However, the emmissions decal on the actual coil cover INSIDE the engine bay of my '88 5.0 states "Spark Plug Gap - 0.052" - 0.056"
.044 is the gap of the early model 5.0's, a lot of refernce books fail to mention that in 1986 Ford went with a larger gap since they upgraded the ignition from the Duraspark unit previously used. The new gap on all 86-04 Mustangs is 0.052-0.056"
I had hesitation in my 91 5.0L over 4,500RPM. I pulled out Autolite plugs, which looked worn out to a whopping .072 gap!!! I installed Motorcraft factory spec plugs, and I gapped them at .048 since my car has 145K on it. No more hesitation, and I noticed a big difference in performance. I can now squeal tires in 2nd gear!!!
If you need to close the gap to run smoother than you might want to take a look at your ignition system. It may be weak. No reason to really close the gap up unless you are unable to maintain a spark due to boost or nitrous or a weak ignition system.
The factory ignition on the 86+ cars should be capable of maintaining a spark across a 0.054" gap easily. If it's weak, then you would need to close the gap. But if that happens you might want to address the possibility of needing new ignition components. (new plugs, cap rotor and possibly coil)
Thought my 86 5.0 was experiencing some massive blowby. Though I had one case where my #8 plug was covered in oil about a month ago, but checking my plugs again yesterday, they were bone dry with normal burn on the electrodes.
Wound up changing my plugs and needed to know the gap, found this thread, and it was like music. I run out and check the dizzy cap and rotor, and they were done. WASTED. The little lead piece under the center tower fell out even.