WMC has a survey of 180 member firms out indicating only 22% of respondents believed that the Wisconsin economy is strong.
Source: WMC.
This is a strange finding in light of today’s December employment release, which showed continued employment growth.
Figure 1: Wisconsin Nonfarm Payroll Employment (black, left scale), and Philadelphia Fed early benchmark NFP (red, left scale), Wisconsin November Economic Forecast (light blue, left scale), civilian employment (gray, right scale), Wisconsin November Economic Forecast (light blue, right scale). Source: BLS, DWD, Philadelphia Fed, Wisconsin Department of Revenue Nov. Economic Forecast.
GDP is also up in Q3.
Figure 2: Wisconsin GDP (bold black), and Wisconsin Economic Forecast (blue), both in bn.Ch.2017$ SAAR. Source: BEA, and Wisconsin Department of Revenue Nov. Economic Forecast.
Here are other indicators all together.
Figure 3: Wisconsin Nonfarm Payroll Employment (dark blue), Civilian Employment (tan), real wages and salaries, deflated by national chained CPI (tan), GDP (red), coincident index (green), all in logs 2021M11=0. Source: BLS, BEA, Philadelphia Fed, and author’s calculations.
The Baumeister-Leiva Leon-Sims WECI index is 0.55 ppts above trend, for the week ending 12/30.
Perceptions decoupled from reality. This is what Faux news does to the minions.
Maybe 10% of the population are able and willing to understand “the economy”. The rest gets their perceptions of it “second hand”. They do not believe that their own personal experiences are a reflection of “the economy”. So when they are doing well themselves, they think its because they are “better” than the average person.
All of us have to use trusted second hand sources when facing complicated issues beyond our immediate area of knowledge and expertise. That information used to come from news organizations who tried to identify true experts (with decades of experience and studies of the subject), then journalists “digested” the information from those experts and presented it to people in a more simplified and understandable language. So actual facts and knowledge was the basis for peoples perception of reality. It was not a perfect system but it worked 80-90% of the time – and when they got it wrong it was usually because of true scientific uncertainty.
However, sometimes the truth is unpopular – either with the ruling class, or even with the minions themselves. So the ruling class began circulating the idea that the media had a “liberal bias”. They pointed to factual information that were at odds with the minions “gut feeling” and claimed conspiratorial liberal bias as the explanation. It is always easy to convince people that they (their gut feeling) is smarter than the experts (makes yo feel good) – so it became popular to discard expert opinions based on your own gut feeling, rather than actual contrary evidence.
Fox news were created to exploit the minions in both political and monetary ways. They managed to offer themselves as credible alternative information sources by pointing to cases when experts actually got it wrong (as evidence of evil liberal conspiracies, not honest uncertainty) and also by pandering to peoples gut feelings whenever those were in conflict with facts. A substantial cult of MAGAverse addicts have been fooled and corralled into an alternative universe that is completely isolated from verifiable facts and knowledge – and instead have these self-sustaining loops feeding people false “feels right” information, while using the power of that trust to exploit them and distract them from realizing that they are being exploited.
The current danger is that all gatekeeping on postulated information is disappearing. Very few people have the scientific training to sort out true from false information or even identify credible sources of information. So they literally get addicted to the endorphins rush of hearing/reading things they want to be true and rejecting facts they don’t feel good about. The market forces and search/news algorithms are pulling them down that rabbit hole because any kind of fact-checking and lie filter is bad for profit.
You can actually see that whole process at work with a couple of the more pathetic trolls on this site. In contrast to the truly knowledgeable economists (that constantly pull those trolls apart) they really don’t have the ability to seek, sort and digest information from the internet. They fall into one internet rabbit hole after another and never seem to learn from (or even realize) it
Maybe, just maybe Menzie, instead of whining and criticizing, you should go to these firms, and talk to them – sit down, and listen.
Don’t interrupt, just listen what they have to say.
Instead of sitting in your high tenured, taxpayer funded chair in a public university, and throwing out comments, without knowing what they are actually thinking.
These people who filled out the survey are people who actually run things, who actually have to make decisions on resource allocation – they don’t have the luxury of sitting in a high tenured chair and bloviate, like you do.
But I know Menzie, you have degrees from Hahvahd (not really a good degree these days, but that is another story), and Berkeley, and so you think you know better.
Going to individual firms and listen to the owners whining, without even digging into the basis for their words – is not something a tenured professor should waste taxpayer funds doing. He was not hired to be a crying shoulder. The information from such an approach would be anecdotal and pretty useless for understanding what is actually happening to the economy. If Menzie was a sociology Professor he might learn something about sociology (and why firms disconnect from reality when surveyed about the economy).
Since you are demanding that Menzie try to listen and understand people like you, it may not be too much to ask that YOU get down from your high chair of self-importance and try to understand what Menzie is doing (or not doing). He is pointing out that there is a big divergence between what those firms are saying, and what the collected data on economic parameters (sales, profits, employment, etc.) say. So according to the average of numbers reported from all firms, things are going quite well – yet the firms say that “the economy” is not strong. You interpret this as him saying the sentiment is wrong, he actually is just saying he doesn’t understand it.
If you look at the survey, you’ll see that even though only 22% say the economy is strong, another 70% list it as moderate. Only 9% say it is weak.
In addition, 46% anticipate the number of employees they have to INCREASE in the next 6 months and 73% expect hourly wages to increase by more than 3% indn 2024!
That, to me, sounds like MOST employers in Wisconsin think the economy is pretty strong.
Wow… This diatribe exposes a deep vein of bitterness and disappointment, but why erupt today? A hair in your cornflakes? Get a blister from shoveling snow?
Maybe take a breath before hitting “post comment” next time.
Wasn’t Manfred the guy who bragged on here once he had a job in Louisiana or Mississippi government???
Mississippi may not have the brightest pencils in the box but not even they are too stupid to hire Manfred even as dog catcher.
That first graph is truly amazing. Huge swings with little connection to changes in objective economic parameters. To me it looks like its pretty much explained by first a very effective con man (Trump) convincing people that the economy is great, then a Covid pandemic creating a reality so large it cannot be denied (even Trump didn’t try, he just deflected blame). The bounce back from Covid was undeniable and also (prematurely) sold well by Trump/Fox. Then we get Biden who makes sure we steadily recover – but is not a con man and focussed more or changing reality than on countering the right wing disinformation machine.
A little house keeping in light of JohnH’s continuing whining that people like Macroduck and yes me have this awful habit of calling out Jonny boy’s incessant dishonesty. Macroduck recently noted how Jonny boy cherry picks a company here or there that has seen profit margins rising rather than using the aggregate data on corporate profits provided by http://www.bea.gov and he often gets his favorite companies data wrong as he never learned to use http://www.sec.gov. Did Jonny boy ever do any real work here – of course not. He attacked yours truly for not going Jonny boy’s homework for him.
OK – I have already given little Jonny boy a very useful FRED link that allows one to plot GDI data by source of income including corporate profits data. Jonny’s reply? He ran and hid as usual.
But I want to be helpful even if this lying troll complains when people help. Jonny boy loved to tell us how Pepsi’s operating margin has been soaring but of Jonny boy never bothered to find their 10-Q financials to show operating margins over time. Well this link makes it easy:
https://www.macrotrends.net/stocks/charts/PEP/pepsico/operating-margin
After falling through the end of 2021, this profit margin did spike in 2022QI but has been down ever since. Now Jonny boy might whine that this is only one company – but it is the company little Jonny boy picked all by his little self.
“only 22% of respondents believed that the Wisconsin economy is strong.”
Well – I bet over 80% of these respondents get all their business news from Faux News including Cavuto, Kudlow and Varney.
it’s not just Wisconsin’s survey; i just checked the NY Fed manufacturing survey, covering all of New York state, an adjacent county in Connecticut, Puerto Rico and northern New Jersey…they reported their headline general business conditions index fell from +9.1 in November and from -14.5 in December to -43.7 in January, its lowest reading since May 2020
https://www.newyorkfed.org/survey/empire/empiresurvey_overview.html
Turns out, economists and manufacturing firms aren’t the only ones to notice the factory construction boom:
https://www.politico.com/news/2024/01/19/biden-manufacturing-factory-jobs-00136473
Since this is from Politico, the political implications of the factory construction boom are the focus – factory jobs come only after the factory is built, and the boom is in its early phase. Biden keeps telling folks about the factory boom, but it may not help him get re-elected.
Here’s the picture, factory construction vs factory jobs:
https://fred.stlouisfed.org/graph/?g=1elCv
In fact, nonresidential construction employment has increased as a result of the factory construction boom:
https://fred.stlouisfed.org/graph/?g=1elFj
But nonresidential construction employment is dwarfed by factory employment, so the construction hiring boom is less noticeable:
https://fred.stlouisfed.org/graph/?g=1elEy
https://twitter.com/paulkrugman/status/1748328732941545632
Krugman notes how the fiscal stimulus following the pandemic worked to avoid a recession. Oh my this real economists never mentioned the Princeton Steve suppression BS!
“Pay structure matters, because it is the key tool for ensuring good governance, including, for example, ‘draining the swamp’, addressing corruption in Ukraine, and capturing Russia’s governance in the post-conflict world.”
This is how Princeton Stupid Steve starts a post on what US Senators should get paid? Seriously? And Stevie really thinks paying a bit more would get us the best and brightest. Has he met Ted Cruz or Tommy Tubberville? Come on man.
But the real kicker is how much this Know Nothing troll thinks lawyers get fresh out of law school. Most of them are not paid anything close to what Princeton Stupid Steve claims. Yea – another reason not to read the most worthless blog ever.
And we thought JohnH told absurd lies!
Trump defends himself to the Supreme Court, saying he called ‘for peace, patriotism, respect for law and order’ on Jan. 6 and is not an insurrectionist
https://news.yahoo.com/trump-defends-himself-supreme-court-015808458.html
Matt Gaetz tells women that MAGA does not need their votes as they have Uncle Jamaal and Uncle Julio!
Gaetz intended his misogynist and racist comment to speak to the diversification of his far-right group, but it led only to backlash.
https://www.thedailybeast.com/matt-gaetz-invites-julios-and-jamals-to-replace-maga-karens
‘Far-right Republican Rep. Matt Gaetz (R-FL) killed three birds with one stone on Wednesday by using racist and sexist nicknames to invite Black and Hispanic men to replace the female voters ditching Donald Trump. While appearing on Newsmax, Gaetz told host Carl Higbie that “for every ‘Karen’ we lose, there is a ‘Julio’ and a ‘Jamal’ ready to sign up for the MAGA movement.” “That bodes well for our ability to be more diverse and to be more durable as we head into not only the rest of the primary contests but also the general election,” he added.’
After the interview Gaetz started looking for his next 17 year old prostitute and some rich white dude to pay her for doing this clown.
If Gaetz gets caught in the act will he tell the public that like Alan Pedowitz, he had his Fruit of the Loom undies on the entire time?? Oh yeah, and also “his wife scheduled the massage”.
Menzie – I think it would be hard to explain to some of your commentators/non-Wisconsinites – what the WMC is. It is a lobbying group for mostly “old school” WI manufacturers and it’s political influence is similar to the Tavern League of Wisconsin. Just try and find out who these member CEOs are that they surveyed. You will find this “WMC does not disclose their issue advocacy donors list to the public.” https://en.wikipedia.org/wiki/Wisconsin_Manufacturers_%26_Commerce
Also – looking at the survey – we find the same issues that WMC has been touting for years – “we can’t find workers!” and “they want too much pay!” Easy solution folks – encourage international migration into Wisconsin and develop Spanish language training materials. Also vote for Biden because if Trump/Heritage Foundation – Project 2025 get in charge – large sections of your workforce will be deported. https://thehill.com/opinion/immigration/4355506-maga-gets-the-economics-of-immigration-all-wrong/
Finally – I wonder what a survey of WI Biotech Hub Consortium members would reveal? https://wedc.org/blog/wisconsin-establishes-consortium-to-expand-its-lead-in-biohealth/ – strong growth?
(Disclosure – several years ago – i worked at an organization that provided training and workshops in SCM, IT and marketing to management of many WMC corporations – so I am familiar with this group and have listened to their concerns.)
As James and others note, WMC are a bunch of lying GOP operatives whose analysis\ on any issue should be taken with a massive dose of skepticism. They represent “family businesses” run by failsons and other mediocre businessMEN, who are more concerned with rent-seeking than in excelling.
They are trying to impose a narrative of “uncertainty and looming downturn” that doesn’t exist in the Real Wisconsin. The true job creators (small business people and consumers) have almost nothing to do with this “business lobby”.
@ Jake
Your comments on this blog are always above average. You keep your comments limited but improving the level of convo. Not a blatherer like me. Love that last sentence:
“The true job creators (small business people and consumers)….. “