First, I'm flattered that Governor Walker is putting out
press releases to combat me and a few other bloggers. I appreciate your efforts, guys. I will face off against Cullen Werwie in a battle of wits any day of the week. Perhaps over the summer. I don't work in the summer and, well, Cullen might not be working in the summer either.
Per the offer of the Governor's office, I sauntered over to the Philly Fed website to see what they may have been conveniently omitting - or misinterpreting. Statistics are hard, after all.
Using the leading index, which measures the projected change in the coincident index, roughly 60% of states have seen
month-over-month improvements. Here's your map!
There's a great deal of volatility in one-month comparisons. For example, West Virginia experienced a 254.8% change in its score from last month. Louisiana is up 327.5%.
Relative measurements in general are specious. If Wisconsin has one widget this month, and two widgets next month, Wisconsin now has 100% more widgets. If Iowa has 20 widgets this month and 21 widgets next month, it only has 5% more widgets, even though Iowa still has 20 more widgets than Wisconsin and each state gained one widget.
If your economy has sucked over the last year, like Wisconsin's, any improvement will appear larger than a improvement of identical size in the economy of a state whose economy has not sucked. Any perceived change from nearly zero growth is going to appear enormous when using a relative measurement.
Walker's claim in his release that Wisconsin "experienced the most
improved forecast in the nation" is an outright lie and one that can
only be told by people who don't understand statistics.
Per the Philly Fed itself, Wisconsin's
six-month growth rate ranks 33rd of the 50 states. No amount of spin can correct Walker's statement.
Walker is correct in asserting that Wisconsin's 1.95% growth reading is the best monthly score since 2003. It would be equally correct to assert that Walker also has the five worst monthly scores in a non-recession period since 2003. Here's your proof!
Congratulations?
Now, let's take a look at the three-month change in the coincident index, which measures nonfarm payrolls, average manufacturing hours worked, unemployment, and wage and salary disbursements in a single measure.
Again, to be clear, the coincident index uses data to evaluate what has actually happened. The leading index represents the forecasted change in the coincident index over the next six months.
Now look where Wisconsin ranks compared to its friends. Another map!
Awwwwww. Who's that sad grey blob in the middle of a sea of green? That'd be YOU, Wisconsin!
Per the three-month coincident index, Wisconsin is ranked 49th, above Alaska and only Alaska. 48 states saw positive change in the last three months, one saw negative change, and then there's Wisconsin, spinning its wheels in the mud.
So is it any wonder that Wisconsin's six-month forecast is improving relative to other states? It's because compared to other states, Wisconsin's economic recovery is still DEAD IN THE WATER. The only way Wisconsin's economy could be looking down is if you flipped the corpse over in the coffin before you buried it.
In a nutshell, America is doing better. That's great. The Philly Fed thinks things are likely to improve in Wisconsin. That's also great. Unfortunately, the reality Walker avoids is that Wisconsin's recovery is dreadfully lagging and behind that of nearly every other state. And to no great surprise, that seems to have missed Cullen's talking points.
Ladies and gentlemen, if this is Scott Walker's idea of good news, I'd hate to see what the bad news looks like.