With update 8/23 showing application of same methodology to Doyle administrations.
DWD released data today. Wisconsin private employment in July is estimated to equal what we earlier thought it was in June…
Figure 1: Wisconsin private nonfarm payroll employment from July release (blue), June release (red), and May release (green). Source: BLS, and DWD.
Notice that the past two preliminary estimates have been revised down.
Wisconsin private employment continues to increase at a lackluster pace; employment stands 47.9 thousand below the level Governor Walker stated in August 2013 was the goal for January 2015
6. This is shown in Figure 2.
Figure 2: Wisconsin private nonfarm payroll employment (blue), and Governor Walker’s August 2013 commitment to create 250,000 new private sector jobs (red). Light green shading denotes data that has not been benchmark-revised. Source: BLS, Milwaukee Journal Sentinel, author’s calculations.
Note that the data in the green shaded area will be benchmark revised using Quarterly Census of Employment and Wage. The spikes in 2015M10 and 2016M03 will likely be benchmarked away (at least as suggested by data from QCEW through March 2016, also reported in the DWD release).
It’s of interest to see whether Wisconsin has gained on Minnesota, and the Nation. Since the beginning of the year, the gap has widened with respect to Minnesota.
Figure 3: Log private nonfarm payroll employment in Minnesota (blue), Wisconsin (red), and US (black), seasonally adjusted, 2011M01=0. Source: BLS, DWD, DEED, and author’s calculations.
The correct comparison is what Wisconsin is doing relative to what it should be expected to do, based upon historical correlations. Using an error correction model (1 lag) estimated over the 1994-2010 period, with national private employment as the key exogenous variable, I find that current employment levels are below expected, by a statistically significant amount.
Figure 4: Wisconsin private nonfarm payroll employment (blue), and dynamic historical simulation (red), and 90% prediction interval (gray lines). Source: BLS, DWD, and author’s calculations.
The current evaluation of the efficacy of the Governor’s economic policies can be seen in this Marquette Law School Poll (taken August 4-7) result:
Update, 8/23, 11:40am Pacific: For those curious what a similar methodology says for the Doyle governorship, here is the analogous graphic.
Figure 5: Wisconsin private nonfarm payroll employment (blue), and dynamic historical simulation (red) based on ECM (1 lag) 1976M01-2002M12, and 90% prediction interval (gray lines). Source: BLS, and author’s calculations.