The national economy continued to set records for peacetime prosperity. Table 1 presents data on the Gross National Product. The 3.5 percent increase in the sum of final goods and services produced is remarkable given the length of the expansion (six years). Another piece of evidence supporting this assertion is the 5.7 percent increase in industrial production reported by the Federal Reserve System. This means that U.S. factories are producing at a significantly higher rate than last year. Interest rates are virtually unchanged from a year ago, providing encouraging news for producers of big ticket items and housing. The Consumer Price Index has increased by approximately 3.9 percent. Thus, inflation is not a serious problem at this time. However, inflation, even at this rate, can become burdensome for consumers and the economy if it is sustained over a long enough period of time. Finally, the prognosis for the nation remains positive as the stock market crash of October 19th becomes a fading memory.

Unemployment rates for the Central Wisconsin counties were dramatically below last year's levels. Also, state and national rates were greatly improved over the same time period. Employment in Central Wisconsin rose by 3800 positions or 3.3 percent. But growth was uneven among the three counties. Structural differences among the counties and plant closings influenced this situation.

Manufacturing in Central Wisconsin led all sectors by posting a gain of 2100 jobs, an 8.2 percent increase from a year ago. Strength was also evident in services and trade. Overall, non-farm employment expanded at a healthy 4.4 percent adding 4400 positions. Thus, manufacturing accounted for nearly half of the regional employment growth. Since manufacturing jobs are on average higher paying than other types of employment, this sector's growth is even more significant and important to the region.

Key industry payrolls grew by 800, with food processing accounting for the largest gain. Over the past several years food processing has emerged as a major component in Central Wisconsin. Business confidence in the region has rebounded since the financial turmoil of late last year. This parallels national confidence poll results. Regional business managers believe that local and industry conditions will be improving in the near future.

The Stevens Point area economy expanded slowly from last year. Total employment grew by only 1.4 percent from first quarter 1987. However, total non-farm employment increased at a healthier rate of 2.8 percent. Areas of strength and weakness were evident in the local economy. Examples of strength were the relatively low unemployment rate and the record high level of first quarter employment. With the national economy appearing more vigorous than it did at year's end, the local economy should benefit from this positive influence.

The resilience of the national economy is documented by its first quarter 1988 performance. It is quite likely that the economy will continue to expand, at a moderate rate, for the next several quarters. However, fundamental imbalances continue to exist and could have a negative influence on local developments.