Biden is visiting Wisconsin. It will be interesting to see how the state economy performs versus the Evers administration's projections, which are largely based on state macro developments.
First employment:
figure 1: Wisconsin nonfarm payrolls (bold black) and Wisconsin economic forecast (blue), both starting with 000, sa Source: BLS and Wisconsin Department of Revenue November Forecast.
Nonfarm employment growth is expected to stall in the second half of 2024, likely due to a slowdown in the national economy forecast by SP Global (formerly IHS Markit).deceleration is
figure 2: Wisconsin civilian employment (bold black) and Wisconsin economic forecast (blue), both for the 000s, sa Source: BLS and Wisconsin Department of Revenue November Forecast.
Note that the civilian employment series exhibits more variability. It is important to remember that state-level civilian employment estimates are calculated using a different model than the methodology used at the national level. This is necessitated by the smaller sample relative to the state.In other words, IBe extremely cautious about using state-level employment series based on household surveys.
That being said, forecasts point to essentially zero job growth in the first quarter of 2024.
Employment and labor force errors may be related in such a way that the unemployment rate fluctuates less. Here's how Wisconsin's unemployment rate compares to the nation's. Wisconsin's unemployment rate is, on average, 0.9 percentage points lower than the national average (taking into account state-level fixed effects). Still, the Department of Revenue's forecast shows the unemployment rate is growing faster than the national unemployment rate surveyed by professional forecasters (in principle, to understand what's driving Wisconsin's unemployment rate, one should look to S&P Global (formerly IHS-Markit )Prediction) .
image 3: Wisconsin unemployment rate (bold black), Wisconsin economic forecast (blue), national unemployment rate (bold red) and forecast from the Survey of Professional Forecasters, all expressed as percentages, seasonally adjusted Source: BLS and Wisconsin Department of Revenue November Forecast. Federal Reserve Bank of Philadelphia (November)
As for non-labor market indicators, GDP is expected to rise, reflecting country-level forecasts for continued growth.
Figure 4: Wisconsin GDP (bold black) and Wyesconsin economic forecast (blue), both 2017 $1 billion SAAR. Source: BEA, and Wisconsin Department of Revenue November Forecast.
The latest release of Wisconsin GDP (ahead of time, first 2017 dollars) fell, with first quarter 2023 revised downwards compared to the previous year. There is no doubt that revisions can change the trajectory of state-level GDP.
Compared with GDP, inflation-adjusted total personal income did rise from the first quarter to the second quarter.
Figure 5: Wisconsin gross personal income (bold black), and WIsconsin economic forecast (blue), both 2017 USD Billion SAAR, 2019-2024. Deflated using the national PCE deflator, the national PCE deflator was forecasted by a survey of professional forecasters. NBER-defined recession peak-to-trough dates appear gray. Source: Bank of East Asia, Wisconsin Department of Revenue November ForecastFederal Reserve Bank of Philadelphia, NBER, and author's calculations.
It is important to note that this is total personal income (not disposable income), or NBER BCDC target series personal income (excluding current transfers).
Note that recently, the Joint Economic Committee (Republican) has been tallying the dollar increase in the cost of living per consumer unit (household) since January 2021, “National Inflation Tracker”, which I thought was an attempt to connect with ordinary people (but ended up being completely confusing). I prefer to present such data as a per capita percentage. Here's my take – per capita wages and total wages adjusted for the month-on-month Consumer Price Index.
Figure 6: Wisconsin's per capita wages and total wages, calculated from the national CPI, calculated as December 1999 SAAR. Total wages and salaries (FRED series WIWTOT) are divided by Wisconsin's resident population in July (FRED series WIPOP) through quadratic interpolation. Sources: BEA, FRED Census, BLS, and author's calculations.
Since the first quarter of 2021, real total compensation (not earnings) in Wisconsin has exceeded the cost of living by a cumulative 5.4%.
More information on November's employment situation will be provided by DWD tomorrow and BLS on Friday.
