The national economy grew at a slower rate than in first quarter 1987. Results for the second quarter indicate that GNP expanded at an annual rate of 3.7070. As stated in the previous CWERB report, an unusually mild winter may have had a strong positive effect on first quarter economic performance as GNP "rocketed" upward by 4.3%. Thus, we see that economic growth at the national level has decreased somewhat, but is still quite respectable and the expansion which started approximately five years ago continues. Industrial production has picked up since last year. Moreover, the general level of interest rates has remained favorable for interest sensitive activities such as housing, and business investment. Economic forecasters are predicting that GNP will grow at around 2.5-2.7% for the remainder of the year with inflation running at approximately 4.5%. Furthermore, the unemployment rate will remain virtually unchanged at a seasonally adjusted rate of 6.3%. Thus, it appears that this record long peacetime expansion will continue into the latter part of the year and beyond.

     The unemployment rate decreased significantly in each county of the region. Marathon County registered the lowest level, i.e., 4.5%. Closely following the improvement of Marathon were Wood and Portage counties. CWERB's unemployment rate for Central Wisconsin stands 1.2 points lower than a year ago. The 5.2% rate for Central Wisconsin is lower than the state and national averages. This is a reversal of last year's situation. Thus the region is showing signs of vitality.

     Total employment figures also were indicative of an improved regional economy. Each county experienced appreciable employment gains. Wood County led the way with an 8% jump. Marathon and Portage counties also exhibited healthy increases. Thus combined, Central Wisconsin saw 7200 persons added to payrolls. Furthermore, activity at the state level was brisk, i.e. nearly a 5% increase in employment was recorded. Growth at the national level was a modest 2.4%. Expansion in the regional job market was broadly based with manufacturing having the largest gain of 3300 new positions. In summary, total nonfarm employment exceeded last year's level by 4300 jobs or 4.2%.

     Key Central Wisconsin industries provided much of the impetus for regional expansion. A gain of 10.8% or 2700 jobs in key sector industries illustrates the inherent strength of the Central Wisconsin regional economy. It was reported last quarter that several of these industries would have a more profitable year in 1987;e.g., finance, insurance and real estate. Thus with these basic sectors showing the potential for growth, the future looks bright for the area. Furthermore, the CWERB's survey of regional business leaders indicates that although there is less optimism than in the previous quarter, the "no change" response can be interpreted to mean that favorable conditions will continue.

     The Stevens Point-Portage County area experienced measurable gains in many facets of its economy. Growth, as in the region, seems not to have been effected by the mild winter weather. That is, employment grew at approximately the same rate as in first quarter 1987. Likewise, a substantial decrease in the unemployment rate took place in the first and second quarters of 1987. The CWERB believes that the expansion in the local economy will continue during the remainder of the year. Besides the favorable variables of relatively low interest rates, the lower dollar, and mild inflation, a number of factors are operating at the regional level. For example, the farm economy is improving, business confidence remains positive and conditions should not deteriorate in the near future, retail activity will expand according to survey results, local labor demand continues to be strong, and residential construction has been quite vigorous during the past few quarters. Lastly, nonresidential construction has been consistently adding to the community's capital stock.