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Economic Expansion Picked Up During Third Quarter 1994 The U.S. and Minnesota economies showed renewed vigor during the third quarter of 1994. Sizable wins in employment and real income and a buoyed consumer confidence continued to sustain the healthy growth of consumer spending which, in turn, stimulated the economy. This _ economic strength blunted the potential adverse effects of four successive interest rate hikes • early in the year, but also prompted the Federal Reserve Board to raise discount rates two more times during the second half of 1994. Nfinnesota Increased hiring by Minnesota businesses pushed state unemployment rates near historic lows this quarter. The Department of Economic Security reported tightening in several local labor Statewide markets. This strong labor demand resulted in employees working longer hours and earning Analysis more. The number of new businesses and new jobs increased by more than 14 percent over the previous quarter, and the number of business closings and job losses declined by more 3rd Quarter, 1994 than I3 percent. New businesses created 2.5 additional jobs for every job eliminated by closing businesses. .,ury 1993 Jan.1995 2350 2338 2326 Wage and 2314 Salary 2302 Employment'22 Seasonally 2276 Adjusted (1,000) 2266 2.254 2242 2230 4% 2.9 3% 2,6 Business Birth 2.3 and 2.1 Dissolution 2% Rates 1s 1.4 "Rate • - - _ _ - , _ Dia6dueOn Pate II 0% 3n1 Quarter,1993 atn Quarter.1993 1st Quarter,1994 2110 Quarter,1994 3ra Quarter,1994 Manufacturing Expansions Surged Ahead of Retail Trade . ,r A surge in Minnesota manufacturing and few large retail expansions produced twice as many expansion Jobs in manufacturing as in the large retail trade industry. The number of expanding manufacturers increased l9 percent over the previous quarter, and added 3/ percent more jobs. A strong nationwide demand for computers, electronic products and other consumer durables boosted employment among Minnesota's manufacturers of industrial machinery and computers. electrical and electronic components, transportation equipment and scientific instruments. Interestingly, nearly two of every three new and expansion jobs in manufacturing occurred in Greater Minnesota. Computer programming and data processing services also continued its growth, while chemical manufacturing and defense-related industries lagged behind. With a favorable growing season in 1994, the farm sector, food manufacturing, and related transportation sectors scored large revenue and job wins compared to the flood-ravaged 1993 season. The good weather also allowed state and local governments and their construction • contractors to finish repairs on flood-damaged roads and other public facilities. )