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Iowa Economic Forecast Projects Iowa Income Growth in 2005

According to its latest Iowa Economic Forecast, the University of Iowa Institute for Economic Research expects real personal income growth of 2.7 percent in 2005, up from a forecast of 1.9 percent in November 2004. For 2006, the Institute projects real personal income growth in the state to be 1.8 percent.

Charles Whiteman, Institute director and UI professor of economics, said the forecast is based on state income data through the third quarter of 2004. Real income growth is adjusted for inflation.

The differences between the current and November income forecasts are mainly due to revisions to farm income. The U.S. Bureau of Economic Analysis initially reported farm income to be about $1.8 billion in each of the first two quarters of 2004, whereas the revised data increases the figures to roughly $3.2 billion and $3.5 billion respectively, Whiteman noted.

The Institute's forecast for employment shows a moderate recovery of the job market in Iowa. The forecast for 2005 is for a growth rate of only 1.4 percent in employment, up from 1 percent in July, and an increase of 1.4 percent in 2006.

The Board of Regents, State of Iowa created the Institute for Economic Research in July 1975 to facilitate cohesive and continuing economic research and to establish a formal mechanism for providing interaction with, and economic research services to, government and industry. Each quarter, the Institute produces the Iowa Economic Forecast, which contains quantitative forecasts of economic conditions and tax revenues for the State of Iowa, utilizing the latest developments in the latest advances in econometric theory.


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