By Tom Still

MADISON, Wis. – If the current economic picture appears a bit like an abstract painting to you, there’s no need to adjust your vision. A confusing mosaic of data makes forecasting what is next for consumers and workers challenging. Consider the following:

  • Prices surged in June by 9.1% nationally, the steepest climb since 1981, and wholesale prices accelerated as well. The only encouraging news is that gasoline prices have fallen of late and will likely temper July inflation numbers when the month is done.
  • The nation added 372,000 jobs in June and total private sector employment is now 140,000 jobs higher than it was the month before the pandemic began. In Wisconsin, the most recent figures reflected record-high employment at 3.06 million people. June job figures may even be better.
  • Job openings in the Midwest has declined overall and the “quit rate” is down, too. That may mean employers are starting to find and retain the workers they need.
  • And yet, a recent employer survey by Wisconsin Manufacturers & Commerce showed more pessimism than a year ago, largely because of workforce and supply chain concerns.
  • Construction spending is down slightly, but depending on where you live, heavy-duty cranes still dot the landscape.
  • Home mortgage rates have doubled nationally since December to about 5.75% for a 30-year loan, which has boosted monthly payments for many home buyers. That’s the highest average rate since 2008, according to the Federal Reserve Bank of St. Louis. Despite it all, home prices rose 20% between May 2021 and May 2022, according to the Zillow real-estate site.
  • Core inflation rates, stripped of food and fuel prices, increased by nearly 6% in June. That means the Federal Reserve is certain to approve a sizable interest rate hike later this month – perhaps a full percentage point – even if some observers think the hot economy is already cooling and too much cold water could lead to recession.

No wonder the S&P 500, the Dow Jones Industrial Average and the Nasdaq composite have been on a mostly downhill roller-coaster ride, joined by other public markets. Uncertainty is the coin of the realm … along with a strong U.S. dollar that is now nearly equal in value to the euro, which can help Americans who travel abroad and hurt American companies that export goods.

How does it all play out for Wisconsin? Historically, Wisconsin enters a recession later than some states and recovers later, too, but conditions are more complicated than recent downturns that were tied to the bust (2000-2001) or the collapse of the subprime mortgage market (2008).

“It hasn’t been just one thing this time. It’s been a bunch of things,” said David J. Ward, founder and president of NorthStar Analytics.

Ward said inflation contributors have included wage increases finally hitting employers’ bottom lines and triggering price hikes; the Ukraine war; early retirements culling the workforce; seaport and highway transit troubles; a chronic shortage of affordable housing; the cryptocurrency crash and an economy still flush with cash from pandemic aid programs, which drove spending and raised demand for all kinds of products and services.

Wisconsin could fare somewhat better if and when a recession hits, Ward said, because many manufacturers have backlogs at this point that could carry them a while, supply chain woes are beginning to ease in some sectors – lumber prices have dipped, for example – tourism is humming along, and some signs point to people migrating to Wisconsin to escape quality of life issues elsewhere. That may attract people who can work remotely, or largely so.

No state is safe from inflation, recession or a “bear” market that has seemingly lost its nerve.  If a recession occurs, however, the main questions will be severity and duration. Wisconsin may have the economic strength to partially answer both.

Still is president of the Wisconsin Technology Council. He can be reached at