ECONOMISTS: STATE'S LABOR POOL TO OUTDISTANCE JOB GROWTH

COLUMBIA -- Economists at the University of Missouri are forecasting a more rapid increase in the state's labor force than available jobs, causing the unemployment rate to drift upward throughout 1997 and during the remainder of the decade.

Despite this cloud, the economists believe personal income this year will reach just 0.3 of a percentage point below the 1996 record, which registered a 4.9 percent gain.

Missourians' personal income in 1997 should reach $127.3 billion, up from last year's $121.7 billion. Wages and salaries will supply $72.6 billion of this year's total, while nonwage income will provide $54.7 billion. This means the state's citizens should see a 4.6 percent increase in their incomes through the remainder of the current calendar year.

Growth in Missouri's labor force will accelerate to 2.3 percent this year, university economists predict. Because employment growth will average less than 2 percent, the unemployment rate will drift up throughout this year, averaging 4.5 percent by the beginning of 1998.

After falling last year, manufacturing employment will turn around in 1997, increasing just under 1 percent, the forecasters believe. Nondurable industries should show the most strength, with stronger gains in both printing and food processing fields. Nonmanufacturing employment will increase by about 2 percent, or more than 43,000 jobs in 1997. Growth in services, construction and trade will be the fastest.

More than 26,000 building permits were issued in 1996 across the state, an increase of 17.5 percent over 1995. This year, building permits are expected to grow by 1.3 percent, with all of the strength occurring in the single-family market.

University economists are less optimistic about Missouri's prospects between 1997 to the new millennium, a period in which personal income growth will be in the low 2 percent range. Wage income and nonwage income will probably rise at about the same pace for the rest of the decade.

For 1998-2000, overall labor force growth wil exceed employment growth, causing the state's jobless rates to drift up slightly.

Growth in nonagricultural employment will fall off over the remainder of the decade. After growing by just under 1 percent in 1998, manufacturing employment will fall in the last two years of the decade. With the exception of mining and federal government employment within Missouri, all other industries should grow. Building permits will grow slowly through the rest of the forecast period, economists believe.

Missouri's general revenue fund grew 7 percent in fiscal year 1996 and should end fiscal 1997 on June 30 with 6.6 percent growth. The general revenue increase for the fiscal year starting July 1 should be 6 percent.

University economists' predictions for the nation as a whole are, in general, compatible with those for Missouri. They have predicted real gross domestic product will increase 2.5 percent this year, identical to last year's pace. A deceleration in investment spending and a slight worsening of the trade deficit will be offset by an acceleration in government spending.