yesterday, Wisconsin Macro Outlook The review comes against the backdrop of the November economic forecast released by the Treasury.Today we can use Newly released employment data.
First, the decline in non-farm employment in October was wiped out, and non-farm employment rose in November, hitting expectations.
figure 1: Wisconsin Nonfarm Payrolls for October (bold black), Wisconsin Nonfarm Payrolls for November (red), and Wisconsin Economic Forecast (blue), all starting with 000, sa Source: BLS, DWD and Wisconsin Department of Revenue November Forecast.
Over time, nonfarm employment growth has been decelerating (as shown on the logarithmic scale of Figure 1, with a decreasing slope implying slower growth). Employment 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).
The slowdown from September to October was also reflected in the private employment series, but reversed in November. Of course, never put too much faith in a month's worth of observations.
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 forecasts from the Survey of Professional Forecasters released in November, all expressed as percentages, seasonally adjusted Source: BLS, DWD and Wisconsin Department of Revenue November Forecast. Federal Reserve Bank of Philadelphia (November).
Wisconsin's unemployment rate rose to expected levels, while the national unemployment rate was below November's SPF level.
The employment data is retrospective, ending in early November. The Baumeister/Leon-Leiva/Sims Weekly Economic Conditions Index provides more up-to-date information on Wisconsin's economy:
Figure 4: Baumeister-Leiva-Leon-Sims U.S. Weekly Economic Conditions Index (green), Wisconsin (pink), all year-over-year growth rates (expressed as percentage deviation from trend). source: WECIaccessed 12/21, and author's calculations.
