Workforce & Economic

Outlook

Dennis K. Winters

Chief Economist

Department of Workforce Development4th Annual Partner Ideas Exchange Forum

January 29, 2019

Madison, WI

Total Non-farm Jobs

Source: LMI, OEA

2,600,000

2,650,000

2,700,000

2,750,000

2,800,000

2,850,000

2,900,000

2,950,000

3,000,000

3,050,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Wisconsin Total Nonfarm Jobs (NSA)

2007 2010 2016 2017 2018

Economic Outlook

Employment

Source: Bureau of Labor Statistics, LMI, OEA

2,600,000

2,700,000

2,800,000

2,900,000

3,000,000

3,100,000

3,200,000

3,300,000

Labor Force & Employment (SA)

Labor force

Employment

Economic Outlook

Unemployment Rate

Source: Bureau of Labor Statistics, LMI, OEA

“… every time the economy strengthens,

‘they want to raise [interest] rates again.’”

-- The Finance 202; July 25, 2018

Lamenting Economic Theory

Projected Population Change

2015 - 2035

Source: WI Dept. of Administration Demographic Services Center and U.W.-Madison Applied Population Lab

Projected Population Change

2015 – 2025

People Aged 65 & Older

8

Wisconsin Population and Labor Force

1,000

2,000

3,000

4,000

5,000

6,000

7,000

1960 1970 1980 1990 2000 2010 2020 2030

( x

10

00

)

POPULATION

CIVILIAN LABOR FORCE

Source: Bureau of Labor Statistics, OEA

Wisconsin’s Workforce Growth

The New Economy

How Employment is Tracking

• GDP

• Inflation

• Interest Rates

• Recession

Economic Growth

GDP

• Slower

– Less stimulus

– Tax cuts run course

– Trade

• Consumption

– Housing

– Autos

Mortgage Rates

Inflation

• Some cost push

– Wages

– Commodity prices

• Trade

– Global v. Domestic capacity

– Tarriffs

Inflation

Interest Rates

• How well managed

– GDP

– Inflation

– Trade, currencies

• Cost of capital

– Non-residential investment

– Housing

Interest Rates

Source: fred.stlouisfed.org

Effective Federal Funds Rate

Recession

• Uncertainty

– Trade/Investment

– Profits/Stocks

– Consumption

• Self-fulfilling

– Less Consumption/More Savings

– Panic

Household Debt Service Payments as a Percent of Disposable Personal Income

Months

Current expansion; July 2009 - ?;

116 months (February)

• There have been 11 business cycles since 1945

• There have been 33 business cycles since 1854

• Average post-war recession lasted 11.1 months

• Great Recession lasted 18 months

• Great Depression lasted 43 months

• Recession of 1873 lasted 65 months

Questions?

Dennis.Winters@dwd.Wisconsin.gov