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February 1998, Vol. 121,
Strong job growth continues, unemployment declines in 1997
Randy E. Ilg and Angela Clinton
- The labor market continued to improve
in 1997 as job growth accelerated from the previous year
and unemployment declined. Total nonfarm payroll
employment increased by more than 3 million workers and
the unemployment rate fell to 4.7 percent in the fourth
quarter of 1997, the lowest level in nearly 28 years.
During this sixth year of job market expansion, earnings
growth accelerated and real average hourly earnings of
private production or nonsupervisory workers posted their
largest increases in 21 years.
- This article summarizes
labor market developments for 1997 and describes the
economic context in which these developments occurred.
Unless otherwise noted, the data presented are quarterly
averages, and 1997 changes represent the difference
between the fourth quarters of 1996 and 1997.
- The U.S. economy
expanded at a solid pace in 1997. The gross domestic
product, or GDP, adjusted for inflation grew by 3.8
percent over the year, much faster than in 1996. (See
table 1.) Almost every sector of the economy showed
improvement in 1997. For most of the year, consumers
reacted to a strong job market and rising personal
incomes by increasing their expenditures on goods and
services. The consumer confidence index advanced by
nearly 17 percent to record levels by yearend. Consumers
also benefited from modest price increases; in 1997, the
Consumer Price Index for All Urban Consumers (CPI-U) rose
by just 1.9 percent, a very small advance by historical
standards. The housing market also continued to show
strength in 1997, although the pace of new home sales
slowed somewhat from 1996.
This excerpt is from an article published in
the February 1998 issue of the Monthly Labor Review. The
full text of the article is available in Adobe Acrobat's Portable
Document Format (PDF). See How to view
a PDF file for more information.
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