SUMMARY OF NOAH’S UPDATE AT WMC BUSINESS COALITION UPDATE CALL FROM WISBUSINESS.COM …
— A professor at the UW Center for Research on the Wisconsin Economy said Wisconsin’s unemployment rate could top 27 percent, if the state’s stay-at-home order continues.
“Everything is kind of proportional to duration, so if we extend (Safer-at-Home) another month, I wouldn’t be surprised if it hit that 27 percent and (went) beyond it,” said Prof. Noah Williams of CROWE in a Wisconsin Manufacturers & Commerce webinar.
With daily unemployment claim updates from the Department of Workforce Development, CROWE estimated the state unemployment rate for April 14 at 16.17 percent.
“I think we’ll hit 20 before too long; at the rate we’ve been going it’s been roughly a percentage point or so every couple of days, so I would certainly say by the end of month we could be nearing 20 percent.”
But Williams said it remains to be seen how effective the Payroll Protection Program and other programs are in limiting that.
Initial unemployment claims dropped from 104,805 the last week of March to 65,654 the second week of April and 9,069 on April 14.
Williams noted that CROWE’s focus is regional and while national forecasts get a lot of attention, “the thing to note is these forecasts have generally lagged reality often significantly.”
“But we’re still seeing increases in unemployment going on for the foreseeable future,” he said, noting his prediction of a 10 percent unemployment rate in the fall.
“My sense is we will still see elevated unemployment for quite some time,” he said.
From a business lens, it’s estimated that 30 percent of companies are completely closed, according to Williams. Without funds, he said about 50 percent of small businesses couldn’t survive more than two months.
But he believes the state and federal relief packages will help “substantially.”
“A lot of that is really going to depend on the policy response and how effective these programs, not only the PPP but some of the other direct lending programs, are.”