The rise continues, according to the coincident index just released by the Federal Reserve Bank of Philadelphia. The gap with GDP persists.
figure 1: Wisconsin nonfarm payroll employment (dark blue), Philadelphia Fed early benchmark measure of nonfarm payrolls (pink), civilian employment (tan), linear interpolation of real wages and salaries, by state chain consumer price index ( Sky blue), GDP (red), and consistent index deflation (green), all in the log 2021M11=0.Sources: Bureau of Labor Statistics, U.S. Bureau of Economic Analysis, Federal Reserve Bank of Philadelphia [1], [2]and the author's calculations.
The Wisconsin Coincident Index's three-month annualized growth rate was 3.7%; year-on-year it was 1.2%.
Note that there is a sharp contrast between the GDP series and the other series. The GDP series is calculated based on the income definition of GDP and then uses country-level sectoral value added information to calculate equivalent GDP. In fact, compared to the first quarter of 2018, the GDP released as of the first quarter of 2023 is much higher than the corresponding baseline revised data for the corresponding quarter. See below:
figure 2: GDP $ in 2017 (bold black), GDP $ in 2012 (blue) released in the first quarter of 2023, consensus index (green), and real wages and salaries (tan), all in logarithmic form, 2018 Season 1=0. The authors use X-13 to adjust wages and salaries for the national chain CPI. The peak-to-trough dates of the national recession, as defined by the National Bureau of Economic Research (NBER), are shown in gray. Calculations by BEA, BLS, Federal Reserve Bank of Philadelphia, NBER, and authors.
What explains the gap between the latest estimate of Wisconsin GDP and other measures? I suspect part of this has to do with the gap between GDI and GDP. At the national level, the difference is about 2% (in logarithmic terms).
