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February 1990, Vol. 113, No. 2
Job growth moderated in 1989; unemployment steady
Steven E. Haugen and William Parks II
Job growth moderated in 1989, and unemployment held steady for most of the year, as the U.S. economic expansion extended to 7 consecutive years. The overall deceleration in employment growth resulted largely from pronounced weakness in manufacturing, where employment actually declined during the year, reflecting slower growth in domestic consumption and weaker export growth. Although actual job losses were concentrated in manufacturing, nearly all other industries showed smaller job gains in 1989 than in 1988.
Despite this slowdown, the unemployment rate showed very little change during 1989. After slipping to 5.2 percent in the first quarter, it then registered 5.3 percent each quarter thereafter. Similarly, the number of unemployed persons in the fourth quarter, at 6.6 million, was little different from the year-earlier figure. The pattern of little change in unemployment over the year held for the major demographic groups.
This article is the most recent of a continuing annual series on the status of the labor market.
Overview of the economy
The pronounced slowdown in labor markets in 1989 reflected a diminution in overall economic growth. The rate of growth in real gross national product (GNP)-the Nation's total output of goods and services-moderated from the 1988 pace, reflecting marked declines in auto production and new home construction, as well as a slowdown in export growth. In the first quarter, the economy grew at a seasonally adjusted annual rate of 3.7 percent, although much of this relatively strong growth reflected the temporary resurgence in agricultural output following the 1988 drought. Evidence of slackening growth became clearer in the second and third quarters, when real GNP expanded at annual rates of 2.5 and 3.0 percent, respectively. By the fourth quarter, the economy had slowed much further, as advance data showed the economy growing at an annual rate of 0. 5 percent.1 This was the smallest increase since the second quarter of 1986, when GNP actually declined. (It is important to note, however, that some of the weakness in late 1989 may have reflected the temporary effects of labor-management disputes, as well as the impact of several natural disasters which occurred in the fall.)
This excerpt is from an article published in the February 1990 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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1 Data on gross national product (GNP) are produced quarterly by the Bureau of Economic Analysis of the U.S Department of Commerce. Advance estimates are released ion the first month following the end of the quarter. Preliminary and final estimates, based on more complete information, are released in the second and third months, respectively.
U.S. labor market weakened in 1990. February 1991.
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