Heading into 2020, Wisconsin economy was on relatively solid footing. The state saw minimal job growth in 2019, but unemployment remained low and wages were generally trending upward. Of course, those conditions have quickly become a memory as economic activity has slowed or ground to a halt as Wisconsin seeks to limit the spread of
Heading into 2020, Wisconsin economy was on relatively solid footing. The state saw minimal job growth in 2019, but unemployment remained low and wages were generally trending upward.
Of course, those conditions have quickly become a memory as economic activity has slowed or ground to a halt as Wisconsin seeks to limit the spread of the coronavirus. More than 110,000 initial unemployment claims were filed from March 15 to March 28, a two-week total that tops even some six-week stretches during the Great Recession, according to U.S. Department of Labor data.
Another 127,597 claims have been filed since March 29, according to Wisconsin Department of Workforce Development data. The initial count data from DWD differs from the official number released by DOL after verification and processing.
Wisconsin’s unemployment rate as of April 2 could be as high as 12.5%, according to estimates from economists at the Center for Research on the Wisconsin Economy at UW-Madison. The peak in the Great Recession was 9.3%.
Still, a series of data releases in recent weeks shed light on how the state was performing and could again, depending on how long an economic recovery takes.
Wisconsin ended 2019 with 2.1% annualized growth in real GDP for the fourth quarter, according to U.S. Bureau of Economic Analysis data released Tuesday. It was the best quarter of the year and ranked 25th in the country. It also was also Wisconsin’s best fourth quarter of growth since 2013.
For the full year, Wisconsin had the 38th fastest growing GDP in the country at 1.4%. In 2018, the state grew 2.4% and ranked 29th.
Texas, at 4.4%, saw the fastest growth in 2019, followed by Washington and Utah at 3.8%, New Mexico at 3.7% and Colorado at 3.5%.
The Great Lakes region, which includes Illinois, Indiana, Michigan, Ohio and Wisconsin, saw the slowest growth of any area at 1.3%. Ohio and Illinois grew slightly faster than Wisconsin at 1.7% and 1.5% respectively while Michigan and Indiana were slower at 0.7% and 0.8%.
Most of Wisconsin’s GDP growth in 2019 came from four sectors. Professional and business services led the way, contributing 0.45 percentage points, including 0.27 points from professional, scientific and technical services. Health care added another 0.38 points as did finance, insurance, real estate, rental and leasing. The latter sectors growth primarily came from finance and insurance.
Manufacturing also added 0.29 percentage points to growth, primarily driven by durable goods manufacturing.
Wisconsin’s job growth in 2019 was worse than its GDP growth, averaging a 0.29% year-over-year increase for the year that ranked 44th in the country. The state even had three months with a year-over-year decline in private sector jobs, according to data from the U.S. Bureau of Labor Statistics.
One challenge the state has faced in adding jobs in recent years is a lack of available workers. While Wisconsin entered 2019 with an unemployment rate of just 3%, the measure ticked up throughout the year to finish at 3.5%. It stayed at that level in January and February.
With low unemployment, Wisconsin has seen upward pressure on wages in recent years, including 2018 in particular when the state averaged a year-over-year hourly wage increase of nearly 4.9%.
In 2019, wage growth slowed with hourly rates increasing an average of 1.9% for the year. The average weekly wage saw even slower growth, up just 0.5% for the year.
Both measures trended up in the fourth quarter, however, and saw continued gains to start 2020. In January, the average hourly wage was up 3.6% from the prior year and it increased nearly 3.9% in February.
The professional and business services sector saw the strongest wage gains, averaging an 8% year-over-year increase over the last five months. Manufacturing at 4.3% and leisure and hospitality at 4.2% also saw strong gains during that period.
Workers in manufacturing saw their hourly wage increases translate to a year-over-year average increase of nearly 5% over the last five months while leisure and hospitality workers saw a 2.1% increase.
In 2019, Wisconsin exports declined by more than $1 billion or 4.6% as trade conflict with China and other countries led to lower international sales. But in January and February, exports were up 1.2%, the best start to the year since 2017.
On the other hand, imports were down 10.6% to start the year, a $477 million decline in just two months. Most of the decline came from a $454 million decline in imports from China, which halted a lot of its economic activity to deal with the coronavirus.
Imports from the rest of the world were down 0.7% or $23 million.
Get more news and insights in the March 30 issue of BizTimes Milwaukee:
