THE VIRGINIAN-PILOT  
              Copyright (c) 1995, Landmark Communications, Inc.

DATE: Tuesday, March 21, 1995                TAG: 9503210405
SECTION: BUSINESS                 PAGE: D1   EDITION: FINAL 
SOURCE: STAFF REPORT 
                                             LENGTH: Short :   37 lines

HAMPTON ROADS' ECONOMY IMPROVES SLIGHTLY IN JANUARY

Slower economic growth in January suggests that the Federal Reserve's engineered ``soft landing'' may have hit Hampton Roads.

The Hampton Roads Economic Performance Index released Monday rose modestly to 105.2 in January from December's revised 105.0.

For the past three months, the index rose at a 2.3 percent annual rate, significantly slower than the 9.1 percent rate of the previous three months, said David Garraty, a professor at Virginia Wesleyan College, which administers the index.

The index is compiled from seasonally adjusted job and average-wage data to measure local economic activity. It operates from a base line of 100 that represents an average from 1989 to 1991.

Mild weather pushed construction employment up 39.5 percent in January. All other industries reported improved employment except government, which fell in the federal sector.

Virginia's economy was stronger than Hampton Roads' during 1994, showing moderate improvement in January. But interest-rate hikes by the Federal Reserve have also slowed the state's economy as its index showed a minimal increase of 0.3 percent to 107 in January.

Seven consecutive interest-rate increases, beginning in February 1994, were designed by the Federal Reserve to slow down a robust economy and to prevent runaway inflation. ``Soft landing'' refers to a slowing down of the economy.

The mild growth in Hampton Roads' and Virginia's economies because of construction can be attributed to good weather rather than solid economic momentum, Garraty said. by CNB