New Philadelphia Fed report shows Wisconsin economy strengthening

2013-07-31T05:30:00Z New Philadelphia Fed report shows Wisconsin economy strengtheningMIKE IVEY | The Capital Times | mivey@madison.com madison.com

Those banking on Wisconsin’s economy tanking in hopes it might cost Gov. Scott Walker his re-election are not going to like the latest numbers from the Philly Fed.

A new report from the Federal Reserve Bank of Philadelphia is predicting Wisconsin’s economy will grow 3.14 percent on an annualized basis over the next six months, second best among all states.

Only New Hampshire at 3.3 percent had a higher ”leading index” for June, although officials caution the numbers are not meant to compare states but rather predict changes in economic performance going forward. The monthly report forecasts positive economic growth in 38 states over the next six months.

For Wisconsin, the June leading index represents a complete turnaround from April, where the Fed actually predicted the state economy would contract over the next six months. That report was widely circulated among state Democrats as evidence that Walker’s policies were not helping the state economy or leading to job creation.

But improvements in housing starts, manufacturing and unemployment claims since April have Wisconsin on an improved trajectory. The May leading index also showed Wisconsin on the upswing.

"We know that employers want stability and while we can't control all the factors affecting job creation, this ranking is another sign that the work we are doing is improving the business climate in the state," Walker said in a statement Tuesday.

Still, a spokesman for the Philadelphia Fed warned against reading too much into the monthly numbers or using them to compare one state to another.

Released each month, the leading index predicts the six-month growth rate of a state's “coincident index,” a measure designed to reflect economic conditions. The coincident index is calculated by state-level housing starts, initial unemployment insurance claims, manufacturing activity and interest rates.

“Our leading indexes are not meant to be a ‘ranking’ of sorts,” says spokesman Thomas Elliott. “But yes, the numbers are positive for Wisconsin.”

For years, nobody in Wisconsin paid too much attention to the various reports churned out by government economists on a regular basis. But Walker’s vow to create 250,000 new private sector jobs during his first term has put those reports into the spotlight, often prompting debate over the relevance of the figures.

For example, when Wisconsin moved up in the CNBC rankings of Best States for Business in 2012, Walker issued a press release touting the improvement. But when CNBC’s 2013 numbers showed Wisconsin falling several slots, the Walker administration chose to ignore it

UW-Madison economist Menzie Chinn has been tracking a lot of the data on his “Econobrowser” blog. He noted recently that the state Department of Revenue in its latest Economic Outlook predicts Wisconsin will fall about 81,000 jobs short of hitting Walker’s 250,000 jobs target by January 2015.

But even if Walker fails on his job creation promise, some observers say it won’t matter to voters one way or another.

“What this tells me is that people filter the economic news through their own political lens,” UW-Milwaukee political scientist  Charles Franklin told me earlier this year.

In a followup email Tuesday, Franklin offered this:

"Current indicators such as employment or wages tell us the path we are on but not where we will end up. By late summer and early fall of 2014 voters will look back on four years and decide if performance has been good enough or disappointing and that judgement will shape votes in November."

"We see that opinion of today's economy strongly influences evaluation of Gov. Walker's performance now, but we don't know how those opinions will change over the next 14 months or so. Also, the skills of candidates play a role in how the public views their economic situation and that too remains to be seen."

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(14) Comments

  1. Ralph the Polar Bear
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    Ralph the Polar Bear - September 26, 2013 9:56 pm
    Funny thing is, this stat is only a prediction of how much Wisconsin's economy is going to grow.

    If it doesn't grow, will Walker take the blame?
  2. keepcryin
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    keepcryin - August 15, 2013 11:49 am
    As someone who has seen their property taxes go up for 10 years straight, that tax cut is just a little more than tiny. I pay over $3500 a year for a 120k house on a quarter acre of land. It's also nice to know that instead of having to pay for all of the public workers to retire, that they can kick in some on their own like the rest of us do. His policies have helped me not have to withstand another 4 years of Doyle like policies that put us into massive debt, and did nothing to create jobs.
  3. Siddhartha
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    Siddhartha - August 01, 2013 9:02 pm
    LOL! DaTruth should change his name to DaComedian!

    Walker campaign add:

    We're 48! We're 48! Wait wait....a new projection's come out. If we're lucky....in a few months we'll move up to.....drum roll......46!!!!!!! WoooHoooo!!!!!!! We're 46! We're 46!!

    ......and if re-elected governor I promise that by 2018 I will make good on creating the 250,000 jobs I promised to you in 2010!!!

    Yeah....the really funny thing is.....those adds would play well in conservative circles. They really are that dumb!
  4. ThreadKiller
    Report Abuse
    ThreadKiller - July 31, 2013 10:17 am
    Let me ask you a question, answer truthfully. How has Walker's policies actually helped you? Conceal carry bright shiny object? Bullying teachers? A tiny tax cut?
  5. ThreadKiller
    Report Abuse
    ThreadKiller - July 31, 2013 10:15 am
    For example, when Wisconsin moved up in the CNBC rankings of Best States for Business in 2012, Walker issued a press release touting the improvement. But when CNBC’s 2013 numbers showed Wisconsin falling several slots, the Walker administration chose to ignore it

    Read more: http://host.madison.com/news/local/writers/mike_ivey/new-philadelphia-fed-report-shows-wisconsin-economy-strengthening/article_ecdecc2c-f953-11e2-ba76-001a4bcf887a.html#ixzz2adNNpbpK
  6. Notagopgoodoldperv
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    Notagopgoodoldperv - July 31, 2013 9:12 am
    Walker says Wisconsin is now a model for the country . His mother Russia the Koch`s homeland.
  7. Notagopgoodoldperv
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    Notagopgoodoldperv - July 31, 2013 9:06 am
    The GOp say the economy will grow in Wisconsin, the world is flat and there is no such thing as global warming. What ever happen to sticking to facts not GOP propaganda.
  8. TheRestOfTheStory
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    TheRestOfTheStory - July 31, 2013 8:07 am
    “What this tells me is that people filter the economic news through their own political lens,”

    And so, we're going to hear from the Righties how everything is going well, and the Left that you can't read into one month's report anything important.

    I sometimes wish these articles weren't posted as it just throws fuel onto the fire for both sides and I think Scotty has done his job so well at polarizing Wisconsin that it will make no difference to either side. Divide and Conquer has worked very well indeed. Jobs probably not, but that doesn't matter when all your looking for is a power base anyways.
  9. Wis_taxpayer
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    Wis_taxpayer - July 31, 2013 7:45 am
    "But when CNBC’s 2013 numbers showed Wisconsin falling several slots, the Walker administration chose to ignore it"

    What now righties...

    So the April report showed the exact opposite.... as stated in the article; For years, nobody in Wisconsin paid too much attention to the various reports churned out by government economists on a regular basis.

    So who's right and who's wrong? only time will tell, as they say the proof is in the pudding.

    The Wisconsin voters in November of 2014 will decide if Walker kept his promise to create 250,000 jobs, and if he stayed "laser focused" on jobs in Wisconsin.

    You know, kind of like that "Laser focused" jobs bill he just signed on abortions.
  10. rightiehack
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    rightiehack - July 31, 2013 7:09 am
    Thank you Mike for validating the viciousness of the left. The first paragraph says it all. Most of the left would rather have Wisconsinites suffer in order to fulfill their political objectives. Selfish as always.
  11. notsofast
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    notsofast - July 31, 2013 2:48 am
    Let me get this straight. The Richmond fed said their manufacturing is off -11. The Dallas fed said their manufacturing is off from 6.5 to 4.4. and say yours is up. Hmmmmmmmmm.
  12. idunoe
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    idunoe - July 30, 2013 9:23 pm
    Yup DA, a 15 month old report being touted ad nauseum will be Walker's campaign ad. Are you still going to vote for him after you read that Scott Walker compares himself to FDR?

    Walker wouldn't be close to 55% even if he did to every WI voting resident what he does to the Koch Bros.


  13. Fartinthewind
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    Fartinthewind - July 30, 2013 8:30 pm
    I think it's a good thing that the fed sees our economy as having the potential for improvement. Just a month ago the fed saw a different direction. And since this report from the fed, Wisconsin's unemployment numbers are up again.

    My gut feeling. We ain't out of this yet and there is little evidence that Walker's policies are responsible for any turn around.
  14. DaTruth
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    DaTruth - July 30, 2013 5:40 pm
    What now, libs?

    Walker 2014 Campaign Ad:

    Philly Fed Chart showing our growing economy under Governor Walker.
    Photo of Mary Burke holding a "sick" note for a teacher.

    Walker 74%
    Burke 25%
    Barrett 1% write-in (some people can't help themselves)
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