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Wisconsin Economic Activity in October

Summary:
As measured by the Philadelphia Fed coincident index. Figure 1: Coincident Index for Wisconsin (red), Minnesota (blue), US (black), all in logs, 2020M02=0. Source: Philadelphia Fed, November 25th release, and author’s calculations. The Wisconsin economy seems to be faltering earlier than some other midwestern states (and is only one of 8 states registering a decline in October). Employment (one of the components of the coincident index) also declined in Wisconsin, as discussed in this post. The index combines: … four state-level indicators to summarize current economic conditions in a single statistic. The four state-level variables in each coincident index are nonfarm payroll employment, average hours worked in manufacturing by production workers, the unemployment rate, and wage and

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As measured by the Philadelphia Fed coincident index.

Wisconsin Economic Activity in October

Figure 1: Coincident Index for Wisconsin (red), Minnesota (blue), US (black), all in logs, 2020M02=0. Source: Philadelphia Fed, November 25th release, and author’s calculations.

The Wisconsin economy seems to be faltering earlier than some other midwestern states (and is only one of 8 states registering a decline in October). Employment (one of the components of the coincident index) also declined in Wisconsin, as discussed in this post. The index combines:

… four state-level indicators to summarize current economic conditions in a single statistic. The four state-level variables in each coincident index are nonfarm payroll employment, average hours worked in manufacturing by production workers, the unemployment rate, and wage and salary disbursements deflated by the consumer price index (U.S. city average). The trend for each state’s index is set to the trend of its gross domestic product (GDP), so long-term growth in the state’s index matches long-term growth in its GDP.

Perhaps the decline should not be surprising, given the lack of legislative action over the past 7 months, and Republican allied organizations’ moves to impeded executive branch measures.

Wisconsin’s comparative performance is illustrated by this map of the month-on-month annualized growth rate in the index.

Wisconsin Economic Activity in October

Figure 2: Month-on-month annualized growth rate of coincident index for October 2020 (in log terms). “-0.04” means negative 4% m/m annualized growth rate. Darker colors indicate higher growth rates. US growth rate is 0.83%. Source: Philadelphia Fed, November 25th release, and author’s calculations.

Menzie Chinn
He is Professor of Public Affairs and Economics at the University of Wisconsin, Madison

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