Friday, July 21, 2023

Wisconsin returns to record-high job levels in June

After a down report in May, Wisconsin’s job market bounced back in June, and hit a new record high.
The Department of Workforce Development (DWD) today released the U.S. Bureau of Labor Statistics (BLS) job totals for the month of June 2023, which showed Wisconsin's total nonfarm jobs reached a record high of 3,006,900. This is 52,900 more jobs than a year ago and an increase of 6,900 over the previous month.

Preliminary employment estimates for June 2023 showed Wisconsin's seasonally adjusted unemployment rate was 2.5%. The total labor force grew by 14,000 and employment increased by 10,700 over the month of June. Additionally, the state's total labor force participation rate increased to 65.3%.

Nationwide for the month of June, the U.S. unemployment rate was 3.6%, 1.1 percentage points above Wisconsin's rate, and the national labor force participation rate of 62.6% was 2.7 percentage points below the state rate.
Both of those items are pretty darned good, and it means that despite May's setback, Wisconsin has continued to be in the same moderate and relatively steady amount of job growth that we've had for most of the last 2 years. And that the state has gained over 260,000 jobs since Joe Biden took office 2 1/2 years ago.

(260,000 new jobs? Insert Scott Walker joke here).

There’s another part to the report that isn’t mentioned – May’s “largest in the nation” losses were revised down from 6,400 to 1,900. Some of that was fewer losses in manufacturing, and much of the rest was the erasure of losses in private education and health services. So even better than we thought.

Likewise, I want to give some warning to the 6,100 increase in leisure and hospitality jobs for June, because there are a lot of seasonal jobs that happen in that industry, and even with adjustments for that fact, that sector in particular may not be a sign of a longer-term trend when we look at June in isolation. And sure enough, leisure and hospitality lost 2,200 jobs on a seasonally-adjusted basis in May.

Given the sizable revisions to May and the reversals in June, I think the early reporting date for the May jobs report skews the numbers a bit, especially in areas like Wisconsin that have a lot of seasonal changes in employment between mid-May and mid-June.

With that in mind, let’s look at the net change from April to June, to take some of these calendar-related distortions out of the equation, and get a better idea of how things are really doing.

Seasonally-adjusted change in jobs, Apr – Jun 2023, Wisconsin
Accomodation + Food Service +600
Arts, Entertainment, and Rec +3,300
Prof./Bus Services +1,900
Construction -300
Health Care/Social Assist. -500
Manufacturing -2,900

While the manufacturing and construction losses are a concern, I’ll add that more people are working in those industries than they were in April – those industries just hadn’t added as many Summer jobs as normal.

Change in jobs, Apr-Jun 2023, Wisconsin Manufacturing
Seasonally-adjusted -2,900
Not seasonally-adjusted +2,900

Seasonally-adjusted -300
Not seasonally-adjusted +10,700

So let’s see if those “losses” in construction and manufacturing are merely a byproduct of a state that can’t find enough people to fill the needed positions as the weather warms, and that those sectors “gain” in August and September as there are fewer of those seasonal workers to lay off.

The increase in labor force and employment is a great sign, and the odd (seasonally-adjusted) decline in Wisconsin’s labor force from 2022 has now reversed. In fact, this month's Wisconsin labor force of 3,113,700 is a new post-pandemic high, and that's badly needed in a state’s that has a major economic concern over whether we can continue to get people to come here and stay here.

If more people wanting to work, finding jobs and the state getting record-high job levels translate into a 0.1% increase in unemployment each month this Summer, I think that’s an OK trade. And we need to continue and expand the high-employment situation we have in Wisconsin as long as we can.

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