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Show Economic Activity Expected To Rise According to the First Security News Letter, economic activity is expected to strengthen in the second quarter, said Richard Parkinson, manager of the First Security Bountiful office. of-fice. EDITED BY Dr. Kelly Matthews, vice president and economist for First Security Company, the quarterly News Letter will be published this week. By the latter part of this year, however, the pace of economic growth will likely diminish, with an inflation induced downturn in business conditions extending into the early part of 1980. The major threat to continued economic expansion is inflation, according ac-cording to the News Letter. INFLATION WENT from bad to worse in the first quarter as producer prices rose 14 percent, while prices at the retail level jumped about 12 percent. There are no easy solutions available which will noticeably slow inflation in the immediate months ahead. Monetary policy is not expected ex-pected to be altered significantly sig-nificantly in the second quarter. Short-term interest rates could edge moderately higher, but significant tightening tigh-tening in credit availability is not expected. THE NEWS Letter predicted predict-ed that business activity in Utah in the second quarter is expected to improve relative to the reduced growth rates experienced in the first two months of 1979. The cost and availability of petroleum products, particularly par-ticularly in the summer months, is a major concern for the Intermountain area, as well as the nation. A 15 percent per-cent shortfall in gasoline supplies will undoubtedly result in higher prices, reduced service station hours and some lines. UTAH'S JOB market is forecast to remain strong in the second quarter despite some subtle evidence of softening sof-tening in the first three months. The rate of unemployment in Utah dropped to 4.4 percent, compared com-pared with a 5.7 percent naj tional average. Residential building permit activity in Utah remained soft in the first quarter, but, should improve in the second quarter. Residential real estate es-tate sates volume remained strong in the first quarter with unit sales down only five percent. REFLECTING A sign of caution, the pace of consumer spending and retail sales in Utah is expected to improve in the second quarter. Retail sales tax collections reflecting reflect-ing sales made in the fourth quarter of 1978 declined abruptly, and consumer spending probably remained soft in the first quarter of 1979. Demand for commercial bank credit in Utah slowed in the first quarter but is expected ex-pected to strengthen in months ahead. |