Signs of a gradual economic cooling emerging, forecasted trends pointing to rising housing costs and employment losses in manufacturing and retail
Nov. 3, 2025
MILWAUKEE — Wisconsin is in a good economic position relative to the U.S. as a whole and the unemployment rate in the state and Milwaukee metro region remain well below the national average according to the Economic Scorecard for Southeastern Wisconsin released by the Center for Applied Economics in Marquette University’s College of Business Administration.
The complete Economic Scorecard for Southeastern Wisconsin with complete data and visualizations is available online.
The scorecard finds total state income in Wisconsin is growing at a similar rate relative to national Gross Domestic Product, and the unemployment rates for Wisconsin and the Milwaukee metro region remain well below the national average. While the Milwaukee metro region has experienced lower unemployment rates relative to the national average, economists are starting to see moderating labor market conditions.
“The local labor market in the Milwaukee metro region is beginning to cool down,” said Dr. Nicholas A. Jolly, associate professor of economics and a co-author of the scorecard. “When comparing monthly employment numbers from the same month in the previous year, non-farm employment has seen year-over-year declines since April 2025, and this trend is expected to continue through April 2026. Average hourly earnings are projected to rise, but at a slower rate.”
The Milwaukee-Waukesha metropolitan area has experienced average monthly year-over-year declines in employment starting in April 2025 when looking at either seasonally or non-seasonally adjusted data. Data expects this trend to continue throughout the early part of 2026. One area of economic resiliency is that average hourly earnings is expected to continue its climb, albeit at a slower rate.
“The recent slowdown in Milwaukee’s labor market signals a period of adjustment after several years of strong growth,” said co-author Dr. Grace Wang, professor of economics and director of the Center for Applied Economics. “Overall economic conditions remain stable, with wages rising modestly and inflation showing signs of restraint. This environment calls for a focus on long-term resilience by supporting workforce development and helping local employers adapt to changing labor and housing market conditions.”
Additional takeaways from the scorecard revolve around house affordability, sectoral shifts in employment and wage growth stabilization:
- Through September 2025, Wisconsin’s average median home price rose by 1.8% this year when compared to the same months last year. That deviates from the national average, which had a slight 0.2% decline. The Milwaukee metropolitan area saw even stronger growth, with the average median listing price climbing 2.7%, which may create challenges for local employers whose potential employees may not be able to afford to live in the area.
- Across sectors in Wisconsin, retail employment experienced a loss of roughly 1,200 jobs, down 0.4%, between January and August 2025. In contrast, employment grew 21.1% (about 56,600 jobs) in leisure and hospitality and 16.5% (21,600 jobs) in construction jobs.
- Average hourly earnings in the Milwaukee metro area are projected to rise modestly from $35.62 in April 2025 to $36.06 by April 2026. The previous scorecard noted the most recent trend points to a slowdown in growth, suggesting a more stable labor market. This moderation in wage growth may be driven by a cooling labor market and easing inflationary pressures.
Reflecting on May 2025 Economic Scorecard projections
The Center for Applied Economics released its first bi-annual economic scorecard in May 2025 and all five data points analyzed—non-farm payroll employment, manufacturing employment, retail employment, average hourly earnings, and the median home listing price—fell within the predicted 95% confidence intervals.
- For total non-farm and manufacturing employment, forecasts were never off by more than 0.37%.
- The largest error for retail employment was 1.28% in magnitude, and the worst forecast for average hourly earnings was off by 0.90%.
- Median listing price proved difficult to forecast accurately. The scorecard overestimated the listing price in April by 3.38%, which is the highest percent error from all five data series. However, by June, forecasts were back to a less than 1% error.
Based upon these accuracy metrics, Jolly and Wang concluded that their initial round of forecasting was quite successful.
Methodology
The current economic conditions presented in this report are based on publicly available data from the Bureau of Labor Statistics, the Federal Reserve Bank of St. Louis, and the National Association of Realtors. All reported data points, such as GDP growth rates, unemployment rates, and housing prices for 2024, reflect actual values as published by these agencies.
The forecasts for non-farm employment, manufacturing employment, retail employment, average hourly earnings, and median home listing prices are produced using an ARIMA (autoregressive integrated moving average) modeling approach.
While ARIMA models offer robust short-term forecasts, events, such as policy shifts, geopolitical risks, or technological changes, could cause actual future outcomes to diverge from these projections.
About Marquette University
Marquette University is a Catholic, Jesuit university located near the heart of downtown Milwaukee that offers a comprehensive range of majors in 11 nationally and internationally recognized colleges and schools. Through the formation of hearts and minds, Marquette prepares our 11,100 undergraduate, graduate, doctoral and professional students to lead, excel and serve as agents of positive change. And, we deliver results. Ranked in the top 20% of national universities, Marquette is recognized for its undergraduate teaching, innovation and career preparation as the sixth-best university in the country for job placement. Our focus on student success and immersive, personalized learning experiences encourages students to think critically and engage with the world around them. When students graduate with a Marquette degree, they are truly prepared and called to Be The Difference.
About Kevin Conway
Kevin is the associate director for university communication in the Office of Marketing and Communication. Contact Kevin at (414) 288-4745 or kevin.m.conway@marquette.edu.