National economic statistics in Table 1 show that the country is in the midst of a slowdown. Preliminary reports indicate that Real Gross National Product increased by only .74 percent from second quarter 1989. Thus, the record long peacetime expansion is flirting with recession. Another measure of activity, industrial production, increased by a mere 1.3 percent from June 1989. Even these modest growth rates are optimistic since a good portion of the increase went toward inventory buildup. Inflation continued to be quite stubborn over the course of the year. The rate of increase for consumer prices hovers around the 5 percent level and is higher than many analysts believe is healthy for the long‑run vitality of an economy.
 

     On the positive side, unemployment rates for each of the three counties of Central Wisconsin plunged to record low levels for the second quarter time period. For the region the unemployment rate sunk to a very low 3.9 percent for June. In contrast the unemployment rate for the state stood at 4.1 percent.
 

     The good news concerning regional unemployment rates was tempered somewhat by the declines in the total number of people employed. For each county a decrease was recorded. This is the first time since the early 1980s that total employment in Central Wisconsin is below a previous year. The region experienced a preliminary decline in employment of 2600 positions or approximately a drop of 2.0 percent. The national economy continues to flirt with recession, employment from last year grew at an anemic 1.1 percent.
 

     A more optimistic view of the local economy is depicted in the amount of growth taking place in our industrial sectors. Employment grew by approximately 3.0 percent from last year with the majority of the sectors reporting solid gains from twelve months ago. Service sector job growth was the leader this quarter and paced all activity with a 6.2 percent gain from June of 1989. Trade and manufacturing also contributed to the positive situation with gains of 1500 and 300 respectively. Key Central Wisconsin industries, the foundation of our regional economy, grew by a very small 1.1 percent over the course of the year. Softness was especially apparent in the food processing and finance, insurance, and real estate categories. There employment levels are estimated to have receded by 200 and 300 jobs respectively. Paper products along with lumber and wood products were the bright spots for the local economy increasing by 3 percent and 9.6 percent.
 

     The consensus among regional business leaders is that economic conditions will not change that much in the months ahead. However, views concerning the future, especially regarding expected changes in their particular industries, were much less optimistic than three months earlier and the situation warrants close attention in future quarters by the CWERB.
 

     The Marshfield‑Wood County economy appears to have expanded in spite of a very weak situation nationally. However, given the lag that exists between macroeconomic and international events and the local scene, the future of the regional economy becomes cloudy and unclear. Positive factors at the local level in this quarter's report include expanding industrial employment and strong activity in residential construction.
 

     The determining influence of the national economy on local matters suggests that all interested individuals keep an eye on Washington and data concerning the U.S. Economy. At the time of this report several parts of the country are now in or are on the brink of sliding into a recession. The northeast is a prime example of a region that is already in recession. Wisconsin's neighbor to the south, Illinois, is near recession and Michigan, to the east, may have already crossed the line into recession.