After a summer of robust consumer spending, America’s bars, hotels and restaurants say the era of post-pandemic splurging by U.S. consumers has likely drawn to a close.

The prediction came as part of the regular “Beige Book” economic snapshot from the Federal Reserve released Wednesday. Several of the Fed’s 12 regional districts reported peaking or even slowing tourism activity — a sign that U.S. consumer spending, which accounts for about two-thirds of U.S. economic output, could be shifting in the coming months.

“Consumer spending on tourism was stronger than expected, surging during what most contacts considered the last stage of pent-up demand for leisure travel from the pandemic era,” the report said.

But that strength in leisure spending began to level off toward the end of August, the latest Beige Book shows. That’s partly because students went back to school and summer vacations wrapped up. Still, leisure spending varied by region, with some reporting a noticeable slowing and others saying it is holding steady.

Time is running short for Ford, General Motors and Stellantis to reach respective agreements with the United Auto Workers (UAW) for new contracts, and UAW President Shawn Fain reiterated Wednesday that his union is ready to strike against any of Detroit’s Big Three automakers that have not made a deal before next week’s deadline.

When asked during an interview with the Associated Press whether the labor union would strike against any of the companies that do not have tentative agreements in place when the current contracts expire at 11:59 p.m. on Sept. 14, Fain said, “That’s the plan.”

The labor union is seeking a 46% pay raise over the four-year contract along with an array of additional benefits, including a reduction of the workweek to 32 hours for 40 hours worth of pay for its 146,000 members at Ford, GM and Dodge parent Stellantis, whose latest offer the UAW rejected last month.

UAW members at each of the Big Three voted in favor of strike authorization last month by large margins, according to the union, passing with 96% among GM workers, 98% at Ford and 95% for Stellantis.

Although Fain doubled down Wednesday on saying the UAW could strike against all three automakers, he told the AP that the union does not want a strike and would prefer to reach new contract agreements before the deadline.

Republican state lawmakers have been circulating a package of six bills designed to address child care affordability.

One proposal would allow families to create pre-tax savings accounts for up to $10,000 annually in child care expenses. Another lays out details for an interest-free revolving loan fund, which would allow child care facilities to borrow money for renovations. Lawmakers included $15 million for that fund in the state’s biennial budget, and backers say the financing option could help providers expand capacity.

Four other bills would alter licensing requirements in the following ways:

• Creating a new type of license for facilities to be known as “large family child care centers.” Family day care centers typically operate out of a provider’s home, and the change would expand capacity by creating a category for such centers that care for between four and 12 children. The large family centers would be prohibited from caring for more than eight children at a time who are 2 years old or younger — an increase compared to current rules, which allow family centers to care for no more than four children at once who are under 2 years old.
• Lowering the minimum age from 17 to 16 years old to become an assistant child care teacher or school-age group leader and lowering the minimum age from 18 to 16 years for providing sole supervision to a group of children. Sponsors say the change would alleviate Wisconsin’s shortage of qualified child care workers.
• Increasing the maximum number of children allowed per worker, as well as the maximum number of children per age in group centers. Group centers could change their ratios of workers to children to match the average teacher-pupil ratio in the local school district.
• Allowing a category of providers known as “certified child care operators” to care for as many as six children under the age of 7, regardless of whether the children are related to the provider. Under current law, those providers can care for up to six children, but no more than three who are not related to them.

State Representative Joy Goeben, R-Hobart, is listed as author of at least five of the recently-unveiled proposals. Goeben said she used to own a family child care center, and that she has been speaking to current providers about the changing landscape in the approximately 25 years since then.

“I know that when I ran that center, there was profit.” she said. “We need to really find the underlying issues as to why there’s a struggle with this profitability. So I’m trying to look at … ‘What are barriers that are getting in the way of that?’ Because this is why we can’t afford child care.”

“While it’s great to hear some legislative Republicans are finally acknowledging the child care crisis facing our state, legislation that could reduce the quality of care for our kids, fails to keep child care center doors open tomorrow, and provides no immediate help to make child care more affordable for working families simply will not cut it,” a spokesperson for the governor said in a statement.

Evers has tried unsuccessfully to get lawmakers to allocate more than $360 million in state funding to continue a pandemic-era subsidy program called Child Care Counts. Thousands of Wisconsin child care providers used money from Child Care Counts to help cover costs including wages, rent and utilities, but the initiative is petering out with federal funding set to end in early 2024.

Governor Tony Evers and the Department of Safety and Professional Services, or DSPS, are asking the state’s Republican-controlled finance committee for more staff and funding as they say the agency has reduced the amount of time to process licenses.

The Evers administration unveiled a new licensing dashboard on Thursday that shows the agency is reviewing applications within three to five days, meaning applicants who meet all requirements can receive licenses in less than a week on average. The processing time for applications is down from 38 days earlier this year and a high of about 80 days in 2021 as the agency faced a backlog of licenses for nurses and other professionals.

DSPS oversees 245 types of licenses for professions including nurses, therapists and plumbers. The agency issues more than 70,000 new credentials and 400,000 license renewals each biennium, according to the Department of Administration. Data from the agency’s dashboard shows it has issued 38,845 licenses so far this year compared to 30,200 licenses issued in all of 2018.

The agency is using federal money from the American Rescue Plan Act to fund 21 contracted staff at its call center, but the funding is set to run out at the end of next year. The governor proposed to increase funding for the agency under the current two-year budget by nearly 24 percent or around $14.7 million and add nearly 80 positions. Republicans scaled back that request to 17.75 positions, including seven full-time positions to support licensing.

U.S. consumer spending increased by the most in six months in July as Americans bought more goods and services.

Consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased 0.8% last month. Data for June was revised slightly higher to show spending rising 0.6% instead of 0.5% as previously reported.

Spending on goods increased 0.7% last month mostly reflecting products with a short life span, including pharmaceuticals, recreational items, groceries and clothing. There were also increases in outlays on recreational goods and vehicles as well as household furnishings and equipment and other long-lasting goods. Services spending increased 0.8%, driven by portfolio management and investment advice services, housing and utilities, restaurants and healthcare.

When adjusted for inflation, consumer spending increased 0.6%, also the largest gain since January. The so-called real consumer spending rose 0.4% in June. Last month’s solid increase put real consumer spending on a higher growth path at the start of the third quarter, prompting economists to raise their gross domestic product estimates.

The United States Department of Labor (DOL) has proposed an increase to the Fair Labor Standards Act’s (FLSA’s) annual salary-level threshold to $55,068 from $35,568 for white-collar exemptions to overtime requirements. The department also is proposing automatic increases every three years to the overtime threshold.

The proposed rule would, according to the DOL, do the following:

• Restore and extend overtime protections to low-paid salaried workers. Many of these employees work side by side with hourly employees, doing the same tasks and often working over 40 hours a week.
• Automatically update the salary threshold every three years to reflect current earnings data.
• Restore overtime protections for U.S. territories. From 2004 until 2019, the department’s regulations ensured that for U.S. territories where the federal minimum wage was applicable, so too was the overtime salary threshold. The department’s proposed rule would return to that practice and ensure that workers in the U.S. territories subject to the federal minimum wage have the same overtime protections as other U.S. workers.

To be exempt from overtime under the FLSA’s “white-collar” executive, administrative and professional exemptions, employees must be paid a salary of at least the threshold amount and meet certain duties tests. If they are paid less or do not meet the tests, they must be paid 1 1/2 times their regular hourly rate for hours worked in excess of 40 in a workweek.

Prior to January 1, 2020, the salary threshold was $23,660. A blocked Obama-era rule would have doubled the threshold, but a federal judge held that the DOL exceeded its authority by raising the rate too high. The Trump administration’s 2020 overtime rule raised the salary threshold to $35,568 per year. Adjusted for inflation, that amount today would be $42,594 annually.

Under the new rule, approximately 300,000 more manufacturing workers would be entitled to overtime pay, the Labor Department reports. A similar number of retail workers would be eligible, along with 180,000 hospitality and leisure workers, and 600,000 in the health care and social services sector. In total, overtime protections would be extended to approximately 3.6 million workers, according to the DOL.

Republican lawmakers say a nearly $3 billion tax cut proposal will bring relief to middle class Wisconsinites, including retirees.

An Assembly bill introduced Tuesday would use the state’s surplus to cut income taxes for Wisconsin’s third tax bracket from 5.3 to 4.4 percent starting in tax year 2023. That affects individuals with $27,630 to $304,170 in annual taxable income or joint filers making between $36,840 to $405,550.

“The third bracket is a large bracket, but it’s clearly where the middle class of Wisconsin is,” said state Rep. Mark Born, R-Beaver Dam, who co-chairs Wisconsin’s joint budget committee.

The new bill also would expand tax cuts for retirees who are at least 67 years old. It includes a tax exemption for retirement income up to $100,000 for individuals or up to $150,000 for joint married filers.

Wisconsin is projected to end the two-year budget cycle with a $4 billion surplus, and Republicans say much of that extra money should go to tax relief.

Thus far, the tax cut bill has at least one Republican senator as a co-sponsor — Sen. Rachael Cabral-Guevara of Appleton, who said she believes there’s “across the board” support for tax cuts in the state Senate.

The IRS announced Friday that it’s putting an administrative transition period in place until 2026 to extend the new requirement that catch-up contributions made by higher-income individuals participating in a 401(k) or similar retirement plan be treated as after-tax Roth contributions. The change delays the implementation of a rule that Congress approved last year as part of the Secure 2.0 Act.

Americans aged 50 and older have previously been able to make catch-up contributions to put extra cash into their retirement accounts above the contribution limit. For example, eligible savers can deposit a catch-up contribution of up to $7,500 into their 401(k) plans or other retirement accounts above the $22,500 cap in 2023.

Under the Secure 2.0 Act, which became law as part of a year-end appropriations package enacted by Congress in December 2022, the new catch-up contribution rule would require higher-income earners put their catch-up contributions in after-tax accounts subject to Roth rules.

The policy applies to individuals who earned more than $145,000 from a single employer in the prior year and to catch-up deposits into 401(k), 403(b) or 457(b) retirement plans. In effect, this means that higher-income earners wouldn’t receive the same tax break they’ve previously enjoyed once the Secure 2.0 changes are implemented because they wouldn’t be permitted to make pretax catch-up contributions, which reduce the size of the saver’s income subject to tax.

The IRS’ two-year delay allows savers to continue to make pretax catch-up contributions through 2025 as the agency implements the policy change. It also clarified that plan participants ages 50 and up can continue to make catch-up contributions after 2023 regardless of their income level.

“The administrative transition period will help taxpayers transition smoothly to the new Roth catch-up requirement and is designed to facilitate an orderly transition for compliance with that requirement,” the IRS said in the announcement.

Gross Domestic Product. Consumer Price Index. Unemployment rate. These are some of the economic indicators that policymakers such as the Federal Reserve pay attention to in order to gauge the health of the U.S. economy.

But there’s another key, if often overlooked, metric that economists and officials use to guide fiscal and monetary policy decisions — one that measures how well the average worker is at, well, working.

Enter the labor productivity metric.

“It’s an attempt to figure out how efficient workers are,” said Jason Furman, Harvard Kennedy School professor and former chairman of the Council of Economic Advisers under President Barack Obama. “If you can produce a lot of output with an hour of work, you’re very productive. If you can’t produce very much, it’s quite low.”

But labor productivity in the U.S. has been falling. Prior to the data from the most recent quarter, the country had seen five consecutive quarters of year-over-year declines in worker productivity.

According to EY-Parthenon chief economist Greg Daco, this prolonged productivity slump is the first such instance since the Bureau of Labor Statistics began tracking the data in 1948. And while the reasons behind the decline may be up for debate, the economic impacts are wide-ranging and can be felt across the board.

“Sluggish productivity means sluggish growth. It means sluggish wage growth and increase in living standards,” said Furman. “It matters for just about everything in the economy.”

Yesterday, Assembly Speaker Robin Vos (R-Rochester) announced the formation of four bipartisan task forces:  the Speaker’s Task Force on Artificial Intelligence; the Speaker’s Task Force on Childhood Obesity; the Speaker’s Task Force on Truancy in K-12 Education; and the Speaker’s Task Force on Human Trafficking.

“These are important issues to our state that our Assembly members and the public would like addressed,” said Speaker Vos.  “The task forces will travel around Wisconsin obtaining input and innovative ideas in order to compile recommendations.”

Each task force has an Assembly Republican chair and an Assembly Democratic vice chair.  The Speaker has asked the chairs to tap into the knowledge of community experts and those affected in the individual issue areas.  The committees will begin this September with the hope of completing work before the end of the year.

Speaker’s Task Force on Artificial Intelligence

The Speaker’s Task Force on Artificial Intelligence (AI) aims to study the transformative potential of artificial intelligence while ensuring its responsible and ethical deployment. The Task Force shall consider the use of AI tools by the public and private sectors, including automated decision tools, facial recognition, and generative AI. With AI’s growing impact on various sectors, the task force will drive informed policy discussions for a future that balances innovation with societal well-being.

Representative Nate Gustafson (R-Neenah), chair, and Representative Steve Doyle (D-Onalaska), vice-chair, will lead the task force on artificial intelligence.

Speaker’s Task Force on Childhood Obesity:

Childhood obesity is a critical health concern that demands attention.  The task force will study circumstances contributing to childhood obesity, including physical activity, nutrition, medical and other root causes and factors. Through research-driven initiatives and community engagement, the task force aims to combat obesity and its associated health risks among children, fostering a generation of healthier citizens.

Representative Karen Hurd (R-Fall Creek), chair, and Representative Robyn Vining (D-Wauwatosa), vice-chair, will lead the task force on childhood obesity.

Speaker’s Task Force on Truancy:

Recognizing the impact of truancy on educational attainment and future opportunities, the Speaker’s Task Force on Truancy in K-12 Education will work to identify root causes and implement effective interventions. The members of the task force will examine the relationship between truancy and student academic success, evaluate the current practices to hold parents and schools accountable for student attendance, and increase awareness and resources, ensuring every child has access to quality education and a promising future.

Representative Amy Binsfeld (R-Sheboygan), chair, and Representative Dora Drake (D-Milwaukee), vice-chair, will lead the task force on truancy.

Speaker’s Task Force on Human Trafficking:

The task force’s goal is to create a society where the safety and well-being of every person are paramount and where exploitation has no place. The task force will explore innovative solutions to combat human trafficking through prevention, supporting and empowering survivors, and prosecuting traffickers.

Representative Jerry O’Connor (R-Fond du Lac), chair, and Representative Jodi Emerson (D-Eau Claire), vice-chair, will lead the task force on human trafficking.