Frederica Freyberg:
We move now to economic news in Wisconsin. Our state saw a 0.7 percent decrease in the unemployment rate in September. That according to the Department of Workforce Development. The news comes on the heels of other promising recovery signals that were shared this week with an assembly panel by the state’s chief economic officer, John Koskinen, who joins us now.

John Koskinen:
Thank you very much.

Frederica Freyberg:
How would you grade Wisconsin's economy right now, today?  

John Koskinen:
I guess you'd have to get either a C-minus or an incomplete. We're clearly seeing signs of recovery. Our best part of recovery at this point is in some respects a lot of the job loss has slowed down or stalled, whereas before, earlier in the year, we were looking at month-to-month job losses in the 40 to 50,000 range. Now it's trickled down to break-even, from the household survey. Last month we actually had an uptick of 5,600. Which ordinarily wouldn’t be news that people would cheer about, but compared to what we were looking at not too long ago, it looks great.  

Frederica Freyberg:
So, again, the jobless claims are down slightly, but the current unemployment picture compares to say, let's just pick a time, this time last year, how?

John Koskinen:   
This time last year we were looking at an unemployment rate of about 4.7 percent, 4.5 percent. 8.3 percent compared to that, doesn't look all that great. But compared to 9 percent, where we were a month ago, looks good. Partly, what you have to realize from the financial crisis in September, our unemployment rate doubled in less than six months. Now we're sort of coming down from that high.

Frederica Freyberg:
So we have obviously hit bottom and just starting to come back.

John Koskinen:
That's a fair characterization.

Frederica Freyberg:
How does Wisconsin compare to the rest of the country?
               
John Koskinen:
The federal reserve bank of Philadelphia publishes a coincident index that tracks how you're doing over the last three months. Wisconsin is one of only a handful of states that is showing any kind of growth. So that's a positive for us. If we look at sort of the region from roughly Florida all the way up to Michigan, you're looking at double-digit unemployment rates. So in some respects, we're in the middle, with some good signs of progress.

Frederica Freyberg:
What's the forecast for Wisconsin's economy?

John Koskinen:
We're at this point anticipating the job losses will be bouncing around break-even until about early 2010, at which point you would start getting net hiring again, you'd get consistent job gains. We'll probably be in a one step forward, one step back mode for a while. But at that point the economy will have legs and we should get consistent job growth. I don't think we're going to see full recovery to where we were back in 2007 until probably mid to late-2012.

Frederica Freyberg:
That's a long time. What role does federal stimulus spending in the state of Wisconsin for things like building new highways play in our recovery?

John Koskinen:
In our recovery and I think probably for many, many states, the stimulus funds are really only beginning to take effect now. I mean, the bill was passed in February. You're only committing the funds. Local government projects, really are only beginning to be let and determined July, August, so it's only coming into play now. I think clearly it's a significant prop up for the Wisconsin economy, in particular considering the alternative. If you had to turn around and raise $2 billion worth of taxes in order to fund other projects or other spending, that would probably be worse for our economy than the fact that this was supported by the federal government.

Frederica Freyberg:
Now, apparently that stimulus money we learned this week created more than 8,000 public jobs and then some number of private sector jobs as well.

John Koskinen:
Right.

Frederica Freyberg:
But what happens to our economy when that stimulus money goes away?

John Koskinen:
Well, the stimulus money continues this year and next year, so really this is designed truly to be transition. So with the economy stronger and tax receipts growing again, that's why it's designed to transition on it. We can't presume that simply our current economic situation is what we'll be facing two years from now.

Frederica Freyberg:
How does consumer spending, which is the all-important piece of the economy, stand in Wisconsin?

John Koskinen:
Well, our news isn't exactly necessarily great there. The last fiscal year was the first time in Wisconsin history that sales tax collections actually dropped. So far we have not seen any lift. But that's largely because retail sales after the financial crisis dropped so sharply, you lost four years worth of growth in about six months. So the base level of the spending has dropped so significantly it's going to take a long time to bring it back up.

Frederica Freyberg:
All right. Well, mixed news at best, I would say. John Koskinen, thanks very much.

John Koskinen:
Thanks.