The economic forecast released by the Department of Revenue expects employment to grow 4 percent in 2021, 2.1 percent in 2022 and 1.4 percent in 2023.
The current forecast assumes no further fiscal stimulus and that a vaccine will be available by the middle of 2021. The larger unknown in this recession is the long-term impact of “temporary” COVID-related restrictions, according to the report.
The state’s unemployment rate peaked at a revised 13.6 percent in April. It has since declined to 5.7 percent in October.
The state has recovered about half of the 475,000 jobs lost in the spring of 2020. But the winter months and re-adoption of containment measures are expected to slow the recovery of the labor markets, particularly in the services sector, which has led the state’s employment loss.
Wisconsin private employment dropped 16 percent from February to April. In October, it was 8 percent below its February level. In the same period, employment in the leisure and hospitality sector plunged 57 percent and is still 27 percent below its February level.
But the COVID-19 economic recession has shown to be very different compared with previous cycles, crushing some industries while allowing other sectors to suffer minor damage or even show strong growth.
The goods-producing sectors fared better, with employment only declining about half as much as the private sector. October manufacturing employment was 4 percent below its February level and construction employment was just 1 percent below its February level.
The sectors benefited from a steady consumption from middle- and high-income households able to work from home without losing income. The boost from the federal rebates and low interest rates also fueled spending in construction and remodeling.