Sunday, June 18, 2023

In May, Wisconsin had record-low unemployment... and "lost" the most jobs in America?

In between all of the budget news, we found outt that Wisconsin continued at its record-low unemployment rate in May. but there was quite a divergence between the household survey and the payroll information.
The Department of Workforce Development (DWD) today released the U.S. Bureau of Labor Statistics (BLS) preliminary employment estimates for the month of May 2023, which showed Wisconsin's seasonally adjusted unemployment rate stayed at the record-low rate of 2.4%.

The total labor force grew by 14,400 and employment increased by 14,100 over the month of May. Additionally, the state's total labor force participation rate grew to 65.1% during that time. Total seasonally adjusted nonfarm jobs decreased by 6,400 over the month and increased by 41,200 year-over-year. Private-sector jobs decreased by 7,000 in May and increased by 29,900 over the year.
Those jumps in the household survey puts the total number of Wisconsinites working at a new post-COVID high at 3,026,200 and the labor force at its highest level since August 2021, reversing the odd decline that we saw in both of these numbers for much of 2022.

On the payrolls side, we slipped below 3 million after breaking that barrier for the first time in April (reminder – the “employment” numbers include farm and “one-person shop” types of workers), but I’m not too concerned. The 7,000 private sector jobs “lost” actually reflect lower-than-typical hiring for May (non-seasonal totals +18,900 private sector and +12,500 overall).

Given that the survey week was the first full week of the month, most schools were still in session and Summer work hadn’t kicked in yet (it had also been a particularly cold and crappy Spring until that week). That slower seasonal hiring helps explain why Accommodations and Food Services had a bad May, even though 4,000 more jobs were added in that field for the month in the real world.

But seasonal adjustment doesn’t explain all of the disappointing payroll figure in Wisconsin. Health Care/Social Assistance had actual and seasonally-adjusted losses (-1,900 NSA, -1,200 SA), and Manufacturing had notable losses (-3,400 NSA, -3,300 SA). Retail and Wholesale Trade also didn’t have the slower-than-normal seasonal hiring that bars, restaurants and hotels did (+5,500 NSA, +3,500 SA), so let’s see what June’s figures hold to find out if the May decline is a seasonal distortion or a sign of concerns.

I also note that the 6,400 total (seasonally-adjusted) jobs lost in Wisconsin for May was listed as the most out of any state in America (based on national reports released Friday). While monthly numbers can have wide month-to-month variation at the state level, let's see if the calendar turning into June and the warmer weather following makes that a blip, or if it is a sign of worse times ahead.

But taking a step back, Wisconsin was still in a very good place in May, and there isn’t a lot to indicate things have gone the wrong way in June for both the Wisconsin and US jobs markets (so far, anyway). But things are at/near maxed-out levels, and growing the labor force and attractiveness of the state is what’s needed if we want to sustain the strong spot we find ourselves in for mid-2023.

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