I was wondering how Wisconsin, a steel using (not producing), manufacturing and export dependent state was faring as tariffs and retaliation loomed.
Figure 1: Coincident indices for Minnesota (blue), Wisconsin (red), and US (black), all in logs, 2017M01=0. Dashed lines indicate implied levels from May 2018 leading indices. Orange shading denotes Trump administration. Source: Philadelphia Fed, author’s calculations.
What about tradables, nationally? I’ll proxy using the manufacturing sector.
Figure 2: Manufacturing output (dark blue), manufacturing employment (teal, and average hours in manufacturing of production and non-supervisory workers, all in logs, 2017M01=0. Orange shading denotes Trump administration. Source: FRED and author’s calculations.
While employment continues to rise, output (the industrial production index for manufacturing) is down in May (preliminary). Similarly for average hours worked for production and non-supervisory workers. This implies the aggregate hours are down in May. Overall, all three indicators are above 2017M01 levels.
What about forward looking indicators? Whlie the nominal value of new orders continues to rise, those for consumer durables has fallen dramatically in May (preliminary).
Figure 3: New manufacturers orders for nondefense capital goods, ex.-aircraft (dark blue), and new orders for consumer durable goods (pink), both in logs, 2017M01=0. Orange shading denotes Trump administration. Source: FRED and author’s calculations.
As of May, the value of new orders for consumer durables (in nominal terms) are below those of January 2017. If the decline were to be sustained, then that would be worrisome. Recall, some tariffs and retaliation measures only took effect in June, and some additional will take effect midnight tonight Eastern time.