this February Wisconsin Economic Outlook Forecast Just released it yesterday. The same is true for the January 2023 estimate for Wisconsin employment (including the annual baseline revision). Given the data revisions, what is the outlook? Not bad in the short term. The year ahead – reflecting forecasts for the country – is not so good, with modest declines in employment and GDP expected.
figure 1: Wisconsin Nonfarm Payrolls January 2023 (blue), Wisconsin Nonfarm Payrolls December 2022 (tan), DoR WI Economic Outlook Forecast February 2023 (sky blue squares), Nov 2022 (light tan squares), all 000, sa Source: BLS, DWD, Wisconsin Economic Outlook forecast (February 2023, November 2022).
The upward revision to the Wisconsin employment forecast is almost certainly related to the upward revision to the national employment level forecast.
In contrast, GDP forecast levels have been revised downwards, although the contours are now no longer significantly lower (reflecting S&P Global’s country-level forecasts).
figure 2: Wisconsin GDP (blue), DoR WI Economic Outlook forecasts from February 2023 (sky blue squares) and from November 2022 (light brown squares), all at bn.Ch.2012$ SAAR unit. Source: BEA, DWD, Wisconsin Economic Outlook Forecast (February 2023, November 2022).
The Economic Outlook forecast does not provide details on the quarter-over-quarter change in real GDP. I use the first log difference relationship between US GDP and WI GDP for 2021Q1-2022Q3 to forecast WI GDP, assuming 3/8 forecast by S&P Global Market Intelligence. (A 1 percentage point change in US GDP is associated with a 0.85 percentage point change in Wisconsin GDP, with an adjusted R2 of 0.78 and DW=1.28.)
image 3: US GDP (black), S&P Global Market Intelligence forecast 3/8 (yellow green), Wisconsin GDP (blue), DoR WI Economic Outlook forecast from February 2023 (sky blue squares), and forecast using S&P Global Implicit forecasts (pink), all in log 2021Q4=0. Source: BEA, S&P Global Market Intelligence (3/8/2023), Wisconsin Economic Outlook forecast (February 2023).
