Economy Stimulus Checks by aig17760

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									                                  THE STATE
 The State
                                     OF
    of
Wisconsin’s
                             WISCONSIN’S ECONOMY
 Economy




                  Dennis K. Winters
                  Chief, Office of Economic Advisors
August 15, 2008   Wisconsin Department of Workforce Development   August 15, 2008
                  WELCOME


 The State
    of             OH, MAN
Wisconsin’s        …
 Economy

                   IT’S EVEN
                   WORSE
                   THAN I
                   THOUGHT




August 15, 2008
                               2
                  HEADLINES ARE NOT ANALYSIS
                  TAKE YOUR PICK ABOUT GDP RELEASE

                   G.D.P. Grows at Tepid 1.9% Pace Despite Stimulus
 The State
    of                   The New York Times, July 31, 2008
Wisconsin’s
 Economy
                   U.S. Economy Grows at Solid Pace in 2nd Quarter
                         Washington Post, July 31, 2008

                   Yes, Virginia, It is a Recession
                         Business Week, July 31, 2008.

                   Still on the right road -- The American economy has
                          often defied predictions of its demise. It has done
                          so again.
                         The Economist, July 31, 2008
August 15, 2008
 The State
    of
Wisconsin’s
 Economy           R
                   or
                  No R


August 15, 2008
                  WHAT CONSTITUTES A RECESSION
                  IT’S NOT THAT SIMPLE


 The State              NBER does not define a recession in terms of two
    of                   consecutive quarters of decline in real GDP
Wisconsin’s             Three Conditions:
 Economy                     1) Depth: Significant decline in total economic activity
                             2) Breadth: Spread across the economy
                             3) Duration: Lasting more than a few months
                        Five Metrics
                               1) Real personal income less transfer payments
                               2) Payroll employment
                               3) Industrial production
                               4) Volume of sales of the manufacturing and wholesale-retail
                                  sectors adjusted for price changes.
                               5) Monthly estimates of real GDP such as those prepared by
                                  Macroeconomic Advisers



                  Source: National Bureau of Economic Research

August 15, 2008
                                                                                          5
                  GDP GROWTH STILL POSITIVE
                  ALTHOUGH NOT IMPRESSIVE BY ANY MEANS

                                                    Real GDP Growth
 The State                             Quarter-to-Quarter Percent Change, Annualized
    of             8%
Wisconsin’s
 Economy
                   6%


                   4%


                   2%


                   0%


                   -2%
                      2000      2001      2002     2003      2004   2005   2006    2007   2008
August 15, 2008      Source: Bureau of Labor Statistics, DOR, OEA                                6
                  ECONOMIC GROWTH
                  UNEVEN ACROSS THE STATES


 The State
    of
Wisconsin’s
 Economy




                                                                 FRB Philadelphia Coincident Index
                                                                           3-Month Change
                                                                     Strong Expansion (>0.5%)     (2)
                                                                     Mild Expansion (<0.5%)      (10)
                                                                     No Change                    (3)
                                                                     Mild Contraction (>-0.5%) (13)
                                                                     Strong Contraction (<-0.5%) (22)


                  Source: FRB Philadelphia, July, 2008 Release
August 15, 2008
                                                                                                        7
 The State
    of
Wisconsin’s
 Economy
                  INCOME




August 15, 2008
                  PERSONAL INCOME
                  HOLDING UP
                                                              Personal income
                                                                   ($ billions)
                      12,500
 The State
    of                12,000
Wisconsin’s
 Economy              11,500

                      11,000

                      10,500

                      10,000

                       9,500

                       9,000

                       8,500

                       8,000
                               Jan- Jul- Jan- Jul- Jan- Jul- Jan- Jul- Jan- Jul- Jan- Jul- Jan- Jul- Jan- Jul- Jan- Jul-
                                00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08


                  Source: U.S. Bureau of Economic Analysis
August 15, 2008
                                                                                                                       9
                  PERSONAL INCOME
                  GROWTH TURNING DOWN

                                                       Change in Personal Income
                                                              (quaterly percent change)
 The State             1.035
    of                                                              United States
Wisconsin’s              1.03
 Economy                                                            Wisconsin
                       1.025
                                                                    Poly.
                         1.02                                       (Wisconsin)

                       1.015

                         1.01

                       1.005

                            1

                       0.995
                           Q1:2000      Q1:2001     Q1:2002    Q1:2003    Q1:2004   Q1:2005   Q1:2006   Q1:2007   Q1:2008


                  Source: U.S. Bureau of Economic Analysis
August 15, 2008
                                                                                                                   10
                  INCOME TAX WITHHOLDING
                  BEGINNING TO SAG

                                                   Withholding Collections, 12-month Moving Average
 The State                                          10%
    of
Wisconsin’s                                          9%
                    Percent change from year-ago

 Economy                                             8%
                                                     7%

                                                     6%
                                                     5%

                                                     4%
                                                     3%

                                                     2%

                                                     1%
                                                      Jan 05     Jan 06     Jan 07     Jan 08


                  Source: DOR, Internal Data
August 15, 2008
                  Latest Month Plotted: July 2008                                               11
                  SALES TAX COLLECTIONS
                  BOUNCE ON STIMULUS CHECKS

                                                         Sales Tax Collections, 12-month Moving Average
 The State
    of                                              5%
Wisconsin’s
                     Percent change from year-ago

 Economy                                            4%


                                                    3%


                                                    2%


                                                    1%


                                                    0%


                                                    -1%
                                                      Jan 05   Jul 05   Jan 06   Jul 06   Jan 07   Jul 07   Jan 08   Jul 08


                  Source: DOR, Internal Data
August 15, 2008
                  Latest Month Plotted: July 2008                                                                     12
 The State
    of
Wisconsin’s
 Economy

                  EMPLOYMENT




August 15, 2008
                  JOB GROWTH FALLING
                  BUT LESS SEVERELY

                                                                                               Total NonFarm Job Growth
                                          5.0%                                                         (unadjusted)
 The State
    of
                                          4.0%                                                                                                                                   Wisconsin
Wisconsin’s
                                                                                                                                                                                 U.S.
 Economy
                                          3.0%
                  Growth over 12 Months




                                          2.0%

                                          1.0%

                                          0.0%

                                          -1.0%

                                          -2.0%

                                          -3.0%
                                                  Jan-91

                                                           Jan-92

                                                                    Jan-93

                                                                             Jan-94

                                                                                      Jan-95

                                                                                                Jan-96

                                                                                                         Jan-97

                                                                                                                  Jan-98

                                                                                                                           Jan-99

                                                                                                                                    Jan-00

                                                                                                                                             Jan-01

                                                                                                                                                      Jan-02

                                                                                                                                                               Jan-03

                                                                                                                                                                        Jan-04

                                                                                                                                                                                  Jan-05

                                                                                                                                                                                           Jan-06

                                                                                                                                                                                                    Jan-07

                                                                                                                                                                                                             Jan-08

                                                                                                                                                                                                                      Jan-09
August 15, 2008                           Source: Bureau of Labor Statistics, LMI, OEA                                                                                                                                14
                  FEW STATES HAVE
                  HIGH UNEMPLOYMENT


 The State
    of
Wisconsin’s
 Economy




                                                            Unemploy ment Rates
                                                                 March 2008

                                                               Les s than 3.0% (3)
                                                               3.0% to 3.9%   (13)
                                                               4.0 to 4.9%    (17)
                                                               5.0 to 5.9%    (13)
                                                               6.0% or more    (5)




August 15, 2008   Source: U.S. Bureau of Labor Statistics
                  Latest Month Plotted: March 2008
                                                                                     15
                  UNEMPLOYMENT RATES
                  INDICATING SIGNIFICANT DOWNTURN

                                                  Unemployment Rates for Wisconsin and U.S.
 The State                                                          (adjusted)
                        6.5
    of                                       Wisconsin
Wisconsin’s                                  U.S.
                            6
 Economy
                        5.5

                            5
                  Percent




                        4.5

                            4

                        3.5

                            3
                             1997   1998   1999     2000   2001   2002   2003    2004   2005   2006   2007   2008

                     Source: U.S. Bureau of Labor Statistics
August 15, 2008
                     Latest Month Plotted: March 2008                                                               16
                  UNEMPLOYMENT CLAIMS JUMP
                  LARGELY DUE TO EXTENDED FILINGS

                                                Wisconsin Continued Unemployment Insurance Claims
                  100.0%                                                                                                                                                                              130,000
 The State
    of                                                                                                                                                % change                                        120,000
                  80.0%                                                                                                                               4-wk MA
Wisconsin’s
 Economy                                                                                                                                                                                              110,000
                  60.0%
                                                                                                                                                                                                      100,000

                  40.0%                                                                                                                                                                               90,000


                  20.0%                                                                                                                                                                               80,000


                                                                                                                                                                                                      70,000
                   0.0%
                                                                                                                                                                                                      60,000

                  -20.0%
                                                                                                                                                                                                      50,000


                  -40.0%                                                                                                                                                                              40,000
                           2000w1

                                    2000w28

                                              2001w2

                                                       2001w29

                                                                 2002w3

                                                                          2002w30

                                                                                    2003w4

                                                                                             2003w31

                                                                                                       2004w5

                                                                                                                2004w32

                                                                                                                          2005w6

                                                                                                                                   2005w33

                                                                                                                                             2006w7

                                                                                                                                                      2006w34

                                                                                                                                                                2007w8

                                                                                                                                                                         2007w35

                                                                                                                                                                                   2008w9

                                                                                                                                                                                            2008w36
August 15, 2008
                  JOB LOSSES
                  LESS SEVERE, BUT CONTINUING


 The State         U.S. lost 387,000 jobs year to date
    of
Wisconsin’s
 Economy
                   Easily lose that many in two months
                    in a recessionary downturn

                   U.S. Initial UI claims 4-wk moving
                    average at 419,500

                   Above 400,000 usually occurs in a
                    recession

August 15, 2008
                                                          18
 The State
    of
Wisconsin’s
 Economy
                   INDUSTRIAL
                  PRODUCTION



August 15, 2008
                  INDUSTRIAL PRODUCTION
                  SIDEWAYS, NOT DROPPING
                                       Manufactuing Production Indexes
                  130
 The State
    of            120
Wisconsin’s
                  110
 Economy
                  100

                  90                                  Midwest
                                                      U.S.
                  80

                  70

                  60

                  50

                  40

                  30
                    Jan-73 Jan-76 Jan-79 Jan-82 Jan-85 Jan-88 Jan-91 Jan-94 Jan-97 Jan-00 Jan-03 Jan-06


August 15, 2008         Source: Federal Reserve Bank of Chicago, OEA                                      20
                  TALE OF TWO INDUSTRIES
                  NO BREADTH TO SOFTNESS

                                             Industry Specific Industrial Production Index
 The State        130
    of
                  125
Wisconsin’s
 Economy          120

                  115
                                                  Mill Products
                  110
                                                  Electrical Machinery

                  105

                  100

                   95

                   90
                        Jan-   Apr-   Jul-     Oct-   Jan-        Apr-   Jul-   Oct-   Jan-   Apr-   Jul-   Oct-   Jan-
                         05     05    05        05     06          06    06      06     07     07    07      07     08
                    Wisconsin is the Nation’s leader for per capita shipments for these industries.


                  Source: U.S. Federal Reserve Bank
August 15, 2008   Latest Month Plotted: March 2008
                                                                                                                          21
                  TALE OF TWO MORE INDUSTRIES
                  NO BREADTH TO SOFTNESS


 The State                                   Industry Specific Industrial Production Index
                    120
    of
Wisconsin’s
 Economy                               Plastics & Rubber
                    115
                                       Fabricated Metals


                    110



                    105



                    100



                     95
                          Jan-05        Jul-05         Jan-06   Jul-06     Jan-07      Jul-07   Jan-08


                   Source: U.S. Federal Reserve Bank
                   Latest Month Plotted: March 2008
August 15, 2008
                                                                                                         22
                  SERVICE INDUSTRY
                  BOUNCES AROUND


 The State
                                 ISM Nonmanufacturing Index (NMI)
    of
Wisconsin’s
                   64
 Economy
                   60

                   56

                   52

                   48

                   44
                        01       02        03         04          05   06   07   08

August 15, 2008    Source: Bureau of Labor Statistics, DOR, OEA                       23
 The State
    of
Wisconsin’s
                  STATUS
 Economy
                   OF THE
                  HOUSING
                  MARKETS


August 15, 2008
                  TWO CONSTRUCTION SECTORS
                  PRIVATE VS. PUBLIC

                                                      Value of New Construction Put in Place
 The State                                20%
    of
Wisconsin’s
                   Change from year ago

 Economy
                                          10%


                                           0%


                                          -10%
                                                 01    02     03       04       05      06      07    08

                                                              Total           Private        Public


August 15, 2008                Source: Bureau of Labor Statistics, DOR, OEA                                25
                  CONTRUCTION COSTS RISING
                  MUCH FASTER THAN INFLATION
                                                                   Construction Price Inflation
                                                                            (December 2003 = 100)
 The State                                 160
    of                                                                                                                    56%
                                                              Highway and street construction
Wisconsin’s                                                   Other heavy construction
                                           150                Nonresidential buildings
 Economy                                                      Single-unit residential                                     46%
                                                              Consumer price index
                  Percent of 12/03 Level




                                           140

                                                                                                                          32%
                                           130

                                                                                                                          25%
                                           120
                                                                                                                          16%

                                           110


                                           100
                                               12/03             12/04               12/05            12/06       12/07


August 15, 2008                            Source: Kim Simonson, Associated General Contractors of America, OEA           26
                  HOME PRICE APPRECIATION
                  CAN YOU SAY BUBBLE?

                                                                  A Century of Real House Prices
 The State                                                   (Shiller Spliced Indexes of House Price/CPI)
    of
Wisconsin’s                                 250
 Economy
                                            200
                  Shiller Spliced Indices




                                            150
                                                                                                                                                  Series1


                                            100


                                            50


                                              0
                                              90
                                                   96
                                                        02
                                                             08
                                                                  14
                                                                       20
                                                                            26
                                                                                 32
                                                                                      38
                                                                                           44
                                                                                                50
                                                                                                     56
                                                                                                          62
                                                                                                               68
                                                                                                                    74
                                                                                                                         80
                                                                                                                              86
                                                                                                                                   92
                                                                                                                                        98
                                                                                                                                             04
                                             18
                                                  18
                                                       19
                                                            19
                                                                 19
                                                                      19
                                                                           19
                                                                                19
                                                                                     19
                                                                                          19
                                                                                               19
                                                                                                    19
                                                                                                         19
                                                                                                              19
                                                                                                                   19
                                                                                                                        19
                                                                                                                             19
                                                                                                                                  19
                                                                                                                                       19
                                                                                                                                            20
August 15, 2008                              Source: Professor Don Nichols, April 4, 2008 presentation                                            27
                    HOME PRICE APPRECIATION
                    VARIES BY STATE

                          Wisconsin Home Prices Up 1.9% in 2007, U.S. Average up 0.8%
 The State
    of
Wisconsin’s
 Economy




                                                                           2007 Change in Home Values
                                                                                   OFHEO Index

                                                                                  Ov er 3.2%   (20)
                                                                                  0% to 3.2%   (20)
                                                                                  Less than 0% (11)




                  Source: Office of Federal Housing Enterprise Oversight
August 15, 2008
                  Last Period Plotted: 4th Quarter 2007                                                 28
                  MORTGAGE PROBLEMS
                  CONCENTRATED IN A FEW STATES

                           Foreclosures on Sub-Prime and Alt-A Mortgage Loans
 The State
    of
Wisconsin’s
 Economy




                                                                           Foreclosure Rates
                                                                          per 1,000 Housing Units

                                                                          More than 2 x US Avg  (3)
                                                                          Above US Avg          (9)
                                                                          Below US Avg         (20)
                                                                          Less than 50% US Avg (19)




                  Source: FirstAmerican CoreLogic, LoanPerformance Data
August 15, 2008   and Federal Reserve Bank of New York                                       29
                  WISCONSIN HOME PRICES
                  HOLDING UP BETTER THAN MANY


 The State                      Average Value of New Houses in Wisconsin
    of
Wisconsin’s        250,000
 Economy
                   200,000


                   150,000
                                                                                Monthly
                                                                                12 Mo Avg
                   100,000


                    50,000


                          0
                       95 n
                       96 n
                       97 n
                       98 n
                       99 n
                       00 n
                       01 n
                       02 n
                       03 n
                       04 n
                       05 n
                       06 n
                       07 n
                       08 n
                            an
                    19 -Ja
                    19 -Ja
                    19 -Ja
                    19 -Ja
                    19 -Ja
                    20 -Ja
                    20 -Ja
                    20 -Ja
                    20 -Ja
                    20 -Ja
                    20 -Ja
                    20 -Ja
                    20 -Ja
                    20 -Ja
                          -J
                       94
                    19




                    Source: Professor Don Nichols, April 4, 2008 presentation
August 15, 2008
                                                                                      30
                  HOUSING STARTS TUMBLE
                  TO EARLY 1990s LEVELS
                                                  Single Family Housing Starts

 The State                     2000
    of
                               1800
Wisconsin’s
 Economy                       1600
                               1400
                   thousands




                               1200
                                                                                                       Monthly
                               1000
                                                                                                       12 month
                                800
                                600
                                400
                                200
                                  0

                                   90     92     94     96     98     00     02     04     06     08
                                 n-     n-     n-     n-     n-     n-     n-     n-     n-     n-
                               Ja     Ja     Ja     Ja     Ja     Ja     Ja     Ja     Ja     Ja

August 15, 2008
                                                                                                          31
                  RESIDENTIAL CONSTRUCTION
                  RECESSIONARY STATE


 The State
    of
Wisconsin’s
 Economy




                    Source: Professor Don Nichols, April 4, 2008 presentation
August 15, 2008
                                                                                32
                  RESIDENTIAL CONSTRUCTION
                  ALMOST CORRECTED?

                                                   Residential Construction: Percent of GDP
 The State                                  7.0%
    of
Wisconsin’s                                 6.5%
 Economy
                   Percent of Nominal GDP


                                            6.0%

                                            5.5%

                                            5.0%

                                            4.5%

                                            4.0%

                                            3.5%

                                            3.0%

                                            2.5%
                                               1985
                                               1986
                                                      1987
                                                      1988
                                                             1989
                                                             1990
                                                                    1991
                                                                    1992
                                                                           1993
                                                                           1994
                                                                                  1995
                                                                                  1996
                                                                                         1997
                                                                                         1998
                                                                                                1999
                                                                                                2000
                                                                                                       2001
                                                                                                       2002
                                                                                                              2003
                                                                                                              2004
                                                                                                                     2005
                                                                                                                     2006
                                                                                                                            2007
                                                                                                                            2008
August 15, 2008                     Source: Professor Don Nichols, April 4, 2008 presentation                                 33
                  HOUSING STOCK
                  HOW LONG TO CLEAR?

                                          Projected Workdown of Excess Stock of Houses

 The State                     1400
    of
Wisconsin’s                    1200
 Economy
                               1000
                  Thousands




                                 800

                                 600

                                 400

                                 200

                                    0
                                    2      3      4      5      6      7      8      9      0
                                 n-0    n-0    n-0    n-0    n-0    n-0    n-0    n-0    n-1
                               Ja     Ja     Ja     Ja     Ja     Ja     Ja     Ja     Ja
August 15, 2008               Source: Professor Don Nichols, April 4, 2008 presentation     34
                    HOUSING INVENTORY WORKOUT
                    ASSUMES LOW STARTS LEVEL

                                                      Projected Housing Starts
 The State                    2500
    of
Wisconsin’s
 Economy                      2000
                  Thousands




                              1500
                                                                                                                        Projection
                                                                                                                        Actual

                              1000


                               500


                                  0
                                   02


                                             03


                                                       04


                                                                 05


                                                                           06


                                                                                     07


                                                                                               08


                                                                                                         09


                                                                                                                   10
                                n-


                                          n-


                                                    n-


                                                              n-


                                                                        n-


                                                                                  n-


                                                                                            n-


                                                                                                      n-


                                                                                                                n-
                              Ja


                                        Ja


                                                  Ja


                                                            Ja


                                                                      Ja


                                                                                Ja


                                                                                          Ja


                                                                                                    Ja


                                                                                                              Ja
August 15, 2008               Source: Professor Don Nichols, April 4, 2008 presentation                                 35
                  HOME BUILDING IN WISCONSIN
                  PEAKED EARLIER

                   WI
                                                    Single-family Units
                                                                                                         U.S.
 The State                                             (12-month Totals)
                  26,000                                                                                  2,400
    of
Wisconsin’s       24,000        WI Peak Dec04 at 25,356                                 US Peak Mar06
 Economy                                                                                                  2,000
                  22,000
                                                                                                          1,600
                  20,000

                  18,000                                                                                  1,200
                                            WI
                  16,000
                                            US                                                            800
                  14,000
                                                                                                          400
                  12,000
                                                                             WI Mar08 was 12,225
                  10,000                                                                                  0
                     2001-Jan    2002-Jan   2003-Jan   2004-Jan   2005-Jan   2006-Jan   2007-Jan   2008-Jan

                  Source: US Bureau of the Census
August 15, 2008
                  Last Period Plotted: March 2008                                                             36
                  WISCONSIN RESIDENTIAL CONSTRUCTION
                  READY FOR A REBOUND?

                                              Wisconsin Building Permits
 The State
                   30000
    of
Wisconsin’s
 Economy           25000




                   20000



                                                                                                                               Monthly
                   15000
                                                                                                                               12 mo Total



                   10000




                    5000




                         0
                      an

                               an

                                      an

                                             an

                                                    an

                                                           an

                                                                  an

                                                                         an

                                                                                an

                                                                                       an

                                                                                              an

                                                                                                     an

                                                                                                            an

                                                                                                                   an

                                                                                                                          an
                    -J

                             -J

                                    -J

                                           -J

                                                  -J

                                                         -J

                                                                -J

                                                                       -J

                                                                              -J

                                                                                     -J

                                                                                            -J

                                                                                                   -J

                                                                                                          -J

                                                                                                                 -J

                                                                                                                        -J
                    94

                           95

                                  96

                                         97

                                                98

                                                       99

                                                              00

                                                                     01

                                                                            02

                                                                                   03

                                                                                          04

                                                                                                 05

                                                                                                        06

                                                                                                               07

                                                                                                                      08
                  19

                         19

                                19

                                       19

                                              19

                                                     19

                                                            20

                                                                   20

                                                                          20

                                                                                 20

                                                                                        20

                                                                                               20

                                                                                                      20

                                                                                                             20

                                                                                                                    20
August 15, 2008
                  Source: Professor Don Nichols, April 4, 2008 presentation                                                        37
 The State
    of
Wisconsin’s
 Economy
                  EXPORTS




August 15, 2008
                                WEAK DOLLAR
                                MAKES EXPORTS MORE COMPETITIVE

                                                               Trade-weighted Value of the Dollar
                                                                  Wisconsin and U.S. Indexes
 The State
    of                                   110
Wisconsin’s
                                         105
 Economy
                                         100
                  Index, 2000-2001=100




                                         95

                                         90

                                         85

                                         80

                                         75

                                         70
                                               1999     2000      2001       2002       2003       2004       2005    2006   2007

                                                                         Wisconsin Index                 U.S. Index
                                Source: US Federal Reserve System US Bureau of the Census, Foreign Trade Division
August 15, 2008                 Last Period Plotted: February 2008
                                                                                                                                    39
                    WEAK DOLLAR HELPS WISCONSIN
                    AG AND MANUFACTURING BENEFITING

                                                   Value of Wisconsin Exports
 The State                               18.0
    of
Wisconsin’s
                                         17.5
 Economy
                     12 Month Total $B



                                         17.0


                                         16.5


                                         16.0


                                         15.5


                                         15.0
                                          Au 7
                                          Ju 7
                                          Fe 7




                                                07




                                          Fe 8
                                          Ja 6




                                          Ap 7




                                          D 7

                                          Ja 7
                                          M 7




                                          O 7




                                                08
                                          N 7
                                          Se 7
                                          M 7




                                              l-0
                                               -0
                                               -0




                                               -0




                                               -0

                                               -0
                                                0




                                                0
                                              -0
                                                0




                                                0
                                                0
                                                0




                                             p-
                                             n-




                                             n-




                                             n-
                                             b-




                                             b-
                                            g-
                                             r-
                                           ec




                                           ov

                                           ec
                                           ay
                                            ar




                                            ct
                                           Ju
                                         D




                  Source: US Federal Reserve System US Bureau of the Census, Foreign Trade Division
August 15, 2008   Last Period Plotted: February 2008
                                                                                                      40
                  MACHINERY MANUFACTURING
                  BUILDING THE WORLD

                                     Wisconsin Exports of Capital Equipment
 The State
    of                                         Machinery          Elec. Machinery    Instruments
Wisconsin’s                   $7.0
 Economy
                              $6.0

                              $5.0
                  $Billions




                              $4.0

                              $3.0

                              $2.0

                              $1.0

                              $0.0
                                95




                                        97




                                                       99




                                                                      01




                                                                                03




                                                                                           05




                                                                                                    07
                              19




                                      19




                                                     19




                                                                    20




                                                                              20




                                                                                         20




                                                                                                   20
August 15, 2008   Source: Professor Don Nichols, April 4, 2008 presentation                         41
                  FARM SECTOR DOING WELL
                  FEEDING THE WORLD
                                                                     Wisconsin Farm Income
                                           2,000
 The State
    of                                     1,800
Wisconsin’s                                1,600
 Economy
                                           1,400
                     Millions of Dollars




                                           1,200

                                           1,000

                                            800

                                            600

                                            400

                                            200

                                              0
                                                   2001 I   2002 I     2003 I   2004.1   2005 I   2006 I   2007 I


                  Source: US Bureau of Economic Analysis
                  Last Period Plotted: 4th Quarter 2007
August 15, 2008
                                                                                                                    42
 The State
    of
Wisconsin’s
 Economy
                  DEMOGRAPHICS




August 15, 2008
                  WISCONSIN’S WORKFORCE GROWTH
                  BECOMES FLAT

                                                   Wisconsin Population and Labor Force
 The State                     7,000
    of
Wisconsin’s                                      POPULATION
                               6,000
 Economy                                         CIVILIAN LABOR FORCE


                               5,000
                  ( x 1000 )




                               4,000


                               3,000


                               2,000


                               1,000
                                         1960      1970       1980       1990   2000   2010   2020   2030



August 15, 2008                Source: Bureau of Labor Statistics, OEA                                      44
                  WISCONSIN’S WORKFORCE
                  HIGHER LFPRs OFFER LIMITED GAINS

 The State                                     Worker Difference from Census 2000
    of                   140,000
Wisconsin’s
 Economy
                         120,000
                         100,000
                          80,000
                          60,000
                          40,000
                          20,000
                              -
                          (20,000)      2010        2010      2020     2020         2030    2030

                                     New BLS       Plus 3% New BLS    Plus 3% New BLS      Plus 3%

August 15, 2008    Source: Bureau of Labor Statistics, OEA                                           45
                  LITTLE CHANGES EVEN WITH HIGHER LFPR
                  AMONG OLDER AGE WORKERS
                                           Wisconsin labor force: historic and projected
                   7,000,000
 The State
                                       Population
    of                                 Labor force base case
Wisconsin’s        6,000,000           BLS prj. change
 Economy                               Elevated LFPR of 3 percentage points

                   5,000,000


                   4,000,000


                   3,000,000


                   2,000,000


                   1,000,000
                                1960      1970       1980        1990         2000   2010   2020   2030
August 15, 2008     Source: Bureau of the Census, DOA, OEA                                          46
                  IN CONCLUSION

                   Expect saucer-shaped economic
 The State
                    cycle with slow growth well into 2009.
    of
Wisconsin’s
 Economy           Housing not expected to turn around
                    until 2009.

                   Strength of recovery will be
                    dampened by high oil prices and
                    subject to consumer income and
                    wealth uncertainty.

                   Job growth in recover not expected to
                    be robust.
August 15, 2008
                                                        47
                       CONTACT INFORMATION
 The State
    of
Wisconsin’s        Dennis Winters
 Economy

                   Phone: 608-267-3262

                   Email: dennis.winters@dwd.state.wi.us

                   Website: www.dwd.wisconsin.gov

                   OEA website: www.dwd.wisconsin.gov/oea



August 15, 2008
                                                            48

								
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