U.S. and Kansas Economic Forecasts for 1992: Midyear Update

Abstract

The U.S. economy is in the midst of a somewhat sluggish recovery from the recent recession. When viewed simply as two quarters of negative growth at the end of 1990 and the beginning of 1991, the recession appears to have been somewhat mild. However, when the period of slow growth that proceeded those two quarters and the fairly anemic recovery that has followed are considered, the whole period is one of quite significant lost output. In fact, of all the recessions since 1959, only the recession of the early 1980's involved more lost output when considered in this way. The effect on employment appears to have been a little less severe, but still substantial. One feature of the recovery period has been a surprisingly low growth rate of the money supply; the Fed's obviously expansionary efforts to bring down interest rates have not been translated into an equally expansionary effect on money growth. As a result, the effect of the Fed's policies has been much less expansionary than intended.

The Kansas economy will continue to be somewhat stronger than the national economy in 1992 and 1993. Non-farm wage and salary employment in Kansas grew 1.0 percent in 1991, while it was falling by 1.3 percent in the nation as a whole. Such employment in Kansas is expected to increase 1.8 percent in 1992 and 1.3 percent in 1993.