>> ALL RIGHT.
MARGARET THELEN, THANKS VERY
MUCH.
>> THANK YOU.
>> IN ECONOMIC NEWS, NON-FARM
JOBS IN WISCONSIN GREW TO A
RECORD HIGH THREE MILLION PLUS
IN JUNE.
INFLATION HAS FALLEN BUT REMAINS
STUBBORNLY ABOVE TARGETS.
THE FED JUST RAISED INTEREST
RATES ANOTHER QUARTER POINT
HOPING TO MAKE BORROWING AND
INVESTING MORE EXPENSIVE TO
REDUCE DEMAND FOR GOODS,
SERVICES, AND LABOR.
WHERE DOES ALL THIS LEAVE US
HERE IN WISCONSIN?
WE TURN TO KEV KEVIN BAHR AT THE
CENTURY SCHOOL OF ECONOMICS.
PROFESSOR, THANK YOU FOR BEING WITH US.
>> FED IRAQI, NI FREDERICA, THAR
HAVING ME.
>> ALL IN ALL, HOW IS THE
ECONOMY FOR FOLKS IN WISCONSIN?
>> WISCONSIN IS PRETTY MUCH
TRACKING THE UNITED STATES IN
GENERAL AND THE ECONOMY HAS BEEN
DOING QUITE WELL, MUCH BETTER
THAN EXPECTED.
THE STOCK MARKET, WHICH IS
GENERALLY VIEWED AS A LEADING
ECONOMIC INDICATOR, THE S&P 500,
THE BENCHMARK INDEX OF LARGE
COMPANY STOCKS, THAT FELL BY 19%
IN 2022.
THAT IS UP THROUGH SEVEN MONTHS
THIS YEAR.
TECH STOCKS DECLINED BY 33% LAST
YEAR.
THEY'RE UP ABOUT 33% THIS YEAR.
AND THE REASON WHY EVERYTHING
HAS GONE MUCH BETTER THAN
EXPECTED IS BECAUSE ECONOMIC
GROWTH THROUGH THE FIRST HALF
HAS BEEN ABOVE 2%.
THAT'S VIEWED AS MODERATE
ECONOMIC GROWTH.
THERE WERE RECESSIONARY CONCERNS
AT THE END OF LAST YEAR.
THAT HASN'T MATERIALIZED.
THE LABOR MARKET IN THE UNITED
STATES, WE HAVE 156 MILLION
AMERICANS WORKING.
THAT'S GREATER THAN AT ANY OTHER
POINT IN TIME IN THE HISTORY OF
THE UNITED STATES.
IT'S FIVE MILLION MORE THAN WERE
EMPLOYED IN 2019.
IT'S 25 MILLION MORE THAN WERE
EMPLOYED AT THE BOTTOM OF 2020
DURING THE COVID YEARS.
UNEMPLOYMENT, 3.6%.
EVERYTHING IS VERY STRONG,
CONTINUES TO BE VERY STRONG.
IF YOU LOOK AT THE NUMBER OF JOB
OPENINGS PER UNEMPLOYED WORKER,
THAT'S ABOUT 1.5.
SO ON BALANCE, THINGS HAVE BEEN
GOING VERY GOOD.
INFLATION, A YEAR AGO, 9%.
NOW IT'S 3%.
>> THOSE RATE HIKES REALLY DID
THE TRICK, THOUGH THEY CONTINUE
TO IMPOSE THEMSELVES.
UNEMPLOYMENT IN WISCONSIN IS
ABOUT 2-1/2% RIGHT NOW.
IT'S STILL A GOOD TIME TO GET A
JOB AND PEOPLE SHOULD EXPECT THE
PAY TO BE HIGHER?
>> WAGE GROWTH HAS BEEN -- WAGE
GROWTH IN THE LAST TWO YEARS HAS
BEEN HIGHER THAN AT ANY OTHER
POINT THIS CENTURY IN THE UNITED
STATES.
WAGE GROWTH HAS BEEN COMING DOWN
THE LAST COUPLE OF MONTHS, BUT
THE GOOD NEWS IS, THE WAGE
GROWTH HAS BEEN COMING DOWN THE
LAST COUPLE OF MONTHS, INFLATION
HAS BEEN COMING DOWN.
NOW YOU HAVE WAGE GROWTH
EXCEEDING INFLATION.
SO YOUR PURCHASING POWER HAS
ACTUALLY BEEN GOING UP.
IF I MIGHT POINT OUT, ONE OF THE
MAIN REASONS WHY INFLATION HAS
GONE FROM 9% TO 3%, THERE WERE
GLOBAL ECONOMIC FACTORS THAT
REALLY DROVE INFLATION
THROUGHOUT THE WORLD.
INFLATION PEAKED NOT OVER 10% IN
THE UNITED KINGDOM.
EUROPEAN UNION, OVER 8% IN
CANADA, NEARLY 9% IN MEXICO, SO
YOU HAD THIS GLOBAL INFLATION
LAST YEAR AND THE TRENDS, KIND
OF THE UPS AND DOWNS OF
INFLATION, THE U.S. PRETTY MUCH
REFLECTS THAT AND IT WAS PRETTY
MUCH DRIVEN BY YET A NEARLY
DOUBLING OF OIL PRICES BECAUSE
PUTIN INVADED UKRAINE.
YOU HAD WHEAT PRICES EXPLODE BY
ABOUT 50% BECAUSE RUSSIA AND
UKRAINE COMBINE FOR ABOUT 30% OF
GLOBAL WHEAT EXPORTS.
RUSSIA IS THE NUMBER ONE
PROVIDER OF AGRICULTURAL
FERTILIZER EXPORTS, SO ALL THAT
CONTRIBUTED TO THIS HUGE
HISTORICALLY HIGH INFLAIPTION
AROUND THE WORLD.
SO -- INFLATION AROUND THE
WORLD.
SO YOU HAVE THE FEDERAL REFER
RAISING INTEREST RATES BECAUSE
THAT'S REALLY ALL THEY CAN DO.
THEY'RE TRYING TO CUT DOWN
DEMAND FOR PRODUCTS, ALTHOUGH
CONSUMER SPENDING HAS REMAINED
STRONG, BECAUSE THEIR GOAL IS TO
GET INFLATION DOWN TO 2%.
WELL, WE'RE STILL ABOVE THAT SO
YOU HAVE ANOTHER RATE INCREASE
YESTERDAY, BASICALLY 11 RATE
INCREASES SINCE THE BEGINNING OF
2022.
>> SO I WANTED TO ASK YOU ABOUT
THE JOB MARKET.
IT'S STILL THE CASE THAT THERE
IS A SHORTAGE OF WORKERS, AND
ONE ECONOMIC EXPERT I READ SAID
THAT THE LABOR MARKET IS, QUOTE,
OUT OF WHACK.
HOW DOES IT GET REALIGNED?
>> WELL, THAT'S WHAT THE -- YOU
KNOW, THAT IS AN EXCELLENT
QUESTION, BECAUSE I THINK IN MY
OPINION, ANYWAY, IF YOU LOOK AT
THE FEDERAL RESERVE AND THE
NUMBER ONE THING THAT THEY'RE
TRYING TO DO IS TO GET THAT
LABOR MARKET BACK IN LINE.
SO IN OTHER WORDS, WHERE YOU
DON'T HAVE THIS HIGHER NUMBER OF
JOB OPENINGS PER UNEMPLOYED
WORKER.
THAT CREATES WAGES GOING UP.
THAT CAN CONTRIBUTE TO
INFLATION.
SO BY INCREASING INTEREST RATES,
THE IDEA IS THAT AT SOME POINT,
CONSUMERS STOP SPENDING ON STUFF
BECAUSE COST OF FINANCING IS
GOING TO BE MORE EXPENSIVE.
BUSINESS INVESTMENT, RESIDENTIAL
INVESTMENT, THAT'S A LITTLE BIT
UP AND DOWN OVER THE LAST YEAR.
THAT'S DEFINITELY FELT THE
IMPACTS OF THE INCREASE IN THE
INTEREST RATES, BUT CONSUMER
SPENDING OVERALL HAS NOT.
BUT YOU HIT ON THE EXACT POINT,
THAT IS WHY THE FEDERAL RESERVE
KEEPS ON RATCHETING UP INTEREST
RATES, EVEN THOUGH INFLATION HAS
COME DOWN RATHER SIGNIFICANTLY.
>> WELL, IT IS A COMPLICATED
MIX.
SO, KEVIN BAHR, STEVENS POINT,