STRICTLY BUSINESS: SURVEY SHOWS MISSOURI EXECS OPTIMISTIC ON '96 PROSPECTS

The nation's unemployment rate experienced its first increase in three months in January, soaring to 5.8 percent, the highest level since last spring.

The number of jobs declined by 210,000, the first drop in 10 months and the largest in six years. But, many business executives in the Midwest are still optimistic about 1996.

Some of the bad news in unemployment and declining jobs for the month was due largely to the blizzard that closed many businesses in the eastern portion of the nation.

The effects of the severe weather make it difficult to determine whether a change has occurred in underlying labor market trends, said Katharine G. Abraham, commissioner of the department's Bureau of Labor Statistics, which issued the January report late last week.

Another economic report -- the Bank of America BAC 100 survey -- indicates that the economy in the Midwest continues to grow at a slow but steady pace.

Missouri business executives entered the new year with little fear of inflation or higher interest rates, according to the Bank of America survey.

The BAC100 survey, which focuses on companies with annual revenues between $50 and $500 million in a number of Midwest states, was conducted for the first time in Missouri.

The survey is designed to provide a gauge of middle-market business sentiments in the Midwest, and it represents a mix of manufacturing and service industries. Executives of 100 businesses were contacted in Missouri.

Missouri executives are optimistic about business prospects this year because interest rates and inflation remain low, said Marcus W. Acheson, executive vice president and head of commercial banking for Bank of America Illinois, based in Chicago.

Of the five states surveyed this year, Missouri ranks second in optimism, behind Wisconsin.

Missouri scored a 48.6 on the Business Confidence Index, behind Wisconsin's 49.6. The BCI tracks the changes in the numbers of employees, labor costs, production output, optimism regarding the Down Jones industrial average and the economy in general. Illinois and Michigan, each recorded 47.2 scores on the BCI, and Indiana had a 40.4.

Of the states surveyed, Missouri ranked best on employment prospects. Only 14 percent of the executives reported staff reductions during 1995, the fewest of the five states involved. Only 5 percent anticipate reductions this year while 42 percent expect to hire more employees. Both of these categories are the highest in the Midwest. By comparison, 22 percent of the companies in Indiana anticipate reductions and only 34 percent expect to hire more staff.

More than 50 percent of the Missouri companies expect sales to increase by 6 percent or more. Another 33 percent anticipate moderate sales growth, 11 percent think sales will remain about the same, and only 6 percent expect a decline.

In another topic in the BAC100 survey, 53 percent of executives believe the presidential election will result in a change in the White House, while 36 believe President Clinton will be re-elected. Sixty-six percent of executives also believe the broad changes in Medicare, welfare and the tax system proposed by Republicans in Congress would have a positive impact on their businesses.

In other categories, 92 percent of Missouri businessmen expect to invest this year in new machinery and equipment, 69 percent expect to make modifications or modernize existing plants and facilities and 37 percent expect to expand facilities with new buildings and property.

And in the final category, 55 percent of Missouri officials were "optimistic" about the business climate, while only 8 percent were "pessimistic." The remaining 37 percent were somewhere in between.

The "Beige Book" summary, which highlights economic development in the Eighth District of the federal Reserve, which includes eastern Missouri, all of Arkansas, western Kentucky and Tennessee, southern Illinois and Indiana, and northern Mississippi, also checks the pulse of Midwest economy.

The report, which is issued eight times a year, agrees that the economy will continue to grow at a slow to moderate pace, with moderate sales and employment increases.

Acknowledging "moderating economic expansion," the Federal Reserve cut short-term interest rates last week in an attempt to spur economic growth. That move is not expected to be felt immediately. Some analysts anticipate additional cuts this year, the next perhaps as soon as late March.

The latest national unemployment reading matched the 5.8 percent rate last April, the highest during 1995.

The 210,000 decline in jobs was the first decline since a 62,000 drop last May and the largest since a 215,000 plunge in April 1991. The department reported that 161,000 new jobs were created in December.

'96 retail sales: $2.3 trillion

The U.S. Commerce Department announced late last week that December sales totaled a seasonally adjusted $198.6 billion, up a scant 0.3 percent.

Economic analysts had expected a 0.6 percent increase in December during the height of the Christmas holiday shopping season.

The December increase was smaller than November's 0.7 percent gain. Sales had fallen 0.2 percent in October and 0.1 percent in September.

The December activity boosted retail sales for the year to $2.3 trillion, 4.9 percent above those of 1994 but the smallest gain since a 0.6 percent advance in 1991 as the last recession was ending.

Automobile sales rose 0.7 percent in December, down from a 1.1 percent gain a month earlier. Sales of building materials, hardware, garden supplies and mobile homes fell 0.8 percent, wiping out a 0.6 percent increase a month earlier. Sales of furniture and other home furnishings were down 0.2 percent after a 1.7 percent advance in November.

Grocery stores rang up a 0.5 percent increase, erasing a 0.2 percent decrease the previous month. Gasoline stations pumped up sales activity by 0.9 percent.

Private collectors for taxes

Think the Internal Revenue Service is tough when it comes to collecting taxes?

Just wait!

The friendly folks at the IRS are looking at a pilot program to hire private bill collectors later this year, according to Money Magazine.

The IRS will launch a $13 million program to see if private collectors can help the agency retrieve the more than $70 billion that Americans owe in back taxes.

The IRS can take advantage of practices that private collectors use, says Lynda Willis, director of tax policy at the General Accounting Office, the congressional watchdog agency.

For example, commercial collectors make evening house calls -- IRS agents don't.

The good news however, is that private collectors won't be seeing any tax returns and they won't be able to seize assets. They will receive from the IRS only names, telephone numbers, addresses and the amounts owned by the taxpayers.