Sec. Barca: Deep Recession Now, Fast Bounce Back Possible
Wisconsin's economy is in the dumps, but a state cabinet secretary says a recent report indicates a recovery in 2021.
The Department of Revenue issues a Wisconsin Economic Outlook and with the coronavirus outbreak as a background, Secretary Peter Barca says the report helps businesses know where the economy is and how soon it will bounce back....
"This hit Wisconsin and the nation even harder than initially we thought it would. But the good news is we expect the bounce back to be a little more rapid than what we originally thought as well..."
In April alone, Wisconsin lost 440,000 jobs. Barca says looking at the Great Recession a dozen years ago, the state lost 170,000 jobs over two years. Barca says while wages have plummeted, the projection is by the middle of 2021, wage growth will be around 7 percent. Wage and salary growth determines how much money is in the economy...
"Businesses right now are hurting desperately. The good news is if they can hang on that we think over the course in the next year we'll see a good bounce back, both in the nation and the state of Wisconsin..."
Barca says key to a recovery is consumer confidence. If the public thinks the economy is coming back they will spend more money.
Barca says compounding the current problem is the steep drop in sales tax revenue. He says the state lost $60 million dollars in sales tax revenue in April alone.
He says one sector that hasn't taken a blow is building supplies and home improvement, where stores are doing brisk business.
We have a link to the report here.