Shrinking labor force helps cut Wisconsin unemployment to 5%

Economic indicators

There is good news in the latest monthly jobs report for Wisconsin. The unemployment rate dropped from 6% in October to 5% in November.

Dig a little deeper, however, and the numbers are not quite as encouraging.

The state’s labor force lost 23,100 people over the month and the labor force participation rate dropped by a half-point to 66.9%. Unemployment was down by 33,000, but employment was up just 9,900, according to place of residence data released by the Department of Workforce Development.

Private sector employment was also down by 1,000, according to a separate survey of businesses used to track job growth.

The retail trade sector was particularly challenged, losing 5,200 jobs from October to November. It is down 11,400 from this time last year.

The leisure and hospitality sector also lost 2,100 jobs and is now down 74,200 from last year.

There were some bright spots. The manufacturing sector added 4,200 jobs, led by nondurable goods, which added 3,200 positions. Transportation, warehousing and utilities also added 2,200 jobs.

Wisconsin’s dip in labor force participation was among the 15 largest in the country last month. Washington was the worst, dropping 2.6 percentage points.

Wisconsin’s participation rate had dropped from 66.9% at the start of 2020 to a low of 65% in July. It had rebounded since then before dropping in November.

Longer-term, the state’s labor force has been trending down since the mid-1990s. The rate averaged 74.5% in 1997. The average has increased year-over-year only three times since then.

In 2010, the average monthly rate was 69.5%. By 2015, the average dropped to 68.1% and it is now at 66.4% through the first 11 months of 2020.

Wisconsin does have a better labor force participation than the country as a whole, which had a rate of 61.5% in November. The state’s November rate was ninth. Nebraska had the best at 69.1%.

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Arthur covers banking and finance and the economy at BizTimes while also leading special projects as an associate editor. He also spent five years covering manufacturing at BizTimes. He previously was managing editor at The Waukesha Freeman. He is a graduate of Carroll University and did graduate coursework at Marquette. A native of southeastern Wisconsin, he is also a nationally certified gymnastics judge and enjoys golf on the weekends.

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