Wisconsin added just 500 private sector jobs in March, but the state’s unemployment rate declined to 2.8%, according to preliminary data released by the state Department of Workforce Development.
Revised data for February also showed the state’s preliminary gain of 20,700 private sector jobs from January to February was actually around 24,900.
The data continue a generally positive trend for the Wisconsin labor market. The state’s unemployment rate has declined 1.5 percentage points over the past year and private sector payrolls are up by 57,500, a 2.3% increase.
Labor force participation also ticked up slightly to 66.5%, a one-tenth increase. In March 2021, the rate was 66.6%, but it is still better than the pre-pandemic rate of 66.1% in February 2020.
“On the labor force, everything is looking good for all the right reasons,” Dennis Winters, chief economist at DWD, said in a call with reporters, highlighting that unemployment is down and employment is up.
Winters said the expectation is the state will likely continue at these levels going forward with depressed labor availability.
“It’s been snug. It’s going to continue to be snug going forward,” Winters said.
The tight labor market has translated to increasing wages. In January and February, the average hourly wage in Wisconsin was up 6.5% from the previous year.
“We are certainly seeing higher wages, almost across the board,” Winters said, acknowledging that inflation has likely taken much of the purchasing power of those increases. Winters said he expects inflation to be a relatively short-term issue while the pay increases will remain, allowing purchasing power to return.
Winters also touted the return of Wisconsin’s GDP to near pre-pandemic levels, even as total payrolls have not reached the same levels. Lower payrolls at nearly the same GDP suggests improved productivity relative to before the pandemic.
But he also acknowledged the lack of available workforce hurts the growth of Wisconsin’s economy.
“It’s limiting the state’s growth, it’s limiting national growth, it’s limiting global growth,” he said. “It’s not just Wisconsin, the lack of talent is global.”