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The United States Economy

Real Gross National Product (GNP) posted an increase of 2.7 percent in the second quarter of 1989, down from the 3.7 percent last quarter. In the July issue of the Survey of Current Business, the U.S. Department of Commerce attributes approximately 2 percent of the first quarter's increase in GNP to a rebound from the 1988 drought. Discounting this 2 percent effect, the GNP increased at roughly the same rate in both quarters. The average annual rate of real GNP growth for the year is 2.7 percent.

Disposable of 1989, down from the 12 percent recorded in the second quarter of 1989, down from the 12 percent recorded in the first quarter. The personal savings' rate decreased 0.2 percent, the first decrease in the last year. This was largely a result in the slowed growth of disposable personal income.

Domestic car sales were up 0.3 million units from the first quarter. Sales of domestic trucks increased slightly.

The nation's unemployment rate rose somewhat this quarter to 5.3% of the civilian labor force, compared to 5.2% for the first quarter. Annualized, the average unemployment rate for 1989 is 5.2 percent. Total civilian employment increased slightly.

The Index of Leading Indicators was relatively unchanged from May to June and rose 0.2% in July. Factory orders reached their lowest level since November 1988. Weak manufacturing area activity is causing some concern among economists.

Average per capita personal income in the U.S. is $16, 489, a 6.6% increase over 1987. Total personal income increased 9.5 percent from the 1st quarter of 1988 to the 1st quarter of 1989. Farm proprietors' income nationally increased 130.7% from the previous quarter. Inflation, as measured by the Consumer Price Index, rose 5.3% on the second quarter of 1989, compared to this period a year ago. Most economists are predicting continued economic expansion throughout 1989, but feel that the rate of growth will slow considerably.

South Dakota's Economy

On a seasonally adjusted basis, unemployment in South Dakota continued to rise in the first half of 1989, increasing from 4.0 percent in the first quarter to 4.2 percent in the second quarter. The current unemployment rate is slightly higher than the 4.1 percent posted in the same period last year. Seasonally adjusted non-agricultural employment is nearly 4 percent higher than last quarter, but is less than 1 percent higher than the same quarter a year ago. Employment levels in construction improved somewhat this quarter, rising almost 1 percent. Current construction employment has only dropped approximately 1 percent, compared to the same period in 1988.

Personal income continued its upward trend, increasing slightly more than 8 percent in the first quarter of 1989. The sizable increase (335 percent) in real farm proprietor's income accounted for a large portion of this increase. Following the drought-induced losses of the third and fourth quarters of 1988, the first quarter increase reflects a return to near normal levels of early 1988.

New car sales on a seasonally adjusted basis rose 5.0 percent over last quarter, although they are 6.7 percent less than the same quarter last year. New truck registrations hit their lowest point since the fourth quarter of 1987. Seasonally adjusted, new truck sales dropped 8.0 percent from last quarter and are 4.8 percent below the level of the second quarter in 1988.
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Title Annotation:includes information on the U.S. economy and South Dakota's economy
Publication:South Dakota Business Review
Date:Sep 1, 1989
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