Wisconsin Trails in Forecasted Economic Growth
Wisconsin’s economic growth in the months ahead is forecasted to be among the worst in the nation, according to new figures released this week by the Philadelphia Federal Reserve Bank. Wisconsin ranks 42nd in predicted economic growth in the next six months.
The Philadelphia Federal Reserve Bank, which looks at recent trends to project a state’s future growth, estimates a 1.1 percent growth rate for Wisconsin in the next six months. Only eight other states have lower growth projections. As the bar graph below shows, the estimated growth rate nationally is 1.6 percent over the next six months, and for other states in this region it’s between 1.6 percent and 3.0 percent.
Wisconsin’s prognosis for weak growth in the coming months is made more problematic by the fact that we we’re building from a lower base of economic gains than the vast majority of other states. As we reported last week, the composite index used by the Philadelphia Federal Reserve for measuring past economic gains and losses indicates that Wisconsin’s growth has lagged well behind other states. Between December 2010 and April 2012, Wisconsin’s economy improved by only 1.0 percent, compared to 3.9 percent nationally and even higher rates in a couple of neighboring states, as shown below.
A recent issue brief by the Wisconsin Budget Project includes more information about the Philadelphia Federal Reserve Bank and the composite index it uses to measure economic growth, and it analyzes the “Philly Fed’s” data over several periods of time.
In March, Governor Walker touted the Philadelphia Federal Reserve Bank’s forecast as evidence that his policies were contributing to economic growth in Wisconsin. Unfortunately, Wisconsin has fallen behind other states in recent months, and economic experts are forecasting more of the same for most of 2012.
Jon Peacock and Tamarine Cornelius