The national economy which earlier this spring showed signs of life has once again weakened and is now stumbling. Real gross domestic product for 2nd quarter 1992 grew by only 1.0 percent from last year. For the record the economy has continued to expand over the last five consecutive quarters, albeit at a less than spectacular pace. The consensus forecast for the economy is that the nation will continue this trend of lackluster performance for the remainder of the year. 

     Consumer confidence concerning the future of the economy has turned downward. This is reflected in retail sales activity which rose by only 0.5 percent in June. Given that the inflation rate was 0.3 percent for June, the amount of real sales activity was actually up by only a scant 0.2 percent. Exporting activity which had been so robust for the U.S.A and had provided much needed stimulus, has cooled off because of sluggish demand from overseas. The fall in demand has resulted from the weakening economies of our major trading partners. Government spending will create a deficit of approximately $400 billion for fiscal 1992. Usually a situation such as this would be very expansive, however dollars used to correct the S&L situation are proving not to be as simulative as tradition government expenditures. For political reasons it seems unlikely that a much larger deficit can be run to stimulate the economy. 

     In a statement made to Congress, Federal Reserve chairman Alan Greenspan expressed the belief that the national economy has weakened once again. The Federal Reserve has been forced once again to cut the discount rate, the rate at which banks can borrow reserves, to 3 percent. Further, Greenspan announced that real money supply growth this year has failed to meet Federal Reserves targets and thus has failed to achieve a rate of growth that is consistent with what many analysts believe is necessary to truly stimulate the economy. Moreover, the same critics contend that the Federal Reserve's preoccupation with inflation over the past several years, and the resulting tight monetary policy, has set the stage for continued snail like economic performance. However, the position that Greenspan and other economists hold is that the basic fundamental problem facing this country is the huge debt burden accumulated by households, businesses, and government during the last decade. Simply stated that until such a time as these sectors of the economy have paid down their obligations to a level they are comfortable with, it is unlikely that spending activity will rebound to more modest levels. Without this spending, jobs can not be created in great quantities nor can income levels rise in the country. Case in point‑inflation adjusted per capita income actually shrank in 1991 in the U.S. for the first time in nine years and this marks the third consecutive year in which the already anemic growth rate in real per capita income has fallen. 

     Closer to home, recent layoffs at area firms such as Celestial Farms in Plover, Marment, Marathon Electric, and Wausau Metals in Wausau, and J.I. Case in Schofield, and Woodward Governor in Stevens Point underscores the interdependence of the Central Wisconsin economy with the national situation. However, even given the above the region has managed to increase manufacturing employment along with most other position categories. The reasons for this, of course, have been elaborated on before in earlier reports but may be worth repeating once more.  

     In brief, a central location, strong work ethic, a trained workforce, abundant natural resources, few firms engaged in defense contracting, lack of past financial excesses et al., have allowed this area to perform relatively well when compared to many sections of the nation.