5. EDSR 09-11-2006 - Laserfiche WebLink

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Overall Business Environment The U.S. economy remains quite healthy, although there axe some concerns: U.S. economic growth slowed during the second quarter, partly reflecting the impact of higher energy costs, rising interest rates and the cooling in the housing market. Downside risks have escalated. The moderation in growth should help keep inflation pressures in check. However, energy prices are likely to stay elevated and inflation will remain a concern. ^ Federal Reserve policymakexs would like to pause, but inflation concerns may keep them on the defensive. The Upper Midwest economy appears strong. The Federal Reserve Bank of Minneapolis has not released a survey of Upper Midwest manufacturers since early 2005. But, at that time, manufacturers anticipated stronger economic activity, increased production and healthier profits - all of which have come to pass. And a more recent Fed. survey of professional service firms, released in June 2006, found that they generally had a successful previous 12 months and were optimistic about the coming 12 months. The Minnesota economy remains healthy and above the national average in job creation, according to data released Aug. 15, 2006, by the Minnesota Department of Employment and Economic Development (DEED). The state added jobs for the 13th straight month in July with an increase of 11,600 jobs. On average, Minnesota's job gains over the past four months account fox 10 percent of the nation's job growth. Overthe-year job growth is up 79,250 jobs, ox 2.9 percent, on an unadjusted basis -the highest rate since March 2000 and more than double the national growth of 1.3 percent. The over-the-year number tops the strongest similar 12-month period in the boom years of the 1990s, when jobs grew by 70,000 between July 1994 and July 1995. During the past four months, Minnesota has been adding jobs more than four times faster than the average monthly gain in 2005, while the nation's growth rate has fallen off more than 30 percent over the same time span. The seasonally adjusted unemployment rate rose two-tenths of a point to 3.8 percent in July. Most of this rise is due to an increase of 6,100 people in the labor force -the first increase in the labor force since February. "The state has been adding jobs at an average of more than 11,000 per month for the past four months and is strongly outpacing the national rate," said DEED Acting Commissioner Waxd Einess. Northstar Commuter Rail continues to move forward. The Twin Cities Metro Area's first commuter rail service, which is slated to run about 40 miles from Minneapolis to Big Lake -with a transit station in Elk River -was cleared Aug. 23, 2006, by the Federal Transit Administration (FTA) to move to final design for the $307.3 million project. Project Director Mark Fuhrmann said this is a sure sign that Northstar will become a reality. The project is expected to clear its fmal hurdle, a funding agreement with the federal government, in May 2007. Service would begin in 2009. (Please see Appendix G fox copies of the economic data source materials.)