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Aggregate Wisconsin Employment Stabilizes, High Contact Services Decline

Summary:
DWD data released yesterday indicates nonfarm payroll employment broke their two month decline. Private employment rose as well, while manufacturing versus accommodation/food services trend diverged. State and local government employment continued their decline. Figure 1: Nonfarm payroll employment from December release (black), forecast from June 2020 Economic Outlook (teal), from November 2020 Economic Outlook (red), all in 000’s, seasonally adjusted. Source: BLS, DWD, and Wisconsin Department of Revenue. Employment is already undershooting the forecast from early November (discussed in this post). To some extent, this is not surprising as national employment growth has flattened out. Finally, the divergent paths for goods producing and high-contact services providing employment is

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DWD data released yesterday indicates nonfarm payroll employment broke their two month decline. Private employment rose as well, while manufacturing versus accommodation/food services trend diverged. State and local government employment continued their decline.

Aggregate Wisconsin Employment Stabilizes, High Contact Services Decline

Figure 1: Nonfarm payroll employment from December release (black), forecast from June 2020 Economic Outlook (teal), from November 2020 Economic Outlook (red), all in 000’s, seasonally adjusted. Source: BLS, DWD, and Wisconsin Department of Revenue.

Employment is already undershooting the forecast from early November (discussed in this post). To some extent, this is not surprising as national employment growth has flattened out.

Finally, the divergent paths for goods producing and high-contact services providing employment is illustrated in figure 3, using manufacturing employment (blue) and accommodation and food services employment (red).

Aggregate Wisconsin Employment Stabilizes, High Contact Services Decline

Figure 2: Wisconsin manufacturing employment release (blue), and accommodation and food services employment (red, right log scale), all in 000’s, seasonally adjusted. Source: BLS, and DWD.

Government employment at the state and local levels continues to decline, illustrating the importance of Federal assistance to state and local governments.

Aggregate Wisconsin Employment Stabilizes, High Contact Services Decline

Figure 3: Wisconsin government employment, all levels (blue), and state and local (red), all in 000’s, seasonally adjusted. Source: BLS, and DWD.

Finally, employment, including self-employed and farm workers, was substantially higher, at least as measured/estimated:

Figure 4: Wisconsin nonfarm payroll employment (black), and civilian employment over 16 (red), all in 000’s, seasonally adjusted. Source: BLS, and DWD.

However, this series is subject to much larger measurement error, as it is based on a household survey that — at the state level particularly — does not have a particularly large sample. Hence, one should be particularly wary of this series. That being said, the trend for this series is downward, while nonfarm payroll is essentially trending sideways.

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

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