>> A whole new spate of tariffs went into effect
this week. Job numbers were weaker than expected this
summer, and business analysts say consumers are
tightening their belts. How do economic trends
nationally translate to how Wisconsin is faring now and
going forward? We asked Steven Deller, UW-Madison
professor of agricultural and applied economics, and
thanks for being here. >> Thank you.
>> So when you look at the broad economic landscape,
what are you seeing. >> From a Wisconsin
perspective? And I think this is kind of generally
true across the country is a lot of businesses have gone
into a wait and see mode. That's why the job numbers
are weak. We're not seeing an increase in unemployment
rates. We're seeing a decline in the number of
hires, primarily because businesses are unsure what's
happening. And when we're unsure, we kind of go into a
lockdown mode. We go into a holding pattern, if you
will. So I think that's why the job numbers are as weak
as they are, and it's going to take a while for this to
kind of play out. >> And so this is this
mostly around tariffs or interest rates or inflation
or all of it. >> I think it's all of it. I
think the major concern is that we're not sure exactly
what the policies are going to be. The tariffs are on.
The tariffs are off. They're back on again. They're off
again. And it's that uncertainty businesses I
mean there's kind of we know what we know. We know what
we don't know. We can make educated guesses. And then
what's going on. That's uncertainty. And when we're
in a situation like that, that's when people just
hunker down. They go into wait and see mode. And, you
know, in terms of like consumers, it is kind of
anticipatory shopping. It is kind of like, okay, now
let's go into a wait and see mode. And it's just we don't
know what's happening. >> So you said that the
trends kind of are the same nationally and in Wisconsin.
But is there anything specific to Wisconsin that
we should be watching. For? >> Wisconsin? Our highs, our
growth periods are not as strong as the national
averages. Our lows are not as weak as the national
averages. So Wisconsin is kind of steady, if you will.
You have to go back to the farm crisis of the early
1980s, before Wisconsin kind of broke that trend. So I
think Wisconsin's going to be kind of in a stable mode
for a little while. >> And yet are the things
that make Wisconsin more or less vulnerable to a
downturn? >> Not necessarily. One of
the reasons is because our economy is pretty
diversified. We don't we're not heavily dependent upon
one particular industry. I mean, you can point to some
of the big ones, like agriculture, food
recreation. So there's some industries that maybe might
be susceptible. But in general, Wisconsin's a
pretty diversified economy. >> So all of this said, are
you seeing indications of a slowdown nationally and in
Wisconsin? >> Yes. And I think that's
what the job numbers are saying. And in talking with
businesses around the state, and again, I tend to talk to
the smaller businesses, which tends to dominate most
of Wisconsin. They're just in a again, a wait and see
mode. They're they're delaying expansion plans.
They're not going into shutdown mode. And one of
the reasons they're not going into shutdown mode is
because they have such a difficult time hiring labor.
Wisconsin has been facing a structural labor shortage
for years, long before Covid, and particularly
coming out of Covid and businesses. Remember that
difficulty of hiring people, so they're really hesitant
to lay people off because they don't want to go
through that again. So again, they're in that wait
and see mode. >> And so you're looking at
kind of a business activity as a bellwether. Are there
others? >> Yes. One is consumer
expenditures. One of the things is we saw an increase
in consumer expenditure after the announcement of
the tariffs. And the reason for that is people were
thinking, oh, I'll buy it now. I'll buy it before the
tariffs hit. So there was kind of a spike in spending
from consumers. Well that kind of spike has you know
those purchases have played out now. And now they're
going into a wait and see mode. So I think if we start
to see consumer expenditures slow down much more than
they already have, then that's a warning sign. The
other thing is we're seeing the housing market start to
slow down, and there's other factors going on there. But
again, I think it's that reflection of just I'm going
to delay making any major purchases because I'm not
sure what's going to happen. sure what's going to happen.