Wisconsin’s Economic Forecast

The Wisconsin Department of Revenue released the latest Economic Forecast on Thursday.

Nonfarm payroll employment and the July and March 2021 Outlook forecasts:

Figure 1: Nonfarm payroll employment from June release (blue), forecast from July 2021 Economic Outlook (released in August) (teal squares), from March 2021 (small tan squares), author’s forecast based on log first differences model using national employment (large light blue square), all in 000’s, seasonally adjusted. Source: BLS, Wisconsin Department of Revenue, and author’s calculations.

Nonfarm payroll (NFP) employment in June was a bit below the DoR’s forecasted level for Q2, growing 4.6% annualized, way down from a year ago (47.1%), but still above recent months. 4.6% is a bit slower than the national pace of 7.3%.

The upside surprise in national nonfarm payroll employment in yesterday’s June employment situation release suggests Wisconsin is on target to achieve the July forecast for Q3. The light blue square is my forecast based on a regression of first differenced log WIsconsin NFP on contemporaneous first differenced log US NFP

It’s important to recall the dualistic nature of the recovery, in particular the fact that high contact services employment remains more depressed than that for goods production. The recovery in leisure and hospitality (a broader category than accommodations and food services I usually plot) seems to have stalled (according to seasonally adjusted numbers), making it look difficult to hit the Q3 forecast. In contrast, manufacturing employment has resumed its rise so that matching the Q3 forecast seems likely.

Figure 2: Wisconsin manufacturing employment release (blue), and forecast from July 2021 Economic Outlook (released in August) (teal squares), all in 000’s, seasonally adjusted. Source: BLS, and DWD.

Figure 3: Wisconsin leisure and hospitality employment release (blue), and forecast from July 2021 Economic Outlook (released in August) (teal squares), all in 000’s, seasonally adjusted. Source: BLS, and DWD.

June manufacturing employment is 1.0% below February 2020 levels, while leisure and hospitality services  are down 20.8% (on a seasonally adjusted basis), log levels.

GDP looks likely to come close to forecasted levels.

Figure 4: Wisconsin GDP (blue), forecast from July 2021 Economic Outlook (released in August) (teal squares), author’s forecast based on error correction model model using national GDP (large light blue square), all in billions Ch.2012$’s, SAAR. Source: BLS, DWD, Wisconsin Department of Revenue, and author’s calculations.

Note that employment and GDP are lagging indicators. Baumeister et al. have developed a Weekly Economic Conditions Index (WECI) for the state level economies. Wisconsin at the end of July was growing about 3.4% above trend US growth.

Figure 5: Baumeister et al. Weekly Economic Conditions Indicators for US (black) and Wisconsin (red), percentage point deviation from annualized trend national growth rate. NBER recession dates shaded gray, from beginning of February to end of April. Source: Weekly State Level Economic Conditions, accessed 8/6, NBER.

The Wisconsin Department of Revenue has now released nine reports on the economic outlook and/or forecast updates since March 2019. It has also set up a data visualizations page for economic data. Contrast this with the Walker administrations, in which not a single such report was released between May 2015 and the end of his second administration. In other words, Scott Walker set the standard for data suppression.

9 thoughts on “Wisconsin’s Economic Forecast”

  1. ltr

    http://www.xinhuanet.com/english/2021-08/08/c_1310115363.htm

    August 8, 2021

    Over 1.77 bln doses of COVID-19 vaccines administered in China

    BEIJING — Over 1.77 billion doses of COVID-19 vaccines had been administered in China by Saturday, the National Health Commission said Sunday.

    [ Chinese coronavirus vaccine yearly production capacity is over 5 billion doses. Along with more than 1.77 billion doses of Chinese vaccines administered domestically, another 750 million doses have been distributed internationally. A number of countries are now producing Chinese vaccines from delivered raw materials. ]

    1. pgl

      Since it takes 5 doses to each effectiveness – this covers only 1 billion people. And it looks like the PRC is making sure most of the vaccines are administered to its own citizens. The few that get out to other nations come with a big price.

      Thank goodness Biden is trying truly effective vaccines to the rest of the world with no strings attached.

      Of course you will not hear this from PRC spokesperson ltr.

    2. ltr

      http://www.xinhuanet.com/english/2021-08/05/c_1310110336.htm

      August 5, 2021

      China to provide 2 billion COVID-19 vaccines globally this year: Xi

      BEIJING — China will strive to provide 2 billion COVID-19 vaccine doses to the world throughout this year and offer 100 million U.S. dollars to COVAX, Chinese President Xi Jinping said Thursday in a written message to the first meeting of the international forum on COVID-19 vaccine cooperation.

      The 100 million U.S. dollars to COVAX will mainly go to the distribution of vaccines to developing countries, he said, adding that China would do its best to help developing countries cope with the COVID-19 pandemic.

      China is committed to building a global community of health for all and has provided vaccines to the world, especially developing countries. The country actively carried out joint production, which illustrates the concept of vaccines as global public goods, Xi stressed….

  4. pgl

    Trump opposes the bipartisan infrastructure bill for one reason – it will not have his signature on it. So won’t it be sweet when it passes the Senate with 20 Republicans voting for it?

  5. ltr

    https://twitter.com/CaoYi_MFA/status/1424643847640989697

    August 9, 2021

    Over 1.782 bln doses of COVID-19 vaccines administered in China

    BEIJING — Over 1.782 billion doses of COVID-19 vaccines had been administered in China by Saturday, the National Health Commission said Sunday.

    [ Chinese coronavirus vaccine yearly production capacity is over 5 billion doses. Along with more than 1.782 billion doses of Chinese vaccines administered domestically, another 750 million doses have been distributed internationally. A number of countries are now producing Chinese vaccines from delivered raw materials. ]

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