You
A whole new spade 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 ask Stephen Dillard, 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 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 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 like consumers, it is kind of anticipatory shopping.
It is kind of like, okay, now let's go into 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, 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 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 processing, tourism
recreation.
So there's some industries that maybe might be susceptible.
But in general, Wisconsin is 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 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 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 slowed 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.
All right.
We leave it there.
Stephen Deller, thanks very much.
Thank you.
Oh.
Oh.
Yeah.
Oh.
That's it.
Yeah.
Oh, this stuff is amazing.
It is.
I mean, it is.
I've done some work for the Wisconsin Hospital Association to try to look at the economic
impacts and whatnot.
And I've gotten into some discussions with them about Medicare, Medicaid, and it's like,
wow, this stuff is, you don't dabble.
Yeah.
You've been trying to study this.
It's so complicated.
It's so complicated.
She's reporting on stuff I've never heard of.
I mean, we've started to see more and more 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 rural pharmacists, independent rural pharmacists,
and they're getting crushed.
She's got one of her pieces is about that.
Yeah.
And it is, I mean, it is that 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.
It's 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.