New DOR Report Projects Gain of Just 31,000 Wisconsin Jobs This Year

Friday, July 19, 2013 at 4:00 PM by

“Moderate” Growth Anticipated by DOR Would Yield 137,000 Jobs During Walker’s Four-year Term

Wisconsin can expect “moderate” economic growth over the next several years, according to an “Economic Outlook” report issued today by the Department of Revenue (DOR).   The new report, which includes estimates for a wide range of economic indicators until 2016, projects that Wisconsin will gain about 137,000 private sector jobs during the four years after Scott Walker was elected Governor (which would be about 55% of the 250,000 jobs that the Governor promised).   That represents a projected increase of 5.9% over four years, compared to an expected 6.8% increase in employment at the national level. 

Some of the other noteworthy findings or projections include the following:

  • Personal income growth in Wisconsin is expected to slow to 1.9% for 2013, before accelerating to 4.6% in 2014 and 4.4% in each of the following two years (not adjusted for inflation).
  • Employment in our state is expected to grow just 1.1% this year, which amounts to 31,000 new nonfarm, private sector jobs, before climbing to 1.4% growth next year and 1.9% in 2015.
  • Wisconsin’s unemployment rate is expected to fall to 6.5% next year (from an average of 6.9% this year), which would continue to be 0.7 percentage points below the national average.
  • Inflation-adjusted gross domestic product (“real GDP”) is expected to grow 7.0% in Wisconsin from 2010 to 2014, compared to 8.9% nationally. 
  • Wages and salaries are expected to grow by 13.4% in Wisconsin during that four-year period, versus 16.2% nationally.

The chart below shows how Wisconsin is expected to lag the national average in growth of real GDP and wages and salaries:


The DOR report is what used to be known as the quarterly economic outlook, but over the past couple of years it has been the once or twice a year economic outlook.  The national figures that it cites are from forecasts by a firm called IHS Global Insight. 

The lackluster but gradually accelerating growth projected by DOR takes some of the shine off the relatively strong job numbers for Wisconsin that were released Thursday by the Bureau of Labor Statistics (BLS).  That preliminary report showed Wisconsin gaining 13,800 private sector jobs in June.  Keep in mind, however, that the very small sample size used for that national survey makes those figures very volatile, and the Walker Administration has spent much of the last two years arguing that we shouldn’t use the data from that survey.  The volatility is illustrated by the BLS report for April, which showed Wisconsin losing nearly 21,000 private sector jobs.  (Read more about the June Numbers in this Journal Sentinel article.)  

Another thing to keep in mind with respect to the June job numbers released yesterday is the quality of the jobs.  Jack Norman wrote about that in a blog post this morning, “Wisconsin sees a surge in bad jobs”:  “Most of the growth—7,200 jobs—was in the “leisure and hospitality” sector, where average weekly pay was only $284 last year. That’s barely one-third the overall average wage in Wisconsin of $803.”

In short, Wisconsin’s economy is gradually improving, but the rate of job growth and quality of the jobs gives us nothing to brag about, particularly when we compare our progress to that of other states. (See yesterday’s Budget Project blog post.)  

Let’s hope that the encouraging April numbers weren’t a statistical aberration, but the new DOR report indicates that their economic forecasters don’t expect that accelerated rate of job growth to hold up.   

Jon Peacock

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