While national news headlines tell of mass layoffs at major tech companies in other states, the unemployment rate in Wisconsin ticked down in December, according to the latest figures from the U.S. Bureau of Labor Statistics.
It’s just one of the signs that the state’s economy is strong, Wisconsin Department of Workforce Development chief labor economist Dennis Winters said in a Thursday briefing with reporters.
“We continue to hire people, companies are keeping their workers on service, and that bodes well for the jobs and paychecks and consumer spending driving the U.S. economy,” Winters said.
The state added 900 nonfarm jobs over the month and 60,000 nonfarm jobs over the year, led by growth in the educational and health services sector, which added 1,800 jobs since November, and the professional and business services sector — including jobs such as accountants and human resources staff — which added 1,900.
Sectors that saw significant drops in seasonally adjusted employment include construction, which lost 1,900 jobs; manufacturing, which lost 400; and government, which lost 600 due to a sharp drop in the number of local government workers. Still, the state’s construction workforce is up 3,700 over the year, having hit a record high earlier this year.
The number of Wisconsinites filing new unemployment insurance claims has remained near record lows all year, and the number of continued unemployment claims continues to set new lows, Winters said. The state’s 3.2% unemployment rate sits, as usual, below the 3.5% rate for the country as a whole.
The big challenge facing the state, Winters said, is that its labor force isn’t growing, making it harder for employers to find the workers they need. Wisconsin’s worker pool has been flattening for decades, and it could begin shrinking by 2035.
“That has huge ramifications for the economy, not only in the state of Wisconsin but across the U.S. and the developed world,” Winters said, noting that the number of workers can’t keep pace with growing demand.
“It's something that we've never experienced before, and it's not going away, so everybody's dealing with it the best they can.”
But that ongoing “worker quantity challenge” could insulate the state in the event that, as many economists predict, the Federal Reserve’s efforts to control inflation trigger a recession. To date, layoffs have largely been confined to a few sectors, including tech and news media.
“We don't expect, even in a mild recession, for the unemployment rate to go up very far, just because of the dearth of workers that we have all around,” Winters said. “There's some inclination for businesses to keep workers on … so they don't lose them to other folks.”
A recession may result in layoffs for some Wisconsin workers, Winters said, but he doesn’t think they’ll be near what’s been seen in past recessions.
“Without any crazy event going on somewhere in the globe, I think those numbers are sustainable at those levels,” Winters said of the state’s low number of unemployed workers.