Wisconsin's unemployment rate sits
at 3.5 percent.
That's lower than the national
average.
But for people newly entering the
job market, like recent graduates,
what are their prospects?
Is the labor market cooling?
And what role does AI have?
That's a lot of questions.
We take them to Scott Hodek,
economist with the State Department
of Workforce Development.
And thanks very much for being here.
Yeah, absolutely, thank you.
So what does the Wisconsin labor
market look like right now for
new entrants into it?
Well, the first thing I would say is
that we're responding to
the national trend, which is a
cooling economy, like you
noted.
We've been seeing gross domestic
product drop from 2.8%
in 2024 to 2.2
in 2025.
And then so far in the first
quarter of 2026, we're at 1.6.
So we're seeing some
deceleration, some slowing at the
national level.
And couple that with rising
prices, which are.
A real drag on the economy and
some of the other indicators
that show some changing
spending patterns
and a flattening trend in real
disposable income, savings rates,
things like that. And we're
definitely seeing then
a slowing national economy.
And of course then in Wisconsin, we
feel that as well.
When I look though at
our overall labor market, there are
some bright spots too.
I mean, like you noted, we do have a
historically low unemployment rate.
So if you look at, say,
national job openings data, you do
tend to see that the
higher rates and the separation
rates tend to be really tight
together. But there's
still, relatively speaking,
a decent amount of openings.
So while we have slowed, there are
still openings out there.
And
we've had plenty of times in
the past where we've have
technological change.
And that definitely does cause some
disruption, whether that be in
some shifts in businesses as they
figure out how to kind of change
occupations or what they're looking
to hire in terms of skills, but
also for then
the new grads and the workers
themselves as they're trying to
decide, well, what skills do
I need and how do I
get into the labor force?
At this point, and it's
always a little bit tricky,
graduating as
the market's cooling.
I mean, I did that myself forever
ago, and it is
a little difficult,
but students and new grads
adapt, and that's
what's always happened in the past.
Now the question with AI is often,
well, are we going to see a
situation
where AI substitutes
for so many jobs That we
see something we've never seen
before. And I can't really answer
that. We just, we don't have enough
data and we don't
everything we see out there,
you see one thing one day, one thing
the next.
And so while this is something
that the Department of Workforce
Development is aware of, and we've
actually done work for the
governor's task force on
AI and looked
into where there's
exposure amongst these occupations
to AI. And there's a lot, there will
be a lot of exposure.
But it doesn't necessarily indicate
substitution.
In a lot of cases, it will be
folks working with AI.
And that's something we're already
seeing.
And so at least right
now, what we're seeing in the data
is that it has been a
little tougher for
new grads to find
work.
That's not unusual, like I said, in
a down period. But we are seeing
some indications that there may be
some other things going on there.
But that said
new grads have always adapted and
there are a lot of job openings out
there.
And given demographics, just with
the retirement of the baby boomers,
there are lot of positions coming
open that are simply because
of retirements.
So there actually are a lots
of openings and opportunities out
there, it's just a matter of kind of
connecting to them.
What are the so-called hot jobs
right now?
Yeah, a couple of the industries,
and again, so I'm gonna base this
off growth, but we're seeing a lot
of growth in healthcare, and that
makes sense with an aging
population, but also with
retirements.
And we're a lot growth
in construction as well.
And you might look at
construction and say, okay, well,
that's mostly manual labor.
And there is a lot that, but it's
not always the case as well, there's
skilled trades like electricians and
plumbers, there's machine operators.
And then you've got the larger
companies that do require
accountants and IT.
So you do have a lot of different
occupations mixed in these fields
that have been doing well.
But also, you
know, if you look at manufacturing
over the last few
years, it's been a downward trend in
employment.
And honestly, throughout the
past decades, we've seen staggered
drops in employment in
manufacturing, which we see
nationally as well. This is a kind
of a developed world sort of trend.
But, um.
What we do see is that there's
still difficulty hiring into
manufacturing as well.
And we're looking at a
ton of employment in Wisconsin
and a ton a ton output and
contribution to our gross domestic
product here.
So there are a lot of positions
there that are open as well, but
we don't necessarily think
about that sometimes as job seekers,
like is this industry growing?
If not, should I not apply there?
And the truth is there's so many
retirements across a lot of these
different.
Industries that's it's more a matter
of thinking of finding kind of the
occupations that fit, right?
So what are your long-term
projections for trends
of the economy?
I mean, are people like you
looking at potential recession?
Well, we don't really speculate on
what we're going
to see in the future.
What I can tell you is that the
trend right now has
been slowing.
That said,
if you were to just sort of
grab news articles around the
country, you would see that while
some economists are projecting that
it will climb back up, some are
projecting that we'll have lower GDP
this year and.
There are not actually a
ton of them calling for a recession
immediately.
Again, that doesn't necessarily mean
that we won't have one or that
one isn't coming.
But what I see right now, what I can
see right is what I tell you, and
that's that we're seeing a slowing
economy, but even
despite all the pushback
from things like tariffs,
the war in Iran, rising prices,
things like that, we're still seeing
growth, and we're see low
unemployment rates.
And here in Wisconsin, we can look
at our unemployment
insurance claims data, and we're
still seeing that on trend and below
the last couple of years as well.
So it's difficult to say with
all the volatility and uncertainty
right now, what we'll see going
forward.
Yeah, indeed.
All right, well, Scott Hodek, thanks
so much.
Absolutely. Thank you.
Wow, you you are
good at your job.
Thank you.
Appreciate it.
Kind of going to make me blush, I
think. We really appreciate
the info.
We'll call on you again, sir.
Well, I'd be happy to get and get an
information out there is important.
Yeah, I appreciate what you do.
Thank you, all right.
Enjoy this beautiful weekend.
Hey, you too. Thank you.
Thank you.
Bye.