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Moderate economic growth in 1998, UI forecasters say
IOWA CITY, Iowa -- Real personal income for Iowans is expected to grow strongly
in the first three months of 1998, but will moderate to about 1.8 percent
growth over the course of the entire year, the director of the University
of Iowa's Institute for Economic Research says.
Beth Ingram, associate professor of economics in the College of Business
Administration, says 1998 is expected to start solidly because strong economic
growth from 1997 is expected to carry over into the first quarter.
"The economy is still going up, but the question is, 'By how much will
it go up?'" Ingram says. "We expect the rate of growth that we've
seen will slow somewhat in 1998."
Ingram, who also chairs the Iowa Economic Forecasting Council, a state commission
that provides data on economic trends and issues to state policymakers, says
Iowa's economy has been relatively stable since recovering from the farm crisis
of the 1980s, and the flood-affected years of 1993 and 1994.
Traditionally, Iowa's unemployment rate is lower than the national average,
but Iowa's economic growth has followed upward national trends during the
past five years.
According to the Institute's projections for the new year:
-- Real personal income (that is, adjusted for inflation) will grow about
2.8 percent in Iowa in 1997. That compares to estimates of 3.7 percent growth
nationally for the year.
-- Real personal income will grow about 1.8 percent in Iowa in 1998, compared
to about 2.5 percent nationally.
-- Farm employment is expected to grow about 0.4 percent in 1998, down from
1997's growth of 1.5 percent. Jobs in durable goods and manufacturing are
also expected to decline in 1998.
-- Most non-farm employment growth is expected in the service sector, which
is expected to grow by about 2.4 percent in 1998, down from 3.9 percent in
"The economy is creating new jobs and will continue to create new jobs,
but not as quickly as it was in 1997," Ingram says.