Wisconsin unemployment rate dropped slightly to 12% last month, remains lower than national rate

Wisconsin unemployment rate dropped slightly to 12% last month, remains lower than national rate

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Wisconsin’s unemployment rate crept down 1.6 percentage points to 12.0% last month as businesses began transitioning back to more normal operations, despite public health concerns of COVID-19.

Citing U.S. Bureau of Labor Statistics preliminary data, the Department of Workforce Development on Thursday reported the state unemployment rate had dropped from 13.6% in April to 12.0% in May. The state’s labor participation rate last month was 66.6%, nearly 6 points higher than the national rate of 60.8%.

“The response to the COVID-19 pandemic has been severe from an economic standpoint and from a job loss standpoint. We knew this was probably going to be the case early on,” DWD chief economist Dennis Winters said Thursday. “It’s still serious, it’s still severe, but we’re making some progress to the upside.”

On May 13, the Wisconsin Supreme Court struck down Democratic Gov. Tony Evers’ stay-at-home order, which had required many businesses to close their doors or drastically limit services in an effort to mitigate the disease’s spread. Some local orders, including in Dane County, have remained in place to limit some business operations.

However, the latest jobs survey was conducted from May 11-15, so it’s unclear how much impact the elimination of the stay-at-home order had on the jobs gained in the most recent report.

DWD will release local and metropolitan area unemployment data next week. Last month, DWD reported the unemployment rate in the Madison metropolitan area in April was 11.1%. Rates in cities around the state ranged from 9.9% in Fitchburg to 21.1% in Superior. In Iron and Menominee counties, the rate reached 26.2%.

All told, Wisconsin added just shy of 75,000 total non-farm jobs and another 72,100 private sector jobs from April to May of this year, according to the DWD report released Thursday.

“May’s job numbers show a strong increase in jobs, employment, and an unemployment rate that is more than a full percentage point lower than the national rate,” DWD Secretary Caleb Frostman said in a statement. “As Wisconsin’s economy continues to reopen, DWD stands ready to assist workers as they transition back to their former employer, or to new employment.”

Jobs in retail, leisure and hospitality saw some of the biggest gains last month, although no industry has recovered to anywhere near the 2.8% unemployment rate of April and May last year.

“As (the economy) closed down those were the industries taking the biggest hits and now that it’s opening up those are the ones seeing the biggest gains,” Winters said.

Also on Thursday, the U.S Department of Labor announced that roughly 1.5 million laid-off workers applied for U.S. unemployment benefits last week, marking the 11th straight week of declining applications since March.

Unemployment claims in Wisconsin surged to unprecedented numbers due to the COVID-19 pandemic and accompanying shut down. DWD reported last month that the state had lost 385,900 private-sector jobs from March to April, and the unemployment rate had climbed to the highest level since the Great Depression. The average number of weekly claims skyrocketed from 45,000 a week to 300,000 last month.

The jump in unemployment claims has placed unprecedented strain on DWD’s unemployment services department, with officials adding more staff in an attempt to expedite the processing of claims. Last month, Frostman said it could be as late as October before the state catches up with a backlog of unpaid unemployment claims, which surpassed 700,000 in late May.

The backlog has drawn criticism from workers seeking unemployment benefits and Republican lawmakers, who have called on DWD to address the issue.

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