Wisconsin GDP declined by 32.6% (SAAR) in 2020Q2, compared to 31.4% for the US. BEA’s release today notes Wisconsin’s Q/Q growth in Q2 ranked 35th.
Moreover, Wisconsin GDP has fallen further since the 2019Q4 peak as defined by NBER.
Figure 1: US GDP (black), and Wisconsin GDP (teal), both in Ch.2012$ SAAR, in logs 2019Q4=0. Source: BEA, and author’s calculations.
The sectoral distribution of the decline is not too dissimilar to that nation-wide. Manufacturing takes a slightly bigger hit — 13.5% decline in Wisconsin vs. 13% nationwide — reflecting Wisconsin’s greater manufacturing intensity.
Figure 2: Wisconsin GDP originating in manufacturing (blue), retail (red) and accommodation and food services (green), in Ch.2012$, in logs 2019Q4=0. Source: BEA, author’s calculations.
That’s Wisconsin; here’s the US:
Figure 3: US GDP originating in manufacturing (blue), retail (red) and accommodation and food services (green), in Ch.2012$, in logs 2019Q4=0. Source: BEA, author’s calculations.
Accommodation and food services accounts for only about 2.5% of Wisconsin GDP on average, so the drop in that sector shouldn’t be taken as a collapse in the Wisconsin economy. However, it accounts for a larger share of employment, roughly 8% pre-Covid19; hence, there should be a lot of concern regarding employment outcomes here.
Figure 4: Wisconsin share of GDP originating in accommodation and food services (black), employment share in accommodation and foods services (red). Q3 observation for employment for July and August only. Source: BEA, BLS, and author’s calculations.
One particularly troubling aspect is the drop in government spending on goods and services (this number excludes transfers).
Figure 5: Wisconsin total government spending (Federal, military, state and local) (black), and state and local (red), both in million Ch.2012$ SAAR. Source: BEA.
As tax revenues remain at depressed levels, the failure of the Federal government to provide aid to the states will increasingly constrain further spending, heightening the hardship faced by average Wisconsinites.