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The U.S. economy to 2008: a decade of continued growth
November 1999, Vol. 122, No. 11
Norman C. Saunders and Betty W. Su
Note: projections for 1998-2008 have been superseded by projections for 2000-10
Bureau of Labor Statistics (BLS)
projections envision a moderately growing economy
over the 19982008 decade, with gross domestic product (GDP) reaching $9.5 trillion in chained 1992 dollars by the end of the decade, an increase of almost $2 trillion over the period.1 Rising by an average annual rate of 2.4 percent, GDP growth is projected to be somewhat slower than the 2.6-percent annual rate of growth over the preceding 10-year period, from 1988 to 1998. Slower growth of civilian household employment, from 1.3 percent a year during the 198898 period to 1.1 percent from 1998 to 2008, accompanies the slowdown in GDP growth. Civilian household employment is projected to increase by almost 16 million employees over the 19982008 period, slightly less than the increase of 16.5 million persons experienced between 1988 and 1998. The employment projection is accompanied by an assumed unemployment rate of 4.7 percent, only marginally higher than the 1998 annual average of 4.5 percent. To best understand what all this means for the U.S. economy, it is helpful to come to some understanding of the major economic events that took place during the decade of the 1980s and then, following the 199091 recession, over the remainder of the 1990s.
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1 Real GDP and its components are stated in 1992 chain-weighted dollars. Chain weighting replaces the past practice of computing real GDP and its components by reference to fixed base-year prices with an averaging technique. The chain-weighted method calculates the prices of goods and services with weights that are appropriate for the specific periods or years being measured. As a result, for a particular year, the most detailed GDP components do not add up to their chain-weighted aggregates, and the chain-weighted aggregates do not add up to the chain-weighted real GDP. For more details, see "Preview of the Comprehensive Revision of the National Income and Product Accounts: BEAs New Featured Measures of Output and Prices," Survey of Current Business, July 1995, pp. 3138; and J. Steven Landefeld and Robert P. Parker, "BEAs Chain Indexes, Time Series, and Measures of Long-Term Economic Growth," Survey of Current Business, May 1997, pp. 5868. In the current article, discussions of GDP and its final demand components are couched in terms of real values unless otherwise noted. Finally, all historical National Income and Product Account data presented in the article are consistent with data published through the July 1999 issue of the Survey of Current Business.
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