DOR predicts unemployment and housing yet to hit bottom in state
Housing hasn't yet hit its bottom in Wisconsin and residents can expect to see unemployment increase in the coming year.
Those are two findings in the recent Wisconsin Department of Revenue's economic outlook for the state which was published late last week.
"The national economic crisis has serious consequences for us all, as we face job losses, declining income growth and a severe state budget shortfall," said Roger Ervin, secretary of DOR.
The Wisconsin Department of Workforce Development reported that the state's unemployment rate in November was 5.3 percent, but the DOR predicts that will climb to around 8 percent in the coming year.
DWD officials also reported that the state lost 32,000 jobs from November 2007 through November 2008.
In their quarterly economic outlook DOR predicts that unemployment will increase by another 0.6 percent this year and around 2.2 percent in 2009.
DOR says that decline will be driven primarily by job losses in the construction, manufacturing, trade, transportation, utilities, professional and business services sectors.
The report predicts that a turnaround in the job market won't be seen until 2010.
Along with a growing unemployment rate the state's growth in real personal income growth will also stall out in the coming year, according to the report.
In their report DOR officials say that real personal income grew in the state during 2007 by 5.7 percent. But in 2009, they expect that growth to be only 1.4 percent.
Along with the negative unemployment and income predictions, DOR officials say that the state's housing market is still on the decline.
The officials reported that home sales in the state were down nearly 17 percent in the third quarter of 2008 over the past year and that building permits are expected to fall to a new low in 2009.
Along with the falling home sales, home prices are also continuing to fall.
According to the DOR outlook, state median home prices continue to fall, but not as sharply as elsewhere in the country.
DOR officials pointed out that because of the relative stability of the housing market in Wisconsin the negative impact of the nationwide housing crisis hasn't been felt as sharply here.
The outlook also notes that the nation is one year into the current recession and that the longest previous post-war recession lasted 16 months.
As bad as the current economic crisis is, one economist says that this downturn is minor compared to the Depression of the 1930s.
Randell Moore, who publishes "The Blue Chip of Economic Indicators," says unemployment at the height of the Depression in 1933 reached 25 percent and that it was above 10 percent from 1931 through 1940.
The entire economic outlook can be found on DOR's Web site (www.dor.state.wi.us).
Wheeler News Service contributed to this report.