U.S. and Kansas Economic Forecasts for 1990

Abstract

The rate of growth of the national economy will slow considerably in 1990. Just as the 4.4 percent growth of GNP in 1988 surprised most forecasters with its strength, the 3.0 percent GNP growth in 1989, boosted by an unexpectedly strong third quarter, was greater than most forecasters were predicting even as late as midyear. Nevertheless, the less than one percent growth during the final quarter of the year was the beginning of a growth slowdown that will be felt in 1990. We are forecasting less than one percent growth for the first quarter of the year, with the economy picking up some strength as time goes on, but we still expect GNP to grow only 1.5 percent for the year.

Reduced growth of the national economy in 1990 will be reflected in slower growth of the Kansas economy. Total employment will grow only 0.2 percent in 1990 after growing 0.9 percent in 1989. Since the labor force will continue to grow at its 0.4 percent rate of 1989, there will be a small increase in the unemployment rate, from 4.3 percent in 1989 to 4.5 percent in 1990. Nonfarm wage and salary employment, which does not include farm employment, self-employed persons, or adjustments for residence, and which we feel that we can forecast more reliably than tot.al employment, is predicted to grow only 0.8 percent in 1990, compared to 2.1 percent in 1989.