US Economy in 2010 an Analysis:

The Bureau of Labor Statistics (BLS, the Bureau) projections for the U.S. economy during the 2000–10 decade reflect continued growth. Gross domestic product (GDP) is expected to reach $12.8 trillion in chained 1996 dollars by the end of the decade, an increase of $3.6 trillion over the period. Rising by an average annual rate of 3.4 percent, GDP is projected to grow faster than the 3.2-percent annual rate of growth over the preceding 10-year period, from 1990 to 2000. Slower growth of civilian household employment, from 1.3 percent a year during the 1990–2000 period to 1.1 percent from 2000 to 2010, is expected to result in an increase of 16.2 million employees over the latter period, slightly less than the increase of 16.4 million employees between 1990 and 2000. The employment projection is accompanied by an assumed unemployment rate of 4.0 percent in 2010, the same as in 2000. To best understand how these projections relate to the U.S. economy, it is helpful to examine the effects of major economic events that took place over the past four decades.

During the decade of the 1960s, labor productivity grew at an annual average rate of 2.9 percent, spurred by the aerospace program and strong defense-related demand. During the 1970s, labor productivity growth slowed to 1.8 percent annually as businesses struggled to deal with skyrocketing petroleum prices, energy shortages, sharp cutbacks in defense spending, and a deemphasize of aerospace research programs. The 1980s were marked by even slower productivity growth—1.5 percent each year over the decade—as large expenditures by businesses on computers and other technologies seemed to have no impact on the statistics and as significant corporate restructuring (downsizing, contracting out, and so forth) worked through the economy. In the early part of the 1990s, the economy moved into a recession, further muting productivity growth, but the stage was set for the longest sustained recovery in the post-World War II economy. The unemployment rate fell for eight straight years, from 7.5 percent in 1992 to 4.0 percent in 2000, the lowest reading in 30 years. Although it is difficult to predict whether the tight labor

market of the recent past will persist, the BLS model has assumed an unemployment rate of 4.0 percent in 2010, the same rate as in 2000. (See table 9.) Overall, civilian household employment

is projected to increase by 1.1 percent per year from 2000 to 2010, or 1.62 million persons per year. The result is that more than 16 million employed persons will be added to the economy over the 10-year projection period. Total employment measured on a non farm establishment basis is expected to grow at a rate of 1.4 percent between 2000 and 2010, from 131.8 million to 152.0 million, an increase of 20.2 million jobs. The civilian labor force is projected to grow at a rate of 1.1 percent per year from 2000 to 2010, the same rate of increase as that attained over the preceding 10-year period.

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