Wisconsin GDP In Q3

Recovery in Wisconsin has brought real GDP back to within 4% of peak levels.

Figure 1: GDP in Wisconsin (red), Minnesota (blue) and US (black), all in Ch.2012$, SAAR, in logs 2019Q4=0. Source: BEA, and author’s calculations.

To place the recovery in context, GDP at 299 billion Ch.2012$ in Q3 implies 12.6% growth in Q4 (to 308 billion) in order to hit the November’s Economic Outlook‘s forecasted level for 2020. This seems unlikely, given national GDP growth nowcasted at about 5.7% (IHS Markit 12/23)

Figure 2: Wisconsin GDP (red), predicted based on US GDP (pink) and Department of Revenue November forecast (teal squares), all in millions Ch.2012$, SAAR. Source: BEA, Wisconsin Economic Outlook, November 2020, and author’s calculations.

My forecast based on a first differences specification on US GDP, 2019Q1-2020Q3, is for 5.8% growth SAAR, 302.9 billion Ch.2012$ – a lot lower than 308 billion.

The differential in fortunes between goods producing and high-contact services producing sectors is highlighted by the evolution of the manufacturing versus accommodations/food services output.

Figure 3: Wisconsin GDP in manufacturing (blue, left scale), and in accommodation and food services (brown, right scale), all in millions Ch.2012$, SAAR. Source: BEA.

The analogous divergence in employment is discussed here.

Disclosure: None.

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