Cross Timbers Business Report, Volume 3, Number 3, Spring 1989 Page: 1
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Cross Timbers Business Report
Volume 3, No. 3
Gross National Product at highest level
A return to more normal agricultural
output following last summer's drought pushed
the first quarter growth rate of real gross na-
tional product to its highest level in a year.
However, economists who factored out the very
rapid farm expansion expressed little concern
that inflationary pressure would push the Fed-_
eral Reserve to a tigher credit policy in the near
According to the latest Commerce De-'
partment estimate, the inflation adjusted meas-
ure of the nation's production of goods and
services expanded at an annual rate of 5.5.
percent in the first quarter of 1989. This growth
rate far exceeded both the 2.4 percent pace
recorded in the final three months of last year,
and the 3.3 percent rate noted since last March.
At first glance, this acceleration in the
nation's output appears to confirm earlier noted
symptoms of an overheated economy carrying
substantial inflationary risk. However, econo-
mists who watch GNP data closely indicate that
statistical aberrations following last summer's
drought in the Midwest led to an understate-
ment of the fourth quarter figure, and an over-
statement of the first quarter aggregate. With
this factor removed, the Janaury-March expan-
sion moves closet to the average pace of the past
several quarters, quieting inflationary concerns.
Also contributing to the production
growth in the first quarter was a strong advance
in business investment. This move reflected a
sharp increase in inventory levels and a rise in
plant and equipment expenditures. Net exports
CHANGES IN REAL GROSS NATIONAL PRODUCT
01 Q U, 04 01
also increased, as exports grew at a faster pace
The growth rate of consumer spending
slowed between Janaury and March, as rising
interest rates apparently reduced the demand
for durable goods. Government spending in-
creased only slightly, as defense related expen-
ditures continued to decline.
In a related report, the Commerce De-
partment noted that the implicit price deflator,
which measures price changes for all goods and
services included the GNP, advanced at an
annual rate of 3.9 percent in the first quarter.
This growth rate compared favorably to the 5.3
percent pace recorded in the previous period.
Stephenville sales tax allocations for the
first four months of this year rebounded strongly
from the lackluster pace set in 1988, but were
little changed from the 1987 level. Two other
Cross Timbers cities noted advances in alloca-
tions, while two reported declines.
Stephenville received a total of $340,063
in allocations in the period from January-April
1989. This value was 9.4 percent greater than
the figure reported for the same four months last
year, but was only 0.3 percent above the aggre-
gate for the same span two years ago.
Dublin also reported a significant alloca-
tions advance, from $25,976 in 1988 to $27,527
this year. The 1989 figure was 9.9 percent above
the total posted for the same four months of
1987. Hamilton's January-April 1989 alloca-
tion of $42,244 was six percent greater than the
figure noted for the same period last year and 7.9
percent above the value reported for 1987.
Comanche received a total of $57,014 in
allocations in the first four months of this year.
This value was 2.2 percent below the figure
noted for last year, and 10.4 percent less than
the aggregate for the same period two years ago.
Eastland's January-April allocations total also
declined, from $95,310 in 1988 to $92,468 this
year. Total allocations to the City of Eastland for
the first four months of 1987 were $91,604.
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Tarleton State University. Department of Social Sciences. Cross Timbers Business Report, Volume 3, Number 3, Spring 1989, periodical, Spring 1989; Stephenville, Texas. (texashistory.unt.edu/ark:/67531/metapth298183/m1/1/: accessed September 25, 2017), University of North Texas Libraries, The Portal to Texas History, texashistory.unt.edu; crediting Tarleton State University.