November 6, A Perspective on the Wisconsin Economy: Past, Present, and Future This presentation is based on information supplied by the U.S. Bureau Of the Census, U.S. Bureau of Labor Statistics, U.S. Bureau of Economic Analysis, Federal Housing Finance Authority, Federal Reserve Board of Governors, Federal Reserve Bank of Philadelphia, Federal Reserve Bank of New York, Wisconsin Department of Workforce Development, various divisions of the Wisconsin Department of Revenue. National forecasts are provided by Global Insight, Inc. Wisconsin Economics Association November 6, 2009
2 About Us Who We Are –Division of Research and Policy Analysis consists of 12 professionals: economists, information technology professionals, and policy analysts What We Do –Analyze the State and National Economy Wisconsin is one of only seven states with a dedicated econometric model to forecast –Results are published quarterly –Metropolitan forecasts annually Prepare specialized reports of interest on the state’s economy –Estimate the State’s General Fund Revenues –Prepare background analysis on state taxes and local finance –Cost and analyze state and local tax proposals Over 300 separate legislative bills Nearly 75 budget proposals Many more proposals that survive the “what-if” stage Find Our Reports Here –
November 6, Today’s Discussion 1)The Bad News: The financial crisis brought the US economy to near collapse. 2)The Good News: Recovery is underway. 3)The Bad News: The drop was so deep that full recovery will take years. 4)The Good News: Wisconsin will match or exceed US growth in )Wisconsin fares better than some critics realize.
The US Was In the Midst of a Long Hard Recession That Was Then…
November 6, U.S. At The End of A Very Long, Deep Recession Source: Actual--Bureau of Economic Analysis.Shaded area indicates period of recession Actual
November 6, Current Recession is Longest Since the Great Depression Source: National Bureau of Economic Research
November 6, In the Beginning, Job Losses Lighter in Recession than the Two Prior Recessions Source: U.S. Department of Labor, Bureau of Labor Statistics
November 6, Then This Happened: Financial Crisis Increased Interest Rates Despite Fed Efforts to Cut Rates Source: Federal Reserve Board of Governors
November 6, Financial Crisis Comparable to Great Depression Hits Late 2008
November 6, Recession On Top of A Recession After Eight Months, Employment Losses Took a Nasty Drop Beginning October 2008 Source: U.S. Department of Labor, Bureau of Labor Statistics
November 6, Wisconsin Lost a Decade of Job Growth in Six Months Source: U.S. Bureau of Labor Statistics
November 6, Wisconsin Unemployment More than Doubled Source: U.S. Bureau of Labor Statistics
November 6, Wealth Losses From Equities About the Same at a Comparable Stage of the Great Depression Source: National Bureau of Economic Research, Standard and Poors
November 6, Household Net Worth Losses Nearly $14 Trillion from Peak Source: Federal Reserve Board of Governors
November 6, Lost Decade: Industrial Production Drops to 1998 Levels Production Dropped 15% Over 6 Quarters Source: Federal Reserve Board of Governors
November 6, Record Drop in Manufacturing Activity Source: Institute for Supply Management
November 6, Non-Manufacturing Dropped Faster Than Manufacturing Source: Institute for Supply Management
November 6, Kick Them While Their Down Housing Falls 55% in Seven Months Source: U.S. Bureau of the Census, Construction Statistics
November 6, Retail Sales Lost Four Years of Growth in Just Four Months Source: U.S. Bureau of the Census
November 6, Wisconsin’s Sales Collections Drop for the First Time Ever in FY2009
November 6, Consumers Paying Down Credit Cards For the First Time, Revolving Credit is Dropping
November 6, Household Debt Service Down to 2001 Levels
November 6, Saving More
November 6, Wisconsin’s Income Taxes Drop for 1 st Time Aside from an ATB Tax Cut Yellow Bars are years of income tax rate reductions
Wisconsin Was Not the Epicenter of the Recession
November 6, States Set Unemployment Records in 2009 But Not Wisconsin Source: U.S. Bureau of Labor Statistics
November 6, Wisconsin Economy Grew in 2008 Source: U.S. Bureau of Economic Analysis
November 6, Economic Growth Wisconsin Only Great Lakes State to Expand in 2008
November 6, Wisconsin Has Moved Up to the Great Lakes Average in GDP Source: U.S. Bureau of Economic Analysis
November 6, And Nudged Ahead of the Great Lakes Average in Income Source: U.S. Bureau of Economic Analysis
November 6, Wisconsin Housing Prices Declined Only Slightly Source: Federal Housing Finance Authority
November 6, Wisconsin Housing Prices Weakness In SE Corner and North of Highway 29
This is Now… The Recovery Has Started
November 6, Substantial Growth In Third Quarter Source: Actual--Bureau of Economic Analysis; Forecast--Global Insight, Inc.Shaded area indicates period of recession Actual Forecast
November 6, Industrial Production Up Three Straight Months First Time Since 2007 Source: Federal Reserve Board of Governors
November 6, Manufacturing Moves To Recovery Source: Institute for Supply Management
November 6, So Does Non-Manufacturing Source: Institute for Supply Management
November 6, Equity Markets Have Recovered from Early Year Losses Source: Standard & Poors
November 6, Household Net Worth Increased in nd Quarter Source: Federal Reserve Board of Governors
November 6, Housing Crawling Out of the Bottom Source: U.S. Bureau of Labor Statistics
November 6, Retail Sales On the Rise Source: U.S. Department of Commerce, Bureau of the Census
November 6, Wisconsin Employment Stabilizing Source: U.S. Bureau of Labor Statistics
November 6, Wisconsin Unemployment Improves Relative to US Source: U.S. Bureau of Labor Statistics
November 6, Still Below Historic High Unemployment During Wisconsin’s Two Worst Post-War Recessions Source: U.S. Bureau of Labor Statistics
November 6, Impact of Recession Varies Substantially by County
It Will Be A Long Road Back
November 6, Financial Crisis Still In The Background
November 6, Full Recovery Will Not Be Complete Until 1 st Qtr 2011 Sources: US Bureau of Labor Statistics, Current Employment Statistics (CES); US Bureau of Economic Analysis Actual Forecast 2007Q4 Real GDP
November 6, Job Recovery Takes Even Longer Employment Losses More Severe Than Output Losses Sources: US Bureau of Labor Statistics, Current Employment Statistics (CES); US Bureau of Economic Analysis, Global Insight Actual Forecast
Wisconsin will Match or Outpace US growth in 2010.
November 6, GDP: Wisconsin Matches US in 2009 Outperforms in 2010
November 6, Wisconsin Employment Prospects Improve in 2010
November 6, Net Hiring Resumes Early 2010
November 6, Employment Growth in Metropolitan Areas of Wisconsin
November 6, Regional Unemployment Rates
November 6, Personal Income Growth By MSA,
Wisconsin Better Off Than Its Critics Realize
November 6, Wisconsin Among States with an Unemployment Rate Significantly Below US Average
November 6, Wisconsin Unemployment Rate Lowest in the Great Lakes Region
November 6, BLS Reports Wisconsin in Top Half For Median Wage Rates
November 6, Wisconsin Ranks 18 th in Median Household Income Source: US Bureau of the Census
November 6, Wisconsin Per Capita Income In a Consistent Range Source: U.S. Bureau of Economic Analysis
November 6, Regional Price Parities (RPP) Wisconsin Personal Income Nearly Identical to U.S. Once Differences In Regional Prices are Recognized Source: U.S. Bureau of Economic Analysis, Survey of Current Business, Nov. 2008
November 6, Health Insurance Coverage Wisconsin Ranks 4th in the Nation Source: US Bureau of the Census
November 6, Wisconsin Ranks 30 th in Population Growth Source: US Bureau of the Census
November 6, Wisconsin Has Net In-Migration Source: US Bureau of the Census
November 6, Wisconsin Ranks 18 th in Business Taxes Below the US Average Source: Ernst & Young, Total State and Local Business Taxes: 50 State Estimates for Fiscal Year 2008, January 2009 U.S. Average 4.9%