| dc.description.abstract | During 1988 real GNP growth will slow to 2.4 percent for the year compared with 2.7 percent for 1987. In the first half of the year, real GNP will grow at an annual rate of only 1.8 percent, but it will pick up to 3.3 percent in the latter half. We forecast that all the major components of GNP, consumption spending, investment spending, government purchases, and net exports, will grow in real terms during the year. Consumption spending and investment spending will grow more slowly during the first half of the year due to the October 1987 stock market crash. However, the falling dollar will make U.S. goods cheaper abroad, reducing the trade deficit and boosting GNP. The trade-weighted average of the dollar will fall 10 percent in 1988 after falling 13 percent in 19 87. Consequently, the U.S. trade deficit in real terms will fall from $131.3 billion to $112 billion during the year. Real U.S. personal income will grow 1.8 percent. Due to social security tax increases, real disposable income will grow only 1.4 percent. Although this is an improvement over last year's 1.1 percent, it will be well below 1986 growth of 4.05 percent. U.S. employment will grow steadily throughout 1988, though at a lower rate early in the year. It will average 1.8 percent for the year, which is significantly below the 1987 rate of 2.6 percent. Slower growth will reduce pressure on prices so that inflation will average 4.7 percent for the year. The outlook for real personal income growth in the nation is not auspicious (1.8 percent), and the Kansas forecast is worse: In real terms Kansas personal income will grow only 1.1 percent. On the other hand, per capita personal income will closely track the nation, since Kansas population will not grow as fast as U.S. population. In current dollars, wage and salary income will grow 5.8 percent, nearly the same rate as the nation (5.9 percent), but falling farm proprietors' income will dampen Kansas personal income growth. In the same fashion falling farm employment will depress Kansas total employment, which will grow 0.7 percent in 1988 compared with 2.5 percent in 1987. But Kansas farm employment will fall 1.5 percent, while nonfarm wage and salary employment will grow 1.5 percent. Figures for nonfarm wage and salary employment are more reliable than total employment figures, because data for self-employment and for farm employment are extremely difficult to collect. The trend has been for growth in wage and salary employment in Kansas to underperform the nation. During 1987 Kansas nonfarm wage and salary employment grew 1.5 percent, while U.S. growth was 2.4 percent. But during 1988 Kansas's growth rate of 1.6 percent will be nearer the national rate of 1.9 percent. The leading sector for employment growth will be mining (8.7 percent), which makes up about 1 percent of total employment. Growth in service sector employment will be 2.4 percent in 1988 compared with 3.0 in 1987. Employment will grow 2.3 percent in nondurable goods manufacturing in 1988. Within that sector, printing and publishing will lead with 2.7 percent growth. Employment in durable goods manufacturing will only grow 0.5 percent, const rained mainly by a 1.4 percent reduction in transportation equipment manufacturing, which includes aircraft manufacturing. Forecasted employment growth for the entire manufacturing sector, which makes up 15 percent of the Kansas economy is 1.2 percent. Wholesale trade will grow 2.2 percent (-0.4 percent in 1987), retail trade employment will grow 1.9 percent (2.6 percent in 1987), construction employment will grow 1.2 percent (-2.0 percent in 1987), transportation and utilities will grow 0.8 percent (0.8 percent in 1987), and finance, insurance and real estate will not grow, although this sector grew 2.2 percent last year. | en_US |
