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Regional Economic
Digest
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| Regional Economic Update The Tenth District economy continued to expand in the second quarter of 1998, although more modestly than in previous quarters. The arrival of summer produced a burst of construction activity, and manufacturing activity remained fairly strong. The farm economy weakened, however, and low energy prices again held back activity in the energy sector. The district unemployment rate rose for the first time in two years, as employment gains were limited. Back to top Regional Economic Digest home Survey
of Tenth District Manufacturers Manufacturing activity in the Kansas City Federal Reserve District contracted marginally in July, according to a quarterly survey of manufacturers across the district. This is the first time since July 1995 the production index has posted a negative reading, indicating a contraction in activity. The survey takes a snapshot of manufacturing the first month of each quarter by asking plant managers about a variety of manufacturing indicators (Table 1). By most measures, growth in the manufacturing sector slowed substantially from the April survey, and growth rates are well below the peak reached in October 1997. Some of the slowdown in July may have been the result of seasonal factors. However, the overall decline in almost all indicators suggests that the recent weakness of manufacturing at the national level has finally arrived in the district. Additionally, the G.M. strike also may have contributed to the slowdown. Inventories of finished goods declined after rising steadily over the last year. Prices received for finished goods declined for the third consecutive quarter, likely as a result of strong competition from Asian producers. Prices of raw materials edged up in June, following a pattern of very small changes so far this year. Overall, district manufacturing remained stronger than a year ago, performing well above the national average. Although manufacturers expect positive growth in the next six months, their level of optimism declined from what it was in April. Back to top Regional Economic Digest home Survey of Agricultural Credit
Conditions Back to top Regional Economic Digest home An Emerging Computer Sector in
the Tenth District Back to top Regional Economic Digest home Economic Indicators |