Trend of business: the U.S. and South Dakota economies.

Trend of Business

The United States Economy

The U.S. economy continues to remain weak. Contributing to the sluggish economy are retail sales which fell sharply in February due mainly to declining automobile sales. Car sales fell 6 percent in February following January's 9.9

Real GNP rose 2.5 percent in the fourth quarter of 1989 compared to this period a year ago. For 1990, GNP is expected to grow at a 2 to 2.5 percent rate.

The Consumer Price Index (CPI) rose 4.8 percent during 1989. Forecasters anticipate about the same rate of increase for 1990.

U.S. seasonally adjusted total personal income rose 8.5 percent in the third quarter of 1989 compared to a year ago. Farm income for this period rose 11 percent, while nonfarm income increased 8 percent. Industries showing the most growth included the service sector and the wholesale trade sector--up 11 and 10 percent respectively.

Total employment rose 1.6 percent in the fourth quarter of 1989 compared to a year ago. The unemployment rate for this period was unchanged at 5.1 percent.

The South Dakota Economy

Significant changes occurred in the state's labor market during the past decade. The South Dakota Labor Bulletin reports a continued increase in the labor force participation rate for women from a rate of 39.1 percent in 1970 to 50.3 percent in 1980. Dual income households, an increasing number of female head of households and career oriented women propelled this rate to 68.9 percent in 1988.

Nonfarm employment in the State increased 3.3 percent in 1989 compared to a year ago. Seasonally adjusted nonfarm employment rose 1.2 percent in the fourth quarter of 1989 from the same quarter a year ago.

The unemployment rate on a seasonally adjusted basis rose slightly at the end of the year--from 3.2 percent in the third quarter to 3.4 percent in the fourth quarter of 1989.

Construction employment was up in the fourth quarter of 1989 from a year ago displaying a 5.3 percent gain. The Labor Bulletin reports a gain of 600 construction jobs in 1989. The building of homes in the expanding cities of Sioux Falls and Rapid City, along with the Aberdeen mall project and the Spearfish convention center provided for some of the growth in this sector.

South Dakota's personal income fell 1 percent in the third quarter of 1989 from the previous period. Leading this decline was the nearly 20 percent decrease in South Dakota's farm income.

Sales of new cars and trucks tumbled in the final quarter of 1989 compared to the previous quarter. Seasonally adjusted figures show a decline of 29 percent in car sales and a 27 percent drop in the sale of new trucks.

Further comparisons of these indicators of economic activity are included in the following table.