August 2024 Wisconsin Economic Outlook Forecast

Released yesterday:

Based on S&P Global’s national forecast, the DoR concludes:

• Employment in Wisconsin is expected to grow by 0.8% in 2024. Wisconsin’s unemployment rate was 3.0% in the second quarter of 2024, a full percentage point below the US average of 4.0%. The forecast expects Wisconsin’s unemployment rate to rise to 3.6% by 2027, compared to 4.6% nationwide.
• Wisconsin’s personal income rose 4.4% in 2023 and just 0.6% after adjusting for inflation. Average earnings grew a solid 5.7%, offsetting a 2.4% decline in owners.
  net worth. The forecast expects personal income to grow by 4.3% in 2024. Personal income is expected to increase by 1.7% in 2024 as inflation slows.

For hire:

Figure 1: Wisconsin nonfarm payroll (bold black), forecast based on US NFP (red), and Treasury Department forecasts for May 2024 (light red lines), forecast for August 2024 (blue lines), all in 000’s, sa Forecast based on first log range Wisconsin and US employment, 2021M07-2024M06, forecasted dynamically. The vertical axis is on a log scale. Source: BLS, DoR, and author’s statistics.

About GDP:

Figure 2: Wisconsin GDP (bold black), and the Department of Revenue forecast for August 2024 (green line), now based on 2021Q3-2023Q4 first log difference (red), +/- 1 standard errors (gray lines), all with -bn.Ch2017$ SAAR. The vertical axis is on a log scale. Source: BEA, DoR, and author’s calculations.

Another mystery is why the BEA’s Wisconsin GDP estimates seem to be separated from the income estimates (total wages and salaries, employment, Philadelphia Fed index). It may be because national level – as opposed to state level – industry-specific discounters are being used, but that’s just speculation on my part. Corrected IR² between the quarterly growth rates in the year 2021Q3-2023Q4 is 0.70. The predicted level is shown in red. Given the sampling uncertainty, it is possible to reach a DoR prediction.

More on the Wisconsin economy from Michael Collins (LaFollette) on WPR, Associate Director Laura Dresser on WIsconsin PBS (8/30).