Wisconsin’s unemployment rises slightly, stays near historic lows

Despite adding more than 14,000 jobs, Wisconsin’s unemployment rate increased slightly last month.

The state Department of Workforce Development, or DWD, released September’s preliminary employment data Thursday.

The data shows that Wisconsin continues to fare better than the United States as a whole in terms of unemployment and labor force participation. It also shows that Wisconsin has added jobs in eight of last nine months. Industries that saw employment gains include leisure and hospitality, construction, and manufacturing, while state government jobs have decreased by about 700 this year.

“Wisconsin jobs continue to increase,” said Dennis Winters, DWD’s chief economist. “We’ve gotten just about back to pre-COVID levels.”

Employment numbers

Wisconsin added 14,400 private sector jobs last month. Still, the state’s unemployment rate increased from 3.1 percent in August to 3.2 percent in September as summer hospitality jobs wound down. For comparison, the national unemployment rate was 3.5 percent in September.

Winters anticipates the state’s unemployment insurance claims will increase as it heads into the winter months.

“We expect that number to increase as we go into the later part of the year,” he said.

Despite the slight increase in September, Winters said unemployment remains near historic lows.

DWD data shows that this September’s rate was slightly lower than the seasonally adjusted unemployment rate in 2019 of 3.3 percent.

Winters said Wisconsin has recovered 99 percent of the jobs lost during the COVID-19 recession in 2020.

“Unless there’s a very serious recession that we’re not looking at, at all, we expect to see those jobs numbers and unemployment numbers (to stay) down around those historic low levels that we saw before and after COVID,” Winters said.

He said inflation hasn’t impacted the state’s employment picture, but it has affected workers’ spending power.

“We keep adding jobs month after month at the U.S. level and Wisconsin level,” Winters said. “But it is impacting, again, spending power. We’re getting some pretty robust wage increases, but — with inflation around 8 percent — they are not quite getting ahead on real terms.”

Labor force participation

Wisconsin’s labor force participation rate was 65.6 percent in September, down slightly from 65.9 percent in August. For comparison, the national rate in September was 62.3 percent.

Winters said the state’s biggest underlying workforce challenge remains demographics as the baby boomers age out of the labor force.

The state’s estimates have the labor force growth flattening to near zero, and potentially shrinking, by 2035.

“This is true for all occupations across all geographies — not only in Wisconsin,” Winters said. “… This tells us we (need to) keep continuing to focus on trying to find everybody we can and get everybody trained up to their max and get them into the workforce to keep pushing Wisconsin’s economy forward.”

Industry gains

In total, the state added about 63,000 non-farm jobs over the past year, with leisure and hospitality, construction, and manufacturing seeing monthly and annual gains.

In a statement, DWD Secretary-designee Amy Pechacek said Wisconsin set records with 133,600 construction jobs, while manufacturing saw “strong growth” with 473,400 jobs.

Meanwhile, the leisure and hospitality industry also made a “strong comeback” in 2022 as it picked up 18,300 jobs, she said.

“Wisconsin’s economic engine continues to drive our state forward,” Pechacek said in a statement. “To continue this positive growth, DWD is hard at work connecting jobseekers with in-demand skills and helping employers tap underutilized labor pools including previously unemployed people, veterans, people with disabilities, and the next generation of workers.”