The U.S. economy has expanded for six consecutive years - the longest peace time expansion in U.S. history. Table I provides selected statistics on the national economy. Real Gross National Product increased by a respectable 2.7 percent from last year. This figure was a bit higher than many analysts had predicted after the stock market crash of October 19, 1987. Another gauge of overall performance, the industrial production index, shows that factory activity increased by a hot 4.7 percent With the economy approaching its productive capacity it was expected that interest rates and inflation would be higher in 1988; and the T-bill rate was up by 190 basis points. And while inflation was not exactly raging, the level was higher than the historic norm.

     Unemployment rates in the counties, region, state, and nation plummeted. The numbers for Central Wisconsin represent the lowest since the early 1970's Undoubtedly the national expansion has touched the heartland of Wisconsin.

     Likewise, employment growth in the area has dramatically increased. Comparing December 1988 to the previous year shows that there are now nearly 4000 more people employed. The state and nation showed similar gains. Locally, services and manufacturing were leaders in the advance by posting gains of 900 and 700 respectively. Government employment also was a leader with an increase of 900. Overall, nonfarm employment grew by a steady 2.3 percent from a year ago.

     Employment changes in the region's basic industries were variable. On the up side, the paper products and food processing industries each added 200 people to their payrolls. However, the financial sector of Central Wisconsin saw no increase in employment over the course of the year and lumber and wood products employment was lower than the year before. Thus, in the aggregate, key regional employment fell by l.l percent.

     Business confidence in the three county area was stuck in neutral. Our panel of local business managers expected no change in national, local, and industry business conditions. Given the fact that the economy has been doing relatively well, this response should be viewed in a positive light. Moreover, by implication, a recession is viewed as unlikely at this point.

     The Stevens Point-Portage County economy performed in a manner consist~nt with the rest of the region. Specifically, the unemployment rate was at a relatively tow level while total employment stood at an all time high for December. Many other economic indicators tell similarly of a healthy local economy. However, there were a few measures of local performance that were not positive, i.e. unemployment claims data.

     The consensus view among economists is that the national economy should continue to expand throughout 1989. GNP is expected to grow by approximately 3 percent with inflation forecasted at around 5 percent. Consumer demand, exports and capital investment should all play an important role in spurring the economy.