Last year the real GNP grew by 3.8%, a stronger showing than was predicted by many analysts (Table 1). Thus even with the dampening effect of the stock market crash, the national economy continued its record-long peacetime expansion. The Federal Reserve reported that the nation's factories were operating at 82% of capacity. Not since the early 1980s has the rate been so high. Although interest rates declined sharply after the crash of October 19th. Overall, three month Treasury Bill rates have risen by nearly .5%, from 5.82% to 6.32%, over the course of 1987. Inflation, as measured by the CPI, for the period came in at 4.4%. This is much above last year's figure of 1.1 %. However, last year's rate was influenced by the precipitous decline in energy prices, oil prices decreased almost 20% in 1986. The outlook for the national economy calls for continued expansion but at a somewhat sluggish rate.

     The unemployment data for the region suggest that fourth quarter 1987 was one of improvement. Except for Wood County, the region saw a substantial decline in unemployment. Drops in regional unemployment rates were accompanied by increased employment in all three counties. In other words, 7200 more people are employed in Central Wisconsin than a year ago. Also, the state and nation performed well in job generation.

     Employment statistics by major sector indicate that manufacturing, especially durable goods, was the major source of new jobs in Central Wisconsin. The data show that 31 % of the increase in nonfarm total employment originated in durable goods manufacturing. The service, trade, construction, and government sectors expanded at respectable rates during the fourth quarter.

     Key Central Wisconsin industries saw their payrolls expand by 1,500 positions. Lumber and wood products employment made the largest stride forward by adding 700 people. Overall a 5.7% increase was registered for the Key Industry group. Thus, much vigor was seen in the region's basic industries. Business leaders expressed serious concern over recent national events. However, as a group they remained quite optimistic about conditions in their industries. This is welcome news for the people of Central Wisconsin. Furthermore, regional executives feel that local and national conditions will improve in the near future.

     The Stevens Point-Portage County economy continued its expansion. However, there were signs that the rate of growth has slowed when compared to the early part of 1987. Evidence of growth is apparent in the following areas. The unemployment rate has decreased, total employment is 2.4% higher than last year, and bank lending was heavy during fourth quarter 1987. The local economy has many positive factors working for it as 1988 unfolds. Some examples are the moderate rate of inflation, the lower dollar and viability in key regional industries.

However, the national economy appears to be slowing. It is expected to register very little growth during 1988 and will have a difficult time staying out of a recessionary mode. This of course will have a major influence on regional economic behavior.