U.S. and Kansas Economic Forecasts for 1993: Midyear Update

Abstract

The national economy will continue to recover in 1993 and 1994, but at a rate that is disappointing by historical standards for recoveries. The burst of growth at well above the long-run average that we are accustomed to seeing early on in a recovery has not occurred so far during this recovery, and there is no such burst present in our economic forecast for 1993 and 1994. On the contrary, so far the economy has not sustained growth that is even nearly equal to the long-run average, and our forecast suggests that the economy will continue to grow at a rate that is at least a percentage point below the long-run average rate of growth for the next two years.

The run during which the Kansas economy has outperformed the national economy appears to be over. Partly because of developments in the durable goods manufacturing sector, the Kansas economy appears headed for a slow-down in 1993 and 1994. Although nonfarm wage and salary employment will continue to grow, at 1.4 percent in 1993 and 1.1 percent in 1994, overall Kansas employment growth will not keep up with the growth of the labor force, and the state is expected to see a significant increase in its unemployment rate. Personal income growth will also be sluggish over the next two years, growing even more slowly than in the U.S. as a whole. Real personal income growth for the state over the next two years is expected to be only 1.1 percent per year.