Manufacturing and construction employment in Wisconsin is projected to shrink this year as the state’s overall labor market “continues to grow at a modest but steady rate.”
That’s according to the state Department of Revenue’s economic forecast for May, which shows job growth in Wisconsin this year is expected to be focused in education and health services, leisure and hospitality, and other services.
Report authors note “unusually high uncertainty” is shaping economic forecasts as tariffs present a top risk for the economy.
The report shows state job growth in 2024 has been revised downward from 0.9% to 0.6% for overall employment and from 0.7% to 0.4% for private employment, based on the state’s Current Employment Statistics data. These figures show state employment rose by 0.5% in the first quarter of this year compared to one year earlier, which falls below the U.S. rate of 1.2%.
Total state employment is projected to rise by 0.7% this year and 0.2% next year followed by “minimal growth thereafter,” in line with the national trend, DOR says.
State unemployment averaged 3% in 2024, below the national average of 4%, the report shows. Wisconsin’s unemployment rate is expected to peak at 4.1% in 2027, “outperforming the national trend.”
Meanwhile, DOR reports personal income in the state rose 4.9% last year, exceeding the Great Lakes region’s average of 4.6% but fell below the national rate of 5.3%. Income growth is being driven by higher net earnings and personal transfer receipts, the report shows.
Looking ahead, the state’s nominal personal income is expected to increase 4% this year, along with a 3.7% boost to wages and salaries and a 4.7% increase in wage supplements. At the same time, personal income growth is “projected to exceed 4.0% annually over the forecast horizon” while average wage and salary growth is forecast at 4.1%.
DOR notes S&P Global is holding to its outlook that no recession will occur this year, as “below-trend but positive” domestic growth continues.
“This view is supported by improved financial conditions: equity markets have exceeded expectations, the S&P 500 volatility index has declined sharply, and credit spreads have narrowed — all signs of reduced market risk,” authors wrote.
The forecast makes several assumptions, including that the debt ceiling will be raised this year and 255,000 federal employees will be laid off. Plus, it anticipates 2017 tax cuts will be extended and the domestic corporate tax rate will be reduced to 15%.
See the report.
