Wisconsin Manufacturing Employment Boom Revised Away

New state level employment data, benchmarked through September 2017, released yesterday indicate the manufacturing employment surge reported last year has been erased, as I predicted in this post. The October-January data do not incorporate additional information from the Quarterly Census of Employment and Wages.

Figure 1: Wisconsin manufacturing employment, January release (thick red), December release (pink), 000’s, s.a., on log scale. Light green shading denotes period in which data revised/benchmarked. Source: BLS via FRED, ALFRED.

The revised series is much in line with my predictions provided in this post, based on QCEW data. Nonfarm payroll employment was also revised downward.

Figure 2: Wisconsin nonfarm payroll employment, January release (thick red), December release (pink), 000’s, s.a., on log scale. Light green shading denotes period in which data revised/benchmarked. Source: BLS via FRED, ALFRED.

9 thoughts on “Wisconsin Manufacturing Employment Boom Revised Away

    1. Moses Herzog

      I’m going to take the liberty of assuming this is the real Steve Kopits. As the above comment seems to be a reasonable comment. Although one can disagree with reasonable comments—which I do in this case.

      If you think the Chinese Communist Party is that easy to topple, I don’t think you understand this particular topic very well. The Chinese Communist Party has a stranglehold on the Chinese populace. The only thing even coming close to “taking the Chinese Communist Party down” is bad municipal debt, bad real estate debt and bad corporate debt, that the Chinese national government is currently “kind of” the “assumed” guarantor for. This really doesn’t have a whole lot of connection to Japanese bonds to start with.

      And although that ZH link may have some interesting data points in it as regards to other important issues worth watching, ZeroHedge is renowned for making melodramatic statements which are largely “pushing their own book” (promoting the investment holdings of ZH authors and the blog’s sponsors). ZeroHedge is still a worthy blog to read, but you have to temper or mitigate anything you read there.

      Just like Financial Times and “Alphaville” are great sites—but you have to remember they get huge amounts of advertising dollars from banks, insurance companies, and the like. I had a huge argument one time with an Arab female writer at “Alphaville” blog once, because she wanted to insist many derivatives are “not” in fact insurance, and “not” a way to use insurance while flouting insurance regulations. Although legally she may have been right that “derivatives are not insurance” it was a very disingenuous argument to make to her readers and created more misperceptions of the problems of the 2007–2009 crisis. IN FACT ANYONE WITH A FUNCTIONING BRAIN KNOWS THAT DERIVATIVES ARE A TYPE OF FINANCIAL INSURANCE COMPANIES USE—WHILE SIMULTANEOUSLY FLOUTING OR “WORKING AROUND” INSURANCE REGULATIONS She was adding fog to the issue for readers, not clarifying it, which is what newspapers/blogs should do. She doesn’t work at FT anymore. Maybe she’s doing cosplay pictures on Instagram now??

  1. Steven Kopits

    It is the Real Kopits, Moses.

    As an economy develops, it requires better and better property rights. This in turn requires a more rules-based economy. For example, if you want global institutional investors in China’s stock market, then that will require appropriate disclosures, free entrance and exit of capital, the ability to convert unlimited funds for yuan to dollars and back, etc. And of course, you need to be free of the fear of arbitrary expropriation or arrest of your staff. You need to feel your family is safe, and that the host country will not go to war with your home country.

    This implies more circumscribed powers by the government, and particularly, the executive. It implies the increasing rule of law, and Xi is taking China in the diametrically opposed course. Thus, at some point, either the economy must succumb, or Xi must succumb. That is likely to occur in a financial crisis associated with the next oil shock, somewhere in the 2021-2025 time frame.

    I would anticipate that the Communist Party will split, with half in the tanks at Tiananmen Square, and half on the streets facing them. In that scenario, Xi loses, and the same democratic impulses will appear in China as have appeared across the region in formerly authoritarian countries, for example, Japan, Korea, Taiwan, Indonesia and Thailand.

    Alternatively, China will withdraw from international engagement and retreat into its shell. I would note that this has been the historical pattern for China. At the end of the day, the perogratives of the Imperial Court were incompatible with an open society, leading China to turn inward. It could happen again, but not without a fight, I think.

  2. Moses Herzog

    @ Steven Kopits
    I like this, giving yourself an 8-year window before we can declare you wrong. Well, when should we tell you “don’t hold your breath” on this “great revolt”, so as you don’t invent an entirely new shade of purple??

    And an “oil shock” in China??—a commodity that is proving to be less and less of a crucial component in the world economy. And on top of that, in a country known for hoarding and having surplus inventories of nearly every commodity under the Sun. I’d put that at around 2% probability. I’m being generous pegging that at 2% chance.

    Your poor use of analogies as per countries that have entirely different cultures (you assumably chose them because they are all Asian??) speaks for itself to anyone with even a surface knowledge of geopolitics. Mostly comedic.

    You clearly do not understand the Chinese Communist Party. They do not “split” over anything. Unless you consider highly private meetings in Beidaihe to decide who gets which slice of pie and who gets the larger slices of the pie to be a “split”. If Zhao Ziyang was still alive you could ask him how Chinese Communist Party “splits” go. He was under house arrest for 16 years before he died in 2005. Most likely Zhao would have been altogether murdered if they weren’t afraid he would have turned into a martyr. Or maybe you could just consult the pictures of the last blood bath in Tiananmen Square. They are out there.

    1. Steven Kopits

      Moses –

      I can speak to societal forces. The timing of when something breaks is hard to tell, for all analysts, not just me.

      Jim Hamilton and I have both written extensively on oil shocks. Look it up.

      I worked for 15 years in post-communist Hungary. I know how communist systems work in practice. My model for China is a variant of the 1993 constitutional crisis in Russia. It was a crisis between former and current members of the Soviet Communist Party.

      The Chinese Communist Party is already split. When did you last hear Li Kiqiang’s name?

      Governance types are a function of per capita income. At the per capita income I project for China in 2025, there are no authoritarian states other than oil exporters. This is why Xi keeps using the phrase ‘moderately’ prosperous when speaking of his plans for China. A prosperous China is not consistent with one-man rule.

      1. Moses Herzog

        @ StevenKopits
        Would you like to share with the class the link or paper where Jim Hamilton predicted an “oil shock” for China??–either in the near term or ANY point on the future time horizon?? I haven’t read all of Jim Hamilton’s papers, but I have the distinct feeling that Professor Hamilton would be as shocked as I would be to see such a foolish prediction made by himself.

        Also Mr. Kopits, I don’t think the falling out of favor of one single Politburo member, or a single member of the Politburo becoming “persona non grata” indicates a Communist Party “split”. And it’s a pitifully ignorant position for someone to take, who [falsely] claims “I know how communist systems work in practice.” or even someone who disappointingly has Donald Trump level knowledge about politics in general (the latter being YOU, Mr. Kopits).

        Lastly, Mr Kopits, when discussing well-known Chinese leaders, you might want to spell their pinyin name correctly. It is correctly spelled Li Keqiang, not “Li Kiqiang”. As for the last time we hard Li Keqiang’s name?? Maybe that would have been the Opening Speech of the National People’s Congress 2018, LESS THAN 2 WEEKS AGO.

  3. Moses Herzog

    @ StevenKopits
    I should also add, for extra measure, that Xi Jinping does not exactly seem frightened of oil tycoons. Any more than Putin is:

    You might also be interested to know, Mr Steven Kopits, aka “Mr Communist Systems Expert” that China has been a net importer of oil since around 1993 (that’s about a quarter of a century ago, in case you’re having problems with the math). In 2006 imported oil accounted for 47% of China’s total consumption of oil. And China is the world’s largest importer of oil.


    Mr Kopits, I could save a lot of my time, trying to find anything true in your comments, rather than listing all the falsities. I guess I’ll just have to settle for you telling us who the hell these Chinese “oil exporters” are, in the year 2025??— as you’ll have a H.E.L.L. of a time telling us who they are NOW


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