The chances of recession in the first half of 1985 have diminished considerably in the last three months. A strong fourth quarter should propel the national economy into a solid first quarter performance. However, the growth rates attained earlier in the expansion are unlikely to be repeated. The ability of the economy to maintain a solid growth rate and avoid a recession in 1985 depends to a large extent on interest rates. Interest rate forecasts remain clouded by the impact of foreign trade and federal government deficits.

     The Marathon County economy is likely to be the immediate beneficiary of a pick up in national business conditions. The county should prosper most in the Central Wisconsin region from the recent drop in interest rates. However, the specter of a declining labor force hangs over the local economy, as well as Wisconsin in general. This trend may be indicating that individuals perceive inadequate employment opportunities. Such an interpretation suggests that long-term growth in the county will be reduced. More evidence is needed to confidently interpret this development.

      Portage and Wood counties tend to lag behind national conditions. Therefore, a mild slow down -can be expected. Indeed, evidence of such a trend is apparent in the fourth quarter indicators for the Stevens Point area. However, such a slow down is likely to be short lived in both counties. Construction activity will continue to fuel growth in Stevens Point, while the Consolidated Paper Corporation project will generate income and jobs in Wood County. As long as national conditions remain reasonably healthy, these two local economies will continue to grow.