The Wausau area economy improved over its second quarter performance. Modest strength was displayed in a number of important categories. It appears that the local economy is responding to favorable changes, e.g. lower energy costs, slow growth in inflation. The evidence to support this contention is as follows. Total employment in the Wausau area has increased. Nonfarm employment by sector is up for all classifications except government jobs. The decrease in employment was reportedly due to the differences in the dates that certain groups are recorded as being employed.

     The unemployment rate has risen. This is due to a faster rising labor force. In other words, when job conditions improve, discouraged workers are induced to re-enter the labor market. Another factor causing the rate to increase was the unusually bad weather of September, which delayed seasonal employment.

     The retailer confidence index indicates that retail sales are likely to improve. The help wanted index shows a greatly improved labor market over that of last year, which will translate into future employment. Moreover, total unemployment claims are down, along with new applications for public assistance. Conditions have improved slightly in the area of commercial construction. Lastly, bank loans have increased during the last two quarters, indicating growth in economic activity.

     The employment situation in Marathon County is looking up. Total employment has risen from 50.9 to 52.0 thousand. This represents an increase of 2.2% from last year. See Table 3. Employment by sector is displayed in Table 7. Manufacturing experienced an increase of 3.7%. Thus, for the past several quarters manufacturing has been showing steady improvement. Services recorded a gain of 100 jobs over last year, i.e. 0.7% and trade also registered an increase. Employment in this sector rose by 500 from last year or 4.8%. Construction expanded by a healthy 600 jobs. Only the government sector had a decline in employment. Employment contracted by 400 positions or by 6.9%. Thus, employment in the nonagricultural sectors expanded by 1.3 thousand over last year. This represents a healthy 3.1% increase.

    Table 8 presents the retailer confidence index for Wausau. The survey of retailers indicates that sales and store traffic are mildly better compared to the previous year. These responses are at approximately the same level as in June. The expected level of sales and store traffic will be better in the next 3 months according to the retailers. This confidence results from the approaching Christmas season. However, these expec1ed index values are somewhat higher than third quarter 1985. Thus, retailers are more confident than last year about potential sales arising from the Christmas buying period.

     The help wanted index in Table 9 indicates that labor demand in the Wausau area is significantly higher than in September 1986. This indicator signals an improved job situation over last year. The index is now about 50% higher than in 1985. No improvement was evident for the United States since the index remained essentially unchanged from last year.

     Table 10 presents the number of public assistance claims made from July to September in the Wausau area. A major change in the method of calculating public assistance claims has taken place. Figures are now collected on a county-wide basis. Thus, the data will tend to be overstated when compared to 1985. However, even with the change, a decrease was recorded in the new applications category, i.e. -15.8%. This is a sign that local conditions have improved since last year.