Wisconsin’s unemployment rate dipped below 3 percent in February, even as net private sector employment was essentially unchanged during the month.
The seasonally adjusted unemployment rate in Wisconsin was 2.9 percent during the month, the first time it has been below 3 percent since February 2018.
Private sector employment was down by 300, according to data released by the state Department of Workforce Development. Total nonfarm payrolls were down 3,400, led by a 3,100-job drop at the local government level.
The bright spot in the monthly jobs report was the addition of 3,400 jobs in retail trade and another 1,200 each in professional and business services and arts, entertainment and recreation. Those gains barely offset losses in transportation and warehousing and health care and social assistance. In total, the service providing private sector saw employment increase by 700.
Goods producing industries saw employment drop by 1,000, led by a decrease of 1,400 jobs in durable goods manufacturing.
Private sector employment in Wisconsin increased 19,300 or 0.75 percent in the last 12 months. The construction, manufacturing, retail trade, and arts, entertainment and recreation sectors led the increase, while professional and business services saw a decline in employment.
“Wisconsin's unemployment rate dropping to 2.9 percent is indicative of an historically tight labor market," said Caleb Frostman, secretary-designee for the Department of Workforce Development. "We look forward to working with our statewide partners, fellow agencies and the legislature to deliver targeted training, expand the labor force by removing barriers to employment, and advocating for quality of life gains for the vast majority of Wisconsinites in the workforce who are working hard to make ends meet.”
Wisconsin’s unemployment rate has not been above 3.5 percent since the start of 2017 and was at 3 percent for seven straight months.
But with low unemployment and businesses lamenting the challenges of finding employees, Wisconsin’s labor force has shrunk by 14,800 people, or 0.5 percent, in the past year. The state’s labor force participation rate dropped by 0.1, to 67.5 percent.
The shrinking labor force has been a trend for the past several months. The state has not had a year-over-year increase in labor force since April 2018.
In January, Wisconsin had the 11th highest labor force participation rate in the country, at 67.6 percent. That rate, however, was down 0.6 percentage points from the year before -- the third largest drop of any state in the country over that time.
Dennis Winters, chief economist at DWD, said the declines are primarily the result of demographics and workers aging out of the workforce. If anything, he said, more older workers have stayed or returned to the workforce, keeping the participation rate relatively flat in recent years.