The Wisconsin Department of Revenue has released its Economic Outlook, dated November 22nd. The forecasts incorporate assumptions that include: “November IHS Markit forecast shows a slowing down of the economic recovery in the last quarter of 2020 and beginning of 2021. Several high-frequency indicators point to a further deceleration in October, but the forecast does not include a double dip. ….Wisconsin personal income growth accelerated in 2020 pushed by the federal stimulus funds, but it’s expected to decline 1.9% in 2021, as the fiscal stimulus fades. …The current forecast assumes no further fiscal stimulus and that a vaccine will be available by mid2021.”
Figure 1: Wisconsin nonfarm payroll employment (black), forecast from November Economic Outlook (red), from June Economic Outlook (teal), all in thousands, s.a. Source: BLS, Department of Revenue, June, November.
Notice the drop in employment in October’s numbers. It’s unclear whether this outcome is a product of measurement error or representative of an actual drop in activity (that observation point is preliminary).
The October figure pertains to the payroll week ending the 14th, so it’s already a bit out of date. November’s figure won’t be out for approximately another week, on the 18th from BLS). With the pandemic surging in Wisconsin (recent peak fatalities was around December 7th, using a 7 day trailing moving average – source), we might see continued sideways trending. The Dallas Fed’s Mobility and Engagement Index suggests this might be the case.
Figure 2: Mobility and Engagement Index by day (blue) and 7-day centered moving average (brown). Source: Dallas Fed and author’s calculations.
Looking forward in the next few months, a lot will depend on the evolution of the pandemic (as much as the extension or not of enhanced unemployment insurance and pandemic assistance — DoR forecast assumes no further support). The CDC’s ensemble models indicate that Wisconsin might be past the (local) maximum in terms of fatalities — but there are very large confidence intervals.
Source: CDC, report of December 7, 2020. Accessed 12/10/2020.
After about seven months of inaction, Republican legislators in Wisconsin have come forward with legislative proposals to address the pandemic’s impact (Capital Times). It’s difficult for me to discern the positive impact on economic activity and/or public health that would result from the proposed measures, but at least there is some indication that Republican policymakers are now considering doing something.