the COVID World of 2020, but it doesn't necessarily explain why those individuals (allegedly) aren't looking for other jobs.

We'll see if that labor force number comes back up as Summer wanes and the school year looms. If so, we might not be falling much further below our current rate of 7% for quite a while. There's a lot of gaps left to fill in this state's employment situation, and with stimulus wearing off and mass layoff notices continuing, it seems likely that our economic recovery is going to cool with the weather.

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