Jul 16, 201908:00 AMInside Wisconsin
with Tom Still
State economy should grow through 2020, but wild cards in deck
(page 1 of 2)
The U.S. economy set a record July 1 for the most consecutive months without a recession — 121, to be precise — a streak that began in mid-2009 as the financial crisis underlying the Great Recession hit bottom.
Cause to celebrate, yes. Reason to worry about the law of gravity, absolutely.
In a market economy, what goes up can easily go down, especially when domestic and world events threaten stability. Investors, companies, and consumers alike get jumpy when confronted with trade wars, Middle East standoffs, uncertainty in the European Union, and more.
What does it mean for Wisconsin, a state that represents slightly less than 2 percent of the U.S. economy and a sliver of the global economy? The answer carries more weight than those fractions might suggest.
Data from the state Department of Revenue suggests the national and Wisconsin economies will continue to grow through the rest of 2019 and probably beyond, although not at the same pace as during 2018. Personal income growth continues to be strong, helped by tight job markets and low oil prices, and Wisconsin’s unemployment rate remains below the U.S. figures.
Personal income in Wisconsin grew by 4 percent in 2018, below the 4.5 percent U.S. mark, but slightly ahead of the 3.9 percent growth in the Great Lakes region. The Revenue Department’s forecast calls for 3.5 percent personal income growth in 2019 and 4.4 percent in 2020, compared to 4 percent and 4.9 percent growth nationally.
That’s not unusual when compared to historical trends, as personal incomes in Wisconsin often rise slower than the U.S. average and emerge from recessionary storms more slowly.
Revenue Secretary Peter Barca talked about the state economy July 9 at a meeting of the Wisconsin Technology Council board of directors in Milwaukee, where he also described the major sources of state government revenues and the largest spending categories.
His remarks underscored why Wisconsin is not immune from downturns in the global economy, especially when it comes to exports.
The total value of all state exports in 2018 was more than $22.7 billion. Leading the way were machinery, computer and electronic products, transportation equipment, food products, chemicals, and electrical equipment, appliances, and components. Together, they represented about 70 percent of the total.
With those kinds of tangible goods making up that much of the state’s export profile, it’s easy to see why a recession could hit Wisconsin hard — as it did in the late 2000s.