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BEEHIVE STATE CAN SOAR INTO THE ‘90S ON WINGS OF IMPRESSIVE GROWTH

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Armed with a briefcase full of impressive quarterly growth figures, Utah can stride into the new decade of the '90s with its head held high and hope in its heart.

That's the message of First Security Corp. economist Dr. Kelly K. Matthews in the bank holding company's quarterly economic newsletter Insights."New job expansion in September, at 4.4 percent, was the third highest nationally, ranked only behind Nevada and Washington," said Matthews. "The robust growth in Utahns' employment opportunities has translated into accelerated income and sales expansion."

This "remarkable economic resurgence" Utah is enjoying is finally getting noticed across the land, said Matthews, noting that Fortune magazine ranked Salt Lake City first among some "real comers" in mid-size cities and U.S. News & World Report identified Salt Lake as one of America's "Boom Towns" where daring entrepreneurs are building profitable new businesses on old industrial bases.

The state's Index of Leading Economic Indicators rose again in September, the fourth consecutive monthly gain and a pretty good indicator of continued economic growth in 1990.

"This index, which combines the inflation-adjusted monthly changes of nine sensitive components, was 2.6 percent above last year," said Matthews. "Inflation along the Wasatch Front jumped 0.7 percent in October, but cumulative over the past six months, local price gains have been approximately one-fourth the national pace."

Matthews characterized new Utah job growth in '89 as "extraordinarily strong." By October, non-agricultural employment reached 705,100, a 4.4 percent increase over 1988

"Even more impressive, however, were the actual job data now available for the first and second quarters, which confirm that job growth has been near 4.5 percent throughout the entire year."

Matthews said the October unemployment rate was 3.8 percent, an 11-year low. The number of unemployed during October was 27,000, the first time in the '80s that fewer than 30,000 Utahns were jobless.

Hourly wage gains in Utah during the second quarter averaged 3.5 percent, said Matthews. This reflects the difference between total wage increases of 8.3 percent and a 4.8 percent new job gain. This means second quarter growth in total wages and salaries was nearly double the increases for the same three months last year.

Happily, the construction industry was once again a positive contributor to the state's economy in the third quarter and Matthews looks for continued improvement in the coming year.

Total construction value for the first nine months of 1989 was $755.8 million, up 14.7 percent. Most of the momentum has been in commercial projects where construction valued at $277.7 million was up 32 percent over last year. Residential was up 7.3 percent with total value of $346.5 million.

As a reflection of sharp gains in retail trade employment, Matthews said, consumer spending remains strong in the fourth quarter. The retail sales component of gross taxable sales jumped 11 percent in the second quarter, compared with a 5.6 percent 1988 annual gain.

Nationally, Matthews believes the economy can survive the current manufacturing slump without slipping into a full-fledged recession in 1990.

Consumer spending will be the key to the economy in 1990, he believes, and so far, consumers aren't showing any signs of running for cover.