It appears that the national economy has pulled out of recession. First quarter 1992 saw real Gross Domestic Product increase by approximately two percent. This marks the fourth consecutive quarter of economic expansion. Although this expansion is one of the weakest on record, it does appear to be real and sustainable. The previous three quarters saw real GDP grow on average by about one percent per quarter.
 

     The expansion, as mentioned in previous reports, is likely to be less than spectacular because of a number of lingering problems. Some of these problems include, but are not limited to, the slowdown in real defense expenditures, the high debt levels accumulated in the 1980's by households and businesses, financial excesses in some parts of the country, and low consumer confidence. Furthermore, even though the economy appears to be growing, the unemployment rate is likely to remain at a high level for some time, because a significant proportion of jobs lost were in an cut in an effort to make U.S. firms more competitive. In other words, even with a recovering economy these individuals will not be called back to their old jobs. Instead they will probably be slowly reabsorbed into the economy as new opportunities arise.
 

     The factors that appear to be propelling the economy forward at this juncture are consumer spending, housing activity, and exports. Consumer spending, which accounts for 66 percent of all economic activity, grew by 5 percent during first quarter 1992. Housing activity ‑sales, construction, etc. is providing much needed stimulus to the national economy. The fall in housing prices in many parts of the country and lower interest rates have all contributed to the situation. Exports of U.S. made goods to the rest of the world is also an important aspect of the recovery. The U.S. in 1991 passed Germany as the number one exporter in the world with over $422 billion in exports for the year. As a matter of record, twenty percent of U.S. industrial production goes toward filling foreign demand overseas. One problem concerning U.S. exports is that many of the industrialized countries to which the U.S. sends exports are in or near recession. All else being equal, this may dampen future exporting activity.
 

     New job growth in the economy may be better later in the year if surveys dealing with business hiring plans are accurate. Several business surveys of this type suggest that nationally and in Wisconsin firms plan on adding new jobs over the course of the year. However, business plans can change quickly if economic conditions deteriorate.
 

     Finally, the riots in Los Angeles will make it more difficult for southern California to pull out of its regional recession. Thousands of businesses were destroyed and as a result many people lost their jobs and income. Unlike natural disasters, where a flourish of activity to repair the damage usually provides an economic stimulus, this socioeconomic disaster will be much more slowly addressed by individuals and businesses because of the great uncertainty surrounding the future of the affected areas.