Brian Dake

After three months of double-digit percentage declines, Wisconsin exports dropped 3.1% in July, according to new data from the U.S. Census Bureau.

The state exported $1.67 billion in goods during the month, bringing its 2020 total to $11.41 billion, a decline of 10.1% from last year.

July’s relatively stronger performance, which ranked ninth in the country, was boosted by a 14.3% increase to $107 million in exports to China and an 8.8% increase to $346.6 million for exports to Europe.

Exports to the rest of Asia were down 13.1%. The state’s exports were also hurt by a 22.6% decline to $215.2 million in exports to Mexico and a 3.1% decline to $526.8 million in exports to Canada.

For the first seven months of the year, exports to Canada, the top destination for Wisconsin exports, are down 14.2%. Exports to Europe are down 8.5% and shipments to Mexico are down 30.8%.

Asia has been a bright spot with exports up 2.8%, including a 15.6% increase in exports to China compared to last year. Trade tensions were increasing between the U.S. and China for much of 2019.

The U.S. added 1.4 million jobs in August, the Labor Department reported Friday.

The unemployment rate declined to 8.4 percent from 10.2 percent in July, according to the August jobs report, falling below 10 percent for the first time since March. Labor force participation also increased by 0.3 percent in August, an indication of both increasing strength in the job market and rising confidence among job-seekers.

August marks the fourth consecutive month of job gains and declining unemployment since the U.S. economy bottomed out in April. More than 20 million Americans lost their jobs that month, pushing the unemployment rate to a post-Great Depression high of 14.7 percent.

The economy has now recovered roughly 10.7 million of the jobs lost to the pandemic as of August, though the number of unemployed Americans is still 11.5 million above its pre-coronavirus level in February.

August also brought declines in the number of Americans unemployed for less than five weeks and those unemployed for anywhere between five and 14 weeks, while the number of long-term unemployed Americans was little changed.

The Wisconsin Legislature may consider legislation to stop frivolous lawsuits over possible exposure to the Covid-19 virus in schools and businesses.

The bill by Sen. Chris Kapenga (R-Delafield) would provide a “safe harbor” liability exemption to business owners and others who own or rent a public space as long as they obey public health orders and are taking reasonable precautions to protect the public from the Covid-19 virus.

“With many businesses struggling due to the impacts of COVID-19, the threat of a frivolous lawsuit is the last thing they need while trying to rebound,” said Kapenga in a statement on Tuesday. “Most entities have adapted and taken precautions over the past six months to protect both their customers and employees. These businesses should not be living in constant fear of litigation for something that is beyond their control.”

The bill would also provide legal protection to schools, universities and even homeowners.

“As students around the state return to school this week, many schools are starting in a virtual environment,” Kapenga said. “For some districts across the state, this can be attributed to school boards fearful of being held liable for an increase in cases. This bill is needed to restore confidence, so our economy and our schools can return to a level of normalcy.”

Over a dozen states have enacted similar laws, according to Kapenga.

The Trump administration is ordering a halt on evictions nationwide through December for people who have lost work during the pandemic and don’t have other good housing options.

The new eviction ban is being enacted through the Centers for Disease Control and Prevention. The goal is to stem the spread of the COVID-19 outbreak, which the agency says in its order “presents a historic threat to public health.”

Under the rules of the order, renters have to sign a declaration saying they don’t make more than $99,000 a year — or twice that if filing a joint tax return — and that they have no other option if evicted other than homelessness or living with more people in close proximity.

Evictions for reasons other than nonpayment of rent will be allowed. The government says it will impose criminal penalties on landlords who violate the ban.

Late on Friday, the IRS issued much-anticipated guidance on the payroll tax deferral that was ordered by President Donald Trump in a presidential memorandum on Aug. 8 (Notice 2020-65). The notice allows employers to defer withholding on affected employees’ compensation during the last four months of 2020 and then withhold those deferred amounts during the first four months of 2021

Under the guidance, employers can defer the withholding, deposit, and payment of certain payroll taxes on wages paid from Sept. 1 through Dec. 31, 2020. The deferral applies to the employee portion of the old-age, survivors, and disability insurance (OASDI) tax under Sec. 3101(a) and Railroad Retirement Act Tier 1 tax under Sec. 3201. The due date for withholding and payment of these taxes is postponed until the period beginning Jan. 1, 2021, and ending April 30, 2021.

The deferral applies to any employee whose pretax wages or compensation during any biweekly pay period generally is less than $4,000.

Under the notice, the determination of applicable wages is to be made on a pay-period-by-pay-period basis — meaning that if the amount of compensation payable to an employee for a particular pay period is less than the threshold amount ($4,000 for biweekly pay periods), then the payroll tax deferral applies to that compensation, irrespective of the amount paid to that employee in other pay periods.

The notice requires affected employers to withhold and pay the deferred taxes from wages and compensation paid during the period between Jan. 1, 2021, and April 30, 2021. Interest, penalties, and additions to tax will begin to accrue on unpaid taxes starting May 1, 2021. The notice says, that, if it is necessary, employers can “make arrangements to otherwise collect the total Applicable Taxes from the employee” but does not provide details on that requirement.

U.S. consumers increased their spending by 1.9% last month, a dose of support for an economy struggling to emerge from the grip of a pandemic that has held back a recovery and kept roughly 27 million people jobless.

The July gain marked the third straight monthly increase in consumer spending, the primary driver of the U.S. economy, but represented a slowdown from the previous two months. Friday’s report from the Commerce Department also showed that income rose 0.4% in July after two months of declines.

The economy, after a catastrophic fall in the April-June quarter, is likely expanding again. Home and auto sales have been strong. Stock prices have set record highs.

President Trump’s payroll tax holiday is scheduled to start next month, but the government has yet to issue guidance to businesses or payroll processing firms — which means employers may be unlikely to participate.

Pete Isberg, vice president of government relations for payroll processing firm ADP, told FOX Business that he is surprised guidance hasn’t been issued by now.

“It’s unlikely that many employers will be able to make the programming changes by September 1,” Isberg said. “We’ve advised Congress and Treasury that anything like this normally requires at least six months for an orderly programming transition.”

Isberg, who has met with the IRS about the issue, said that changing tax rates in the middle of the year, mid-quarter and applying it to selected employees is no simple feat — and may mean that wages need to be recorded separately during the deferral period.

Meanwhile, Isberg noted there are many details employers still need to know, including whether the measure should be an option for all employees if an employer offers it; how workers should elect to defer or not to defer; and what happens if an employee doesn’t make a selection.

New orders for manufactured durable goods in July increased $23.2 billion or 11.2% to $230.7 billion, the U.S. Census Bureau announced today.

This increase, up three consecutive months, followed a 7.7% June increase. Excluding transportation, new orders increased 2.4%. Excluding defense, new orders increased 9.9%. Transportation equipment, also up three consecutive months, led the increase, $19.6 billion or 35.6% to $74.7 billion.

Durable Goods sector is the portion of the economy that provides products that have a utility over long periods of time before needing repurchases – like cars, refrigerators, and planes.

Wisconsin’s 118 state-chartered credit unions continue to have strong financial performance as of June 30, 2020, according to data released yesterday by the Wisconsin Department of Financial Institutions (DFI).

Since year-end 2019, credit union total assets have increased by nearly $6 billion to $46.9 billion and total shares are up to more than $5.4 billion. In addition, with an increase in loans to be more than $1 billion, the loan-to-share ratio dropped from 95.06% at year-end 2019 to 84.88%.

In the six months ending on June 30, 2020:
• Net income was strong at nearly $208 million, 0.94% of average assets;
• Loan balances were nearly $34 billion with an annualized loan growth rate of 6.67%;
• Delinquent loan to total loan ratio was 0.56%, down from the year-end ratio of 0.70%, and still at a historically low level;
• Net worth to assets were at 10.40%, which is a strong ratio despite a decrease due to asset growth; and
• Total assets were $46.9 billion with asset growth at 28% compared to a little more than 14% growth at the same time last year.

“Despite these unprecedented times, Wisconsin’s state-chartered credit unions continued to perform relatively well during the first two quarters of 2020,” said DFI Secretary Kathy Blumenfeld.