What evidence is there that the U.S. economy is performing well and will most likely continue to do so for the remainder of the year?  The following information
will highlight certain aspects of the economy and its meaning to area residents. 

     The housing outlook, although cooling somewhat from the torrid pace of last year, remains robust.  Also, vehicle sales for U.S. manufacturers are surging. Housing and vehicles represent items with the highest dollar value that households
purchase.  Rising income levels and attractive interest rates have served as the
catalyst for the consumption of these goods. 

     Income growth across the nation has been quite substantial.  For example, in
Wisconsin, personal income, i.e., wages, interest, rents, and profits accruing to
households, grew by a very healthy 6 percent in 1998.  Moreover, the government reports that the median income for a family of four rose from $48,200 to $51,200
in Wisconsin over the past year. 

     The growth in the economy has also had an unexpected positive impact on the
nation's social security system.   Rising income levels have added approximately 2 more years of solvency to the system; i.e., to the year 2034.  In addtion,
Medicare solvency has been improved by about 7 years and will be in the black
until the year 2015. 

     Corporate profits for the majority of industries in 1st Quarter 1999 have exceeded expectations.  However, some industries like steel, aircraft, and paper are still suffering from the Asian recession.   The good new is that the worse part of the Asian crisis may be behind us.   This bodes well for companies affected by the
situation and for the economy in general. 

     The stock market indices are now at record levels.  The Federal Reserve
estimates that over the last 16 years nearly $10 trillion of wealth has been
created by the upward movement in the markets.  Why are the financial markets
and economy performing so well? 

     There are many factors that can be cited as playing a role in the growth.  A few of the more important factors are as follows: Corporate restructuring over the past
20 years has greatly increased the competitiveness of U.S. businesses.  This
has helped to fuel profits.  The end of the cold war has allowed the U.S. to
redirect resources toward peacetime activities and problems.  The baby boom
generation, all 79 million of them, are entering their prime earning years.  Their
savings for retirement has created a tremendous inflow in the nation's capital
markets, which, in turn, has greatly lowered the cost of raising capital for
corporations.  The growth and potential of information technology is now hitting
our economy full force.  Our economy is quite literally, being transformed.  For
example, it is estimated that 50 percent of business spending on new equipment is information technology based.  Further, from 1992-1998, 33 percent of all GDP growth was accounted for by business investment. 

     Also playing a key role in the economy has been the movement to deregulate the economy.  This movement started under the Carter administration and has
continued through the Reagan, Bush, and Clinton administrations.  Deregulation
has helped many industries to consolidate and modernize, thus becoming more
competitive.  Lastly, the important role of the Federal Reserve cannot be ignored.  The Fed's fight and continued vigilance against inflation has helped to create low
interest rates and a stable economic environment.  Thus, many factors have
come together to create this robust economic situation which we now enjoy.