Thursday, January 24, 2008

Minnesota in recession, Wisconsin not....yet.

The Packers lost a big game last weekend. While the loss was painful, at least the Pack were in the playoffs and not sitting at home like the 2nd place Minnesota Vikings. I actually felt bad writing that last comment because you hate to kick a state when it's down. I'm referring to the news in which a Minnesota state economist declared his state to be in recession. Ouch.

Needless to say, this declaration was not fully embraced by Minnesota Gov. Tim Pawlenty who described the economist as someone who “tends to err a little bit on the pessimistic side.”

Regardless, the economist cited a significant increase in Minnesota's unemployment rate to 4.9% in December from 4.4% a month earlier and a net loss of 350 jobs over the last 12 months.

If we use the Minnesota example as a benchmark to define "recession," we can see that, for now, Wisconsin seems to have avoided the recession bug. Last week, the Wisconsin Department of Workforce Development reported an unemployment rate of 4.6% which was less than the previous month's 4.8% and less than the current national unemployment rate of 4.8%. In tandem with a lower unemployment, the state benefited from a net addition of 21,700 jobs over the last 12 months.

In short, 2007 was good to Wisconsin. A researcher in this week's Milwaukee Journal Sentinel agrees and states that "overall, Wisconsin is doing better economically than most Midwestern states."

This is not to say that Wisconsin doesn't have it's share of challenges. The article points out that Wisconsin's job mix is still predominantly low-pay (Competitive Wisconsin recently announced plans to address this issue) and that the state should expect job losses in construction and manufacturing due to the housing downturn. Additionally, state tax receipts have slowed and spending cuts may be needed.

How long will labor market data stay positive in Wisconsin? Is it just a matter of time before Wisconsin sinks into recession like our neighbor to the West? We can't be sure of what our future holds but for this very moment let's enjoy our relative economic health and a Packers season to remember.

1 comment:

Jack Lohman said...

Until Doyle and the legislature gets the private money out of the political system, expect the corruption to continue costing us horendous taxes and lost economy. They have to pay back the fat cats somehow.

It seems that politician's #1 priority is getting re-elected, and they are willing to do that at all costs.