Wisconsin sees second-largest slowdown in wage growth after three strong quarters

Metro Milwaukee weekly pay dips for second month

Wisconsin has seen the sixth-strongest average wage growth in the country this year, but data from the past two months shows the increase slowed sharply in October and November.

The reversal includes two consecutive months of average weekly wages in metro Milwaukee for the first time since mid-2015, according to data from the U.S. Bureau of Labor Statistics.

Wage increases, measured as the year-over-year change in average weekly wages, averaged an increase of 4.7 percent statewide during the first 11 months of the year. The increase was nearly 5.8 percent in both the first and second quarters and 5.1 percent in the third quarter.

In October and November, however, Wisconsin wages have increased an average of 1 percent.

Compared to other states, Wisconsin ranked third in wage growth in the first quarter, fifth in the second and 10th in the third. For the first two months of the fourth quarter, Wisconsin ranks 40th. Wages increased 1.4 percent in October and 0.5 percent in November.

The two-month stretch represents the first consecutive months with wage growth of less than 1.5 percent since early 2016.

The data comes from a survey of businesses and is subject to revision. More detailed and accurate data based on payrolls is delayed by about six months.

While all but 11 states saw wage increases slow in October and November compared to the rest of the year, Wisconsin’s 4.6 percentage point swing from the average for the first nine months of the year to the last two months of the year was the second-largest drop in the country, behind only Maryland.

Every sector in the state with available data has seen a slowdown in wage growth. The biggest shift came in the trade, transportation and utilities sector, which averaged a 6.4 percent increase during the first three quarters, compared to a decrease of 1 percent for October and November.

The financial activities sector, which has shown the strongest wage growth in the state this year, also saw a slowdown in wage increases. The sector averaged a 9.7 percent increase during the first three quarters, compared to a 3.8 percent increase to start the fourth quarter.

Leisure and hospitality has seen the smallest slowdown in wage growth, shifting from an average increase of 3.9 percent across the first nine months of the year to a 3.1 percent average for October and November. The sector added 5,600 jobs from October to November, fueling more than half of the state’s job growth last month.

The metro Milwaukee area, which includes Milwaukee, Waukesha, Ozaukee and Washington counties, appears to be a driving factor in the slowdown in Wisconsin’s wage growth. The region, which has the most employees of any in the state, saw average weekly wages decrease 0.1 percent in October and 0.8 percent in November. For the first nine months of the year, the area averaged an increase of 5.6 percent.

Only the Green Bay metro saw a larger swing from the first nine months to the last two.

Meanwhile, Janesville-Beloit, Eau Claire and Appleton have seen wage increases pick up in October and November.

Across the Midwest, only South Dakota has seen an uptick in wage increases to start the fourth quarter. While Wisconsin has seen the biggest slowdown in wage gains, the state’s average increase of 1 percent in October and November does outpace Minnesota (0.4 percent), Indiana (down 0.1 percent) and Nebraska (down 1.5 percent).

Wisconsin has seen the sixth-strongest average wage growth in the country this year, but data from the past two months shows the increase slowed sharply in October and November.

The reversal includes two consecutive months of average weekly wages in metro Milwaukee for the first time since mid-2015, according to data from the U.S. Bureau of Labor Statistics.

Wage increases, measured as the year-over-year change in average weekly wages, averaged an increase of 4.7 percent statewide during the first 11 months of the year. The increase was nearly 5.8 percent in both the first and second quarters and 5.1 percent in the third quarter.

In October and November, however, Wisconsin wages have increased an average of 1 percent.

Compared to other states, Wisconsin ranked third in wage growth in the first quarter, fifth in the second and 10th in the third. For the first two months of the fourth quarter, Wisconsin ranks 40th. Wages increased 1.4 percent in October and 0.5 percent in November.

The two-month stretch represents the first consecutive months with wage growth of less than 1.5 percent since early 2016.

The data comes from a survey of businesses and is subject to revision. More detailed and accurate data based on payrolls is delayed by about six months.

While all but 11 states saw wage increases slow in October and November compared to the rest of the year, Wisconsin’s 4.6 percentage point swing from the average for the first nine months of the year to the last two months of the year was the second-largest drop in the country, behind only Maryland.

Every sector in the state with available data has seen a slowdown in wage growth. The biggest shift came in the trade, transportation and utilities sector, which averaged a 6.4 percent increase during the first three quarters, compared to a decrease of 1 percent for October and November.

The financial activities sector, which has shown the strongest wage growth in the state this year, also saw a slowdown in wage increases. The sector averaged a 9.7 percent increase during the first three quarters, compared to a 3.8 percent increase to start the fourth quarter.

Leisure and hospitality has seen the smallest slowdown in wage growth, shifting from an average increase of 3.9 percent across the first nine months of the year to a 3.1 percent average for October and November. The sector added 5,600 jobs from October to November, fueling more than half of the state’s job growth last month.

The metro Milwaukee area, which includes Milwaukee, Waukesha, Ozaukee and Washington counties, appears to be a driving factor in the slowdown in Wisconsin’s wage growth. The region, which has the most employees of any in the state, saw average weekly wages decrease 0.1 percent in October and 0.8 percent in November. For the first nine months of the year, the area averaged an increase of 5.6 percent.

Only the Green Bay metro saw a larger swing from the first nine months to the last two.

Meanwhile, Janesville-Beloit, Eau Claire and Appleton have seen wage increases pick up in October and November.

Across the Midwest, only South Dakota has seen an uptick in wage increases to start the fourth quarter. While Wisconsin has seen the biggest slowdown in wage gains, the state’s average increase of 1 percent in October and November does outpace Minnesota (0.4 percent), Indiana (down 0.1 percent) and Nebraska (down 1.5 percent).

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