Thomas B. Mandelbaum focuses on economic developments in 1987 in the Eighth Federal Reserve District’s business economy. Indicators of economic activity provide a mixed picture of District economic performance. The expansion of real income continued in 1987, for example, but at a slower rate than in previous years. In addition, there was little change in the level of construction activity. More positively, regional employment grew moderately, allowing the District unemployment rate to fall throughout the year. District manufacturing firms, stimulated by rising exports, expanded their workforces in 1987, resulting in the first annual District gain since 1984. The District’s vigorous employment growth in the year’s final quarter was particularly encouraging, given the shock of the October stock market crash. As in most years of the current decade, the growth of District employment was similar in strength to the national expansion in 1987. This parallel growth stemmed from similar industrial structures combined with the uniform growth of individual sectors. The resemblance of the regional and national industrial growth underlines the influence that national economic conditions have on the District economy.