Brian Dake

The U.S. economy was resilient in the third quarter, with sales and growth powering higher despite the persistent coronavirus pandemic, increased uncertainty about the future and Congress’ inability to pass another spending package to help struggling small businesses and unemployed workers.

Driving the news: Bank of America on Monday revised its third quarter growth forecast to 33%, up from 27%, and just below Goldman Sachs’ recently revised forecast for a 35% jump, up from 30%.

• While both are well above the Wall Street average (consensus is for 25.9% growth, per FactSet), the two heavyweights’ lofty predictions highlight a theme of improved expectations.

What happened: Even with fewer businesses open and social distancing restrictions in place, Americans increased their spending significantly, especially on vehicles, furniture, home renovations, electronics and at big box retail stores.

• August’s U.S. retail sales report showed a 2.6% increase from August 2019 and total sales for the June–August 2020 period were up 2.4% from the same period a year ago.
• June and July’s increases were thanks largely to direct payments and enhanced unemployment benefits paid by the government, but even after they expired Americans kept spending.

Wisconsin’s economy shrunk by an annual rate of 32.6 percent between April and June compared to the first three months of 2020, according to new numbers released Friday from the federal Bureau of Economic Analysis, an agency within the U.S. Department of Commerce.

The drop is the highest recorded by the agency since it started tracking quarterly GDP figures for states in 2005. It dwarfs some of the worst losses seen in past quarters, which hover around 8 percent.

Wisconsin’s economy totaled $314 billion in the second quarter of 2020, down from $348 billion in the second quarter of 2019.

The state’s losses put it virtually in line with the contraction seen across the five-state Great Lakes region, which shrunk overall at an annual rate of 32.8 percent. Among the Great Lakes states, Illinois’ economy fared the best in the second quarter, and Michigan saw the biggest losses.

The sectors that slowed down growth the most were durable goods manufacturing, health care and social assistance, and hotels and the food service industry.

A judge in Waukesha County has temporarily blocked the state from going through with its planned release of data going back to May about which Wisconsin employers had at least two cases of COVID-19.

The order comes in response to a lawsuit filed Thursday seeking to prevent the state from releasing that data by the state’s largest business group, Wisconsin Manufacturers and Commerce, in conjunction with chambers of commerce in Muskego and New Berlin.

Gov. Tony Evers said shortly after the lawsuit was filed that his administration has received multiple open records requests to release that information, and that attorneys for the state have said it would be a legitimate release of data.

“We have an obligation to the public to obey the law in that area,” Evers said, “and we will be releasing (that data) to the people in the media that have asked for that information in the very near future.”

According to WMC, the data could have been released as early as Friday. Their lawsuit was filed Thursday afternoon.

The lawsuit argues that revealing that information would violate the privacy of COVID-19 patients.

“The statutes make it clear that if you release the name of a patient’s employer, that allows for that patient to be identified,” said Ryan Walsh, WMC’s attorney. “That is a violation of that patient’s privacy rights.”

WMC also pointed out the potential harm to businesses, saying in the suit that the release of those businesses’ names “will falsely create the impression that the businesses at issue are somehow dangerous” even though some may not have had positive cases for months.

Consumer confidence rebounded in September by the most in more than 17 years as Americans grew more upbeat about the outlook for the economy and job market, though sentiment remained below pre-pandemic levels.

The Conference Board’s index increased 15.5 points, the most since April 2003, to 101.8 from August’s upwardly revised 86.3, according to a report issued Tuesday. The median forecast in a Bloomberg survey of economists called for a reading of 90 in September, and the figure exceeded all estimates.

Respondents indicated they were more likely to make big purchases in the months ahead. The share expecting to buy major appliances rose to a seven-month high of 49% from 44.9%. Those planning to buy a car increased to 11.8% from 10.1%, and more intended to buy a home.

The share of survey respondents who said they expected their incomes to increase rose to a six-month high of 17.5%, though that’s down from 22.7% who said so in February before the pandemic. Optimism in general was driven by higher-income individuals, the report showed.

Larger shares also expected more jobs and better business conditions in coming months.

Consumers that said business conditions are currently favorable increased to a five-month high of 18.3% from 16%. The percentage of consumers who said jobs are hard to come by decreased to 20%, the lowest since March, from 23.6%.

The Wisconsin Economic Development Corporation (WEDC) is sponsoring the We’re All Innovating Contest to recognize and promote the creative ways startups and small businesses are adapting to the challenges of the COVID-19 pandemic.

The We’re All Innovating Contest will provide a total of $3 million to approximately 195 winners selected through a competitive process to support new business models and technological innovations, from specific health-related solutions to technology that addresses how we’re changing the way we live, learn and work. Top winners in the categories will receive a maximum of $68,000 to take their ideas forward.

The We’re All Innovating Contest aims to provide funding for both new and existing companies that have introduced innovations responding to direct health and economic impacts of COVID19; launching new innovations, including business models and best practices for operating during COVID-19; and providing access to capital statewide, including rurally located and ethnically diverse entrepreneurs.

The contest is designed to reward as many of these ideas as possible. It will help offset costs incurred since March 1 and those anticipated through December 30, 2020. Additional criteria will consider progress to date and the potential for the innovation to move forward.

The competition is open to new and established businesses with 50 employees or less.
Businesses may enter in one of the following categories of innovation:

• Technology innovation to address COVID-19 impacts on health
• Technology innovation to address COVID-19 impacts on businesses
• Service and business operation innovations to respond to COVID-19 disruption

The deadline to apply is 11:59 p.m. Sunday, October 18, 2020. For additional details and to apply, visit wisconsininnovates.com. WEDC is working with the Wisconsin Technology Council and judges across the state to process and evaluate applications for the contest.

A new internal survey finds nearly half of the state’s hotels and lodges may not make it another year without some financial assistance.

The numbers released by the Wisconsin Hotel & Lodging Association showed 47 percent of lodging facilities face closing within 12 months unless they receive a loan or grant assistance.

On top of that, the survey also revealed half of their pre-pandemic staff remain furloughed or laid off.

“The COVID-19 pandemic is the single greatest crisis the hotel and lodging industry has ever faced and the situation remains dire.  We need to see some true leadership out of Madison and at the federal level if the hotel and lodging industry is going to weather this storm,” WH&LA President & CEO Bill Elliott said.

The state association also pointed to national figures from the American Hotel & Lodging Association that reported more than two-thirds (68%) of respondents stated they would be able to make it six more months at current revenue projections without any relief. Nearly three-quarters predicted more layoffs would be likely as well.

President Donald Trump on Saturday officially nominated Seventh Circuit Court of Appeals Judge Amy Coney Barrett to replace the late Supreme Court Justice Ruth Bader Ginsburg, setting up a contentious battle in the Senate.

Barrett has described herself as an “originalist,” meaning she interprets the Constitution based on what she believes was the original intent of its authors, a legal approach used by conservative members of the court.

Earlier this week, Governor Tony Evers announced that more than $5 million of funding from the federal CARES Act will be awarded for the expansion of high-speed, broadband internet. Funding will be awarded by the Public Service Commission of Wisconsin (PSC) to applicants from the 2020 broadband expansion grants that did not receive funding and are able to connect customers by December 30, 2020, and satisfy the requirements of the federal CARES Act.

The PSC houses the state Broadband Office, which administers the state’s Broadband Expansion Grant Program that provides grant funding to organizations, internet service providers, and local governments to expand in areas of the state that are underserved and unserved.

The CARES funding comes as the PSC is also accepting applications for a second round of $24 million in grants that was appropriated in the 2019-2021 state biennial budget. That application period closes December 1, and is expected to be awarded in spring of 2021.

The 2019-2021 biennial budget, which was signed by the Governor Evers last year, provided $48 million over the biennium for broadband expansion grants. For the 2020 round of funding, $24 million was made available. The PSC received 143 applications requesting $50.3 million for large and small projects.

In March of this year, the PSC awarded 72 grants to extend high-speed internet access to as many as 3,182 businesses and 46,537 homes, including 39,778 locations that are currently unserved. Since 2014, 210 grants have been awarded, and have connected or are in the process of connecting over 7,000 businesses and 117,000 homes to high-speed broadband internet service.

Wisconsin Department of Administration (DOA) Secretary Joel Brennan announced that state agencies will return more than $300 million to the state’s general fund in the current budget year (FY20-21). The savings will be generated based on specific targets that have been communicated to each agency.

The reductions follow Gov. Tony Evers’ July request that the DOA work with state agencies to identify $250 million in cost savings, known as lapses, for the current fiscal year (FY20-21), which ends June 30, 2021.

“There is no doubt that state agencies must make difficult decisions,” said Secretary Brennan. “This pandemic has affected every community in Wisconsin, and families across our state have also had to make tough decisions. This Administration is committed to taking the necessary actions to stabilize the state’s budget and spur on Wisconsin’s
economic recovery from the COVID-19 pandemic.”

The next step is for agencies to develop plans on how they will achieve their targeted savings amounts before the end of the fiscal year. Agencies are being asked to submit their lapse plans to the DOA by December 15, 2020.

Gov. Tony Evers has issued a new statewide mask mandate in Wisconsin, citing an increase in COVID-19 cases across the state.

The new order goes into effect immediately and will last until Nov. 21. It overlaps with a previous statewide mask order that was set to expire Monday. It is accompanied by a new public health emergency declaration in Wisconsin, the governor’s third public health emergency related to the COVID-19 pandemic since March.

The governor’s new mandate mirrors requirements in the previous mask order. It will require people 5 years old and older to wear masks in indoor or “enclosed” public places when people who don’t live with them are present. There are exemptions for certain activities, like eating, drinking and swimming.

The new order has the same $200 penalty for noncompliance as the previous mandate.