News of the Day

Yesterday, the Public Service Commission of Wisconsin (PSC) announced the creation of a new, additional area code to overlay the area in which the 608 area code is now in service.

The 608 area code is expected to run out of assignable prefixes (the three numbers in a phone number following the area code) in the first quarter of 2024. The new 353 area code will be used to provide telephone numbers to new customers. All current customers will retain their existing telephone numbers and will continue to dial and receive calls without change.

The Commission approved the petition by the North American Numbering Plan Administrator (NANPA), the neutral third-party area code relief planner, to overlay a new area code. This decision will provide additional numbering resources to meet the demand for telephone numbers. The new 353 area code will be in service by late 2023.

An area code overlay adds a second area code to the geographic region served by the existing area code. Therefore, multiple area codes co-exist within the same geographic region. Once the 608 area code runs out of assignable prefixes, new customers in southcentral and southwestern Wisconsin may be assigned telephone numbers in the new 353 area code. Customers will continue to dial the three-digit area code for all calls to and from telephone numbers with the 608 and 353 area codes. The price of a call will not change due to the overlay. Customers can still dial just three digits to reach 911, as well as 211, 311, 411, 511, 611, 711, 811, and 988, the new Suicide & Crisis Lifeline.

The plan filed by the North American Numbering Plan Administrator can be found here: PSC REF#: 440694

Retail sales, a measure of how much consumers spent on a number of everyday goods, including cars, food and gasoline, rose 0.3% in August, the Commerce Department said Thursday.

That is an improvement from the downwardly revised data in July, which showed that retail sales actually tumbled 0.4%.

The August advance is not adjusted for inflation – which rose 0.1% last month – meaning that consumers may be spending the same but getting less bang for their buck.

“Consumer spending has flatlined in real terms in the face of steep inflation and interest rate increases from the Fed,” said Ben Ayers, a senior economist at Nationwide. “While retail sales continue to move higher, much of this is due to higher prices which push up the dollar volume of sales. This is another indication of the general slowdown in activity across the economy this year.”

A potential nationwide freight rail strike is looming, threatening to cripple the U.S. economy ahead of the holiday shopping season. Roughly 115,000 rail workers could walk off the job as soon as September 16 if they cannot agree to a new contract with railroads.

Five of the 13 unions representing rail workers have reached tentative agreements with railroads to enact the Presidential Emergency Board (PEB) recommendations, which call for 24 percent pay raises, back pay and cash bonuses.

But the bulk of railroad workers belong to unions that haven’t yet agreed to a deal. It’s also unclear whether workers would vote to ratify PEB recommendations that don’t address their concerns about punishing hours and rigid schedules that make it difficult to take time off for any reason.

“I would suspect that most railroad workers would love to strike, would love to get back at their employers after years of abuse while they watched the industry make record profits,” said Ron Kaminkow, an organizer at Railroad Workers United, which represents rank-and-file railroaders.

Federal law gives Congress the power to block or delay a railroad strike. If workers were to walk out, lawmakers could vote to enact the PEB deal or appoint arbitrators to fast-track a new contract, among a range of other options.

The Association of American Railroads, which estimates that a national rail shutdown would cost the U.S. at least $2 billion a day, said that lawmakers should vote to implement the PEB recommendations in the event of a strike to “instantly reward employees and reduce economic uncertainty.”

Experts say that an extended walkout would devastate industries that rely on freight to transport grain, coal, diesel, steel and motor vehicle parts. Shipping containers would pile up at ports, severely congesting supply chains and sending prices soaring ahead of the holidays.

Yesterday, Governor Tony Evers announced that Wisconsin high school juniors and seniors heading back to school this fall will have 14 new occupational pathways that local employers can support, thanks to ongoing modernization efforts by the Wisconsin Department of Workforce Development (DWD).

Working in collaboration with school consortiums, employers, the Wisconsin Technical College System, and other partners, DWD has modernized the framework for a total of 75 Youth Apprenticeship (YA) program pathways to help industries like construction, health sciences, marketing, science and engineering, and transportation find and develop home-grown talent.

DWD’s YA Program Modernization Initiative resulted in 14 new occupational pathways in which local employers can offer apprenticeship opportunities to students. These include:

• Agriculture, Food, and Natural Resources, new pathways: Arborist and Dairy Grazier.
• Architecture and Construction, new pathways: Gas Distribution Technician, Heavy Equipment Operator/Operating Engineer, and Utilities Electrical Technician.
• Arts, Audio Visual Technology and Communications, new pathway: Media Broadcast Technician.
• Health Science, new pathways: Phlebotomist and Resident Aide.
• Information Technology, new pathway: IT Broadband Technician.
• Manufacturing, new pathway: Electro-mechanical/Mechatronics.
• Transportation, Distribution, and Logistics, new pathways: Airport Operations and Management, Aviation Maintenance Fundamentals, Aviation Airframe and Powerplant Technician, Aviation Avionics Technician.

The YA program is coordinated and provided around the state by consortia that often consist of school districts, technical colleges, and chambers of commerce. Of the 421 public school districts, 321 districts, or 76.2 percent, had students enrolled in YA for the 2021-2022 school year.

Employers interested in becoming a youth apprenticeship sponsor can find more information here.

Federal Reserve Chairman Jerome Powell pledged that he and his colleagues will keep raising interest rates until they’re confident that inflation is under control.

In short and direct remarks Friday at an economic conference in Jackson Hole, Wyo., Powell acknowledged that higher borrowing costs will likely cause some short-term pain for families and businesses.

Unemployment may be higher and the economy may grow more slowly. But Powell warned the alternative — allowing high inflation to continue unchecked — would be worse.

“Without price stability, the economy does not work for anyone,” he said.

“We are taking forceful and rapid steps to moderate demand so that it comes into better alignment with supply, and to keep inflation expectations anchored,” Powell said. “We will keep at it until we are confident the job is done.”

President Biden signed the Inflation Reduction Act into law on Tuesday, saying “the American people won, and the special interests lost.”

The bill, which was passed by the Senate earlier this month and the House of Representatives last week, costs an estimated $437 billion, with $369 billion going toward investments in “Energy Security and Climate Change,” according to a summary by Senate Democrats.

Democrats project that the legislation will reduce the deficit by bringing in $737 billion. This includes an estimated $124 billion from IRS tax enforcement, the projected result of hiring 87,000 new IRS agents who will ramp up audits.

The bill also imposes a 15% corporate minimum tax that the Joint Committee on Taxation predicts will raise $222 billion, and prescription drug pricing reform that the Senate estimates will bring in $265 billion.

One thing the Inflation Reduction Act is not expected to do, according to multiple analyses, is reduce inflation. The Congressional Budget Office said the bill will have “a negligible effect” on inflation in 2022, and in 2023 its impact would range between reducing inflation by 0.1% and increasing it by 0.1%.

The Centers for Disease Control and Prevention (CDC) on Thursday relaxed many of the guidelines for COVID-19 in communities, a major shift that emphasizes living with the virus rather than strict prevention of infection. The new guidance puts the onus on individuals to assess their own personal risk levels, rather than businesses, governments or schools.

The new guidelines no longer recommend case investigation and contact tracing, except in health care settings and certain high-risk congregate settings. The new guidance also treats a COVID-19 exposure in the same way regardless of whether the person exposed is vaccinated. Under the new guidelines, there is no quarantine recommendation.

The agency no longer recommends physical distancing, and instead asks individuals to consider the risk in specific settings.

CDC will also no longer recommend screening testing of asymptomatic people without known exposures, except in certain high-risk settings like nursing homes and prisons.

“Screening testing might not be cost-effective in general community settings, especially if COVID-19 prevalence is low,” CDC wrote.

In schools, CDC removed the recommendation that kids avoid mingling with other classrooms, a practice known as cohorting.

It also removed a recommendation on “test-to-stay,” which was aimed at keeping children who were exposed to COVID-19 in the classroom as long as they had no symptoms and repeatedly tested negative.

They’re not just racking up higher balances on their credit cards as sky-high inflation and rising interest rates hit household wallets, though. A study released Tuesday by the Federal Reserve Bank of New York’s Center for Microeconomic Data shows a 13% cumulative year-over-year increase in credit card balances. That’s the largest jump in 20 years, since 2002.

Credit card debt stands at $890 billion as of the end of the second quarter, according to the quarterly report on household debt and credit. While credit card balances typically rise during the second quarter, the $46 billion increase makes the second quarter one of the highest jumps on record since 1999. The last time total credit card balances were this high was the first quarter of 2020.

“Americans are borrowing more, but a big part of the increased borrowing is attributable to higher prices,” New York Fed researchers wrote Tuesday. Not only did balances increase, researchers note, but the number of new credit cards was up too.

Mortgages, auto loans, retail cards, and other consumer loans also rose at a fairly rapid clip. In total, non-housing debt grew by $103 billion during the second quarter, the largest increase recorded by the New York Fed since 2016.

Overall, Americans’ total household debt increased by 2% to $16.15 trillion during the second quarter, according to the New York Fed. That puts balances about $2 trillion higher than they were at the end of 2019, prior to the onset of the pandemic.

Wisconsin companies will pay 8.47 percent less in worker’s compensation insurance rates starting October 1, 2022, giving a boost to businesses​ around the state, the Wisconsin Department of Workforce Development reported.

The 2022 rate decrease, approved by the Wisconsin Commissioner of Insurance, marks the seventh year in a row worker’s compensation insurance premiums have declined in Wisconsin. The latest reduction in premiums is expected to save Wisconsin employers some $146 million.

“Strong partnerships among employers, workers, training providers, and other stakeholders are helping to keep employees safe and healthy on the job,” said DWD Secretary-designee Amy Pechacek. “Wisconsin’s proactive, collaborative approach is delivering real benefits for workers and their families while supporting the competitiveness of employers statewide.”

Worker’s compensation insurance rates are adjusted annually by a committee of actuaries from members of the Wisconsin Compensation Rating Bureau. This independent body examines and selects the methodology and trends that produce the proposed rate adjustment, which is then reviewed and approved by the Wisconsin Commissioner of Insurance. While the overall rate level will decrease by 8.47 percent, the impact to policyholders will vary based on specific circumstances.

Wisconsin’s housing market is still being affected by lack of supply, according to a report from the Wisconsin Realtors Association.

Statewide median prices have gone up 10 percent through six months this year compared to the same timeframe in 2021.

However, overall listings during the month of June were down 14 percent compared to June 2021.

WRA President and CEO Mike Theo is anticipating that the current high demand is going to settle down by the end of the year.

“Without more inventory or a slowing down of demand to bring that equilibrium, we’re still going to see this upward pressure on prices and that means we’re going to start pricing more and more families out of the market,” Theo said.