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Trend of business.

TREND OF BUSINESS

The United States Economy

Economic forecasters from Data Resources, Inc. (DRI) and Blue Chip are predicting a bottoming out to the recession. A mild recovery is expected to begin in June or July. Housing and nonresidential construction is not expected to make a sudden rebound due in part to overbuilding during the 1980s and difficulty in financing building activity. The National Index of Consumer Confidence returned to its pre-Gulf crisis level, measuring 87.7 in March 1991, but tapered off to 81.8 in April. Layoffs and falling incomes have tempered consumer spending.

Employment levels during the first quarter of this year fell slightly from a year ago. Total employment was down 1 percent and nonagricultural employment fell 0.3 percent. The unemployment rate was 7.1 percent in the first quarter of 1991 compared to 5.7 percent a year ago.

Seasonally adjusted total personal income rose nearly 6.0 percent in the fourth quarter of 1990 compared to a year ago. Farm proprietors' income increased 9.0 percent. The U.S. Department of Commerce Bureau of Economic Analysis reported a widespread slowdown in personal income growth in the fourth quarter of 1990 compared to the third quarter. All regions except the Rocky Mountain and Plains felt the slowdown.

The South Dakota Economy

South Dakota's indicators of business activity maintained by the Business Research Bureau were up in the income sector. Total personal income on a seasonally adjusted basis increased 6.2 percent in the fourth quarter of 1990 compared to the previous quarter. Federal farm subsidy payments which are usually paid during the fourth quarter of the year, boosted farm proprietors' income 53.3 percent.

Seasonally adjusted non-agricultural employment increased slightly (0.2%) in the first quarter of 1991 compared to the previous quarter. From a year ago, nonag employment grew from 277.4 thousand jobs to 286.4 thousand jobs--an increase of 3.2 percent. All of the major sectors showed some growth. Construction employment led the way with an 11.7 percent jump, followed by retail/ wholesale trade--up 5.7 percent. The seasonally adjusted unemployment rate of 3.7 percent in the first quarter of 1991 was slightly higher than the 3.5 percent rate of the previous quarter--still well below the national rate.

Particularly slow are new car and truck sales in South Dakota. Seasonally adjusted figures showed a downturn in car sales of 10.5 percent and 15.6 percent for truck sales in the first quarter of 1991 compared to the last quarter of 1990. Further comparisons of these indicators can be found on the following page.
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Publication:South Dakota Business Review
Date:Jun 1, 1991
Words:437
Previous Article:South Dakota personal income update.
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