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 Stephen 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 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 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 but
we don't know we can make educated
guesses, and then there's just we
don t know 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 in terms of consumers,
it is kind
of anticipatory shopping.
It is kind like,
OK, 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
natural averages.
So Wisconsin is kind of
steady, if you will.
You have to go back to the farmer
crisis of the early 1980s before
Wisconsin kind of broke that trend.
So I think Wisconsin is going to be
kind of in a stable mode
for a little while.
And yet are there 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 processing,
tourism, recreation.
So there's some industries
that maybe might be susceptible,
but in general Wisconsin's a pretty
diversify 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 delaying expansion plans.
They're not going into shutdown
mode. And one of the reasons they're
not go into shutdown mode is
because they had 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 by it before the tariffs hit.
So there was kind of a spike
in spending from consumers.
Well, that kind of spike is,
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 gonna delay
making any major purchases because
I'm not sure what's gonna happen.
We leave it there.
Stephen Deller, thanks very much.
Costs and access and yeah,
that's it. Yeah.
Oh, this stuff is amazing
It is, it is, I mean
it is.
I've done some work for the
Wisconsin Hospitals Association
to try to look at the economic
impacts and what not.
And I've gotten into some
discussions with them about Medicare
and Medicaid, and it's like wow,
this stuff is, you don't dabble.
Care.
In trying to study this.
It's so complicated.
She's reporting on stuff I've
never heard of.
I mean, we've
started to see more and more of this
whole business about prescription
benefit managers and all
that.
Oh they're the big,
this is something Congress did
a number of years ago with
the intent of helping
but they unleashed a monster and
it is,
we just did a small piece on
a rural pharmacist, independent
rural pharmacists and they're
getting crushed.
She's got, one of her pieces is
about that.
And it is
kind of
that neighborhood pharmacist that's
kind of an anchor to a downtown,
they're going away.
You should watch her series, it's on
our website.
Really good.
I should send her some of the stuff
we published on it.
Yeah, she's like up
to here with all this, but yes.