The Philadelphia Fed coincident indices for October are out. Figure 1 presents the log series, normalized to January 2011 = 0.
Figure 1: Log coincident indicators for Wisconsin (bold blue), Minnesota (red), California (green) and United States (black), all normalized to 2011M01=0. Observations for 2014M04 are implied by leading indicators. NBER defined recession dates shaded gray. Sources: Philadelpha Fed [1] [2], accessed on 5 Dec 2013, NBER and author’s calculations.
Note that using the figures from the Philadelphia Fed’s leading indicators, Wisconsin will continue to lag the US, as well as Minnesota and California.
The Wisconsin employment outlook is discussed in this post.
Doesn’t the Philadelphia coincident indicators also show that Wisconsin has been lagging Minnesota and the US since the year 2000?
Thanks. I can hear the chorus already: it would have been worse if …
Neil: Yes. If you rebase to the prior trough of 2001M11 (the first recession of GW Bush), you will see the underperformance relative to Minnesota is only 1.2% (log terms) at last peak. Since then the gap has widened to 6.0%; up from 3.8% as of 2011M01.
With WI blocking medicaid expansion, we can only expect even worse performance in the future. Well at least they are doing it to themselves.
Neil, I said on the previous post that I think the US line is the most instructive to compare against (less idiosyncratic variation). WI was above the US in 2009 and the same when Walker takes over. Look, Walker cannot claim success with these numbers, even if he cannot be blamed for everything. He made grandiose claims that failed to materialize. Hard to see it any other way.
for those that argue that walker and Wisconsin have struggled to overcome the Obama policy, and this is the reason for the underperformance, you need to think carefully about this graph. if the Obama policy is bad, that is no excuse for why the Wisconsin state performance is even worse than US performance. if the walker policies are good, they should offset the US policy and at least outperform that metric. continuing to underperform should focus attention on the local policies which are not working.
https://app.box.com/s/kaajuqk090dqqdc2if3v
http://www.bls.gov/news.release/empsit.a.htm
818,000 increase in employment in Nov with withholding receipts flat and no higher than in Jan-Feb 2012 . . . ? That being the case with payroll taxes 2% higher than a year ago? Curious.
http://www.gallup.com/poll/127538/Workforce-Weekly.aspx
Gallup’s NSA U rate is at 8.3%, equivalent to 1.7 million more people self-reporting as unemployed than the BLS household survey indicates.
The withholding receipts data imply that employment is overreported by 2 million or more, which fits more closely with Gallup’s self-reported NSA U rate of 8.3%, i.e., 12.9 million unemployed vs. BLS’s 10.9 million.
http://www.bls.gov/news.release/empsit.t01.htm
The SA labor force is lower than a year ago and declining at an annualized rate of ~1% since July. At this rate, the U rate will be 6% my summer-fall 2014, but primarily because the labor force is declining.
If unemployment benefits are not extended at the end of the month, the U rate will fall to 6.2% in early 2014.
http://www.bls.gov/news.release/empsit.t09.htm
No growth yoy for employed age 25-54, but there was a 631,000 surge in Nov . . . ?
Curiouser and curiouser . . .
If you look at Simon Wren-Lewis’ piece in Free Exchange about the British economy, he includes a graph of output per capita that has one of the most obvious trend lines imaginable: a strong tending to 2% per year … and then 2008 and austerity in Britain and the graph literally flatlines. It is farther from trend than any time since the beginning of 1955, which is when the graph starts. Flatlined.
Baffling, thanks that was what I was trying to say….you said it clearer….
“(the first recession of GW Bush)”
More commonly known as Clinton’s last recession.
Menzie, Wisconsin will continue to lag due to the arbitrary date you have used to normalize the data ( January 2011). Wisconsin has grown roughly at the same rate (or faster more recently) as the rest of the country for the past year, and the leading index shows that Wisconsin is expected to grow at a faster rate than the US for the next six months. If you normalized for January 2013, it would show Wisconsin only lagging Minnesota YTD, and Wisconsin leading 6 months from now. If you normalize for any date after Jan 2013, Wisconsin leads, suggesting to me that Wisconsin is and has been growing faster than the sampled states and the US average for roughly the past year. One could argue that using only more recent data could be more indicative of “current” economic growth rate based off these indices.
Sorry Scott Walker balanced the budget and has the nations only fully funded pension system. I know you hate sustainability.
Anonymous, 2011 is not arbitrary, because that is when Walker took over. Looking at the graph again, here is what I see:
1. WI equals or betters the US before austerity.
2. WI is less than the US after austerity, even in 2013.
It is strong evidence. I asked before for other austerity Govs, such as Christie, to be broken out from the US line. Right now, the US line includes some austerity states, and that muddles it. Can you do that Menzie? Maybe make lines for FL and NJ also?
Yes, before that there was a monster deficit, now the budget is balanced and growth is sustainable. No free lunch.
Also lol at “austerity.”
Anonymous (December 9, 2013 08:21 AM): Just a comment on the pension system. Yes, best in the nation, perhaps the world. But that has been in place, fully funded, for decades. Walker can take absolutely no credit for that. In fact, he was looking into changing it. No success story can avoid a battle based on ideology.
XO, the budget has always been balanced as it is required by law to be so. That is until this year when the Republican controlled Assembly made an exception for the current budget.
http://mediatrackers.org/wisconsin/2013/06/19/assembly-exempts-budget-from-balanced-budget-requirement
The current “balanced” budget is based on project of state growth.
“The reason Republicans wanted to avoid applying the balanced budget provision to the budget likely had to do with how state finances are calculated. Because Republicans failed to reduce spending, and instead increased overall state spending, and because tax cuts lowered revenue projections, the budget does not balance at this time unless assumptions are made about the state’s economic growth.”
Anonymous,
You have made no response to the quick refutation of your attempt to credit Walker for the health of the Wisconsin Pension System. Why not?
Perhaps you knew that the system has been close to or better than 100% funded for several decades prior to the current Administration, or perhaps not. Perhaps you knew that the pension system was set up as a “sum-certain” contribution system (and not a defined benefit system) in which the state is liable to the independent trust fund only for a percentage of compensation paid to state employees, or perhaps not (although it is true that the state would need to pay in the case of a catastrophic collapse bigger than The Great Depression). Perhaps you knew that pensioners who had chosen, as their source of benefits, the regular pension fund, have had their benefits cut for the past five years running, or perhaps not.
So what is it? Either you were aware of these very unique features of the Wisconsin Retirement System that work to share return risks with state retirees, or you weren’t? And if you weren’t, what gave you the idea that you could express a relevant opinion as to the source of the System’s financial health?