View original document

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

S:Sf:';:W^W't-^WW': ;,S4 Si: •&' I ! ';'!v i!'^.^w




iiilIiiii?Bi'-tfl




Economic Report
of the President

Transmitted to the Congress
February 1994
TOGETHER WITH

THE ANNUAL REPORT
OF THE

COUNCIL OF ECONOMIC ADVISERS

UNITED STATES GOVERNMENT PRINTING OFFICE
WASHINGTON : 1994

For sale by the U.S. Government Printing Office
Superintendent of Documents, Mail Stop: SSOP, Washington, DC 20402-9328




ISBN 0-16-043028-3




C O N T E N T S
Page

ECONOMIC REPORT OF THE PRESIDENT

1

ANNUAL REPORT OF THE COUNCIL OF ECONOMIC
ADVISERS*

9

CHAPTER 1. A STRATEGY FOR GROWTH AND CHANGE

21

CHAPTER 2. THE U.S. ECONOMY IN 1993 AND BEYOND

55

CHAPTER 3. TRENDS AND RECENT DEVELOPMENTS IN THE U.S.
LABOR MARKET

97

CHAPTER 4. HEALTH CARE REFORM

131

CHAPTER 5. MICROECONOMIC INITIATIVES TO PROMOTE EFFICIENCY AND PRODUCTIVITY

169

CHAPTER 6. THE UNITED STATES IN THE WORLD ECONOMY

205

APPENDIX A. REPORT TO THE PRESIDENT ON THE ACTIVITIES
OF THE COUNCIL OF ECONOMIC ADVISERS DURING 1993

249

APPENDIX B. STATISTICAL TABLES RELATING TO INCOME, EMPLOYMENT, AND PRODUCTION

261

* For a detailed table of contents of the Council's Report, see page 13.




(iii)







ECONOMIC REPORT
OF THE PRESIDENT




Economic Report of the President
To the Speaker of the House of Representatives and the President
of the Senate:
America has always thrived on change. We have used the opportunities it creates to renew ourselves and build our prosperity. But
for too long and in too many ways, our Nation has been drifting.
For the last 30 years, family life in America has been breaking
down. For the last 20 years, the real compensation of working
Americans has grown at a disappointing rate. For 12 years a policy
of trickle-down economics built a false prosperity on a mountain of
Federal debt. As a result of our national drift, far too many American families, even those with two working parents, no longer
dream the American dream of a better life for their children.
In 1992, the American people demanded change. A year ago, I
sought your support for a comprehensive short-term and long-term
strategy to restore the promise of our country's economic future.
You responded, and together we replaced drift and gridlock with
renewal and reform. Together we have taken the first necessary
steps to restore growth in the living standards of all Americans.
We have created a sound macroeconomic environment and
strengthened the foundations of future economic growth. As a result of our efforts, the economy is now on a path of rising output,
increasing employment, and falling deficits.
Establishing the Fiscal Conditions for Sustained Growth
For more than a decade, the Federal Government has been living
well beyond its means—spending much more than it has taken in,
and borrowing the difference. The resulting deficits have been
huge, both in sheer magnitude and as a percentage of the Nation's
output. Since 1981 the Federal debt has been growing faster than
the economy, reversing the trend of the previous three decades. As
a consequence of this binge of deficit financing, Federal budget
deficits have been gobbling up an inordinate share of the Nation's
savings, driving up real long-term interest rates, discouraging private investment, and impeding long-run private sector growth.
On August 10, 1993, I signed the historic budget plan that you
passed several days earlier. It will reduce Federal deficits by more
than $500 billion. The plan is a balanced package of cuts in spending and increases in revenues. The spending cuts are specific, farreaching, and genuine. They will reduce discretionary spending by
over 12 percent in real terms in 5 years. The plan increases income




tax rates for only the top 1.2 percent of taxpayers, the group of
Americans who gained the most during the 1980s and are most
able to pay higher taxes to help reduce the deficit. At the same
time, a broad expansion of the earned income tax credit will help
make work pay for up to 15 million American families. Nine out
of ten small businesses will benefit from more-generous tax breaks
that will help them invest and grow. And new, targeted capital
gains tax relief will encourage investment in new small businesses.
Our deficit reduction plan has been the principal factor in the
dramatic decline in long-term interest rates since my election in
November 1992. Lower interest rates, in turn, have sparked an investment-driven economic expansion that has created more private
sector jobs during the last year than were created during the previous four. The fact that investment is leading the recovery is good
news for living standards, because investment is the key to productivity growth and hence to growth in real incomes for all Americans.
Investing in Our Nation's Future
Laying the macroeconomic groundwork for sustained growth is
the government's first responsibility, but not its only responsibility.
Government also has a vital role to play in providing some of the
critical raw materials for economic growth: science and technology,
an educated and well-trained work force, and public infrastructure.
For much too long we have underinvested in these areas, in comparison both with our global competitors and with our own economic history. Our overall budget deficit has masked another,
equally disturbing deficit—a deficit in the kinds of public investments that lay the foundations for private sector prosperity.
Like private investments, well-chosen public investments raise
future living standards. As a consequence, deficit reduction at the
expense of public investment has been and will continue to be selfdefeating. That is why our budget package increases much-needed
public investment even as it takes steps to reduce the budget deficit. One without the other will not work.
With the help of the Congress, our public investment initiatives
in the areas of technology, infrastructure, the environment, and
education and training received about 70 percent of the funding we
requested in fiscal year 1994. We increased funding for such proven
successes as Head Start and the WIC program in the human resources area, and the Advanced Technology Program of the National Institute of Standards and Technology in the area of technological research. We also launched a number of new initiatives, including the National Service program, a new program of
empowerment zones and enterprise communities for urban and
rural development, and several new technology programs, including




the Technology Reinvestment Project, designed to help defense contractors retool to serve civilian markets. We increased funding for
research into new environmental technologies. In addition, we developed a comprehensive, cost-effective Climate Change Action
Plan, comprising nearly 50 initiatives to reduce U.S. greenhouse
gas emissions to 1990 levels by the year 2000.
As these examples bear witness, we have made significant
progress on our investment agenda, but much more remains to be
done. We will have to work together to find room to fund essential
new investments even as we reduce real government outlays to
meet tight annual caps on discretionary spending. This will not be
easy. But it is essential, for we face a dual challenge—we must fundamentally change the composition of discretionary spending even
as we reduce it in real terms.
This year my Administration is requesting funding for several
new investment initiatives. Our Goals 2000 proposal will encourage
local innovation in and accelerate the pace of school reform. It will
link world-class academic and occupational standards to grassroots
education reforms all across America. Our School-to-Work initiative
will provide opportunities for post-secondary training for those not
going on to college. Our reemployment and training program will
streamline today's patchwork of training programs and make them
a source of new skills for people who lose their jobs. Finally, our
proposed welfare reform will provide the support, job training, and
child care necessary to move people off welfare after 2 years. That
is the only way we will make welfare what it ought to be: a second
chance, not a way of life.
Reforming Our Health Care System
This year we will also make history by reforming the Nation's
health care system. We face a health care crisis that demands a solution, both for the health of our citizens and for the health of our
economy over the long run. The United States today spends more
on health care relative to the size of its economy than any other
advanced industrial country. Yet we insure a smaller fraction of
our population, and we rank poorly on important overall health indicators such as life expectancy and infant mortality. Over 15 percent of Americans—nearly 39 million people—were uninsured
throughout 1992. And tens of millions more have inadequate insurance or risk becoming uninsured should they lose their jobs. Meanwhile health care costs continue to climb, increasing premiums and
medical bills for American families and aggravating budget crises
at all levels of government. Both the Office of Management and
Budget and the Congressional Budget Office have concluded that
unless the system is reformed, rising health care costs will begin




pushing the Federal budget deficit back upward as this century
comes to a close.
Piecemeal approaches to solving our health care crisis will not
work. If we simply squeeze harder on Federal health spending,
without attempting systemwide reform, more of the costs of covering health services guaranteed by the government will be shifted
to the private sector, and medical care for the elderly, the disadvantaged, and the disabled will be put at risk. Similarly, if we
attempt to provide universal coverage without complementary
measures to improve competition and sharpen incentives for costconscious decisions, costs will continue to escalate.
Our health care reform proposal, while bold and comprehensive,
builds on the strengths of our current, market-based system. Our
approach preserves consumer choice and our largely employerbased private insurance arrangements. It relies on market competition and private incentives, not price controls and bureaucracy, to
provide health security for all Americans, to rein in health care
costs, and to solve our long-run budget deficit problem.
Opening Foreign Markets
Raising the living standards of all Americans is the fundamental
economic goal of my Administration. That is why all of our initiatives in international trade share a common purpose: to open markets and promote American exports. This emphasis on exports is
driven by two simple facts. First, America is part of an increasingly
integrated world economy and must adapt to this new reality if we
are to stay on top. There is simply no way to close our borders and
return to the insular days of the 1950s. To try to do so would be
an exercise in futility, doomed not only to fail but to lower living
standards in the process. Second, export industries offer the kind
of high-wage, high-skill jobs the country needs. By shifting production toward more exports, we will shift the composition of employment toward better jobs. In short, to realize our goal of higher living standards for all Americans, we must compete, not retreat.
The year just past will go down in the history books as a watershed for trade liberalization. With your help, we enacted the North
American Free Trade Agreement, which links the United States,
Canada, and Mexico together in the world's largest marketplace.
We also successfully completed the Uruguay Round of the General
Agreement on Tariffs and Trade, which promises to add as much
as $100 billion to $200 billion to the Nation's output by the end of
a decade. And we are now on a course of increasing trade and investment liberalization with the rapidly growing economies of East
Asia and the Pacific, which will be a major source of new export
opportunities for American products in the coming years. At home
we have eliminated much of our export control system and have




rationalized our export promotion activities to help our producers,
workers, and farmers increase their sales around the world.
Improving the Efficiency of Government
My Administration is committed to improving the Federal government's efficiency across the board. The National Performance
Review (NPR), completed under the bold leadership of Vice President Gore, provides a road map for what must be done. The NPR's
report shows how substantial budgetary savings can be realized by
making existing programs more efficient and cutting those that are
no longer necessary. As a result of our efforts to reinvent how the
government performs, we will reduce the Federal bureaucracy by
252,000 positions, bringing it down to the lowest level in decades.
My Administration is also committed to reducing the burden of
government regulations by improving the regulatory review process. My Executive Order on Regulatory Planning and Review requires that all new regulations carefully balance costs and benefits,
that only those regulations whose benefits exceed their costs be
adopted, and that in each case the most cost-effective regulations
be chosen.
This year we will also work with the Congress to develop the
new regulatory framework required to encourage the development
of the national information superhighway. We must cooperate with
the private sector to connect every classroom, every library, and
every hospital in America to this highway by the year 2000. Rapid
access to the most advanced information available will increase
productivity and living standards, help to educate our children, and
help health providers improve medical care for our citizens.
The Economic Outlook
An economic strategy built on long-run investments will not bear
fruit overnight. But there are already signs that our policy initiatives are beginning to pay off. Prospects for sustained economic expansion look far brighter now than they did a year ago, when my
Administration first asked for your support. Growth of real gross
domestic product increased steadily over the course of 1993, and
the economic expansion has continued into 1994. Consumer spending should remain healthy because of continued gains in employment and output, and investment spending should remain strong
because of low long-term interest rates and increasing levels of demand. Low interest rates will also continue to support the recent
expansion in residential construction. The Administration forecasts
that the economy will grow at 3 percent in 1994 and will remain
on track to create 8 million jobs over 4 years.
As 1994 begins, our economy is strong and growing stronger.
With continued deficit reduction, more public investment, a re-




formed health care system, increased exports, and a reinvented
government, we can create the foundations for an even more prosperous America.

THE WHITE HOUSE
FEBRUARY 14, 1994




8

THE ANNUAL REPORT
OF THE
COUNCIL OF ECONOMIC ADVISERS







LETTER OF TRANSMITTAL
COUNCIL OF ECONOMIC ADVISERS,

Washington, D.C., February 4, 1994.
MR. PRESIDENT:

The Council of Economic Advisers herewith submits its 1993 Annual Report in accordance with the provisions of the Employment
Act of 1946 as amended by the Full Employment and Balanced
Growth Act of 1978.
Sincerely,




Laura D'Andrea Tyson
Chair

Alan S. Blinder
Member

Joseph E. Stiglitz
Member

11




CONTENTS
Page
CHAPTER 1. A STRATEGY FOR GROWTH AND CHANGE

The Legacy of the Recent Past
Inadequate Recovery from Recession
Inadequate Productivity Growth
Worsening Income Inequality
Large Deficits, Mounting Debt
Inadequate Public Investment
Prosperity and Growth: The Benefits of Economic
Change
Reducing the Deficit to Promote Capital Formation
Investing in People
Investing in Public Infrastructure
Investing in Technology
Trade Policy and Living Standards
Health Care Reform
Summary: Prosperity and Change
Creating Opportunity
Summary

21

22
22
23
25
26
29
30
31
39
41
43
45
48
49
50
53

CHAPTER 2. THE U.S. ECONOMY IN 1993 AND BEYOND

55

Struggling to Grow
The End of the Cold War
Weak Foreign Economies
The Debt Workout
Oversupply of Commercial Buildings
Credit Crunch
Corporate Downsizings
The Headwinds Are Mostly Calming
Overview of the Economy in 1993
Consumption Expenditures
Business Fixed Investment
Inventories
Residential Investment
Net Exports
Employment and Productivity
Incomes
Inflation
Monetary Policy
Fiscal Policies and the Timing of Output

56
56
57
59
61
63
63
64
64
65
66
66
68
68
68
69
69
70
70




13

Page

The Federal Government's Fiscal Stance
Industrial and Regional Disparities
Deficit Reduction and the Real Interest Rate
How Deficit Reduction Reduces Long-Term Interest
Rates
Short-Run Effects of Interest Rates
Long-Term Effects of Deficit Reduction
The Economy's Response to Higher Income Taxes
Do Taxes Change Behavior?
Do Higher Tax Rates Increase Tax Revenues?
The Economic Outlook
Risks to the Forecast
Sources of Long-Run Growth
Conclusion

75
76
78
81
84
85
87
88
89
90
92
93
95

CHAPTER 3. TRENDS AND RECENT DEVELOPMENTS IN THE U.S.
LABOR MARKET

97

Employment Growth
A Slow Recovery
Sources of Job Growth
Unemployment and Nonemployment
Trends
Is the Natural Rate of Unemployment Increasing? ...
Direct Measures of the Natural Rate
The Magnitude and Costs of Job Loss
Slowing Wage Growth and Widening Inequality
Slow Income Growth
Growing Inequality
Explaining Slow Wage Growth
Explaining the Growth of Inequality
Job Quality
Hours of Work
Job Stability
Benefits
Toward a Comprehensive Work Force Policy
CHAPTER 4. Health Care Reform
Universal Coverage and Health Security
Insurance Market Reform
Insuring Major Risks and Preexisting Conditions
Community Rating
Reducing Administrative Costs
Creating a More Efficient Market and Containing Costs
Explaining Cost Increases
Who Pays for Health Care?
Health Care and Government Budgets
The Architecture of the Health Security Act
Elements of Reform

98
99
101
103
103
110
112
114
115
115
115
117
118
121
121
123
127
128
131
133
137
137
138
139
140
144
145
149
151
151




14

Page

Providing Comprehensive Benefits
Organizing the Insurance Market
Paying for Insurance
Providing Discounts
Using Savings to Guarantee Health Security and
Reduce the Deficit
Economic Effects of the Health Security Act
Macroeconomic Effects
Sectoral Effects
Conclusion
CHAPTER 5. MICROECONOMIC INITIATIVES TO PROMOTE EFFICIENCY AND PRODUCTIVITY

Promoting Efficiency in the Public and Private Sectors ...
Creating a More Effective Government
Promoting Competition
More Efficient Regulation of Natural Monopolies
Addressing Environmental Externalities
Managing Resources on Federal Lands
Climate Change Action Plan
Superfund Reauthorization: the Administration Position
Sustainable Development and Green Accounting
Promoting Technology
Principles of Technology Policy
The Administration's Technology Initiatives
Technology Policy, Growth, and Competitiveness
CHAPTER 6. THE UNITED STATES IN THE WORLD ECONOMY

Trends in U.S. Trade
Trade, Jobs, and Wage Inequality
The Administration's Trade Initiatives
Domestic Initiatives: The National Export Strategy
Bilateral Negotiations
Regional Initiatives
Multilateral Initiatives: The Uruguay Round
The Trade Policy Agenda
Trade and the Environment
International Trade and Competition Policy
Regionalism
Foreign Exchange Market Developments
The European Monetary System
The European Currencies in Turmoil
The Maastricht Treaty on Economic and Monetary
Union
Conclusions




15

153
154
155
157
159
163
163
163
167
169

170
170
173
175
179
181
184
186
188
189
190
194
204
205

206
212
214
214
215
225
233
238
238
239
240
240
243
244
245
247

APPENDIXES

A. Report to the President on the Activities of the
Council of Economic Advisers During 1993
B. Statistical Tables Relating to Income, Employment,
and Production

249
261

LIST OF TABLES
Page

1-1 Structural Budget Deficit as Percent of GDP
1-2 Effect of OBRA93 on Fiscal 1998 Budget
1-3 Distribution of the Change in Taxes Under OBRA93
by Income Category
1-4 Changes in Statutory Marginal Tax Rates Under
OBRA93 for Married Individuals Filing Jointly
1-5 Contributions to Growth of Interest-Sensitive and
Other Components of GDP
1-6 Structural Budget Deficits
1-7 Sources of U.S. Economic Growth
2-1 Foreign Country Real GDP Growth
2-2 Administration Forecasts
2-3 Accounting for Growth in Real GDP, 1960-99
4-1 Health Perception and Health Status by Type of Insurance Coverage, 1987
4-2 Distribution of Population and Health Spending by
Spending Category, Estimates for 1994
4-3 Sources and Uses of Health Care Funds, 1991
4-4 Estimated Premiums in the Regional Alliance, 1994 ...
4-5 Discounts Under the Health Security Act in 2000
4—6 Caps on Premiums by Firm Size
4-7 Allowed Growth Rates of Alliance Premiums
4—8 New Federal Spending and Savings Due to Reform
4-9 Sources and Uses of Federal Funds Under Reform,
2000
4-10 Employer Payments for Health Care: Baseline and Reform, 2000
6-1 U.S. Merchandise Trade by Industry, 1972 and 1992
6-2 U.S. Merchandise Trade by World Region, 1972 and
1992
6-3 Stock of U.S. Outward and Inward Foreign Direct Investment, 1992
6-4 U.S. Merchandise Trade Balances with Selected Countries, 1987-92
6-5 Selected Trade Indicators for Six Industrialized Countries, 1990
6-6 Intrafirm Trade as Share of Total U.S. Exports to and
Imports from Europe and Japan, 1992




16

27
32
33
34
36
37
44
59
92
94
136
145
147
156
158
159
160
162
162
166
209
210
212
216
216
218

LIST OF CHARTS
Page

1-1
1-2
1-3
l-4a
l-4b
1-5
1-6
1-7
1-8
1-9
1-10
1-11
1-12
2-1
2-2
2-3
2-4
2-5
2-6
2-7
2-8
2-9
2-10
2-11
2-12
2-13
2-14
2-15
2-16
3-1

Growth of Real GDP in Recoveries
Real Income, Productivity, and Compensation
Shares of Total After-Tax Income by Income Category
Federal Budget Deficits With and Without 1993 Deficit Reduction Package
Net Federal Debt as Percent of GDP
Federal Civilian Fixed Investment as Percent of GDP
Federal Deficits and Real Interest Rates
Correlation of Investment and Productivity
Ratio of Wages of College Graduates to Wages of High
School Graduates
Ratio of Public to Private Net Nonresidential Capital
Stock
Projected Real Growth Rates of Principal Federal
Budget Components
Shares of Wages and Benefits in Compensation
Earned Income Tax Credit for Families with Two or
More Children
Recovery Pattern of Nonfarm Payroll Employment
National Defense Purchases as Share of GDP
U.S. Merchandise Exports to Various Trading Partners
U.S. Exports Implied by Industrial Country GDP
Households: Credit Market Debt as Percentage of Disposable Income
Nonfinancial Corporate Business: Credit Market Debt
as Percentage of Output
Defense Spending: Actual Versus Baseline
Effects of 1992 Tax Withholding Change on Personal
Consumption
Alternative Measures of the Stance of Fiscal Policy

Ten-Year Treasury Note Yields
Real Interest Rates
Federal Debt as Percent of Nominal GDP
Dynamic Effects of Deficit Reduction
Personal Income Taxes as a Share of GDP
Changes in Output and Payroll Employment in First
Eleven Quarters of Recovery
3-2 Employment and Output in Recoveries
3-3 Civilian Unemployment Rate
3-4 Long-Term Unemployment as Share of Total
Unemployment




17

23
24
25
28
28
30
31
37
40
43
49
50
52
57
58
60
60
62
62
72
73
76
77
77
79
80
82
86
90
100
101
105
106

LIST OF CHARTS—CONTINUED
Page

3-5 Long-Term Unemployment and the Unemployment
Rate
3-6 Employment-to-Population Ratios of Women
3-7 Unemployment Rates by Educational Attainment,
March 1993
3-8 Ratio of White-Collar to Blue-Collar Unemployment
Rates
3-9 Real Hourly Compensation and Wages
3-10 Average Annual Growth of Mean Family Income by
Income Quintile
3-11 Productivity Growth and Price Reductions, 1950-90 ...
3-12 Average Weekly Hours of Production and Nonsupervisory Workers
3-13 Help Supply Industry Employment as Share of Total
Employment
3-14 Part-Time Employment: Total and Voluntary
3-15 Reallocation of Employment Between Industries
4-1 Distribution of Population by Source of Health Insurance Coverage: 1991
4-2 Sources of Payment for Health Care by Insurance Status: 1994 Estimates
4-3 Administrative Expenses of Commercial Insurers as a
Share of Claims Paid
4 4 Health Expenditure and Life Expectancy in Industrial
—
Countries
4-5 Estimates of Inappropriate Care for Five Common
Procedures
4-6 Sources of Health Care Financing as Percent of Total
Expenditures
4-7 Government Spending on Health Care as Percent of
Total Government Revenues
4-8 Health Expenditures as Percent of GDP
4-9 Business Spending on Health Insurance
6-1 U.S. Trade as Share of Real Gross Domestic Product
6-2 U.S. Exports of Goods and Services
6-3 Nominal and Real Effective Dollar Exchange Rates
6-4 Exchange Rates of the Dollar Against Selected Currencies
6-5 French Franc-Deutsche Mark Exchange Rates

106
107
108
109
116
117
118
122
124
125
126
134
135
140
141
144
148
150
162
165
207
208
241
242
246

LIST OF BOXES
Page

1-1 The New Measure of Unemployment
1-2 Saving, Investment, and Current Account Deficits




18

22
29

LIST OF BOXES—CONTINUED
Page

1-3
1-4
1-5
1-6
2-1
2-2
2-3
2-4
3-1
3-2

Credible Deficit Reduction and Real Interest Rates
A Balanced Budget Amendment to the Constitution? ..
The National Service Program
How Does the Earned Income Tax Credit Work?
The Economic Effects of the Midwest Floods of 1993
The Economic Effects of Lower Oil Prices
Are Current Long-Term Interest Rates Sustainable? ...
Estimating the Long-Run Effects of Deficit Reduction
The New Current Population Survey
Growing Inequality of Employment and Unemployment
3-3 Consequences of Productivity Growth
3-4 Why Productivity Growth Does Not Cause Unemployment
4—1 Moral Hazard and Adverse Selection
4-2 Recent Reductions in Health Care Inflation
4-3 Capped Entitlements
5-1 Selected National Performance Review Recommendations
5-2 Market Power
5-3 Natural Monopoly
5-4 Externalities
6-1 U.S. Exports: More Than Peanuts
6-2 The Case of the Polish Golf Carts
6-3 Mexican Economic Reforms
6-4 The Asian "Miracle"
6-5 The Economic Impact of the Uruguay Round
6-6 The Uruguay Round and U.S. Trade Laws
6-7 Exchange-Rate Volatility and International Trade
6-8 Criteria for Joining the Economic and Monetary
Union




19

35
39
42
51
67
71
81
87
104
116
119
120
137
146
164
172
174
176
180
209
224
226
232
234
237
244
247




CHAPTER 1

A Strategy for Growth and Change
ON ELECTION DAY 1992, the American economy faced a number of daunting challenges—both short term and long term. The
principal short-term problem was that recovery from the 1990-91
recession had been disappointing in almost all respects. Real gross
domestic product (GDP) had grown at only a 2.2-percent annual
rate from the first quarter of 1991 through the third quarter of
1992, less than half the pace of a typical recovery. Payroll employment had actually fallen during the first year of recovery and had
risen a scant 0.4 percent from March 1991 to October 1992. Furthermore, the seesaw pattern that had plagued the recovery raised
fears that the weak economy might relapse into recession.
But America's long-run problems ran deeper and their causes
were less well understood. While U.S. workers and firms remained
the world's most productive, our productivity growth had been sluggish for almost two decades. In consequence, real hourly compensation and GDP per capita had advanced extremely slowly, and real
median family income had barely increased at all. In addition, inequality had been rising for more than a decade, leaving the American economy with the most unequal distribution of income in its
postwar history. The combination of stagnant average incomes and
widening dispersion meant that many middle-class and low-income
families had actually suffered declines in their real incomes.
Finally, the Federal budget deficit was large and rising, the national debt had been growing faster than GDP for about a decade,
and huge amounts of foreign borrowing had transformed the United States from the world's biggest creditor nation into its biggest
debtor.
National economic policy was the major cause of some of our economic difficulties, such as the Federal budget deficit, but only a
contributing factor to others, such as growing income inequality.
Although the economic policy agenda of the new Administration
cannot cure all of these problems overnight, steps we have taken
have already contributed to noticeable progress on several fronts.
The recovery has solidified. Job growth has resumed. Fiscal policies
that will reduce the Federal deficit substantially have been put in
place. Although much more needs to be done, taxes have been
made more progressive and starts have been made on education
and labor market policies that will address the inequality problem.




21

And, perhaps most fundamentally of all, the Administration has
embarked on a comprehensive investment agenda designed to raise
productivity, which is the wellspring of higher living standards in
the long run.
This chapter explains the Administration's economic strategy and
examines some of the specific policy initiatives that have been undertaken to pursue that strategy. The chapters that follow provide
much more detail.

THE LEGACY OF THE RECENT PAST
The policies of any new Administration are dictated in part by
the challenges it faces and the problems it inherits from the past.
Because America's current problems are both short run and long
run in nature, the solutions must be, too.
INADEQUATE RECOVERY FROM RECESSION
Short-run cyclical problems are, almost by definition, transitory.
But when the American macroeconomy performs poorly, that one
fact seems to overwhelm all others and crowd out consideration of
longer run problems. In fact, the U.S. economy has been operating
well below its productive capacity for years now. From 1989
through 1992, real GDP grew only 1.5 percent per year, and the
civilian unemployment rate (by what was the standard measure
until this year—Box 1-1) has remained above 6 percent since November 1990. Under such circumstances, public concerns with economic policy tend to be summarized in a single word: jobs.
Box 1-1 .—The New Measure of Unemployment

Beginning with its February 4 announcement of the January
1994 unemployment rate, the Bureau of Labor Statistics has
changed its principal measure of joblessness* The changes, reflecting technical improvements in the household survey used
to estimate unemployment (Chapter 3 contains more details),
are expected to increase the measured unemployment rate by
about 0.5 to 0.6 percentage point, although the precise amount
is impossible to know. All unemployment numbers used in this
Report are measured on the old, traditional basis.
As Chart 1-1 shows, the recovery that began in the second quarter of 1991 has been exceptionally slow by historical standards—
so slow, in fact, that the unemployment rate was still rising more
than a year into the "recovery." Only in mid-1993 did unemployment fall back to its rate at the recession trough. Growth has been
not only slow but extremely uneven, proceeding in fits and starts




22

which have left consumers and business people wondering how long
the recovery would last.
Chart 1 -1 Growth of Real GDP in Recoveries
Real GDP in the current recovery has grown at only about half the rate of the
typical post-World War II recovery.
Percent change from trough
14

1

2

3

4

5
6
7
Quarters after Trough

8

9

10

11

Note: "Average" includes all recoveries from 1954 to 1982, except 1980. The trough quarter for the current
recovery is first quarter 1991.
Sources: Department of Commerce and National Bureau of Economic Research.

Thus the Administration's first task was to put the recovery on
a sound footing—not to produce a short-run burst of activity, but
to lay the groundwork for a sustained expansion that would restore
confidence and encourage firms to resume hiring. In large measure
this task was accomplished in 1993. (Chapter 2 provides more details.) Sluggish economic growth in the first half of the year gave
way to solid growth in the second half. More important, job growth
began in earnest: Employers added about 2 million jobs to nonfarm
payrolls between December 1992 and December 1993. As 1994
began, the outlook for sustained expansion looked brighter than it
had in a long time.

INADEQUATE PRODUCTIVITY GROWTH
The economy's longer run problems will not be dealt with so
quickly. They require sustained attention over a long period of
time. Primary among them is the troubling fact that growth in productivity has been anemic for about two decades.




23

Chart 1-2 shows the remarkable slowdown in productivity
growth that occurred around 1973—from an annual average of 3.1
percent in the 1947-73 period to just 1.0 percent since 1973. In
part, this slowdown is exaggerated by the fact that the first few
postwar decades were aberrant: There was much catching up to do
after the Great Depression and the Second World War. But America's long-run average productivity growth rate over the century
leading up to 1973 was slightly above 2 percent per year; since
1973 it has averaged about 1 percent. At 2-percent growth, productivity doubles in 35 years; at 1-percent growth, doubling takes 70
years. Even seemingly modest changes in productivity can have
dramatic effects on living standards in the long run. Thus the Nation has much at stake in improving its productivity growth rate.
Chart 1-2 Real Income, Productivity, and Compensation
Productivity, real income, and real hourly compensation all slowed markedly around 1973.

1992 dollars

Index, 1959=100
200

40,000
Real Median
Family Income
(left scale)

175

30,000
150
Output
per Hour
(productivity) 1
(right scale)

20,000

Real Compensation
per Hour 1
(right scale)

125

100

10,000
75

I

I

I

I

I

I

I

I

50

1947 1950 1953 1956 1959 1962 1965 1968 1971 1974 1977 1980 1983 1986 1989 1992
1
Business sector. Compensation deflated by implicit price deflator.
Sources: Department of Commerce and Department of Labor.

Labor productivity—output per hour of work—may seem an abstract concept, of more interest to analysts than to working men
and women. But without productivity growth, higher real wages
would lead directly to lower employment as profit-oriented firms reacted to higher labor costs by trimming their work forces. It is only
steady productivity gains that enable the economy to generate
more jobs and rising real wages at the same time. Chart 1-2 shows




24

that growth in both real compensation per hour and real median
family income slowed markedly at just about the time that productivity growth slowed. This coincidence in time is, of course, no coincidence at all. Productivity growth is the ultimate source of growing real wages and family incomes.
Nothing is more important to the long-run well-being of the U.S.
economy than accelerating productivity growth. Most of the Administration's economic strategy is therefore devoted to that end.

WORSENING INCOME INEQUALITY
Starting some time in the late 1970s, income inequalities widened alarmingly in America. Chart 1-3 shows that the share of the
Nation's income received by the richest 5 percent of American families rose from 18.6 percent in 1977 to 24.5 percent in 1990, while
the share of the poorest 20 percent fell from 5.7 percent to 4.3 percent. Part of this change was due to the cuts in taxes and social
spending of the early 1980s, the net benefits of which were heavily
skewed toward the rich. But there was a much more powerful force
at work, one not attributable to fiscal policy: The distribution of
wage rates grew substantially more unequal. In real terms, wages
at the bottom of the distribution fell while wages at the top rose.
Chart 1 -3 Shares of Total After-Tax Income by Income Category
The richest 5 percent of Americans saw their share of total income rise sharply in the 1980s,
while the poorest 20 percent saw their share decline.

Top 5 Percent

Lowest Quintile

1977 •
Source: Congressional Budget Office.




25

1990

The forces underlying this widening of the wage distribution are
not well understood. (More details are contained in Chapter 3.) But
the facts are stark. Between 1979 and 1990, the real median income of males with 4 years of college fell about 1 percent, but that
of males with only 4 years of high school fell a stunning 21 percent,
and high school dropouts fared even worse. A similar pattern
emerges almost any way one slices the data: Wages near the top
of the distribution rose faster than wages near the bottom. Salaries
of chief executive officers rose rapidly while the minimum wage fell
in real terms. Wages of skilled workers rose faster than those of
the unskilled. Wages of experienced workers grew faster than
entry-level wages.
The widening dispersion of wages accounts for most of the
squeeze on the middle class, because the middle 60 percent of the
income distribution derives about three-quarters of its income from
wages and salaries. And these people do not bring home the highest wages, but those nearer the middle. When middle-class wages
stagnate, middle-class family incomes do, too. That is precisely
what happened in the 1980s.
In sum, for whatever reasons, in the late 1970s our market economy began to dish out more-handsome rewards to the well-off and
stingier ones to the middle class. Government policies compounded
the problem by weakening the social safety net, lowering the tax
burdens of the wealthy, and driving up real interest rates. In concert, the market and the government produced the greatest
disequalization of incomes since at least before World War II.
This Administration sees the combination of stagnating average
incomes and rising inequality as a threat to the social fabric that
has long bound Americans together and made ours a society with
minimal class distinctions. Although the underlying forces of the
market are vastly more powerful than anything the government
can do, the right kinds of policies can make a difference. For example, changes in Federal tax policy have already shifted the burden
of taxation away from the working poor and toward the well-to-do.
And several initiatives in the human investment arena, described
later in this chapter and in Chapter 3, should help mitigate rising
wage inequality.
LARGE DEFICITS, MOUNTING DEBT
Of all the Nation's economic problems, the one most directly
traceable to government policy is the large Federal budget deficit.
Although the Federal budget has been in deficit almost every year
of the postwar period, until the 1980s these deficits were small
enough that the ratio of public debt to GDP was stable or falling.
In fact, the structural budget (that is, the one that would result if
the economy were at a high level of employment) after adjustment




26

for inflation was on average roughly balanced for decades (Table 11). This approximate balance was not achieved by any formal, legal
requirement, but rather through an informal, unstated political
consensus.
TABLE 1-1.—Structural Budget Deficit as Percent of GDP
Adjusted deficit as percent of GDPi

Fiscal years
1959-1982

-0.1

1983-1993

1.9

1994-1998 (forecast)

.8

1

Adjusted deficit is unified structural budget deficit corrected for depreciation of the value of Federal debt due to inflation.
Sources: Office of Management and Budget, Congressional Budget Office, and Council of Economic Advisers.

The budget picture changed dramatically with the tax cuts of the
early 1980s, and the structural, inflation-adjusted budget began to
display chronic, large deficits for the first time. The deficit in fiscal
1992, the last year before the election of President Clinton, was a
whopping $290 billion in the unified budget and $131 billion on a
structural, inflation-adjusted basis. Worse yet, both the deficit and
the debt-GDP ratio were expected to rise further (Charts l-4a and
Deficits of this magnitude—around 5 percent of GDP—would
have been far less worrisome if American households were saving
enough to cover both the government budget deficit and the needs
of business to finance investment. But, in fact, American household
saving rates not only are among the lowest in the world, but actually fell in the 1980s. So for both of these reasons—declining household saving and rising budget deficits—national saving as a share
of GDP dropped sharply in the 1980s.
Casual discussions often equate national saving with domestic
investment, but the two can differ in an open economy (Box 1-2).
And in the United States of the 1980s, they differed dramatically.
While national saving was falling as a share of GDP, the share of
domestic investment, although low by international standards, was
roughly constant. To plug the gap between saving and investment,
the United States had to import massive amounts of foreign capital. In consequence, our current account balance went from a
small surplus to a large deficit in the 1980s.
All this foreign capital had its positive side: By limiting the rise
of real U.S. interest rates, it partly shielded investment from the
consequences of huge Federal deficits. But it left the United States
the greatest debtor nation in the world. Even more disturbing, all
this borrowing from abroad went to maintaining the Nation's comparatively meager investment rate, not to increasing it.




27

Chart 1-4a Federal Budget Deficits With and Without 1993 Deficit Reduction Package
Budget deficits will now reverse course. Deficits would have kept rising
without the reduction package.
Billions of dollars
350

300

-

250

Without Deficit
Reduction Package

200

150
With Deficit
Reduction Package
100

50

1980

_L
1982

_L
1984

_L
1986

_L
J_
1988
1990
Fiscal Years

1992

1994

1996

1998

Note: Data exclude health care reform. Projected for fiscal years 1994-98.
Source: Office of Management and Budget.

Chart 1 -4b Net Federal Debt as Percent of GDP
Federal indebtedness as a percent of GDP is expected to plateau after fiscal 1994
under OBRA93, instead of rising as estimated without deficit reduction.
Percent

Without Deficit
Reduction Package

50

40

-1----*""

t

_

With Deficit
Reduction Package
^ — ^

30

20

10

n

-

I
1980

I
1982

I
1984

I
1986

I
I
1988
1990
Fiscal Years

I
1992

i
1994

i
1996

1998

Note: Net federal debt defined as debt held by the public less debt held by the Federal Reserve. Data exclude
health care reform. Projected for fiscal years 1994-98.
Sources: Council of Economic Advisers and Office of Management and Budget.




28

Box 1-2.—Saving, Investment, and Current Account Deficits

Private saving, whether generated by households or by businesses, can be used for one of three purposes: to finance domestic private investment, to purchase debt issued by the government, or to purchase foreign assets. If private saving is insufficient to cover the sum of the first two uses—private investment and the combined deficit of all levels of government—
we must borrow the difference from abroad. Such a shortage
of saving has characterized the United States for about a decade now.
When Americans borrow from foreigners, we run a surplus
in our international capital account. But, since the capital account and the current account must balance under floating exchange rates, the mirror image of this capital account surplus
is an equally large current account deficit. Thus, a country that
saves less than it invests and runs a large budget deficit is
bound to have a large current account deficit. Indeed, chronic,
large current account deficits date from precisely the time that
the United States started running huge fiscal deficits. Between
1981 and 1984 the overall government budget deficit rose from
1.0 percent of GDP to 2.9 percent. During those same years the
current account balance went from a surplus of 0.2 percent of
GDP to a deficit of 2.6 percent of GDP.
The legacy of foreign debt was not the only cost of our addiction
to foreign borrowing. To attract the needed capital to American
shores, the United States had to offer interest rates higher than
those prevailing in the other leading industrialized countries. This
gap between U.S. and foreign interest rates, in turn, led to a sharp
appreciation of the dollar, as foreign investors demanded more dollar-denominated assets. The sky-high dollar made life exceedingly
pleasant for American tourists in Europe in the mid-1980s. But it
handicapped portions of American industry by making many U.S.
manufactured goods uncompetitive on world markets. It has taken
years for our manufacturing sector to recover from this shock.
INADEQUATE PUBLIC INVESTMENT
The budget deficit and the trade deficit were major national concerns in the 1980s and on into the 1990s. But there was also a
third deficit: a shortage of funds for public investment in critical
national needs like education and training, transportation facilities,
and environmental infrastructure.
The share of Federal civilian fixed investment in GDP is only
about half what it was in the 1960s (Chart 1-5). Furthermore, the
share of the Federal budget devoted to all types of public invest-

 1 5 1 - 4 4 4
0 - 9 4 - 2


29

ment—including education and research and development, as well
as civilian and military fixed investment—fell from 35 percent in
1963 to 17 percent in 1992. As the 1990s started, more and more
Americans were becoming painfully aware that our public investment was not what it should be.

Chart 1-5 Federal Civilian Fixed Investment as Percent of GDP
Relative to GDP, the Federal government invested little more than half as much
in nonmilitary infrastructure in the 1980s as it had in the 1960s.

1960
1964
1968
1972
1976
1980
Note: Includes Federal nonmilitary, nonresidential, fixed capital investment.
Source: Department of Commerce.

1984

1988

1992

PROSPERITY AND GROWTH: THE BENEFITS OF
ECONOMIC CHANGE
The economic strategy of this Administration follows logically
from this legacy. We must secure the expansion and spur long-term
economic growth. We must reverse the trend toward rising inequality. We must reduce Federal borrowing and shrink the trade deficit. We must invest more in both private and public capital. And
we must bolster our human resources.
While the Administration's economic policy agenda is broad and
varied, it can be summarized in a single word: investment—investment in private capital, investment in people, investment in public
infrastructure, investment in technology, and investment in environmental preservation. Six major themes stand out and define the
essence of the Administration's economic strategy: deficit reduction;




30

investments in human capital; investments in public infrastructure; investments in technology; expanding international trade; and
health care reform.
REDUCING THE DEFICIT TO PROMOTE CAPITAL
FORMATION
The legacy of large and growing Federal budget deficits required
that first attention be devoted to their reduction, so as to free up
resources for expansion of private physical capital—the machines,
factories, and offices that make American labor more productive.
For too long, Federal budget deficits have been gobbling up an inordinate share of the Nation's saving, thereby keeping real interest
rates too high (Chart 1-6) and leaving the Nation with a Hobson's
choice between lower domestic investment and higher foreign borrowing. Reducing the budget deficit was a necessary part of clearing away the financial underbrush that had grown up around us
in the 1980s—so that economic growth could be put on a sounder
and more sustained footing.

Chart 1 -6 Federal Deficits and Real Interest Rates
Interest rates adjusted for inflation rose and fell sharply in the 1980s, in tandem with
the sharp increase and subsequent decrease in the Federal budget deficit.
Percent

Percent

8

12
Real Yield on 10-Year
Treasury Securities
(right scale)

Deficit as
Percent of GDP
(left scale)

J
1955

1958 1961

1964 1967 1970 1973 1976 1979 1982 1985 1988 1991

Note: Real rates are nominal rates minus 10-year forecast of inflation.
Sources: Council of Economic Advisers, Department of Commerce, and Department of the Treasury.

Deficit reduction is difficult and painful. But the President concluded that the Nation could not remain on the path bequeathed




31

us by the previous Administration—a path on which the national
debt was growing faster than GDP and deficits were threatening
to explode (Chart 1-4). So he gave first priority to putting the Nation's fiscal house back in order.
Policy changes in the President's deficit reduction package will
gradually reduce the Federal deficit after 5 years by 1% percent
of GDP. By fiscal 1998, the last year of the program, the deficit is
expected to be $146 billion below what it otherwise would have
been: falling from $333 billion to $187 billion (Table 1-2). The ratio
of debt to GDP at the end of fiscal 1998 falls from a projected 51
percent without the deficit reduction program to 46 percent with it.
TABLE 1-2.—Effect

ofOBRA93 on Fiscal 1998 Budget
[Billions of dollars]
Before OBRA93

Item

After 0BRA93

Outlays
Discretionary .
Mandatory
Debt service ..

1,825.5
584.3
970.6
270.5

1,738.2
548.1
945.0
245.0

Revenue

1,492.2

1,550.8

Deficit

333.2

187.4

Change

-87.3
-36.2
-25.6
-25.5

58.6
-145.8

Note.—Data exclude health reform.
Source: Office of Management and Budget.

The Omnibus Budget Reconciliation Act of 1993
Because the President did not want to delay deficit reduction for
another year, the fiscal 1994 budget had to be prepared on a compressed schedule. The President introduced a detailed budget plan
to a joint session of the Congress in February 1993, just 4 weeks
after taking office. The House and Senate passed the final version
of the budget resolution on April 1—the earliest date in the history
of the modern congressional budget process. A spirited congressional debate followed, leading to enactment of the Omnibus Budget Reconciliation Act of 1993 (OBRA93) in August.
Several principles guided the design of OBRA93. First and foremost, the deficit reduction had to be large, genuine, and credible.
To this end, the Administration proposed hundreds of specific
spending cuts and increases in revenue. Second, the package had
to be balanced between expenditure cuts and tax increases. Specifically, the $146 billion of deficit reduction in fiscal 1998 consists of
$87 billion in net spending cuts—including $25 billion in lower
debt service—and $59 billion in additional net revenue. Third, the
tax increases were highly progressive—heavily skewed toward the
people who are most able to pay and who benefited most from
the large tax cuts of the early 1980s. Income tax rates were raised
for only about the top 1.2 percent of taxpayers. Some 90 percent
of the new taxes in OBRA93 will be borne by the upper 6.5 percent




32

of the income distribution (Table 1-3). Fourth, even while cutting
the deficit, room had to be found in the budget for a variety of critical public investments (more on this below).
TABLE

1-3.—Distribution of the Change in Taxes Under
OBRA93 by
Income Category

Family income (dollars)1

Share of
total change
in taxes
(percent)

Average change
in taxes
(dollars per family)

Share of
families
(percent)

Less than 10,000

14.0

-£8

-2.5

10,000-20,000

17.4

-86

-3.9

20,000-30,000

15.7

-41

-1.7

30,000-40,000

12.6

50

1.6

40,000-50,000

9.9

105

2.7

50,000-75,000

15.5

192

7.8

75,000-100,000

6.8

312

5.6

100,000-200,000

5.2

649

8.8

1.3

23,521

81.3

100.0

382

100.0

200,000 or more
All incomes2

1 Pretax family income (CBO definition).
Total includes negative incomes, not included in categories above.
Source: Congressional Budget Office (CBO).

2

The spending cuts touched virtually every part of the budget. On
the discretionary side, the Congress imposed what amounts to a 5year freeze on nominal spending, capping fiscal 1998 spending at
$548 billion, or about $2.5 billion below the fiscal 1993 level. With
inflation (as measured by the implicit deflator for GDP) projected
to average about 2.8 percent per year over the period, the implied
cut in real discretionary spending is about 13 percent. Furthermore, if inflation comes in lower than the forecast, the caps will be
lowered commensurately. The budget cuts in OBRA93 include a reduction in the Federal work force by 100,000 positions (since raised
to 252,000 positions), delay of the 1994 cost-of-living adjustment for
Federal employees, defense cutbacks beyond those projected by the
previous Administration, and a host of smaller cuts in discretionary
programs.
On the mandatory side of the budget, the largest cuts were in the
medicare program (about $18 billion by fiscal 1998). But there were
also reductions in agricultural and veterans' programs, savings in
the student loan program, new receipts from auctioning portions of
the radio spectrum (discussed in Chapter 5), and savings from
shortening the maturity structure of the national debt. Total cuts
in mandatory spending other than debt service are expected to
reach $25.6 billion by fiscal 1998.
OBRA93 also increased taxes. Higher income tax rates on the top
1.2 percent of households constitute the biggest source of new revenue by far: $27.2 billion by fiscal 1998. (The bracket structures be-




33

fore and after OBRA93 are compared in Table 1-4.) In addition,
the 2.9-percent payroll tax for medicare, which formerly applied
only to the first $135,000 of earnings, now applies to all earnings
(raising $7.2 billion by fiscal 1998), the taxable portion of Social Security benefits was raised for the top 13 percent of recipients ($4.5
billion), and the motor fuels tax went up by 4.3 cents per gallon
in October 1993 ($5 billion). Finally, OBRA93 increased the top corporate tax rate and closed a variety of business tax loopholes, but
also enhanced or created several tax incentives for investment. The
net effect of these increases and decreases in business taxes should
yield about $8 billion in revenue by fiscal 1998.
TABLE 1-4.—Changes in Statutory Marginal Tax Rates Under OBRA93 for
Married Individuals Filing Jointly
Marginal rate (percent)
Taxable income (dollars)

0-36,900
36,900-89,150 ....
89,150-140,000 ..
140,000-250,000
Over 250,000
Source: Department of the Treasury.

OBRA93, Interest Rates, and Investment
As critical elements of the President's deficit reduction package
started to become known, long-term interest rates began to fall—
indicating that the financial markets viewed the proposals as substantial, genuine, and credible (Box 1-3). Rates fell dramatically
between January and October 1993 before backing off a bit late in
the year.
As documented more completely in Chapter 2, the medicine of
low interest rates now seems to be taking hold. Business investment has been leading the economy's expansion, with consumer durables and housing important sources of strength. If we divide GDP
into its interest-sensitive components (business fixed investment,
housing, and consumer durables) and everything else, the data tell
a fascinating story. While the three interest-sensitive pieces typically account for about 30 percent of GDP growth, in 1993 they accounted for virtually all of GDP growth. The rest of GDP barely increased over the year (Table 1-5).
It is important to understand why this Administration made deficit reduction a top priority and worked so hard to see it through
the Congress. One important reason was the concern being expressed in many quarters that deficits were growing out of control
and might threaten financial stability—and thereby macroeconomic
stability.




34

Box 1-3.—Credible Deficit Reduction and Real Interest Rates
Long-term nominal and real interest rates dropped sharply
in 1993. The decline in rates was closely linked to the proposal
and enactment of the Administration's budget (as argued in
Chapter 2).
Lower deficits reduce real bond yields through several channels:
• Lower Federal borrowing reduces interest rates directly,
by reducing demand for credit.
• A more prudent fiscal policy reduces the likelihood that
the Federal Reserve will need to pursue a restrictive
monetary policy, and so reduces expected future shortterm rates.
• As long as international capital mobility is not perfect,
increased national saving leads to an increase in investment, in the long run, the consequent increase in the
capital stock reduces the marginal product of capital and
therefore the interest rate.
Because the plan had credibility, financial markets anticipated these effects. Since future expected short-term interest
rates govern current long-term rates, long rates fell immediately In response to the proposal and enactment of the Ad*
ministration's plan. There would have been no such market response if the plan had lacked credibility. What features of the
Administration's plan account for its apparently high 'credibility?
• The plan is based on realistic economic assumptions; it
does not presume that the economy can "grow its way
out" of the deficit problem,
• The President proposed and the Congress enacted many
specific spending cuts in the fiscal 1994 budget, thereby
demonstrating the feasibility of maintaining the discretionary spending caps.
• The tax provisions of the plan by and large result in permanent increases in revenue; they do not merely shift
future revenue into the current budget window.
« The President showed himself willing to make difficult
choices to correct the fiscal imbalance: freezing total discretionary spending; increasing the taxation of Social Security benefits for recipients with the highest incomes;
and proposing reform of the Nation's health care system.




35

TABLE 1-5.—Contributions to Growth of Interest-Sensitive and Other
Components of GDP
[Average annual percent change]
Historical
average
(1955-92)

Fourth quarter 1992
to
fourth quarter 19931

Interest-sensitive components2

0.8

2.6

All other

2.1

.2

2.9

2.8

Component

GDP
1

Preliminary.
Business fixed investment, housing, and expenditures on consumer durables.
Source: Department of Commerce.
2

But the central objective of deficit reduction was and remains expenditure switching—away from consumption and government purchases toward investment. The lower interest rates brought about
by deficit reduction are the way the market accomplishes this expenditure switching.
The reasons for wanting to raise the investment share of GDP
are straightforward: Workers are more productive when they are
equipped with more and better capital, more-productive workers
earn higher real wages, and higher real wages are the mainspring
of higher living standards. Few economic propositions are better
supported than these—or more important. As Chart 1-7 shows, investment rates and productivity growth rates correlate well across
countries. Lower budget deficits that raise private investment are
therefore critical to raising the economy's long-run growth rate.
However, some people worry that deficit reduction might retard
growth in the short run by siphoning off aggregate demand. Such
a concern is justified. Deficit reduction by itself certainly does tend
to contract the economy. After all, raising taxes and cutting government spending reduce the demand for goods and services. But deficit reduction accompanied by sufficient declines in long-term interest rates need not be contractionary. It is, of course, the latter, not
the former, that we experienced in 1993.
Economists judge the impact of fiscal policy on aggregate demand
by looking at changes in the structural deficit. Table 1-6 shows
that OBRA93 will reduce the structural deficit by about $65 billion
from fiscal 1993 to fiscal 1995, after which it is expected to rise
slightly. The large deficit reductions after fiscal 1995 serve to limit
what would otherwise have been even larger increases in the structural deficit—mainly due to rising expenditures on health care.
Analysis by the Council of Economic Advisers suggests that the declines in long-term interest rates that have occurred since the 1992
election, even after the backup late in 1993, are more than enough
to offset the contractionary effects of this decrease in the structural




36

Chart 1-7 Correlation of Investment and Productivity
There is a close correlation between investment rates and productivity growth
rates across countries.
Average annual per capita real GDP growth rate (1970-90)
t.u

Portugal
*

Italy

3.0

2.5

Japan

Ireland
•
Iceland
•

Finland

3.5

I
* _

Turkey
•
_

Belgium

\ ^^

Canada
.
^ % Spam

^

^

Norway
^ ^ ^

Austria^-^^
^^*r

many < ^ r e ® c 3 ^ ^ ^ ^ ' ^ Luxembourg

-^FLce
2.0
^

Denmark #
Netherlands
•
•
U.S. Sweden

^ ^ ^ ^
1.5

•
Australia
Switzerland

1.0

New Zealand
I

nR
16

I

18

20

I

I

I

22
24
26
28
Investment as share of GDP (average, 1970-90)

30

32

Source: International Monetary Fund.

deficit. Hence the economy should be able to grow right through
the deficit reduction period.
TABLE 1-6.™Structural Budget Deficits
Structural deficit
Fiscal year

Billions of
dollars

Percent of
GDP

1992

206.0

3.5

1993

214.7

3.4

1994

190.8

2.9

1995

149.1

2.1

1996

156.1

2.1

1997

162.8

2.1

1998

171.4

2.1

Note—Data for 1994-98 are forecasts excluding health reform.
Sources: Council of Economic Advisers, Congressional Budget Office, Office of Management and Budget, and Department
of Commerce.

There are limits, however, to the amount of deficit reduction an
economy can be expected to withstand within a short period without endangering economic growth. The Administration's judgment




37

is that cutting the annual deficit by about $140 billion to $150 billion over a period of 5 years is roughly the right amount, given the
current strength of our economy. Some critics dispute this judgment and call for much deeper cuts in spending than those provided in OBRA93, or for substantial increases in taxes. The Administration views this strategy of more aggressive deficit cutting in
the near term as risky.
A small amount of additional deficit reduction would, of course,
have only small effects on the economy. But further large spending
cuts or tax increases at this time would require additional large declines in long-term interest rates to replace the lost aggregate demand. Should interest rates decline by less than the required
amount, economic growth would slow and jobs would be lost. For
example, a deficit reduction package substantially larger than
OBRA93 would be needed to comply with the proposed balanced
budget amendment to the Constitution (Box 1-4). The Council estimates that it would take a decline in long-term interest rates of
roughly 3 percentage points to offset the contractionary effect of
such a large fiscal package. Since a 3-percent long-term interest
rate seems quite unlikely, complying with a balanced budget
amendment seems likely to harm the economy—perhaps severely.
Deficit Reduction and Public Investment
Once it is understood that deficit reduction is not an end in itself,
but a means to an end—the end of greater investment—two important principles become evident.
First, it is clear that deficit reduction is only a first step. We
must start to build—to invest in our future. That is why the President's economic plan contains more than just deficit reduction; it
also includes new proposals to encourage private investment and
needed public investments in education and training, public infrastructure, and technology. We must worry about the debt we bequeath to our children, but we must also worry about the quality
and quantity of capital—broadly conceived—that they will inherit.
Second, it is clear that squeezing worthwhile public investments
out of the budget is the wrong way to reduce the deficit. After all,
the main purpose of deficit reduction is to pave the way for more
private investment. Cutting public investment to make room for
more private investment is like running on a treadmill. America
needs more of both, not a swap of one for the other.
Shifting Federal spending priorities from consumption to investment is one of the hallmarks of this Administration's approach to
economic policy. We seek not only to constrain total government
spending, but also to reorient it toward more productive uses.
Doing so will take time and requires use of the surgical scalpel, not
the meat-ax, in cutting the budget. As the Administration and the
Congress struggle together over tight Federal budgets in fiscal




38

Box 1~4*~-A Balanced Budget Amendment to the Constitution?
To argue that substantial deficit reduction was imperative in
1993 is not to argue that the budget deficit must be reduced
even further in the short run—and certainly not to argue that
we should mandate a balanced budget every year by constitutional amendment, as some have advocated*
This Administration opposes the proposed balanced budget
amendment to the Constitution for many reasons. First and
foremost, the amendment would put fiscal policy in a straitjacket that might imperil macroeconomic stability, thereby abdicating one of the government's principal responsibilities and
raising the specter of mass unemployment. Second, the proposed amendment would lead to budgetary gimmickry—such
as mixing one-time asset sales with recurring income transactions—and would be almost impossible to enforce. It could
push economic policy decisions into the courts, or even provoke
a constitutional crisis.
Third, there are many candidate definitions of "the budget
deficit," making it both hazardous and unwise to enshrine any
particular definition in the Constitution. For example, do we
want to balance the unified budget or exclude Social Security?
Why not the structural deficit, or even the inflation-adjusted
structural deficit? Fourth, the amendment's call for a 60-percent congressional supermajority to waive the balanced budget
requirement threatens to reinstall both gridlock and the tyranny of the minority.
Fifth, and finally, the amendment by itself would not reduce
the deficit by a single penny; all the hard choices that face us
now would still face us. A deficit reduction package leading to
a balanced budget would most likely have to include major new
taxes on the middle class, substantial cuts in Social Security
benefits, reductions in defense spending that go far beyond the
Administration's proposals, and cuts in Federal spending on
medical care large enough to imperil health reform. The Administration opposes all of these.
1995 and beyond, it is essential that we not allow fiscal myopia to
lead to underinvestment in America's future.
INVESTING IN PEOPLE
The American work force remains the most productive in the
world. Our aim should be simple: to keep it that way. But the rest
of the world is not standing still; it is gaining on us, becoming ever
more productive. And that is what compels change.




39

America has never competed on the basis of low wages, and we
must not start doing so now. It is widely believed that modern industrial processes demand workers with higher levels of education
and training; and evidence on the relative wages of, say, collegeeducated versus high school-educated labor (Chart 1-8) seems to
bear this out. In 1981, workers with college degrees earned about
45 percent more than workers with only high school degrees; by
1992, this gap had reached almost 65 percent.
Chart 1 -8 Ratio of Wages of College Graduates to Wages of High School Graduates
Workers with college degrees earn substantially more than workers without, and the gap
between the two groups' wages grew during the 1980s.

1.40

-

1.30

-

1.20

-

1.10

-

1.00
1974
1976
1978
1980
1982
1984
Note: Data for 1991-92 are not strictly comparable with earlier data.
Source: Department of Commerce.

1986

1988

1990

1992

Some observers claim that average work force quality may actually have deteriorated in the United States in recent decades.
Whether or not this is true, few dispute that the supply of work
force skills has failed to keep pace with the growing demand. Although Americans are, if measured by average years of schooling,
among the most educated people on earth, the rate of illiteracy in
our country has long been high. Tens of millions of adult Americans are either functionally illiterate or barely literate. International test scores suggest that our primary and secondary students are learning less science and mathematics than their counterparts in other countries.




40

This educational record is not good enough in a world economy
that grows ever more competitive and ever more skill-intensive.
American workers must build the additional human capital they
need as a bridgehead to higher wages and living standards. Lifelong learning must cease being a slogan and become a reality.
In a fundamental sense, each American must be responsible for
his or her own education and training. This Administration is committed to creating the requisite opportunities through a comprehensive agenda of education and training that starts before formal schooling and extends into the workplace. For example:
• Head Start will be expanded so that disadvantaged children
have a chance to get ahead. Head Start has been proved effective in preparing these children for primary school, and has
been estimated to save about six dollars in future government
spending for every dollar invested today.
• Goals 2000 is a comprehensive legislative package that will set
higher performance standards for American teachers and students.
• The Departments of Labor and Education are collaborating on
a new School-to-Work transition program that will help students get hands-on, work-related training while still in high
school. This is an area of our educational system that has been
neglected for too long.
• The new National Service program (Box 1-5) will not only provide opportunities for community service and the acquisition of
job-related skills, but also help send more Americans to college.
• The reformed student loan program will also help more of
America's youth attend college by reducing borrowing costs and
offering, for the first time on a national scale, loans whose repayment schedules depend on future earnings.
• The new program for dislocated workers will have an important retraining component, which will make opportunities
available to displaced American workers. Some income support
will be provided so that displaced workers can afford to take
advantage of the training.
Each of these programs will help augment the Nation's stock of
human resources, thereby raising the American standard of living.
INVESTING IN PUBLIC INFRASTRUCTURE
The most obvious kind of public investment is building new public infrastructure—the Nation's highways, bridges, airports, and
water and sewage systems. The Administration believes the United
States has underinvested in its public infrastructure. For example,
the Department of Transportation estimates that almost 20 percent
of our Nation's highways have poor or mediocre pavement and
about 20 percent of our bridges are structurally deficient.




41

Box l-5.—The National Service Program
In August 1993 the Congress passed the National and Community Service Trust Act of 1993, '^d^^ti&^/^^wm N&tional Service program. National Service provides participants
both current compensation (at below-market wa^s) aad>duc&tiOTugl grants of up to $4,725 per year td pay &* college and
other post-secondary education. Participants also receive valuable on-the-job training, accumulate exi^loyih^it ^kiEsi tod acquire t^l-worid workexperience.
The economic rationale for this program is threefold* First,
employers may be reluctant to provide training in skills that
can be utilized in a wide variety of employment applications
because, if the employee leaves the firm soon thereafter, the
firm will fail to recoup the cost of its investment. Since the accumulation of employment skills is socially desirable, it may be
economically efficient for the government to finance part of this
training.
Second, the decline in Federal revenue sharing has reduced
the intergovernmental resources available to State and local
governments. These levels of government often know best what
services their residents need most. Accordingly, the National
Service program provides in-kind resources (labor services) to
precisely those types of public and nonprofit organizations best
able to determine what services are required.
Third, the National Service program provides all Americans
the opportunity to undertake community service positions by
relaxing the tradeoff that workers often face between current
compensation and the richness of an employment experience.
The program ensures that valuable but low-paid public service
positions will not be the province of the wealthy.
The National Service program is funded through an initial
appropriation of $300 million over previous funding for related
programs. This is scheduled to rise to $500 million in 1995 and
$700 million in 1996. At these funding levels, it is expected
that the program will be able to support approximately 20,000
participants in 1994 and about 100,000 participants over the
3-year period covered by the legislation.
A variety of evidence indicates that there has been
underinvestment. First, while the statistical evidence is not unequivocal, the weight of it points to handsome rates of return on
well-planned investments in public infrastructure. Second, estimated benefit-cost ratios on specific infrastructure projects are
often quite high. Third, the ratio of public to private capital has




42

fallen markedly since the 1960s (Chart 1-9). Unless the data are
grossly misleading, the principle of diminishing marginal returns
leaves only two possible conclusions: Either America was
overinvested in public capital in the early 1970s, or it is
underinvested today.
Chart 1-9 Ratio of Public to Private Net Nonresidential Capital Stock
The ratio of public to private capital stock declined steadily and markedly
in the 1970s and 1980s.

0.50

-

0.45

-

0.40

-

0.35
1947 1950 1953 1956 1959 1962 1965 1968 1971 1974 1977 1980 1983 1986 1989 1992
Note: Public capital stock is defined as Federal and State and local net stock, excluding military capital.
Source: Department of Commerce.

Finally, there is the evidence of the senses: America's roads and
bridges are badly in need of repair, a number of our airports are
overcrowded, and our sewage treatment facilities are overburdened.
To many thoughtful observers, America's public infrastructure is
simply not commensurate with our bounteous private wealth.
INVESTING IN TECHNOLOGY
But physical capital is not the only determinant of productivity,
nor even the most important. Over long periods of time, rising productivity and hence advances in living standards depend on the upward march of technology. Indeed, studies of long-term economic
growth attribute a large share of growth to improvements in knowhow (Table 1-7). The history of progress in the industrial world is
working smarter, not working harder.




43

TABLE 1-7.—Sources of U.S. Economic Growth
[Average annual percent change]

1947
to
1973

Source

1.01
1.45
1.63
-.14
3.94

Labor inputs
Capital inputs
Total factor productivity (technological change)
Adjustment from nonfarm business output to GDP
TOTAL (GDP growth)

1973
to
1992
0.88
1.07
.0
4
-.04
2.30

Note.—Labor and capital inputs are measured for the nonfarm business sector.
Detail may not add to totals because of rounding.
Sources: Council of Economic Advisers, Department of Commerce, and Department of Labor.

Technological change does not come for free. Technology advances because scientists and engineers working in laboratories
and on shop floors make new discoveries. And research is expensive.
Since the dawn of the industrial revolution, alarmists have argued that technology and automation threaten jobs. Such claims
are still heard today. But history shows that they have never been
right in the past and suggests that they are wrong again. Time
after time, in epoch after epoch and country after country, technological advance has produced higher wages and living standards,
not mass unemployment. That is exactly what we expect to happen
again in the 21st century. And the government should be helping
this process along—facilitating growth and change, not impeding it.
While the bulk of research and development (R&D) must and
should be done by private industry, support for basic and generic
research has long been recognized as a legitimate function of government because of informational externalities. New technology is
expensive to discover but cheap to disseminate. So what one company learns passes quickly to others, making it impossible for the
innovator to capture all the returns from its discovery. In fact, estimates find that innovating businesses capture less than half of the
social returns to their R&D. Furthermore, estimated social rates of
return on R&D range as high as 50 to 100 percent, suggesting that
there is systematic underinvestment.
For this reason, the Administration asked the Congress to extend
the research and experimentation tax credit, which was done in
OBRA93. For the same reason, the Administration is increasing
funding for research partnerships with industry, such as the Advanced Technology Program, and adding dozens of new manufacturing extension centers. Each of these initiatives and others are
designed to speed the pace at which precompetitive technologies
are invented and disseminated. Once that stage is passed, the market mechanism should and will take over. (Chapter 5 has more details on the Administration's technology policy.)




44

The development and deployment of new technology have long
been of interest to the government. But technology policy is especially critical in a period of large-scale defense cutbacks, because
more than half of total Federal support for R&D has traditionally
been related to national defense. With less need for research on
weaponry, the Federal Government must now make a choice. Will
we reduce total research support, or will we shift the research dollars into civilian technologies? The President believes that the latter is the wiser course, which is why the Administration is
reorienting the research capabilities of the Defense Department
and the national laboratories toward R&D partnerships with industry.
Technology surely creates the wave of the future. America must
be on the crest of that wave—with the technology, capital, and
skilled work force needed to take advantage of tomorrow's economy.
TRADE POLICY AND LIVING STANDARDS
This Administration's policies toward private physical capital,
human capital, public infrastructure, and technology all share a
common objective: to raise the living standards of American families. Trade policy is yet another means toward that same end. This
Administration vigorously supported the North American Free
Trade Agreement (NAFTA), worked hard to complete the Uruguay
Round of the General Agreement on Tariffs and Trade (GATT),
streamlined the Nation's export promotion programs and eased restrictions on exports, and is striving to open the Japanese market
through bilateral negotiations, all for the same reason—to open
markets and boost American exports. (Chapter 6 contains more details on the Administration's trade policy.) The emphasis on trade
expansion is, in turn, driven by two simple facts.
First, Americans now live in an increasingly integrated world
economy and must therefore become increasingly outward-looking
to stay on top. There is simply no way to close America's borders
and return to the insular days of the 1950s and 1960s. Trying to
do so would be an exercise in futility, doomed not only to fail but
to lower living standards in the process. International competition
through trade has long been a powerful engine of change and
progress—for America and for the world. We must not let that engine idle. Instead, we must use it to power America up the technology ladder—by moving our workers into the jobs of the future,
not keeping them mired in the jobs of the past. In the President's
words, we must "compete, not retreat."
Second, jobs in export industries pay wages that are about 22
percent above the economy-wide average, according to the Council's
latest estimates. The implication is that, if the Administration succeeds in shifting the composition of GDP toward more exports, we




45

will automatically shift the composition of American employment
toward better paying jobs. No government program or central direction is needed to accomplish this. The market will do the work for
us.
Trade expansion is sometimes inaccurately characterized as "exporting jobs." Nothing could be further from the truth. A more accurate description is that international trade and investment lead
low-skill, low-paid jobs that would inevitably migrate to poorer
countries to go there in exchange for high-skill, better-paying jobs
in the United States. American companies that compete successfully both at home and in foreign markets offer the best job opportunities for their workers. The history of capitalism throughout the
world shows that companies and industries sheltered from the
winds of competition tend to stagnate.
This Administration's focus on exports does not signal a revival
of mercantilism. Rather, it reflects a belief that America's export
promotion efforts have lagged behind those of other countries and
that our markets are already among the most open in the world.
The Administration fully expects trade liberalization—such as
through NAFTA and the Uruguay Round of GATT—to raise both
U.S. exports and U.S. imports. And we welcome both.
The North American Free Trade Agreement
Indeed, the recently ratified NAFTA illustrates the basic goals of
Administration trade policy extremely well. NAFTA should boost
trade with Mexico in both directions. In consequence, economic resources will be allocated more efficiently on both sides of the border. Inevitably, some American industries will therefore contract
while others expand. Supported by the overwhelming preponderance of scholarly evidence, the Administration believes that
NAFTA will lead to net job creation in the United States.
Equally important is the composition of those jobs, however. The
new jobs that will arise in the United States will, on average, pay
higher wages than the jobs that migrate south. It would be surprising indeed if anything else happened when a low-wage country and
a high-wage country reduced trade barriers. In addition, the lower
tariffs and reduced trade barriers from NAFTA will reduce prices
for a variety of goods that American families buy. Together, the
shift in the composition of employment toward higher paid jobs and
the reduction in prices lead to a clear conclusion: NAFTA will raise
the standard of living of the average American family—and the average Mexican family as well.
The Uruguay Round of GATT
The recently completed Uruguay Round of GATT was a landmark achievement for the entire world trading system. It literally
rewrites the rules of trade for the start of the next century.




46

Earlier rounds of GATT talks had focused almost exclusively on
tariff reductions. The market access component of the Uruguay
Round continues this tradition by reducing tariffs on literally thousands of manufactured goods—by more than one-third on average.
Such tariff reductions should be a tonic for world trade and growth,
just as they have been in the past, and should increase specialization and economic efficiency around the globe. As usual, producers
will gain from bigger markets and consumers will gain from lower
prices.
But the most remarkable achievements of the Uruguay Round
are to be found elsewhere. For the first time, trade in agricultural
commodities has been brought under GATT—a goal that had eluded trade negotiators for decades. When fully effective, the agreement will reduce agricultural export subsidies by 21 percent in volume and 36 percent in value, saving taxpayers and consumers in
many countries billions of dollars. Trade in agricultural goods will
also be liberalized by reducing tariffs on certain commodities (like
beef and fruits and vegetables), partially opening markets that
were previously closed (like rice in Japan and the Republic of
Korea), and prohibiting certain food "safety" measures that were
really disguised trade barriers. America's farmers, consumers, and
taxpayers all stand to gain handsomely from this agreement.
In addition, for the first time GATT disciplines have been extended to a variety of service industries. This achievement of the
Uruguay Round is a vitally important precedent for the United
States for two reasons. One is that production patterns both here
and elsewhere have been shifting and will continue to shift toward
services. The other is that the United States seems to have a
strong comparative advantage in many service industries; in fact,
our trade surplus in services is already three times larger than our
trade surplus in agriculture.
The United States did not succeed in bringing all services into
the agreement, and will continue to press for trade liberalization
in sectors that were left out of the Uruguay Round. But the gains
were still significant: Trade rules in such important industries as
accounting, consulting, construction, and telecommunications will
now require that foreign countries grant the same treatment to
American firms operating abroad as they do to their own companies.
Finally, the path-breaking agreement will provide much stronger
protection for a range of intellectual property rights including patents, copyrights, trademarks, and trade secrets. Since the United
States is the home of so much commercial innovation, we will reap
large gains from the agreement. Among the biggest industrial winners are software, Pharmaceuticals, and biotechnology.




47

In sum, the Council estimates that the various provisions of the
Uruguay Round, once fully phased in after a decade, will increase
U.S. GDP by at least IV2 percent by raising real wages, lowering
consumer prices, and protecting our national property rights.
HEALTH CARE REFORM
Successful health care reform will accomplish many things. Perhaps primary among them is health security for all Americans—a
precious commodity that too many of our citizens have been denied
for too long. In today's United States, workers who lose their jobs
often lose their health insurance, too. Other people and businesses
lose their coverage because a family member or employee becomes
ill and incurs large medical bills. Still other people are afraid to
take jobs that would lift them out of welfare because they cannot
risk losing medicaid coverage. In total, nearly 39 million Americans
lack health insurance, millions more are inadequately covered, and
tens of millions live in fear of losing the coverage they have. Few
people in other industrialized countries face such insecurity.
Under the President's health care reform proposal, which is described in detail in Chapter 4, none of this would ever happen
again. Americans would know that their health insurance would
never lapse, whether they changed jobs, moved, quit to start a new
business, or had the misfortune of serious illness in the family.
When effective health care reform is enacted, one of the major
sources of economic insecurity facing Americans today will have
been removed.
Health care reform is also fundamental to long-run budget control. It is often said that the fastest growing part of the budget is
"entitlements." But the fastest growing part of the entitlement
budget by far is health care spending (Chart 1-10). As the President has repeatedly emphasized, controlling the costs of medical
care is the key to controlling entitlements, and therefore to longrun deficit reduction.
But health care reform will accomplish more than just budget
control and security. The Administration also sees it as a route to
higher standards of living.
For years, the rising cost of health care has forced a shift in the
composition of the typical pay packet away from wages and salaries
toward fringe benefits, especially health insurance. Chart 1-11
shows that the share of health benefits in total labor compensation
rose from 1.8 percent in 1960 to 8.5 percent in 1992. Correspondingly, the share of cash wages fell. In absolute terms, in fact, real
wages and salaries have barely increased in 20 years. Almost all
the gains in compensation have been taken as fringe benefits. This
means that working men and women have, for the most part, paid




48

Chart 1-10 Projected Real Growth Rates of Principal Federal Budget Components
From fiscal 1994 to fiscal 1998, health care spending is projected to grow four times as
rapidly as any other major component.
Average annual percent change
10

Defense

Nondefense
Discretionary

Other
Entitlements

Net
Interest

Social
Security

Health
Entitlements

Source: Office of Management and Budget.

for their escalating health costs by taking home lower wages than
they would have otherwise.
We can arrest this process only by containing medical costs. The
President's health care reform is designed to do precisely that by
making the market more competitive and making both consumers
and providers more cost conscious. On the assumption that the future will look like the past, the Administration expects most of the
benefits from effective health care cost containment to redound to
working Americans in the form of higher take-home pay.
SUMMARY: PROSPERITY AND CHANGE
All of the policy initiatives described here—from deficit reduction, to public investments (both human and physical), to trade expansion, to health care—share a common goal: raising the standard
of living of average American families. But all of them also require
change, sometimes wrenching change. Deficit reduction required a
host of painful changes in government programs and some increased taxes. Lifelong learning requires changes in the way we
view education. Freer trade and export expansion mean that some
jobs will disappear so that more and better jobs can be created.




49

Chart 1 -11 Shares of Wages and Benefits in Compensation
Most of the decline in the wage share of total compensation has gone to
increased health benefits.
Percent

Percent

94

14
Wages (left scale)

92

12

90

10

88

86

84

82

80

_L
1960

1964

1968

1972

1976

1980

1984

1988

1992

Source: Department of Commerce.

And health care reform requires nothing less than a major overhaul of one-seventh of our economy.
None of this will be quick or easy. Real change rarely is. But, in
truth, we have no choice, for standing still is not an option that
history allows. The secret to economic success is making change
our friend, not our enemy—coming to view change as the opportunity for advancement that it is, not as the threat that it sometimes appears to be.

CREATING OPPORTUNITY
Our focus on raising the standard of living of middle-class Americans must not blind us to the fact that some of our fellow citizens
have not managed to attain a middle-class living standard. And
change is especially threatening to those at the bottom of the economic ladder.
When money incomes are corrected for purchasing power, America is the richest of the world's major nations in terms of per capita
income. But a nagging poverty problem remains in this land of
plenty. Millions of Americans have little or no earning power and




50

are therefore on the public dole. Millions more work but do not
earn enough to support their families. Two key policy initiatives
enacted in 1993, the expansion of the earned income tax credit and
the introduction of empowerment zones, were designed to help lowincome workers by making work pay.
The earned income tax credit (EITC) provides needy families
with both income support and greater rewards for working (Box 16). In part, the credit offsets income taxes that low-income working
families would otherwise have to pay. But the credit is also refundable, meaning that if a family's credit exceeds its tax liability, the
Internal Revenue Service sends a check for the difference. As part
of OBRA93, the EITC was increased substantially, both by making
payments more generous and by extending the credit to more families.
Box 1-6.—How Does the Earned Income Tax Credit Work?
The earned income tax credit is often thought of as a type
of negative income tax, but in fact it is more complicated than
that. The EITC has three ranges: a "credit range*" in which it
functions like a wage subsidy, a "plateau" in which it has no
marginal effect, and a "phaseout" range in which the credit is
paid back as earnings rise (Chart 1-12).
To illustrate, when the increases enacted in 1993 are fully
effective (in 1996), the credit will work as follows for a family
with two or more children. (Less generous schedules apply to
one-child and childless families.) As earnings rise from zero to
$8,425 (all dollar figures are in 1994 dollars), the EITC will
provide a 40-percent wage subsidy, so that each $100 of additional earnings will net the family $140. The maximum credit
is $3,370, which is therefore reached when earnings hit $8,425.
The credit will then be constant as earnings rise from $8,425
to $11,000. Beyond $11,000, however, the family's tax credit is
reduced 21 cents for each extra dollar earned. Benefits are
thus exhausted when earnings reach $27,000.
Clearly, the EITC provides a marginal work incentive in the
credit range (unlike a negative income tax), a marginal disincentive in the phaseout range, and neither in the plateau.
However, to the extent that labor supply decisions involve
whether or not to work, rather than how many hours to work,
the credit provides a positive work incentive to all recipients.
As a first step toward welfare reform, the EITC has many virtues. It will lift many families with children out of poverty. It
provides positive work incentives for many of the lowest-paid employees in our society. It is better targeted on the low-income popu-




51

lation than is, say, an increase in the minimum wage, because minimum-wage workers are found in all family-income brackets. It is
simple to administer, requiring no special bureaucracy. And, finally, it apparently reaches a larger fraction of the eligible recipients than is typical of other income-support programs, perhaps because it is easy to claim and carries no stigma.
Chart 1-12 Earned Income Tax Credit for Families with Two or More Children
The expanded earned income tax credit will substantially increase the credit
for eligible families.
Tax credit in 1994 dollars
4,000

3,000

-

2,000

-

1,000

-

10,000

15,000
20,000
Earnings in 1994 dollars

25,000

30,000

Source: Department of the Treasury.

The goal of the innovative empowerment zone program is to
strengthen business activity in certain geographic areas that are
extremely depressed, so that synergies from concentrated economic
activity can help revive these areas. The program's main tax incentive is a 20-percent tax credit for wages up to $15,000 per year paid
by a zone business to a zone resident. This should be a powerful
incentive to create jobs in the zones. In addition, a variety of regulatory waivers may be granted to give communities greater flexibility, and several Federal agencies will direct spending toward the
zones.
Beginning this year, nine empowerment zones, six urban and
three rural, will be selected by a competitive process that should
encourage both imaginative thinking and private-public partnerships. In addition, 95 other neighborhoods will be designated enter-




52

prise communities and be granted smaller benefits than the zones
while sharing the relaxed regulatory environment. The program
will be carefully monitored and evaluated over a 10-year period,
during which time we should learn a great deal about what works
and what does not.
No American should think that programs like empowerment
zones, the EITC, and welfare reform serve only the poor. Every citizen benefits when the welfare rolls are reduced, when low-income
families earn more, when blighted neighborhoods come to life, and
when city streets once again become safe. We are, after all, one Nation.

SUMMARY
An economic strategy based on long-run investments, as ours is,
will not bear fruit overnight. It takes time to see tangible results
and patience to wait for them. The important thing is to get started
down the right path—and soon. The Administration believes that
1993 marked a turning point in that regard. Recovery firmly took
hold in 1993, and prospects for sustained economic expansion look
far brighter now than they did a year ago. The long-run deficit
problem, while not completely solved, looks far less threatening
than it did then. The Congress has begun to fund the President's
ambitious investment agenda—including infrastructure, human
capital, technology, and environmental preservation. Two historic
trade agreements whose negotiations began years ago—NAFTA
and the Uruguay Round of GATT—were brought to a successful
conclusion. And the stage has been set for a much-needed national
debate on health care reform in 1994. All of these accomplishments
set in place the foundation for a more prosperous America.




53




CHAPTER 2

The U.S. Economy in 1993 and
Beyond
THE ECONOMIC EXPANSION consolidated in 1993, setting the
stage for sustained growth in 1994. A sharp decline in long-term
interest rates to 25-year lows, in large part the result of the Administration's deficit reduction package, was the major economic
story of 1993. Momentum picked up in the second half, with interest-sensitive sectors like housing and consumers' and producers'
durable goods leading the way. Continued advances in these sectors helped to create sustained employment and income gains that
put real gross domestic product (GDP) on roughly a 3-percent-peryear growth path.
During 1992 the economy was widely described as being in a jobless recovery, advancing with a disconcerting seesaw quality. The
combination of self-sustaining forces that typically appear in a recovery—strongly rising employment, accelerating incomes, sharply
rebounding automobile sales and housing activity, markedly higher
levels of consumer confidence, and a renewed willingness on the
part of consumers to take on debt—was missing. Many of these
forces did appear over the course of 1993. The economy experienced
a sustained moderate expansion with healthier job creation. Payroll
employment increased by 162,000 jobs per month in 1993, double
the 81,000-job-per-month pace of 1992. The unemployment rate,
higher at the end of 1992 than it had been at the beginning, fell
by almost a full percentage point in 1993.
Many interest-sensitive sectors of the economy finally exhibited
clear-cut improvements during 1993. Business spending for durable
equipment increased at the fastest rate since 1972. Consumer
spending for furniture and household furnishings, another leading
sector in business cycle upswings, also posted one of the biggest
gains in a decade. Motor vehicle sales rebounded smartly as consumers exhibited a newfound willingness to incur debt to finance
a major purchase. Together these forces have put the economy on
track for sustainable growth.
With a greatly improved outlook for the Federal budget deficit,
the Council of Economic Advisers expects long-term interest rates
to remain relatively low for the foreseeable future—which will help
to keep economic growth on track. Low interest rates are the key




55

ingredient that should allow the economy to grow in the face of future large deficit reductions, which would otherwise tend to contract the economy. Expected growth in the 2^2- to 3-percent range
for 4 years should create about 8 million new jobs and steadily reduce the unemployment rate from its currently unacceptable level
toward a rate that is close to noninflationary full employment.

STRUGGLING TO GROW
GDP growth over the current expansion has been much slower
than usual. In the first year after a recession trough, output typically grows by 6 percent in real terms; in this recovery, output
growth over the first year after the trough was less than 2 percent.
Even though potential GDP growth is lower today than it was in
the 1960s and 1970s—mainly because of slower productivity
growth—this factor can only explain a small part of the slower rebound.
Not surprisingly, given the well-established linkage between output growth and employment growth, job growth in this expansion
has also been atypically slow. The decline in employment during
the recent contraction did not bottom out with the rest of the economy, and no rebound in job growth was evident until a year after
the recession's trough. By late 1993 the growth path of employment
was still well below the typical postwar recovery path (Chart 2-1).
After 11 quarters, we have had the employment gains normally expected after just three quarters. Adjusted for the sluggish pace of
output growth, however, employment growth has been closer to
normal. (For further discussion, see Chapter 3.)
A number of special factors have combined to induce this sluggish economic performance. These "headwinds" include defense cutbacks, weak foreign economies, an oversupply of commercial buildings in the wake of the 1980s, the credit crunch, debt overhang,
and a wave of corporate downsizings. None of these factors by itself
explains why the recovery has run so far behind historical levels,
but there is evidence that together they have retarded economic
growth significantly.
THE END OF THE COLD WAR
The end of the cold war was a major geopolitical event for the
United States, and the ensuing defense builddown has had profound economic effects. In 1986 defense spending accounted for 6.5
percent of U.S. GDP. By 1993 its share had fallen to about 4.8 percent, and by 1997 it is predicted to drop to about 3.2 percent (Chart
2-2). This massive shift of national resources away from defense
has meant numerous base closings, cancellations of major weapons
programs, scaled-back procurement plans, and attendant layoffs in




56

Chart 2-1 Recovery Pattern of Nonfarm Payroll Employment
Employment growth in this recovery has been much weaker than in the average
postwar recovery.
Index, trough=100
110
Average Postwar Recovery

108

-

104

Current Recovery

100

I

98

-4

-2

T

2

4

6

8

10

Quarters from Trough
Note: "Average" includes all recoveries from 1954 to 1982, except 1980. The trough quarter for the
current recovery is first quarter 1991.
Sources: Department of Labor and National Bureau of Economic Research.

the whole defense sector. For example, total defense-related jobs
are projected to number 4.5 million by 1997, down from 7.2 million
jobs in 1987. In a purely arithmetical sense, reduced defense
spending subtracted roughly 0.5 percentage point off the real GDP
growth rate in 1993. Moreover, the defense cutbacks have had a
further adverse impact on aggregate demand through the expenditure multiplier. Moving resources out of the defense sector frees
them up for use in the production of consumption and investment
goods and services, improving living standards. But this is a longer
term effect. The conversion process takes time, and although the
defense scaledown is not as large relative to the size of the economy as it was at the end of several wars, reconversion will cause
painful dislocations in the short run.
WEAK FOREIGN ECONOMIES
Weak economic performance in the rest of the industrialized
world over the past few years has also taken a toll on the U.S.
economy by slowing export growth. The period 1991-93 will go
down in history as the worst for economic performance in foreign
industrial countries since at least 1960. During this 3-year period,




57

Chart 2-2 National Defense Purchases as Share of GDP
Defense spending as a share of nominal GDP is projected to continue to fall
steadily over the 1990s.

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

Note: Defense spending projections taken from Mid-Session Review of the 1994 Budget.
Sources: Council of Economic Advisers, Department of Commerce, Department of the Treasury, and
Office of Management and Budget.

output growth averaged just 0.6 percent per year in the European
Community, 1.7 percent per year in Japan, and only 0.2 percent
per year in the world's other industrial countries (Table 2-1). Even
though U.S. growth has been sluggish over the past couple of
years, it has been the fastest among all the Group of Seven major
industrial market economies. The world's second- and third-largest
industrial economies, Japan and Germany, both entered deep recessions in the latter part of 1992 and are now operating well
below their capacities. During 1993, all of the Group of Seven countries had substantial output gaps (that is, actual GDP was well
below potential), and growth was slowing in such developing-country markets for U.S. exports as Mexico and the Middle East.
In large part because of this global weakness, U.S. merchandise
exports, which had increased by about 7 percent in nominal terms
in 1991 and 5 percent in 1992, rose by only 2 percent in 1993. Merchandise exports to Japan and Western Europe, which together
account for 35 percent of total U.S. merchandise experts, were especially hard hit, dropping by about 3 percent (Chart 2-3). Even
exports to Mexico flattened in 1993 after half a decade of rapid increases. With excellent cost competitiveness in world markets, U.S.




58

TABLE

2-1.— Foreign Country Real GDP Growth
[Average annual percent change]
1989

1990

1991

1992

1993

European Community

3.5

3.0

0.8

1.1

-0.2

Japan

4.7

4.8

4.0

1.3

-0.1

Other industrial countries

3.2

1.1

-1.1

0.6

1.2

Developing countries

4.1

3.7

4.5

5.8

6.1

Note— 1993 figures are forecasts.
Source: International Monetary Fund.

exporters have been able to do better than a trade-weighted average of major industrial economies' GDP growth rates would suggest
(Chart 2-4). Still, what had been a strong engine of growth from
the mid-1980s until 1991 clearly shifted into neutral in 1993.
Meanwhile, growing U.S. reliance on foreign computers has led
to a surge of imported capital goods. Office automation equipment,
which now accounts for nearly 45 percent of real private investment in producers' durable equipment, has become the fastest
growing major demand component in the U.S. economy, and imports have been filling a growing portion of this demand. Imports
also account for about one-third of the nonautomotive, noncomputer
portion of producers' durable equipment spending—up sharply over
the past decade.
Together, the slowing of U.S. exports and the surge in imports
have meant that net exports (the difference between them) are now
working against U.S. growth, after making strong positive contributions from the mid-1980s to 1991. For example, according to
a simple calculation holding other components of demand fixed, if
net exports had simply not deteriorated in 1993 from their 1992
level, U.S. GDP growth would have been over 1 percentage point
higher than it actually was in 1993.
THE DEBT WORKOUT
Working off the heavy indebtedness built up over the 1980s may
also have retarded growth. During the 1960s and 1970s, households and firms only gradually increased their levels of indebtedness relative to their incomes. Over the 1984-90 period, this
changed abruptly as individuals and businesses increased their indebtedness sharply (Charts 2-5 and 2-6). For the corporate sector,
the proximate cause of increased indebtedness was a rise in debtbased financial restructurings, such as leveraged buyouts. A portion of new debt issues in the 1980s was used to purchase equity
in existing companies, not to finance increases in plant and equipment investment. It is unclear exactly what motivated households
to move further into debt during this period, although rapid appre-




59

Chart 2-3 Growth of U.S. Merchandise Exports
Continued weak economic growth in industrialized countries has depressed demand
for U.S. exports.
Percent change from year earlier, 6-month moving average
20

r

•

15

Western Europe
10

All Countries

-5
Japan
-10
1990

1992

1991

1993

Note: Data are not seasonally adjusted, f.a.s. basis.
Source: Department of Commerce.

Chart 2-4 U.S. Exports Implied by Industrial Country GDP
U.S. export demand has been healthier than would be expected given the
lackluster performance of the major foreign industrial economies.
Billions of 1987 dollars (ratio scale)

Actual

600 -

500

Implied by
Industrial Country Demand

,'/

400

300

200
I

I

I

!

I

I

I

I

1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
Note: The dashed line plots fitted values from a regression relating exports to industrial country GDP.
Sources: Council of Economic Advisers and Department of Commerce.




60

1993

ciation in the stock market and booms in numerous housing markets probably played a role. Higher asset values may have given
consumers a greater sense of financial security to borrow and
spend even in the face of modest personal income growth.
The debt-income ratios for both households and firms flattened
as the 1980s came to a close. Beginning in 1991, firms initiated a
dramatic reduction in their leverage. This balance sheet repair was
presumably triggered by a reversal of the factors that led them to
accumulate debt. Moreover, there were declines in firms' net worth,
which might have caused them to reduce leverage out of fear of insolvency.
For a domestic debtor to repay a domestic creditor, there need
not be any increase in national saving. Rather, such repayments
represent—in the first instance—adjustments in the portfolios of
domestic households, businesses, and financial institutions. Yet the
recent balance sheet adjustments probably did stem in part from
an increase in saving and therefore acted to slow growth in aggregate demand.
By what mechanism would such balance sheet adjustments affect
national saving? If the households and firms who repaid debts had
higher marginal propensities to spend than those who got the repayments, the balance sheet restructuring would have increased
saving. By virtue of their indebtedness, we can infer that firms and
households who retired debt had in the past shown much more eagerness to spend or to undertake investment projects. Extrapolation would suggest that they still had a high propensity to spend
relative to the creditor firms and households. Therefore, balance
sheet restructuring was probably a drag on aggregate demand in
recent years.
Of course, the causality could be reversed. Indebted households
and firms might have decided for reasons other than those based
on the state of their balance sheets (e.g., reduced expectations of
income or profitability of investment projects) to reduce expenditures, using their free cash flow to repay debt rather than to spend.
OVERSUPPLY OF COMMERCIAL BUILDINGS
Yet another headwind has been the glut of nonresidential structures that was built up over the 1980s. Investment in
nonresidential structures soared in the early 1980s, fueled in part
by high inflation and changes to the Tax Code in 1981 that made
commercial real estate investment more attractive. As this overbuilding continued, vacancy rates rose sharply across the country.
The reversal of the 1981 tax provisions by the 1986 tax reforms,
together with higher interest rates in the late 1980s, derailed the
boom in commercial real estate. The decline in this sector was further exacerbated by the movement of the rest of the economy into

 5 1 - 4 4 4
1
0 - 9 4 - 3


61

Chart 2-5 Households: Credit Market Debt as Percent of Disposable Income
After trending upward slowly over most of the 1960s and 1970s, the ratio of household
credit-market debt to disposable personal income increased sharply in the 1980s.

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

Sources: Department of Commerce and Board of Governors of the Federal Reserve System.

Chart 2-6 Nonfinancial Corporate Business: Credit Market Debt as Percent of Output
The ratio of nonfinancial corporate business debt to nonfinancial corporate
GDP rose sharply in the 1980s. It has since begun to decline.

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

Sources: Department of Commerce and Board of Governors of the Federal Reserve System.




62

1990

1993

recession in 1990. Even by late 1993—more than 2 years into the
recovery—the value of investment in nonresidential structures was
more than 25 percent below its 1990 peak in real terms. Clearly
this small but volatile sector of the economy has failed to provide
its normal cyclical lift.
CREDIT CRUNCH
The credit crunch and its vestiges have also slowed economic activity over this recovery period. Many banks developed balance
sheet problems in the 1980s as the developing-country debt crisis
and widespread lending for speculative construction projects led to
massive loan writeoffs and weak profitability. This weak profitability reduced the banks' ability to lend and probably aggravated
the credit crunch. More-aggressive bank regulation, some of it a reaction to the 1980s savings and loan debacle, accentuated the problem. In 1991 and 1992 there were widespread reports that wouldbe borrowers were having difficulty obtaining funds, although these
reports tended to be concentrated in certain industries (notably
real estate) and regions (particularly the Northeast). A National
Association of Home Builders survey of its members, for example,
consistently ranked "obtaining financing for construction projects"
as a top business problem over this period.
CORPORATE DOWNSIZINGS
Finally, corporations across the industrial spectrum have been
restructuring their businesses and paring costs. The prolonged economic sluggishness apparently induced many firms to hunker down
and reduce their breakeven points as much as possible, often by
shedding workers. Foreign competition and cutbacks associated
with debt workouts might also have been factors. Technological
changes have played a role as well; some of the most notable layoffs have been at mainframe computer companies, for example. In
addition, lower capital costs may have led some firms to substitute
capital for labor.
Even though downsizing may well have made corporations more
efficient and better poised to earn profits in the future, the widespread layoffs have helped to depress wage and salary growth and
probably consumer confidence as well. In addition, although higher
profits can imply higher incomes for corporate stockholders, this
group's marginal propensity to consume is probably lower than it
is among individuals whose primary source of income is wages.
This would also have reduced consumption spending and overall
economic growth.




63

THE HEADWINDS ARE MOSTLY CALMING
As the economy enters 1994, many of these headwinds are dissipating. The credit crunch is fading as banks show new signs of
wanting to make business loans. The decline in yields on government bonds, where banks had parked large amounts of assets, and
the improvement in overall business conditions are making such
loans relatively more profitable. Aided by lower interest rates and
greatly improved margins, banks have also been posting record
profits for the past 2 years. Bank lending surveys by the Federal
Reserve also suggest that credit conditions have eased. For these
reasons, bank lending today is becoming less of a retardant to
growth.
Meanwhile, the other industrial countries will not remain mired
in recession forever. Indeed, the ones that entered recession first
in this global slowdown—the United Kingdom, Canada, Australia,
and New Zealand, for example—are all showing signs of economic
rebound. Even Germany, a late arrival on the global recession
scene, recorded positive GDP growth in the second and third quarters of 1993. By late 1993 there were increasing signs that the European recession was nearing bottom, and that at least modest
growth would return in 1994. Even a small rebound in Europe
would be welcome news to U.S. exporters. The odds of economic recovery in Japan, at least by 1995, seem good as well.
Commercial construction has also started to improve, although it
will not be as bullish as it was in the mid-1980s. By late 1993
there were signs that vacancy rates for commercial real estate were
posting significant declines, implying that the worst might be over
for this sector.
The key exception to the forecast of diminishing headwinds is defense cutbacks. These seem almost certain to continue over the rest
of the decade unless there is some major change in the world's geopolitical circumstances—which might have other, far less beneficial
repercussions. Still, with most of these headwinds blowing less
fiercely over the mid-1990s than they did earlier in the decade, the
economy should be able to turn in a better performance.

OVERVIEW OF THE ECONOMY IN 1993
Although economic growth was sluggish in early 1993, substantial progress was made despite these headwinds. Employment increased steadily, the unemployment rate dropped, inflation remained subdued, and real GDP increased by 2.8 percent from the
fourth quarter of 1992 to the fourth quarter of 1993. Claims early
in the year that only a half-speed economic expansion was under
way gradually gave way to the view that more-normal growth was




64

returning. Fourth-quarter growth of 5.9 percent (annual rate)—the
highest in 6 years—reinforced this view.
The 1993 economy actually exhibited more underlying strength
than was reflected in press reports or in indexes of consumer and
business confidence. Domestic demand and real final sales both
posted healthy increases. Real final sales to domestic purchasers
(that is, excluding inventories and exports but including imports)
actually increased at an annual rate of 4 percent on average from
mid-1992 until the end of 1993, and only dipped below 3 percent
growth once over that period—in the first quarter of 1993. At least
a portion of that dip was arguably caused by a policy of the previous Administration: increased tax liabilities in early 1993 owing
to a reduction in withholding that began in March 1992. In addition, an early 1993 defense spending collapse caused a growth letdown in early 1993.
A look at economic performance sector by sector provides a clearer picture of the laggards and leaders in the present expansion.
CONSUMPTION EXPENDITURES
Because consumer spending represents about two-thirds of GDP,
it is not surprising that the modest output growth in the expansion
to date has been associated with sluggish consumption growth. Indeed, consumption as a whole has failed to show the kind of sharp
rebound typical of postwar recoveries: 11 quarters after the recession's trough, consumption had advanced only two-thirds as far as
would be expected from postwar experience. Consumer sentiment
manifested a typical recovery pattern for only a short time; the
sharp advance usually seen when a recession ends sputtered to a
halt two quarters after the 1991 trough. Sentiment trended upward
only slowly over 1992 and 1993, although there was a sharp acceleration late in 1993.
Weakness in consumer spending can also be seen in the behavior
of the saving rate. Typically, the saving rate falls as a recovery begins, as consumers begin to spend ahead of income. Increases in
spending on consumer durables, such as automobiles and household furnishings, typically follow. Such a drop in the saving rate
did not occur after the 1991 trough, however; the saving rate actually trended upward slightly for almost 2 years into the recovery.
Over 1992, real consumer spending lagged behind real income
growth, suggesting that households were still getting their balance
sheets in order.
Nineteen hundred and ninety-three saw belated reductions in the
saving rate. Between the fourth quarter of 1992 and the third
quarter of 1993, for example, the saving rate fell by more than 2
percentage points, and this provided much of the overall lift that
the economy experienced. In fact, over the last three quarters of




65

1993, real consumer spending increased at a 3.9-percent average
annual rate—not high by historical standards, but at least tending
toward the normal range for a postwar expansion.
BUSINESS FIXED INVESTMENT
After a late start, several important components of investment
spending have rebounded in line with typical recovery patterns.
While investment in structures has remained weak for the reasons
discussed earlier, producers' durable equipment has turned in a
stellar performance. For about a year after the recession trough,
equipment investment remained stagnant; then it spurted to a
growth path above the postwar recovery average. Today, investment in producers' durable equipment remains one of the strongest
components of the expansion. In fact, over the year ending in the
fourth quarter of 1993, investment in these goods increased by
about 18 percent—a growth rate more typical of a Japanese rather
than an American business cycle expansion. Certainly as far as
equipment investment spending is concerned, the weak portion of
the recovery was limited to the first year after the trough. More recent activity has actually exceeded the postwar norm.
INVENTORIES
Businesses kept inventories at extremely low levels relative to
sales throughout 1993, and a major swing in farm inventories resulting from the Midwest floods and Southeast drought influenced
the quarterly GDP growth pattern over the year (Box 2-1). The inventory-to-sales ratio was under 1.5 throughout the year, and the
ratio for manufacturing hit an all-time low during the fourth quarter as sales perked up faster than some businesses expected. Several factors were at work. First, the inventory-to-sales ratio in
manufacturing industries is in secular decline. Second, businesses
seemed to lack confidence in the strength of the recovery. Disappointing growth in the first and second quarters of 1993 and pessimism about the economy's future prospects probably made businesses extremely cautious about producing at a faster rate than
was absolutely necessary. Third, production problems in some key
sectors that did experience a sharp pickup in demand, especially
automobiles, probably prevented some firms from achieving the
level of inventories that they deemed optimal.
The extremely lean inventories of late 1993 are good news for
1994. As 1994 opens, manufacturers are in a position where they
risk losing business because of inadequate inventories, and they
are therefore under pressure to increase output. There seems to be
relatively little risk that overaccumulation of inventories will lead
to production cutbacks in 1994.




66




Box 2-1,—The Economic Effects of the Midwest Floods of 1993
Last summer's floods in the Midwest were a human tragedy
whose immense scope was obvious to all. Measuring their economic effects is more difficult, however. The floods disrupted
the day-to-day operations of businesses, destroyed inventories
and crops, and wrecked a significant portion of the region's infrastructure and housing stock But because the level of economic activity that would have occurred without the floods is
unknowable, the effects of the flooding on third- and fourthquarter economic performance cannot be definitively assessed.
The clearest effect of the floods on national economic performance was a decline in farm output The Bureau of Economic Analysis (BEA) of the Department of Commerce judged
that $2.5 billion worth of farm output was destroyed by the
floods and the simultaneous drought in the Southeast The
BEA accounted for this crop loss by lowering its estimates of
farm output by $7*5 billion (ammalized) in the third quarter of
1993 and by a further $2.5 billion in the fourth quarter, The
adjustments were reflected in the change in farm inventories,
The result of these acljustments was that measured real GDP
growth was lowered by about 0,6 percentage point in the third
quarter of 1993 and increased by about 0*4 percentage point in
the fourth quarter* The BEA also;
• reduced estimated farm proprietors' income to account
for crop damage and uninsured losses to farm property
• lowered estimates of the rental income of persons and
nonfarm proprietors* income to account for uninsured
property losses*
Other flood effects are too embedded in the source data to be
explicitly measured. These include:
* effects of reduced farm output on inflation
• the negative effect of the floods on nonfarm business
output in affected areas
• potential stimulative effects from the rebuilding of flooddamaged roads, bridges, railways, and houses**~espe~
ciaHy if the rebuilding was funded from savings and not
insurance company payouts (whose effects are more like
a transfer from owners of insurance companies to policy*
Holders)/ ' - "
•
•
'-'
•/"'.•'.
# the effect of Federal disaster assistance^ insurance payments, and emergency grants.

67

RESIDENTIAL INVESTMENT
Residential investment was an enigma over the first part of
1993. Mortgage rates fell to 20-year lows, affordability was at 20year highs, yet housing starts were flat for the first half of the
year. Finally, starting in August, housing activity began to respond
to these favorable economic conditions and posted sharp additional
gains. Housing starts rose a stunning 25 percent between July and
December.
A healthy fraction of new homes being sold today are sold before
construction has started. This suggests that the gains in residential
construction are solid and that the upward trend in housing should
continue without any likely inventory cycle. As 1993 ended, the inventory-to-sales ratio of new homes, as measured by the stock of
homes for sale divided by the number actually sold in a month, was
at its lowest level since 1986. Given the unfavorable underlying demographic factors for housing, especially the relatively low rate of
household formation, housing turned in a very good performance
late in the year and was a solid contributor to the economy's advance.
NET EXPORTS
As mentioned earlier, net exports shifted from being a major contributor to economic growth over the 1987-90 period to being a retardant in 1992 and 1993. Weak foreign economies severely
crimped export growth, while imports surged with the capital
equipment spending boom. Even the growth rate of service-sector
exports, the brightest component of U.S. trade, was hit by slow foreign growth. In current dollar terms U.S. trade in services still
posted a $68 billion surplus in 1993, however, illustrating the
strong comparative advantage of U.S. firms in this sector. And exports of services represented about 25 percent of total U.S. real exports in 1993. By comparison, agricultural exports in 1993 represented only about 6 percent of the total.
EMPLOYMENT AND PRODUCTIVITY
The increases in consumer spending and investment and the general pickup in the economy over the past year and a half have finally led to a more acceptable pace of job creation—something that
was completely missing over the first year of recovery. On average,
the economy generated 162,000 jobs per month over 1993, compared with only 81,000 jobs per month over 1992, and the loss of
73,000 jobs per month over 1991.
One important development in 1993 was the lengthening of the
factory workweek and the increase in manufacturing overtime. In
November the workweek reached a postwar record high, and overtime reached its highest level since the data series was begun in




68

the 1950s. Employers have apparently been concerned about the
fixed costs of adding new workers and about the unsteady nature
of the expansion. Many have apparently been concerned that another decline in orders might force new rounds of layoffs, and so
they have been trying to squeeze the most output possible out of
their existing work forces. The good news is that, with the workweek and overtime so high, there should be building pressure on
businesses to add new workers as demand continues to increase.
Productivity growth was weak over the first half of 1993 but rebounded in the third quarter as the economy picked up speed. Employers kept a tight rein on labor costs as output increased. Given
the moderate rates of wage increase, nonfarm unit labor costs (the
cost of labor needed to produce one unit of output) increased by
about 2 percent, about the same as the 1992 increase. These modest gains in unit labor costs helped to give a healthy boost to corporate profits and maintained the prospects for low inflation.
INCOMES
Real disposable income increased by a modest 1 percent in 1993.
Pretax profits posted strong increases, and proprietors' income was
up by over 7 percent. But wages and salaries increased by a more
modest percentage, and interest income was stagnant as interest
rates fell. Average weekly earnings of production workers barely
kept up with inflation.
INFLATION
Nineteen hundred and ninety-three saw the best inflation performance in a generation. The implicit price deflator increased by
the smallest percentage since 1964. During 1993 the consumer
price index (CPI) registered its smallest increase since 1986, and
the core CPI (excluding food and energy) increased by the smallest
percentage since 1972. Meanwhile the producer price index (PPI)
for finished goods showed virtually no increase over the course of
the year. The producer price index for finished goods excluding food
and energy, the so-called core PPI, showed its smallest annual increase since the government began compiling this series in 1973.
Measured inflation increased as 1993 began, as prices of apparel,
public transportation, tobacco products, and motor fuels posted
large increases. The GDP price deflator, the CPI, and the PPI for
finished goods all accelerated from their previous quarter's rate of
change. The increase in inflation was temporary, however; many
analysts believe it was due to problems with seasonal adjustment.
Lower measured inflation returned after the spring.
Wage gains remained modest, as mentioned, and showed no
tendency to accelerate over the course of the year. Medical costs
showed some signs of moderating over 1993 and recorded their




69

smallest annual increase in 20 years. They still increased at roughly twice the pace of the nonmedical CPI, however. External price
factors, such as commodity prices, remained generally tame
throughout the year, and oil prices fell sharply, suggesting a flat
commodity price trajectory as 1994 began. (Box 2-2 discusses the
possible economic effects of lower oil prices.) Given that the economy remains below its potential output level, there appear to be
few inflationary seeds from 1993 blowing into 1994.
MONETARY POLICY
Short-term interest rates were essentially constant over the
course of 1993, and the Federal Reserve continued its vigilance on
inflation. After indications of an acceleration of prices in the first
several months of the year, the Fed adopted an asymmetrical policy
tilt, poised to tighten monetary policy if inflation gained momentum. Over the summer, however, low inflation returned, and the
Fed reverted to its neutral policy stance.
The tendency in recent years for the broad monetary aggregates
to behave in atypical ways, given changes in interest rates and economic activity, led the Federal Reserve to place less emphasis on
these money supply measures in 1993. Some of the change in the
behavior of the monetary aggregates stems from massive portfolio
shifts by American households. For example, the sharp decline in
interest rates on bank certificates of deposit led many households
to shift money into stock and bond mutual funds. The downward
shift of M2 (the broad monetary aggregate) relative to income that
resulted from this and other developments clearly reduced that aggregate's usefulness as a short-term policy indicator. The sluggish
growth of M2 did not signal that the Fed was running a tight monetary policy: In 1993, growth rates of Ml (the narrow monetary aggregate) and the monetary base were up to 10 percentage points
higher than M2 growth.
Another policy indicator in which the Federal Reserve has expressed some interest is the concept of a real short-term interest
rate—the nominal rate less expected inflation. It is generally assumed that real short-term rates will gradually rise as the economy
strengthens and the output gap shrinks. The Federal Reserve's
shift toward reliance on a broader set of guidelines for setting monetary policy, including short-term interest rates, appears to be an
appropriate adaptation to changing events. It should allow the
overall condition of the economy to be carefully monitored, and an
appropriate policy response to be crafted.
FISCAL POLICIES AND THE TIMING OF OUTPUT
The uneven pattern of strong growth in late 1992 and slowdown
in early 1993 was attributable in part to tax and spending changes




70

Box 2-2.—The Economic Effects of Lower Oil Prices
Oil prices tumbled during 1993. Over the first half of the
year, West Texas Intermediate crude oil averaged about $20
per barreL By the middle of October the price was down to
about $18,25 per barrel, and by late December the price had
fallen to about $14.25—more than 25 percent lower than earlier in the year. Weak global economic conditions, including the
recessions in Europe and Japan, the seeming inability of the
Organization of Petroleum Exporting Countries (OPEC) to restrict its members' production levels, and the possibility that
Iraq would soon be exporting substantial quantities of oil again
were likely contributors to the price declines.
A drop in the price of oil, like any relative price change, has
microeconomic consequences; Some sectors benefit and others
are hurt. Lower oil prices will likely bring painful dislocations
in the ILS. oil industry and the regions where it is concentrated. If oil prices remain low, domestic oil output is likely
to decline faster than it already has been. U.S. dependence on
foreign oil would also be likely to increase. Lower oil prices
would also cause more energy to be used and might lead to
higher levels of pollution*
Because oil is such an important input into the VS. economy, however, lower oil prices will also have favorable effects
on the U*S* macroeconomy in 1994—if prices stay in the $15per~barrel range. There are several transmission channels. The
main beneficial effect is that lower oil prices translate into
lower inflation, which boosts real disposable income for consumers, giving them the wherewithal to make more nonoil purchases. Lower oil prices also mean that businesses have lower
costs, which translate into higher cash flow and profit margins,
leading in turn to more investment spending. Foreign industrial economies also get an upward boost from lower oil prices
and in turn demand more US. exports.
Some economic models suggest that if the 25-percent drop in
oil prices in 1993 were sustained over 1994, real GDP growth
would be between 0,3 and 0.4 percentage point higher in 1994.
The same models predict that CPI inflation would be noticeably lower.
in 1992 that served to raise aggregate demand in 1992 and depress
it in the first half of 1993. First, there was a temporary burst in
defense spending in the second half of 1992. Second, a decrease in
individual income tax withholding raised consumer spending in
1992 but reduced it in 1993 as households made their final settle-




71

ments with the Internal Revenue Service (IRS). The Council estimates that these two factors added 0.2 percent to the level of GDP
in the second quarter of 1992 and 0.4 percent in the third and
fourth quarters. These gains were temporary, however. GDP
growth was 0.3 percent lower in the first quarter of 1993 and 0.4
percent lower in the second quarter than it would have been without these fiscal factors. There were also effects on the timing of
consumer spending arising from the expectation and misperception
of 1993 tax changes.
Defense Spending
During the second half of 1992, defense spending temporarily increased well above its trend. Part of the change was in purchases
of durables. The other portion was in "other services," whose increase was in part due to expenditures to close military bases.
Chart 2-7 shows the temporary burst of spending relative to a
baseline which is estimated as the trend in defense spending from
the third quarter of 1989 to the third quarter of 1993, excluding
the quarters of the Persian Gulf crisis and the last two quarters
of 1992.
Chart 2-7 Defense Spending: Actual Versus Baseline
Although defense spending is falling in the post-Cold War era, two recent periods of
relatively high defense spending stand out.
Billions of 1987 dollars
ouu
Persian Gulf War
290

280

\
Actual
\

270

^x ^ ^
>
Baseline

/

A

-

240

Temporary Defense Spending

* \

260 -

250

\

-

1
1
1
1
1989
1990
1991
1992
1993
Note: Baseline is trend in spending from 1989:111 to 1993:1V, excluding 1990.IV-1991:111 and 1992:III-IV.
Sources: Council of Economic Advisers and Department of Commerce.
1




72

1

Change in Tax Withholding
The change in the withholding tables reduced income tax withholding for most taxpayers by an average of $25 a month beginning
in March 1992. Taxpayers therefore owed the IRS an additional
$250 (or received a smaller refund) in 1993. Households basically
faced two choices: They could let the cash accumulate in their bank
accounts and use it to make the extra $250 payment in April, or
they could spend it. From both time-series and cross-sectional estimates of consumer behavior, the Council estimates that roughly 40
percent of households spent the extra cash because of either liquidity constraints, myopia, or inertia. Given their incomes, those
households then had to reduce spending when they settled with the
IRS in 1993. This shift in take-home pay led to the estimated shifting of consumption from 1993 to 1992 shown in Chart 2-8. The
presumption is that households readjusted withholding and spending after their 1993 final settlements, so that this pattern will not
repeat itself.
Chart 2-8 Effects of 1992 Tax Withholding Change on Personal Consumption
The reduction in personal income tax withholding in 1992 induced some households
to shift consumption from 1993 to 1992.
Billions of 1987 dollars
3500
Reduced Consumption as
Households Repay IRS
3450

-

3400

-

(Actual)

3350

Extra Consumption from
Reduced Withholding

3300

(Estimated)
I
I
I
3250 J_
1991 :IV
1992:1
II
III
IV
Note: See text for calculation details.
Sources: Council of Economic Advisers and Department of Commerce.

1993:1

There have been other changes in tax rules that worked in an
offsetting direction regarding tax payments, but not in an offsetting
direction regarding consumption. Specifically, the change in the




73

safe-harbor rules for underpayment of estimated tax probably
caused some high-income taxpayers to move payments that they
would have normally made in their April 1993 final settlements
with the IRS to 1992 estimated tax payments. A household paying
estimated tax is probably less likely to let changes in the timing
of tax payments affect its consumption than is the typical household.
Expectations of 1993 Tax Changes
Anticipation and misperception of proposed 1993 changes in the
tax law could have had further effects on the timing of demand.
During his campaign for the Presidency, then-Governor Clinton
proposed an investment tax credit. In December 1992, then-Senate
Finance Committee Chairman Bentsen and House Ways and
Means Committee Chairman Rostenkowski announced that any
credit would be retroactive to December 3, 1992. Earlier in the
quarter some firms may have delayed making investments in anticipation of receiving such a credit. Except for information-processing equipment, however, there was no discernable shift in investment spending during the fourth quarter of 1992. Given the lags
in making investment decisions, it is not surprising that the anticipation of a possible credit appears to have had little effect on most
components of investment. There was, however, a substantial deceleration in investment in computer and other information-processing equipment during the final quarter of 1992. It is probably
relatively easy to change the scheduling of purchases of such equipment. Hence, this deceleration could well be explained in part by
firms delaying purchases in anticipation of the credit.
Apparently there were also widespread misperceptions about the
scope of the income tax increases in the Administration's economic
plan. As late as the end of July 1993, over 70 percent of respondents to a Wall Street Journal/NBC News poll thought that middleclass taxpayers would bear most of the tax increases. In fact, the
income tax increases apply only to families with taxable incomes
over $140,000—the top 1.2 percent of households. Hence, it appeared for much of 1993 that many consumers incorrectly expected
an income tax increase. This misperception may have accounted for
some of the weakness of consumption in early 1993.
Do the 1993 Fiscal Measures Threaten 1994 Growth'?
High-income households will have to make increased tax payments in April 1994 because of the increase in income tax rates enacted in 1993. There is reason to expect, however, that these extra
payments by high-income individuals in 1994 will have a smaller
effect on GDP than the extra payments made in 1993 by taxpayers
affected by the 1992 change in withholding. One reason is that
high-income taxpayers are presumably more likely to make the




74

payments out of savings. Another is that many high-income taxpayers reduced their 1993 tax liability by shifting income from
1993 to December 1992. Moreover, under provisions of the Omnibus Budget Reconciliation Act of 1993 (OBRA93), these taxpayers
can spread their increased 1993 payments over 3 years.
Nineteen hundred and ninety-four will also see an increase in
the earned income tax credit (EITC). Payment of the EITC will
tend to stimulate demand. Although households are entitled to collect the EITC during the tax year, most only claim it when they
fill out their returns the following year, and they are likely to
spend most of it.

THE FEDERAL GOVERNMENT'S FISCAL STANCE
The size of the budget deficit is an incomplete measure of the
stance of fiscal policy. One important function of the budget is to
act as an automatic stabilizer against economic fluctuations. When
the economy enters a recession, tax collections fall as incomes decline, and there is an increase in government spending on such
items as unemployment insurance and income maintenance programs. As a result, the budget deficit tends to increase in recessions and fall in recoveries, without any change to the tax system
or in legislated expenditures. Chart 2-9 plots historical and predicted levels of the actual Federal budget deficit, which is expected
to fall from 4 percent of GDP in fiscal 1993 to about 2.3 percent
of GDP by the late 1990s.
The effects of the business cycle and inflation mask the true fiscal stance of the government. Declines in output from its full-employment level reduce revenue and increase expenditures. Inflation
reduces the real interest cost to the government for a given level
of nominal interest payments, which are included in the deficit.
Chart 2-9 shows the actual deficit and the inflation-adjusted structural deficit. (The structural deficit is the one that would prevail
at a high level of employment.) The estimates use the Congressional Budget Office's estimate of the cyclical adjustment. For the
inflation adjustment, the outstanding Federal debt (bonds held by
the private sector plus the monetary base) is multiplied by the inflation rate. As a result of the Administration's budget plan, the inflation-adjusted structural deficit falls to less than 1 percent of
GDP after fiscal 1994—its lowest level since 1982. This share,
moreover, remains constant for the remainder of the forecast period. The conclusion is that current fiscal policy—primarily as a result of the Administration's recently adopted deficit reduction
plan—is following a more balanced and stable course than did the
policies of the previous decade.




75

Chart 2-9 Alternative Measures of the Stance of Fiscal Policy
Fiscal policy as measured by the adjusted structural budget deficit is forecast
to move to a more stable trajectory with the current deficit reduction plan.
Percent o GDP
f

1959

1962

1965

1968

1971

1974

1977 1980 1983
Fiscal Years

1986

1989

1992

1995

1998

Note: See text for details.
Sources: Council of Economic Advisers, Congressional Budget Office, Office of Management and Budget, and
Board of Governors of the Federal Reserve System.

INDUSTRIAL AND REGIONAL DISPARITIES
Disparities in growth across industries became more pronounced
over 1993. Information-processing equipment benefited from heavy
investment demand and experienced double-digit output gains.
Certain interest-sensitive sectors of the economy, especially furniture, motor vehicles, and major appliances, were clearly helped
by the sharply lower long-term interest rates and also posted large
output gains. At the opposite end of the spectrum, the defenserelated industries—aerospace, instruments, and ordnance—saw
continued sharp production cutbacks.
These industrial disparities contributed to regional differences in
economic activities. The State of California has been particularly
hard hit by the defense builddown and has yet to start posting
gains in nonagricultural employment, even though the rebound in
the Nation as a whole began in March 1992. Aerospace jobs are a
particularly acute problem: Of the 125,000 defense-related jobs that
are projected to be lost in California from 1993 to 1997, 90,000 will
be in the aerospace sector. California's 8.7-percent unemployment
rate at year-end contrasted with a rate of just 6.4 percent for the
Nation as a whole (Chart 2-10).




76

Chart 2-10 Unemployment Rates by State, December 1993
The national unemployment rate masks substantial regional differences. California is the
only large state with an unemployment rate above 8 1/2 percent.

8.5% and over
7.3% - 8.4%
ED 6.2% - 7.2%
3 5.0% - 6.1%

•

4.9% or below

Source: Department of Labor.

Chart 2-11 Nonfarm Employment Growth by State, November 1992 to November 1993
Employment gains are now widespread across the country. California remains a
key exception.

I j 2.0% and over
E 3 1.0% - 1.9%
0% - .9%
- . 1 % or below

Note: Chart shows percent change in nonfarm payroll employment.
Source: Department of Labor.




77

Meanwhile, the Mountain States were 1993's growth leaders.
Strong income and employment gains were seen in Utah, Colorado,
New Mexico, and Arizona (Chart 2-11).

DEFICIT REDUCTION AND
THE REAL INTEREST RATE
As the new Administration took office, it appeared that the ratio
of Federal Government debt to GDP was on an unsustainable upward path. The explosion of debt in the 1980s had kept real interest rates high throughout the decade. Hence, nominal rates did not
fall by as much as the 1980s' victory against inflation warranted.
Much of the recent reduction in long-term interest rates, it will be
argued below, should be attributed to the change in budget policy
in early 1993. The close linkage of the decline in long-term interest
rates to the political and legislative events of the last 15 months
gives strong support to the view that high Federal debt in the
1980s was responsible for the high real returns on long-term bonds,
and that the change in Federal fiscal policy is responsible in large
part for the declines in real interest rates.
The President's economic plan reoriented fiscal policy from consumption toward investment, both by reducing the size of projected
budget deficits and by changing the composition of Federal spending from current expenditures to investment. The reduction in future Federal borrowing was well received by the financial markets.
In the words of the Federal Reserve Board Chairman in his July
1993 Humphrey-Hawkins testimony, the financial markets
"brought forward" the effects of future deficit reduction. The event
analysis shown in Chart 2-12, linking the announcement and enactment of credible budget reduction to changes in the long-term
interest rate, provides support for the view that the interest rate
declines were largely due to budget policy.
Long-term interest rates are near the lowest they have been
since the 1960s. On election day 1992, the 10-year Treasury yield
was 6.87 percent. It has ratcheted down several times since then,
with the declines closely tied to political and legislative events. The
yield fell to 6.02 percent at the end of February, following Treasury
Secretary Bentsen's announcement of the proposed energy tax and
the President's speech announcing his economic plan. The decline
stalled in April when the stimulus component of the President's
plan was filibustered in the Senate. It resumed its downward
movement when the House passed the President's budget in late
May. It then fell to 5.51 percent at the end of August after the plan
was finally enacted by the Congress.
Long-term rates did increase in late 1993, reversing some of the
decline that followed the passage of OBRA93. Reports in the finan-




78

Chart 2-12 Yields on 10-Year Treasury Securities
Administration policy actions have had a noticeable effect in reducing
interest rates.
Percent
7.0

President's Plan
Introduced (2/17/93)
6.5 \-* '

House Approves
President's Plan (5/27/93)
Secretary Bentsen
Details Fiscal
Measures (1/24/93)
6.0

5.5
Final Approval
of Budget (8/6/93)

_L

5.0
1992

1993

Source: Department of the Treasury.

cial press attributed the increase in yields to the release of favorable economic data and to speculation by some financial observers
that the Federal Reserve would tighten monetary policy. But these
data and statements did not actually signal much that was new
about the state of the economy nor any change of monetary policy.
Unobserved factors, psychological or otherwise, are important determinants of market prices. Still, despite large, unexplained fluctuations, the three major moves in yields shown in the chart have
resulted in a cumulative reduction in yields on 10-year Treasuries
of 104 basis points from the election to December 31, 1993.
The sharp decline in long-term interest rates in 1993 continued
the downward trend that began in the early 1980s. Interest rates,
both short- and long-term, had reached historic highs in the late
1970s and early 1980s, during the period of very high inflation and
the subsequent period of very tight money. The latter period was
characterized by a negative or slightly positive slope to the yield
curve (which relates interest rates to lengthening maturities).
Long-term real rates remained high throughout the 1980s. Chart
2-13 decomposes the nominal yield on 10-year Treasuries into expected inflation and the implied ex ante real interest rate. Expected




79

inflation is measured by the Blue Chip consensus forecast (a private sector survey of forecasts) for 10-year inflation, which has
been compiled semiannually since 1980.
Chart 2-13 Real Interest Rates
Recent declines in the nominal long-term interest rate reflect declines in the
ex ante real rate from its unusually high level over most of the 1980s.
Percent
16

Nominal 10-Year Treasury Yield

Ex Ante Real 10-Year Treasury Yield

1980

1983

1986

1989

1992

Note: Real rate is nominal rate minus a consensus forecast of 10-year inflation.
Sources: Council of Economic Advisers, Department of the Treasury, and Eggert's Blue Chip
Economic Indicators.

Over the period shown in the chart, the ex ante real rate averaged almost 5 percent. Unfortunately, comparable data on longterm expected inflation are not available prior to 1980. Ex post real
rates provide only an imperfect guide to ex ante rates, especially for
long-term rates, because there are so few time periods over which
to average the expectational errors. Over the second half of the
1950s, the average ex post real 10-year rate was about 1 percentage
point, over the 1960s it was -0.4 percentage point, and over the
1970s it was about +0.7 percentage point. The low ex post real
rates of the 1960s and 1970s were surely partly explained by the
unexpected rise in inflation of the 1970s. For the 1960s and 1970s,
the ex post 10-year real interest rate understates the ex ante real
rate because of the unexpected inflation in the late 1960s and
throughout the 1970s. Based on forecasts of 10-year inflation, the
Council estimates that ex ante real 10-year interest rates averaged
slightly above 0.5 percent in the 1960s and about 2.4 percent in the




80

1970s. Although higher than the ex post rates for the same periods,
these rates are well below the ex ante rates of the 1980s.
Therefore, it appears that real rates were unusually high
throughout the 1980s. Only with the declines in nominal rates over
the last few years has the real rate begun to decline. With the most
recent set of observations, those of October 1993, the 10-year
Treasury yield was 5.33 percent and the Blue Chip consensus forecast for long-term inflation was 3.3 percent, so the real rate was
close to 2 percent. This level of real rates is somewhat above historical norms (Box 2-3).
Box 2-3.—Are Current Long-Term Interest Rates Sustainable?
Long-term Treasury bonds now yield about 6 percent. These
nominal interest rates are very low by the standards of the last
decade. But given the expected rate of inflation and historical
standards for real interest rates, they appear to be sustainable.
Long-term expected inflation is probably between 3 and 3%
percent, implying a 2V2- to 3-percent real yield on long-term
Treasuries. A real interest rate in this range, although low relative to recent experience, is not low relative to historical experience.
From 1953 to 1982 the ex post real yield on 10-year Treasuries averaged about 1 percent. Over the period 1900-50, the ex
post real yield on government bonds was under 1 percent, but
these bonds are not wholly comparable to current Treasury
notes because they were callable and had tax benefits.
Clearly, if inflation remains under control, bond yields have
some way to fall to come into line with their historical real
averages.
HOW DEFICIT REDUCTION REDUCES LONG-TERM
INTEREST RATES
The previous section discussed the circumstantial evidence linking Federal deficit reduction to the decline in real long-term interest rates. Over the 1980s, which saw a growing and potentially explosive Federal debt, real long-term rates were unprecedentedly
high. Over the last 15 months there have been sharp declines in
real rates associated with policy changes that provide for credible
deficit reduction. This section explores the four economic mechanisms that link Federal deficit reduction policy with the real rate:
national saving, investment, and capital accumulation; the policy
mix; short-run real activity; and inflation risk.




81

Saving, Investment, and Capital Accumulation
The Federal debt-GDP ratio doubled in the 1980s, jumping from
22 percent of GDP in 1980 to 46 percent currently (Chart 2-14).
To the extent that Federal debt substitutes for productive capital
in an individual's portfolio, the increase in debt reduces income and
productivity and raises the marginal product of capital and therefore the real interest rate. The Administration's economic plan is
meant to increase national saving and national investment. The cumulated additional investment will have a significant effect on the
capital stock and therefore on future real interest rates. (See the
section on "Long-Term Effects of Deficit Reduction" below for estimates of the impact of the plan on wages and the capital stock.)
Chart 2-14 Net Federal Debt as Percent of Nominal GDP
From the end of World War II until 1980, the debt-GDP ratio fell to about 20 percent.
Since 1980 it has increased to over 45 percent.

1945

1949

1953

1957

1961

1965

1969
1973
1977
1981
1985
1989
Fiscal Year
Note: Net Federal debt is defined as debt held by the public less debt held by the Federal Reserve.
Sources: Department of Commerce and Office of Management and Budget.

1993

The policy changes in OBRA93 reduce the projected deficit for
fiscal 1998 by 1% percent of GDP. Not all of this projected reduction in the deficit will go to national investment, however. Changes
in either the current account or private saving could offset the decrease in Federal dissaving.
During the 1980s much of the Federal deficit was offset by increases in the current account deficit. As the budget deficit is reduced, there should be similar decreases in the current account




82

deficit. The mechanism is simple. Deficit reduction is generally associated with an improvement in the price competitiveness of U.S.
goods and services abroad, and therefore an increase in net exports. This expansion in net exports provides a stimulus that partially offsets the contractionary impact of spending cuts and tax increases on domestic demand. While it is difficult to determine the
magnitude of this offset precisely, studies suggest that net exports
will rise by approximately 40 percent of the initial deficit reduction.
Declines in private saving could also offset decreased Federal dissaving. However, the experience of the 1980s provides strong evidence on the reaction of private savers to government deficits. Personal saving did not act to offset ballooning Federal deficits in the
1980s, contrary to the predictions of neo-Ricardian theory. Therefore, we expect no decrease in private saving as deficits are reduced
under the President's economic plan. After taking into account the
reduction in the current account deficit, we estimate that the deficit reduction plan enacted in OBRA93 should increase the share of
national investment in GDP by about 1 percentage point.
The deficit reduction package should increase the capital stock,
as productive capital substitutes for government debt in private
portfolios. An increase in the share of investment in GDP of 1 percentage point would have a substantial effect on the capital-labor
ratio—raising it in steady state by about 10 percent (see below for
details of the assumptions underlying this calculation). With conservative assumptions about the curvature of the production function (which governs how much output per worker will increase for
a given increase in capital per worker), such a change in the capital-labor ratio would be expected to reduce the return on capital
by about 2 percentage points—which is slightly higher than the decline in real long-term rates that we have seen to date.
It takes many years, however, to adjust to a new steady state.
Along the transition path, the return on capital would fall only
gradually. So, even if we accept the implied reduction in the
steady-state return on capital, capital deepening alone cannot account for the sharp reduction of interest rates on long-term bonds
that has already occurred.
Policy Mix
Credible deficit reduction also might affect long-term interest
rates through the expectation of a changed mix of fiscal and monetary policy. In the 1980s, the Federal Reserve pursued a relatively
restrictive policy to counter the stimulus engendered by loose fiscal
policy. This mix resulted in high real interest rates. With credible
deficit reduction, the Federal Reserve will be able to achieve a
given level of nominal demand with a less restrictive monetary policy. This shift in the policy mix should reduce future real shortterm interest rates. Expectations that short rates will be lower in




83

the future should be reflected in lower real long-term rates. As a
consequence, the composition of output will shift toward investment at the expense of consumption.
The Short-Run Level of Real Activity
Long-term rates might also fall because of bad news about expected future real economic activity. Real growth in the first half
of 1993 was indeed disappointing. But both Administration and private forecasters believed, correctly as it turned out, that growth
would be better in the second half of the year. Moreover, if there
are fears of a future slump, why is the stock market at record
highs? Presumably, market participants expect good earnings and
dividends. The low bond yields and high stock values are consistent
with the path of stable growth, low inflation, and decreasing unemployment that the Administration forecasts. Finally, the news of increasing growth that began to emerge in the fall was greeted by
only modest increases in long-term rates.
Inflation Risk
A decline in expected inflation could also account for the decline
in long-term bond rates associated with the deficit reduction plan.
Chart 2-13 shows, however, that there is no break in inflation expectations associated with this decline in long-term bond rates. The
difference between the nominal and real interest rates in Chart 213 gives a time-series of expected long-term inflation. In October
1992 the Blue Chip consensus expected an average annual GDP inflation of 3.3 percent for 1994-98 and 3.4 percent for 1999-2003.
In October 1993, the consensus was again for 3.3-percent inflation
for 1995-99, and 3.3 percent for 2000-2004. Hence, the consensus
forecast implies that virtually all the recent reductions in nominal
long-term rates were also reductions in real rates.
SHORT-RUN EFFECTS OF INTEREST RATES
The reduction in real long-term interest rates has been an important element powering the economic recovery. As discussed elsewhere in this chapter, reductions in Federal purchases—especially
for defense—have been an important factor holding back the recovery. As the reductions in expenditures and increases in taxes built
into the Administration's plan take effect, they—taken in isolation—would place a continued drag on the economy. But they
should not be taken in isolation. Because long-term interest rates
anticipate credible future fiscal consolidation, the effects of deficit
reduction in long-term rates show up in advance of the actual deficit reduction. The resulting increases in interest-sensitive expenditures provide a boost to economic growth that works in the opposite
direction of the direct fiscal effect. This increase in interest-sensitive spending is closely linked with the sustained reduction in




84

long rates. In 1993, real GDP in the interest-sensitive sectors (business fixed investment, housing, and consumer durables) rose 11
percent, while the non-interest-sensitive sectors showed virtually
no growth.
The interest-sensitive components of spending did not, however,
increase uniformly throughout 1993. Producers' durable equipment
was strong throughout the year, growing 18 percent from fourth
quarter to fourth quarter. Expenditure on consumer durables was
also strong throughout the year (with an 8-percent growth rate),
but production of automobiles was irregular. Investment in
nonresidential structures was weak for most of the year, most likely as a result of high vacancy rates in existing buildings, due in
turn partly to overbuilding in the 1980s. The lags in the response
of residential construction to the low interest rates were unusually
long. Residential investment fell at a 4-percent annual rate in the
first two quarters of 1993, but rose at a 21-percent rate in the last
two quarters.
Net exports would appear on many economists' lists of interestsensitive expenditures. Normally, low interest rates should lead to
depreciation of the dollar and therefore to increased exports. This
channel for interest rates was offset by other factors, however.
Short-term rates fell around the world, not just in the United
States, and the dollar has actually appreciated slightly on a multilateral basis. (A further discussion of the exchange rate is presented in Chapter 6.)
LONG-TERM EFFECTS OF DEFICIT REDUCTION
The key macroeconomic rationale for reducing the Federal deficit
is to increase investment and therefore productivity and real incomes in the future. Changes in fiscal policy should exert sustained
effects on national investment and saving. As discussed above, the
President's economic plan should increase the share of domestic investment in GDP by about 1 percent once it is fully phased in.
Chart 2-15 shows the projected impact of such an increase in the
national investment rate on the marginal product of capital, the
real wage rate, and the capital stock. (Box 2-4 contains details of
the computation.) The data are expressed relative to the initial
steady-state position.
All of the variables require several decades to adjust to their
steady-state values. The ultimate reduction in the return to capital
is about 2 percentage points. The reduction in long-term rates we
have already seen is closer to IV2 percentage points. The reduction
in the marginal product of capital takes place, however, over a very
long period of time. Indeed, as presented in the chart, the marginal
product of capital is down only 1 percentage point after 8 years.
Moreover, since capital and bonds are not perfect substitutes, their




85

Chart 2-15 Dynamic Effects of Deficit Reduction
The real effects of raising the saving rate through deficit reduction include
higher wages and investment and lower real interest rates.
Percent

Percentage points

12

10

Wage
(left scale)

Marginal Product of Capital
(right scale)

0

5

10

15

20

25

30

35

40

45

50

Years
Source: Council of Economic Advisers.

rates will move by less than one for one. Other factors, such as expectations about the policy mix, therefore must explain the bulk of
the rate reduction.
A small increase in the investment rate buys a substantial increase in the capital stock, again over a long period. This increase
in the capital stock should ultimately raise real wages and productivity by about 33A percent.
Initially, consumption falls because of the direct effect of the Federal budget package. As output and productivity increase, however,
so does consumption. It takes about 5 years for the change in fiscal
policy to have a net positive effect on consumption. Thereafter, the
effect of the economic plan is to raise consumption permanently,
eventually by more than 2V2 percent per year.
These calculations are quite conservative. They do not assume
any externality from capital accumulation or any extra boost to
productivity from embodied technological progress. If these factors
are present, the gains from the increase in investment could be
substantially higher.




86

Box 2-4.—-Estimating the Long-Run Effects of Deficit
Reduction
Chart 2-15 shows the results of applying a model of economic growth developed by Robert M, Solow to the change in
the investment rate engendered by OBRA93. To carry out
these calculations, we make several assumptions:
• The production function is Cobb-Douglas with a capital
share of one-third. (The Cobb-Douglas function presumes
a fairly large degree of substitutability between capital
and labor and will thus show a substantial output effect
of increasing capital).
• The rate of growth of the economy's potential output (a
little below 2,5 percent) plus the rate of depreciation (a
little above 9 percent) is 1L5 percent.
• The initial investment rate is 13 percent, about the ratio
of fixed investment to GDP in 1993. It is assumed to rise
to 13.4 percent the first year, 13*7 percent in the second,
13.8 percent in the third, and is 14.0 percent thereafter.
The magnitude and timing of the increases in investment re*
fleet the increase in Federal saving from the deficit reduction
package and the assumption (see text) that 40 percent of the
increased Federal saving will be offset by a reduced current account deficit.
These calculations are subject to a considerable degree of tincertainty. They are sensitive to the form of the production
function and the assumed rates of depreciation and growth in
potential.

THE ECONOMY'S RESPONSE TO HIGHER
INCOME TAXES
Critics of the increase in income tax rates enacted in August
1993 make two related claims: first, that higher tax rates will have
an adverse effect on the level of saving, investment, and employment in the economy, and second, that the higher tax rates on
high-income taxpayers will not result in much (or any) increase in
tax revenues. The arguments offered to bolster these claims have
a common foundation, namely, that the disincentive effects of higher marginal tax rates have a profound influence on individuals' behavior.
We note first that economies can thrive under a wide range of
top marginal tax rates—which already weakens the arguments of
these critics. In fact, the U.S. economy has performed extremely
well during periods of relatively high top marginal rates: We en-




87

joyed healthy average real GDP growth of 4 percent per year over
the decade of the 1960s, when the top marginal income tax rate on
wage and salary income averaged 80.3 percent, but less impressive
2V2-percent average annual growth in the decade of the 1980s,
when the top rate on wages and salaries averaged 48.4 percent.
Also, many people in the United States admired the investment-led
economic boom that Japan enjoyed in the 1980s, when that country
had much higher marginal income tax rates than did the United
States. Obviously, many other important factors besides marginal
tax rates determine saving and investment patterns and economic
growth.
DO TAXES CHANGE BEHAVIOR?
A central tenet of economics is that relative prices matter. Taxes
on capital and wage income change the relationships among the
various prices that people face when deciding how much to save,
invest, and work, and thus have an effect on the way people choose
to allocate their time (between supplying labor and taking leisure)
and their income (between current consumption and saving). This
observation serves as the basis of the supply-side dictum that a reduction in taxes, by inducing people to work harder and save more,
can induce higher rates of investment and economic growth.
The extent to which changes in the marginal tax rate on income
affect labor supply and saving has been a subject of extensive research for many years. The preponderance of evidence seems to indicate that the changes are small. Saving rates seem to be little affected by movements in after-tax interest rates, and hours worked
and labor force participation rates for most demographic groups
show only limited sensitivity to changes in after-tax wages.
It is undeniable that the sharp reduction in taxes in the early
1980s was a strong impetus to economic growth. But it is unlikely
that the principal source of this growth was people reacting to reductions in marginal tax rates by working and saving more. The
expansion that took place over the 1980s was tax-induced mainly
insofar as lower taxes raised disposable income, which led to increased consumption. For example, between 1981 and 1986, the
consumption share of GDP increased from 64.5 percent to 67.4 percent. In other words, the 1980s' saw a classical Keynesian, demand-driven expansion—not the kind of expansion that supply-side
theory predicted. Those who would point to the effects of the 1980's
tax cuts as evidence of strong supply-side effects of taxation are
grossly overstating the case.
The increases in the top marginal income tax rates enacted by
the Congress in 1993 will affect directly only the top 1.2 percent
of American families. Moreover, top marginal tax rates remain low
by historical standards. While some individuals may alter their be-




88

havior because of the higher tax rates and, for example, cut back
their hours worked, others may actually increase their work effort
in order to meet saving or consumption objectives. Overall, it is unlikely that the Administration's plan will induce large responses in
labor force participation, hours worked, or savings in the overall
economy.

DO HIGHER TAX RATES INCREASE TAX REVENUES?
Some also argue that income tax collections do not vary much
when top marginal tax rates increase or decrease. In this view, an
increase in income tax rates provides such a strong incentive for
people to reduce their taxable income that the tax base shrinks and
no additional revenue is generated. For example, a worker facing
higher taxes on wages might choose to take some compensation in
the form of nonwage benefits, such as more vacation time or larger
future pensions. Similarly, individuals facing higher tax rates on
unearned income might change the composition of their savings
(while keeping the level constant) by investing in tax-exempt bonds
rather than stocks or corporate debt.
History can serve as a guide to determining whether these offsetting effects of a change in tax rates are strong enough to have a
significant impact on revenues. For the United States, contrary to
the supply-siders' claims, income tax cuts have generally reduced
income tax revenues and tax increases have generally raised them.
Chart 2-16 illustrates the effect that a number of changes in tax
policy have had on personal income tax receipts. Several episodes
stand out:
• The 1964 tax cut reduced the top marginal rate from 91 percent in 1963 to 77 percent in 1964 and then to 70 percent in
1965. Income tax revenue as a share of GDP dropped sharply.
• The special Vietnam war surtax imposed additional charges
equal to 7.5 percent of tax in 1968, 10 percent in 1969, and 2.5
percent in 1970. The result was a sharp increase in revenues
in 1968 and 1969, followed by a decline as the surtax was
phased out.
• The 1981 tax cut reduced the top marginal rate from 70 percent to 50 percent in 1982 and cut tax rates for lower income
individuals over the 1982-84 period. Since then, personal income tax revenues as a share of GDP have never regained their

1981-82 levels. Similarly, the 1986 tax reform reduced marginal rates in stages over 1987 and 1988, and revenues as a
share of GDP in 1988 fell slightly below their 1986 level.
In short, evidence from postwar experience strongly suggests
that personal income tax revenues rise when marginal rates are increased, and fall when marginal rates are reduced.




89

Chart 2-16
Personal Income Taxes as Percent of GDP
A number of historical changes in tax rates demonstrate the effect that rate
changes have on revenues.
Percent
10 |

1981 Reagan
Tax Cut
(phased in
over 1981-84)

Tax
Reduction
Act of 1975

I

I I

1955

I III M
1960

I I M
1965

I

M
1970

1975

I I l

111

1980

I

1985

I I I

1990

Note: Shaded bars denote recessions.
Sources: Department of Commerce and National Bureau of Economic Research.

THE ECONOMIC OUTLOOK
A credible deficit reduction plan and low long-term interest rates
have set the stage for moderate but sustainable economic growth
over the mid-1990s. As the ratio of the Federal budget deficit to
GDP declines, financial markets should be reassured that inflation
and interest rates can be sustained at the levels of the 1950s and
1960s. Interest-sensitive sectors of the economy, particularly business fixed investment, should thrive and provide a steady demand
base. Housing and demand for household durable goods and automobiles should also do well and underpin a steady economic expansion.
The lean inventories that the economy was carrying as it entered
1994 suggest that manufacturers should face gradually increasing
order levels. With the factory workweek and manufacturing overtime at postwar highs, there will be growing pressure on firms to
add new workers to meet production demands. Higher employment
should contribute to a steady increase in income and provide lift for
all sectors of the economy. Income growth, which was outstripped
by increases in consumer spending over the course of 1993, should




90

gradually overtake spending growth over the next couple of years,
leading to a slowly increasing saving rate.
Finally, foreign economies should recover over the next couple of
years and provide an export lift for U.S. firms. By early 1995, net
exports should once again be contributing to U.S. growth rather
than subtracting from it. Strength in these sectors is expected to
more than offset the continued declines in real Federal spending
that are expected over the next 5 years.
The projected decline in the Federal budget deficit, from 4.0 percent of GDP in fiscal 1993 to about 2.3 percent of GDP by fiscal
1996, should have benefits for the economy that go beyond interest
rates. First, with less government "crowding out," more funds will
be available for private business investment. This higher investment level will increase the Nation's capital stock and hence increase its long-run potential output. Second, there is a linkage between the Federal budget deficit and the current account deficit.
Because foreign savings have been steadily flowing into the United
States to cover the imbalance between domestic saving and domestic investment, we have been running large capital account surpluses. These in turn have required large current account deficits,
because the two accounts are mirror images. A steady reduction of
the Federal budget deficit, therefore, should also translate into
smaller current account deficits.
With these developments, GDP growth of 2V2 percent to 3 percent per year—in line with 1993 growth—seems likely to continue
over the rest of the 1990s (Table 2-2). This growth should be sufficient to reduce the unemployment rate steadily from the roughly
6V2-percent level of late 1993 to about 5V2 percent (under the old
unemployment definition) by the end of 1998. (Box 3-1 in Chapter
3 contains a discussion of the relationship between the old unemployment rate, based on the historical Current Population Survey,
and the new unemployment rate, based on the revised version of
the survey.) These gains will be paired with healthy increases in
real disposable income, which are as important as job growth to the
American worker. After two decades of relative stagnation, real
wages should post solid gains and allow American families once
again to enjoy steadily improving living standards.
Within this macroeconomic environment, short-term interest
rates are likely to drift slowly upward over the coming years as the
economy strengthens. Long-term interest rates are not expected to
increase appreciably, however, because inflation should remain
subdued and budget deficits will continue to shrink. Healthy gains
in productivity, the mainspring of rising living standards, will be
the key to keeping inflation tame. The higher rate of business investment in the 1990s than in the 1970s and 1980s should keep
productivity on a relatively fast track and prevent unit labor costs



91

TABLE 2-2.— Administration Forecasts
Item

1994

1993

1995

1997

1996

1998

1999

Percent change, fourth quarter to fourth quarter

Real GDP

2.8

3.0

2.7

2.7

2.6

2.6

2.5

GDP implicit deflator .

2.2

2.7

2.8

2.9

3.0

3.0

3.0

Consumer price index
(CPI-U)

2.7

3.0

3.2

3.3

3.4

3.4

3.4

Calendar year average
Unemployment rate
(percent)
Old basis

6.8

New basis

6.3
(6.6-7.2)

5.9
(6.2-6.8)

5.7
(6.0-6.6)

5.6
(5.9-6.5)

5.5
(5.8-6.4)

(5.8-6.4)

5.5

Interest rate, 91-day
Treasury bills
(percent)

3.0

3.4

3.8

4.1

4.4

4.4

4.4

Interest rate, 10-year
Treasury note
(percent)

5.9

5.7

5.7

5.7

5.7

5.7

5.7

110.2

112.3

114.3

116.2

118.2

120.0

121.9

Nonfarm payroll employment (millions)

Sources: Council of Economic Advisers, Department of the Treasury, and Office of Management and Budget.

from accelerating. Health care reform should help rein in the spiraling costs that have plagued that huge sector of the economy and
thus help control overall inflation.
The Administration's forecast is in line with private sector forecasts for 1994 and the mid-1990s. It assumes no dramatic shift in
aggregate economic performance beyond the trends clearly established over 1993—low inflation, low long-term interest rates, and
healthy investment spending. It also assumes that the historical
(Okun's law) relationship between output and unemployment continues to hold.
RISKS TO THE FORECAST
As always, there are risks to this forecast. First, foreign economic
activity may not pick up as expected, especially if other governments remain reluctant to stimulate their economies by easing interest rates or pursuing countercyclical fiscal policies. It is also possible that the kind of industrial restructuring that the United
States has endured over the past decade may prove to be a bigger
hurdle than realized for key European trading partners and Japan.
Also, the timetable for the correction of the Japanese speculative
bubble of the late 1980s is unclear and could take longer than expected. The better the Group of Seven countries coordinate their
macroeconomic policies over the next couple of years, the lower the
risk of a prolonged pause in industrial-country growth.




92

A second risk is that long-term interest rates could take back
more of their declines of 1993. Such a move could crimp the interest-sensitive sectors that provided the economy with most of its
growth in 1993. Housing and business fixed investment would likely be the most vulnerable sectors.
A stalling out of consumer demand cannot be ruled out either.
Consumers have been increasing their spending by a larger percentage than their incomes have been rising over the past year,
and they could turn pessimistic about the future again. Indeed,
they have already done so several times in this business cycle expansion. An unexpected cutback in consumer spending would lead
to higher than desired inventory levels, which would in turn reverberate back through the economy in the form of lower orders and
perhaps lower employment in manufacturing.
But economic growth could also exceed this forecast in the short
run. The U.S. output gap widened sharply over the 1990-91 recession, and the economy could grow faster than its noninflationary
potential for a couple of years as part of a catchup process. Certainly growth of 4 percent would not be unprecedented during such
a phase. Among the factors that might contribute to faster than expected growth are a faster than expected rebound of economic
growth in Europe, Japan, and the rest of the industrial world,
which would sharply boost U.S. exports; oil prices remaining relatively low and giving a healthy boost to real disposable incomes;
and the possibility that Americans have more pent-up demand
than realized for houses, automobiles, and other durable goods.
SOURCES OF LONG-RUN GROWTH
The long-run rate of real GDP growth can be expressed as the
sum of the individual growth rates of four components: (1) the
number of available workers in the economy (the labor force); (2)
the rate at which these workers are employed (the employment
rate); (3) the number of hours worked per year (which is proportional to the average workweek); and (4) the quantity of goods and
services produced by an hour of labor (labor productivity). Table 2 3 details the contribution of each of these components to real GDP
growth over several historical time periods and as projected for the
rest of the decade. Because many of these components vary with
the business cycle, their growth rates are measured from cyclical
peak to cyclical peak. Estimates in the fourth column are based on
actual data through the fourth quarter of 1993 and forecasts by the
Administration through 1999.
The projected growth of nonfarm business product from the business cycle peak in the third quarter of 1990 to the end of 1999 is
2.7 percent per year. Underlying this projection is a growth in output per hour of 1.5 percent per year and growth in hours of 1.2 per-

0 - 9 4 - 4
1 5 1 - 4 4 4


93

TABLE 2-3.— Accounting for Growth in Real GDP, 1960-99
[Average annual percent change!

1960 I
to
1981 I
1) Civilian noninstitutional population aged 16 and over
2) PLUS. Civilian labor force participation rate
3) EQUALS
4) PLUS.
5) EQUALS:
6) PLUS:
ployment
7)
8)
9)
10)
11)
12)
13)

Civilian labor force
Civilian employment rate
Civilian employment
Nonfarm business employment as a share of civilian em-

EQUALS: Nonfarm business employment
PLUS: Average weekly hours (nonfarm business sector) ...
EQUALS: Hours of all persons (nonfarm business)
PLUS: Output per hour (productivity, nonfarm business) ..
EQUALS. Nonfarm business output
LESS: Nonfarm business output as a share of real GDP2
EQUALS: Real GOP

1973 IV
to
1981 III

1981 III
to
1990 III

1.8
0.5

1.1
0.4

2.4

1.6
0.2

1990 III
to
1999 IV

2.0

2.0

1.8

1.0
0.2
1.2
0.0
1.2

0.1
2.1
-0.6
1.5
1.7
3.3
0.1

0.1
2.1
-0.7
1.3
0.6
1.9
-0.2
2.1

0.2

0.0

2.0
0.0

2.0
0.9

1.2
0.0
1.2
1.5

2.9
0.2

2.7
0.4

2.7

2.4

1.8
0.3
2.1
-0.1

3.2

-0.4

1 Line six translates the civilian employment growth rate into the nonfarm business employment growth rate.
2
Line 12 translates nonfarm business output back into output for all sectors (GDP), which includes the output of farms
and general government.
Note.—Data may not sum to totals due to rounding.
Time periods are from business cycle peak to business cycle peak to avoid cyclical variation.
Source: Council of Economic Advisers, Department of Commerce, Department of Labor, Department of the Treasury, and
Office of Management and Budget.

cent per year. The share of nonfarm business in GDP is projected
to grow at 0.4 percent per year, so the growth rate of GDP over
this period is projected to be roughly 2.4 percent per year.
The forecast for nonfarm hours assumes a civilian labor force
growth rate of 1.2 percent per year, which is about a percentage
point lower than labor force growth during the 1960s and 1970s.
Virtually all of this difference reflects the slower growth of the
labor force. It also assumes no change in the average workweek.
The return of the economy to full employment by 1998 implies zero
peak-to-peak growth in the civilian employment rate over the forecast period.
More than half of the predicted growth in real GDP results from
an assumed rate of nonfarm labor productivity growth of 1.5 percent per year. This rate is somewhat higher than the actual rate
over the past two decades. While the sources of productivity growth
are complex, and the causes of the well-documented "productivity
slowdown" of the 1970s remain under debate, we believe there is
justification for assuming an increase in labor productivity growth
over the near term.
First, the baby-boom generation, which entered the labor market
en masse during the 1970s, has now been fully assimilated. The
workforce of today is thus older, more educated, and more experienced than in previous years. Second, capital deepening (see above)
is likely to occur. As business continues to respond to low real interest rates, the level of investment in the economy should rise,




94

leading to an increase in capital intensity. Third, the Administration's programs of promoting public investment—including better
transportation and communications infrastructure—and human
capital formation should enhance private sector productivity. The
implication of all these factors is that some improvement in the
rate of productivity growth over the next several years is likely.

CONCLUSION
The performance of the U.S. economy was unsatisfactory from
early 1990 until the second half of 1992. Job creation was lackluster, unemployment was higher than it should have been, and
real output failed to manifest the gains that are usual for an economic recovery. Even today the economy is operating below its potential level of output. Some of the sluggishness over this period
was payback for a decade of debt-financed growth. Over the 1980s
and early 1990s, the Federal Government ran massive budget deficits even in years of strong economic growth, and the level of net
Federal debt jumped from about $800 billion in 1982 to about $2.7
trillion in 1992. A key result was historically high real interest
rates.
Corporations followed suit, heavily leveraging their operations.
Even individuals got into the act and allowed debt levels to rise
markedly. Meanwhile, large budget deficits contributed to the remarkable transformation of the United States, from a country that
lent more to foreigners than it borrowed, into the world's largest
debtor.
Many necessary corrections have now taken place, including new,
more responsible fiscal policy. The Federal budget deficit should
fall roughly in half as a share of GDP over the next 4 years. This
anticipated deficit reduction has already caused long-term real interest rates to tumble. With inflation likely to remain subdued,
these lower interest rates poise the economy for a period of sustained growth in the mid-1990s. This growth should be sufficient
to generate 8 million new jobs within 4 years.
Lower interest rates should also boost the share of the economy
going to investment. More investment should lead to capital deepening, higher labor productivity, and higher real American wages.
As the government share of the economy falls, the net export share
should increase. A higher level of exports should give a boost to
real wages, too, partly because export jobs on average pay better
wages than average U.S. jobs, and partly because of increasing specialization by American industry. Real income gains, in the final
analysis, are the ultimate payoff from economic growth.




95




CHAPTER 3

Trends and Recent Developments in
the U.S. Labor Market
THE CLINTON ADMINISTRATION has made increasing both
the quantity and the quality of jobs its highest priority. Providing
a stable macroeconomic foundation for private sector activity is essential to achieving this goal, but it is not enough. Sound macroeconomic policies are necessary but not sufficient for the task at
hand. They must be complemented by labor market policies to remedy a number of deep and longstanding impediments to the maintenance of high employment and to improvements in the quality of
jobs. This chapter discusses these impediments and the Administration's proposals for addressing them.
The 1990-91 recession and the first year of the recovery witnessed rising unemployment. Even though output and employment
have since been increasing, the news has been filled with stories
of corporate downsizings and the increasing use of "contingent
workers." These reports have sharpened fundamental fears about
the security of employment. Popular accounts of recent events also
allege that technical change is reducing employment throughout
the economy.
After rising steadily for several decades, U.S. real wages have
hardly grown since the early 1970s, while the growth of total real
compensation (wages plus benefits) has slowed considerably. At the
same time, the income gap between rich and poor has been growing, so that the poor are worse off in real terms now than they
were two decades ago. Incomes of those in the middle have stagnated. The unemployment rate, both at peaks and troughs of the
business cycle, has tended to be higher in the last two decades than
in the first half of the postwar period. Employment-to-population
ratios have risen for women, but fallen for men—especially for
black men, whose employment prospects are particularly bleak.
Further, although there is little evidence of any large increase in
job instability, turnover rates in the U.S. labor market have long
been very high, and job displacement is often very costly for those
unlucky enough to lose a job they have held for many years. High
turnover rates combined with rising inequality imply increasing
uncertainty about future income for many Americans.




97

In response to these problems in the Nation's labor market,
many of which have been with us for several years, this Administration has set out a long-term work force strategy to help the
economy create more jobs—at least 8 million over 4 years. To reduce job insecurity, the Administration aims to ease labor market
transitions in a number of ways. By making sure that people have
health insurance whether or not they are employed, the Administration seeks to reduce the trauma of job loss. The strategy also includes plans to help young workers enter the labor market more
smoothly by providing a bridge between school and work. The Work
Force Security Act will help experienced workers who have lost jobs
find new employment more quickly, and will provide support for
training for those who cannot.
Finally, and importantly, the Administration's strategy seeks to
improve worker productivity and increase earnings. To this end,
the Administration is pursuing policies to increase investment in
research and development, to spur private investment in plant and
equipment, and to facilitate the spread of modern cooperative employment practices (such as total quality management and quality
circles). These initiatives address the general problem of slow wage
growth, but growing inequality and real wage declines for the least
advantaged are problems that require specific attention. Since
growing inequality is due in large part to the growing mismatch
between the demand for trained labor and its supply, the Administration aims to provide more and higher quality training so that
wages may rise—particularly for the middle-class and the least advantaged. Income inequality has also been directly addressed by an
increase in the earned income tax credit.

EMPLOYMENT GROWTH
U.S. employment grew rapidly from 1950 to 1990, with the number of nonfarm jobs increasing on average by over 2.2 percent a
year. In contrast, from the end of 1990 to the end of 1992, job
growth was virtually nonexistent. During 1993, employment
growth improved considerably to an annual rate of 1.8 percent, but
job creation remains low compared with past recoveries. As of the
fourth quarter of 1993, the U.S. economy had been in recovery for
11 quarters. The unemployment rate fell from its postrecession
high of 7.7 percent in June 1992 to 6.4 percent in December 1993.
Yet despite these signs of recovery there has been widespread concern about the pace of job growth.
A SLOW RECOVERY
Without question, job growth has been relatively weak since the
trough of the recent recession. During the 11 quarters after the




98

first quarter of 1991, nonfarm payroll employment grew by 2.3 million, an increase of only 2.1 percent. In fact, employment did not
begin to rebound until the first quarter of 1992. In previous recoveries employment growth was much stronger. For example, during
the first 11 quarters after the recession of 1981-82, nonfarm employment grew by 10.1 percent. In seven previous postwar recoveries, employment increased, on average, by 8.8 percent over the first
11 quarters of recovery and expansion.
A key difference between the current and past recoveries, however, is the extraordinarily slow pace of output growth. Real gross
domestic product (GDP) grew only 7.7 percent during the first 11
quarters of this recovery, compared with an average increase of
14.3 percent during the previous postwar recoveries. Possible reasons for the slow growth of output are discussed in Chapter 2. They
include balance sheet adjustments by firms and consumers, cutbacks in defense purchases, slow growth of construction spending,
the credit crunch, and slower export growth due to weak economies
abroad. Given the slow rate of output growth, it should not be surprising that employment growth has also been slow.
Nevertheless, the current recovery still stands out relative to
other recoveries when one compares the ratio of total employment
growth to output growth. By the 11th quarter of previous recoveries, that ratio was about 0.62, compared with 0.27 in the current
recovery (Chart 3-1). It is comparisons such as this that have led
observers to claim that corporate restructuring and rapidly rising
productivity have allowed output to grow without commensurate
increases in employment. Some critics see deeper forces at work.
For example, it has been argued that productivity growth—strongest in the manufacturing sector—is now proceeding at a rapid pace
in the service sector as well. Historically, job losses in manufacturing were offset by rapid growth in the service sector, but with
strong productivity growth in the service sector this is alleged to
be no longer possible.
However, simple comparisons of total labor force growth to total
output growth miss an essential point. As output rises during the
early stages of a recovery, the ratio of employment growth to output growth is usually low. This is because employers keep more
workers on their payrolls than are needed during downturns, and
therefore do not hire more workers until their existing work force
is fully employed and they are confident of continued growth. Consequently, employment grows slowly, and may even continue to decline, for the first few quarters after GDP begins to recover.
Chart 3-2 compares the cumulative growth of employment and
output during the most recent recovery with that in previous recoveries. The boxes show how output and employment have grown together historically. The circles show how output and employment




99

Chart 3-1 Changes in Output and Payroll Employment in First Eleven Quarters of Recovery
The ratio of employment to output growth is much lower in the current recovery
than in the past. Output growth is much slower, too.
Percent
30

-

0.2

0.0
1952

1956

1 H

1960
1963
1973
1977
Year of 11 th Quarter of Recovery
Output Growth
(left scale)

I

1985

1993

I Employment-Output Growth Ratio
(right scale)

Sources: Department of Commerce and Department of Labor.

have grown together in the most recent recovery. Although the cumulative growth of output and that of employment have both been
extraordinarily slow in this recovery, the relationship between them
is consistent with historical experience. Using the historical relationship between output and employment growth, one can estimate
what employment growth should have been during the most recent
recovery given output growth. This exercise yields estimates of cumulative employment growth that are larger than actual employment growth during this recovery by as much as 1 percent of total
employment. This is a large difference, but not a statistically significant one. In other words, employment growth in the most recent
recovery appears to have been at the low end of the range of historical experience, but is nonetheless consistent with it.
A similar conclusion applies to the behavior of manufacturing
employment. Analysis of past experience shows that the actual
growth of manufacturing employment during the most recent recovery is not statistically different from what would have been predicted based on GDP growth and long-term trends. (Manufacturing
employment has been declining as a fraction of the labor force since
1953 and reached its postwar peak in 1979.) This is surprising be-




100

cause defense cutbacks have caused large job losses in manufacturing in the most recent recovery. Evidently, growth in demand for
manufactured goods in other parts of the economy was strong
enough to offset the depressing effects of these cutbacks on manufacturing employment.
Chart 3-2 Employment and Output in Recoveries
Employment growth in the recent recovery is in line with past experience given
the slow growth of output.
Cumulative employment growth (percent)
10

8

--

6

Q1
1
m

-

Q10

® ^ s ^

Average Postwar Recovery

04,
2

--

-•934
-#933
Q2

912

931

Q1
*"" 922

9 3 :I

\v Current Recovery

924

923

913 914
I
0

I

2

I

4

I

I

6
8
10
Cumulative Output Growth (percent)
Note: Recoveries are dated from the quarter of minimum real GDP.
Sources: Department of Commerce and Department of Labor.

I

I

12

14

16

SOURCES OF JOB GROWTH
Although much has been written about the sources of job growth,
it is hard to get an accurate picture from the pastiche of popular
accounts. Are new jobs good jobs or bad jobs? What does the future
hold?
Industry and Occupation
The service sector—defined to include personal and business
services but exclude trade and finance—was the economy's job engine in 1993. Although these industries account for less than 30
percent of total employment, they were responsible for more than
60 percent of total job growth in that year. Many of these jobs—
about 350,000—were created in the personnel supply industry
(mainly temporary agencies), which represented almost 20 percent
of total payroll job growth. Other sectors registering strong job cre-




101

ation over 1993 included retail trade (more than 400,000 jobs) and
construction (about 200,000 jobs). In contast, manufacturing employment declined by about 180,000 during the year.
These sectoral patterns are not new, however. Since January
1983, service sector employment has grown by 11.5 million and has
accounted for 52 percent of total nonfarm job growth. And, jobs in
retail trade have accounted for an additional 21 percent of all jobs
created over this period. Since January 1983, construction employment has risen by 785,000, but manufacturing payrolls have
shrunk by 325,000.
A common misconception identifies manufacturing jobs as "good
jobs" and service jobs as "bad jobs." However, growth in high-end
services such as various kinds of business services have led to increased demand for high-level white-collar workers. During 1993,
48 percent of the increase in employment occurred in the managerial and professional occupations. The large increases in these relatively well-paying occupations belie the criticism that most employment growth has been in "bad jobs."
The recent occupational pattern of employment growth is largely
in line with the experience of the last 10 years, during which managerial and professional jobs accounted for 49 percent of new employment. Both over the last year and over the last decade, new
employment has shifted toward better paying jobs requiring more
skills and education, not toward low-paid, low-skilled jobs.
Outlook for the Future
One of the major goals of this Administration is to increase employment by at least 8 million jobs in 4 years. Progress toward this
goal has been moderate but steady. Between January and December 1993, nonfarm payroll employment grew by 1.8 million jobs,
and the number of unemployed fell by 809,000, lowering the unemployment rate from 7.1 percent to 6.4 percent. With a higher
growth rate of output expected next year, the pace of job creation
should accelerate.
The Bureau of Labor Statistics (BLS) projects employment to
grow between 1.1 and 1.9 percent per year through 2005. Most of
this growth is expected in service-producing industries, which the
BLS expects will add between 1.4 million and 2.1 million jobs per
year. Employment in manufacturing is expected to fall or to rise
only modestly, with losses or gains of fewer than 160,000 workers
per year. Many new jobs (about 500,000 a year) will be in service
occupations such as food service workers and home health aides,
but even more will be in the comparatively higher-paying managerial, professional, and technical occupations (about 825,000 a year).




102

UNEMPLOYMENT AND NONEMPLOYMENT
The United States has a history of strong job growth, and the
outlook for job creation over the next decade is good. But how many
new jobs are enough? The best indicator of how well we are doing
is how many of the people who want jobs are able to get them. The
unemployment rate is one measure of this. The unemployed are defined as people who are not working but are either waiting to return to a job or looking for a new one. If jobs are sufficiently difficult to find, however, some people may give up looking. Then they
are counted not as unemployed but as "discouraged workers." Thus,
both unemployment rates and the employment-to-population ratio
need to be examined to determine if the economy is providing
enough jobs.
TRENDS
The National Bureau of Economic Research, the private organization that dates the beginning and endpoints of U.S. business cycles, fixed the trough of the 1990-91 recession at March 1991. Yet
unemployment did not reach its peak of 7.7 percent until June
1992. Since then the unemployment rate has fallen steadily to 6.4
percent in December 1993. (In January 1994 the BLS began measuring unemployment in a new way: Box 3-1 describes the changes).
This represents a considerable improvement, but the economy has
a way to go before unemployment reaches normal levels. Unemployment was below 6.4 percent from April 1987 to January 1991,
and from February 1978 to March 1980. After World War II and
prior to 1974, unemployment topped 6.4 percent for only three brief
periods, each of less than a year.
Chart 3 3 shows the time path for unemployment since 1948.
—
Besides the ups and downs that correspond to business cycles, the
outstanding feature is the apparent ratcheting up in the level of
unemployment in the 1970s. Since the early 1970s, unemployment
has never returned to the levels typical of recoveries in the 1950s
and 1960s, and has peaked at much higher rates. It is widely believed that this long-term increase in unemployment is at least in
part due to an increase in the minimum level to which unemployment can be reduced without causing increasing inflation—the socalled natural rate of unemployment. The natural rate in turn is
thought to depend on labor market frictions, and skill and geographic mismatches, between labor supply and labor demand.
There have also been changes in the incidence of long-term unemployment. As of December 1993, 1.7 million workers, comprising
21.0 percent of the unemployed, had been unemployed for 27 weeks
or longer. This is a reduction from September 1992, when the number of long-term unemployed reached 2.1 million and comprised




103

Box 3-1.—The New Current Population Survey
The Current Population Survey (CPS), a national survey of
60,000 U.S. households, provides a monthly picture of the Nation's labor force, employment, and the unemployment rate.
Beginning in January 1994, that picture is being taken
through a new lens. For the first time since 1967, the CPS has
undergone a major redesign. Changes in the patterns of employment by industry, the increased labor force participation of
women, and several other factors have made the pre-1994 survey less accurate as a guide to the Nation's work force. The
new survey includes new and revised questions that reflect
these changes and incorporates new procedures (including the
use of portable computers to conduct the survey rather than
pencil and paper) designed to lead to more-accurate and consistent responses.
Between July 1992 and December 1993, a pilot version of the
new survey was conducted in parallel with the old CPS to determine the effects of the new questions and data collection
procedures. Results of the parallel survey indicate significantly
different estimates for key statistics, including the unemployment rate. Specifically, the unemployment rate as measured by
the parallel survey averaged a half a percentage point higher
than the estimates from the old CPS. In addition, the use of
new population weights increased the measured unemployment
rate another 0.1 percentage point. The unemployment rate is
expected to rise for all demographic groups, but particularly for
women, since the old CPS questionnaire may have tended to
classify women who were unemployed as out of the labor force.
The new survey is expected to produce several other changes
as well. For example, measured labor force participation rates
and employment-to-population ratios are expected to rise for
women and fall for men. Changes in the questions defining discouraged workers and people working part-time for economic
reasons are expected to lead to a decline in numbers of discouraged workers of 60 percent and part-time workers for economic
reasons of 20 to 25 percent.
21.7 percent of all unemployed workers. There is still a sense, however, that long-term unemployment is unusually high today. The
peak share of long-term unemployed workers during the current recovery was higher than during most previous postwar recoveries
(Chart 3-4). In addition, the share of long-term unemployment is
high given the overall unemployment rate (Chart 3-5).




104

Chart 3-3 Civilian Unemployment Rate
Unemployment rate peaks and troughs have been higher since 1973.

1948 1951 1954 1957 1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993
Note: Quarterly data.
Source: Department of Labor.

While average unemployment rates have risen, they have risen
more for some groups than for others. The unemployment rate for
women, which used to be consistently above the unemployment
rate for men, is somewhat lower (6.2 percent for women, 6.5 percent for men in December 1993). In contrast, the black unemployment rate has risen more than the white unemployment rate (1.5
percentage points for whites between 1970 and 1993, and 3.5 percentage points for blacks and others).
Employment-to-population ratios show some of the same patterns
of relative distress for different groups. While black women had a
higher employment ratio than white women in the 1970s, the reverse is now true (Chart 3-6). Both black and white men have had
falling employment-to-population ratios since the early 1970s; but
the decline for black men has been larger than for white men (10
percentage points for black men from 1972 to 1993; 6 percentage
points for white men).
The unemployment rate for teenage workers (aged 16 to 19
years) has always been higher than the rate for all workers, and
the current situation is no exception. While the unemployment rate
for all workers during 1993 averaged 6.8 percent, the rate for teen-




105

Chart 3-4 Long-Term Unemployment as Share of TotaS Unemployment
The share of the unemployed who have been out of work 27 weeks or more approached
historical highs in the last downturn.

1948 1951 1954 1957 1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993
Note: Quarterly data.
Source: Department of Labor.

Chart 3-5 Long-Term Unemployment and the Unemployment Rate
The share of long-term unemployment in total unemployment has been high recently,
given the unemployment rate.
Long-term unemployed (percent)
25

• 1983
1993

s^

^1992
D1984

•
15

• 16
91
ry'

59

-

•

•
•

10 -

DiP^P

rjn

^
D

s^
s^

• 1982

me

•

D1980

••
• • 1949

• 1970
5

-

I

I

I

6
8
Unemployment Rate (percent)
Source: Department of Labor.




106

I
10

12

Chart 3-6 Employment-to-Population Ratios of Women
The employment rate of black women fell below that of white women in the
last recession.
Percent
60

50

Black Women

45

40

35

r

White Women

J

L

1972
1975
1978
Note: Quarterly data.
Source: Department of Labor.

1981

1984

1987

agers was nearly three times as high at 19 percent. Teenage unemployment rates were 17.6 percent and 14.6 percent for white males
and females, respectively. The unemployment rates for black teenage workers were more than twice as high at 40.1 percent for
males and 37.5 percent for females. Over the last 20 years, the
teenage unemployment rate rose along with the overall unemployment rate. Unemployment rates also differ by education. Chart 37 compares the unemployment rates of those without a high school
diploma, high school graduates, those with some college, college
graduates, and those with advanced degrees.
According to popular accounts, another distinguishing feature of
recent labor market developments is the "white-collar recession."
That expression implies that the recent unemployment experience
of white-collar workers relative to that of blue-collar workers has
been significantly worse than in past recessions.
In fact, as in the past, the unemployment rate among white-collar workers has been significantly below that of blue-collar workers
in the most recent recession and recovery (3.2 percent versus 9.9
percent in 1992). However, the white-collar unemployment rate relative to the blue-collar rate has been rising (Chart 3-8). The ratio




107

Chart 3-7 Unemployment Rates by Educational Attainment, March 1993
Unemployment is generally lower for more-educated workers.

No Diploma
Some College
Master's Degree
Professional Degree
High School Diploma
Bachelor's Degree
Doctoral Degree
Note: Data relate to workers age 25-64.
Source: Department of Labor.

of the two rates in 1992 was 0.33, the highest since 1979. The ratio
of the number of unemployed white-collar workers to the number
of unemployed blue-collar workers has been rising since 1982, the
first year for which we have consistent occupational estimates. By
1992, the ratio of the number of white-collar unemployed to that
of blue-collar unemployed was about one-third, compared with only
one-fifth in 1983. This happened both because the ratio of the
white-collar to the blue-collar unemployment rate has increased, as
already noted, and because white-collar workers now make up a
larger fraction of the work force than they did before.
Just as the rate of overall employment growth is not out of line
with past experience given output growth, the level of unemployment in the most recent recession is within the bounds of what we
would expect given GDP growth. Further, as already noted, unemployment has fallen by 1.3 percentage points from its June 1992
peak, with nearly a percentage point of the drop coming in 1993.
However, three concerns are raised by trends and recent experience.
The first problem is increasing disparities between black and
white rates of both employment and unemployment. These changes




108

Chart 3-8 Ratio of White-Collar to Blue-Collar Unemployment Rates
The ratio of white-collar to blue-collar unemployment rates has been rising
but is still below historical highs.

0.32

-

0.30

-

0.28

-

0.26

-

0.24
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
Note: Data after 1981 are not strictly comparable with earlier years because of changes in occupational definitions.
Source: Department of Labor.

are linked to equally disturbing changes in the distribution of income and job security, discussed later in this chapter. The second
concern is the long-term increase in the average level of unemployment. The third concern is that recent high levels of long-term unemployment suggest that we may be seeing an increase in the
share of unemployment caused by mismatches between workers'
skills and job demands. If this is the case, it is argued, it may be
difficult to lower the unemployment rate much further without
causing labor market bottlenecks. As we will see below, little evidence can be found that skill mismatches have contributed much
to recent increases in unemployment, but they do seem to have
been a major cause of growing income inequality.
IS THE NATURAL RATE OF UNEMPLOYMENT
INCREASING?
How would we know if there had been an increase in what economists call the natural rate of unemployment? A sustained increase
in long-term unemployment might be one indication, an increase in
the number of people who have given up looking for work might
be another, and an increase in the fraction of job losers among the




109

unemployed yet another. These are all indirect indicators of an increase in the natural rate of unemployment. The problem is that
these indicators also respond to cyclical conditions—they increase
when the economy is in recession, and they can be slow to decline,
or may even increase, in periods of slow recovery.
Not surprisingly, therefore, concerns that mismatch unemployment is increasing are likely to develop in recessionary times. Less
skilled workers are more likely to find themselves unemployed
than better skilled workers. During recessions, labor market slack
makes it easier for employers to find better qualified employees, allowing them to raise job qualifications without raising compensation. Thus recessions may create the appearance of increasing mismatch unemployment. Once a recovery is under way, however,
more jobs of all types are created, and the unemployment rate for
the less skilled usually declines. Thus indirect indicators of increasing skill mismatch are not enough to determine whether the natural rate is increasing. We must consider additional evidence.
If most new jobs require skills that many workers do not have,
they might experience lengthening periods of unemployment as
they wait for jobs appropriate to their skills to become available.
On the other hand, the available statistical evidence does not rule
out the possibility that relatively slow output growth since the recession trough in 1991 is the major reason why recent levels of
long-term unemployment have been so high. Since high levels of
overall unemployment have persisted for so long, the number of
people looking for work for a long period of time has also increased.
A statistical analysis relating the percentage change in the number
of workers unemployed for 27 weeks or more to the percentage
change in output indicates that the behavior of long-term unemployment in the most recent period of recession and recovery is not
statistically different from that during previous recession-recovery
cycles. Although the recent behavior of long-term unemployment
may not be different, it is worth noting that the average number
of long-term unemployed increased substantially during the 1970s
and has remained high since then.
Another possible indicator of worsening mismatch unemployment
is the number of discouraged workers. Because they have given up
looking for work, they are not counted as unemployed. Yet large increases in the number of discouraged workers might be taken as
indirect evidence that many people are having a very difficult time
finding jobs. Again, however, the slow speed of the recovery could
also explain such an increase. Although the number of discouraged
workers is up, reaching 1.1 million in the fourth quarter of 1993
compared with fewer than 800,000 in the first quarter of 1990, the
percentage increase in the number of discouraged workers is less




110

than would be expected given its historical relationship with output
growth.
In summary, after taking into account the effects of slow output
growth, neither recent high levels of long-term unemployment nor
recent increases in the number of discouraged workers suggest that
there has been an abrupt worsening of mismatch unemployment or
an abrupt increase in the natural rate of unemployment in the
most recent period of recession and recovery.
A third indirect indicator of a changing natural rate of unemployment is the share of permanent job losers in total unemployment.
If unemployment is truly cyclical, firms lay off workers for a while,
but recall them when conditions improve. However, if mismatch is
increasing, one might expect to see more permanent job losers
among the unemployed rather than individuals on temporary layoff. Indeed, the share of permanent job losers among the unemployed hit an all-time high of 43.9 percent in the second quarter
of 1992, and has fallen only slightly since then. However, this number must be interpreted with caution. Despite the image of cyclical
unemployment as due to temporary layoffs, the fact is that the
share of permanent job losers among the unemployed rises in every
recession. Recessions bring not only temporary interruptions in employment due to slack demand, but also business failures and
forced restructurings that cause permanent job loss at a higher
rate than during normal times.
A statistical analysis relating the number of permanent job losers to output growth indicates that the relatively large number of
permanent job losers in the most recent period of recession and recovery can be explained by relatively slow output growth. Thus
there is little evidence of any recent increase in the natural rate
of unemployment in this relationship, either. The predictions of
this analysis for earlier periods do suggest that there was an abrupt increase in the number of unemployed permanent job losers
in the early to mid-1970s, compared with what would have been expected given business conditions. This is consistent with other data
which suggest an increase in the natural rate around that time.
DIRECT MEASURES OF THE NATURAL RATE
Traditionally, economists have used two methods to identify the
natural rate, and two additional methods for evaluating how it
might be changing. The simplest way to identify the natural rate
is to look back and see at what unemployment rate the last acceleration of inflation began. Alternatively, a statistical model of inflation that embodies the assumption of a natural rate (an
accelerationist "Phillips curve") can be used to estimate the natural
rate.




Ill

Changes in the natural rate have been identified in two ways.
Since different demographic groups have different unemployment
rates, it has become a common procedure to assume that the natural rate changes whenever the composition of the work force
changes. More recently, several authors have looked at the relation
between unemployment and proxies for job vacancies. If increases
in the natural rate are caused by an increasing mismatch of workers and jobs, then the job vacancy rate should be rising along with
the unemployment rate.
All these approaches have serious shortcomings. Many factors
other than the tightness of the labor market influence the rate of
wage and price inflation. Taxes, raw material prices, exchange
rates, expectations, and a host of other factors all come into play.
Thus, determining the natural rate by looking back to see what the
unemployment rate was the last time inflation picked up works
only if inflation was caused by labor market tightness.
Some economists argue, however, that the principal causes of inflation since the early 1970s have been factors other than tightness
in the labor market—for example, oil and other commodity price increases in the 1970s and the falling value of the dollar in the late
1980s. If this is true, estimating the natural rate by estimating
models of inflation is a misleading exercise unless all causes of inflation besides tightness in the labor market are adequately controlled for. Moreover, even estimates of the natural rate obtained
in this manner may be very sensitive to assumptions about the
form of the Phillips curve relation. Without direct evidence of a
rapidly increasing rate of inflation below a particular unemployment rate, estimates of a changing natural rate from statistical
models of inflation are suspect at best.
Determining how the natural rate has changed by looking at demographic changes also poses problems. In the 1970s, the apparent
increase in the natural rate was attributed in large part to increasing labor force participation of women and teenagers—both of
whom had higher than average unemployment rates at the time.
However, as women have changed their attachment to the labor
force, their unemployment experience has also changed. In the recent past, women have had a lower unemployment rate than men.
Should we therefore believe that the increased labor force participation of women has tended to decrease the natural rate below
what it was prior to the surge in their participation? The share of
teenagers in the labor force has also fallen in the last decade, and
this too should have reduced the natural rate.
Further, why focus on these particular demographic changes to
the exclusion of others? Black male labor force participation rates
have been falling over the last two decades. Since black men have
higher unemployment rates than white men, should we conclude




112

that the natural rate is falling? More important, people with college educations have a much lower rate of unemployment than
those with less education, and their share of the labor force has increased considerably over the last two decades. Again, this would
suggest that the natural rate should be lower today than in 1970,
before the ratcheting up of the unemployment rate.
Finally, although the U.S. Government does not collect the data
on job vacancies that would allow us to examine directly whether
there is an increasing mismatch of jobs and workers, the Conference Board does publish an index of help-wanted advertising.
The relationship between this index and the unemployment rate
has changed over time, but there is no evidence of any increase in
the level of help-wanted advertising, given the unemployment rate,
in the last decade. There is, however, a higher level of help-wanted
advertising at all levels of unemployment since the early 1970s.
The increase in help-wanted advertising could be interpreted as
evidence of an increase in mismatch unemployment, but many
other things affect the level of help-wanted advertising. Different
types of employers advertise in different ways for different types of
jobs. Changes in the industrial and occupational mix of employment make an advertising index a questionable measure of longterm changes in job vacancies. Changes in advertising prices, the
structure of media markets, and legal requirements for advertising
certain jobs also change the relationship between vacancies and advertising in ways that call into question the meaning of any longterm changes.
Altogether, the various pieces of statistical evidence examined in
the preceding discussion suggest that the increase in the unemployment rate since 1989 has been largely cyclical in nature. There is
some evidence of an increase in the natural rate—possibly due to
an increase in mismatch unemployment—in the early 1970s, but
little evidence of any increase since then. The evidence also suggests that today's unemployment rate exceeds the natural rate by
a significant amount. Therefore, wage-push price inflation is unlikely to be a factor constraining economic growth in the near future.
THE MAGNITUDE AND COSTS OF JOB LOSS
The U.S. economy is constantly in flux, and while there is no evidence that the rate of churning in the labor market has increased
in recent years (see the discussion of job stability below), normal
rates of structural adjustment are quite high and impose significant costs.
Estimates of the number of jobs created and destroyed each year
in the United States are staggering. Data from various sources suggest that on average more than 10 percent of all jobs disappear




113

every year, while even more new jobs are created. Luckily, not
every job that is lost forces someone to become unemployed. Companies reducing the size of their operations can often do so using
normal attrition—quits and retirements. When they cannot, workers given advance notice of an imminent layoff can sometimes find
work before they lose their old job, allowing a seamless transition
with no unemployment. But for the many workers who do not
make such easy transitions, the costs of dislocation can be high.
Between 1981 and 1990, about 2 million full-time workers per
year lost their jobs. These workers spent an average of nearly 30
weeks unemployed, and of those who found new employment, about
a third suffered earnings losses of more than 20 percent.
Wage losses were most severe for those who had been with their
employers the longest. For example, those with 10 or more years
of tenure on their previous job were nearly four times as likely to
see their earnings fall by 20 percent as to see them rise by 20 percent in their new jobs. They were also less likely than other displaced workers to find new employment at all. One set of surveys
asking about job loss found that 73 percent of all job losers had obtained new jobs, but only 65 percent of those with 10 or more years
of job tenure had found new work.
The special problems of workers with long job tenure are understandable. Those who work for the same employer for a long time
build up skills that are most valuable to that employer. Further,
many employers reward long job tenure with higher wages as a
way of motivating employees and ensuring their loyalty. The loss
of a job when one has obtained the privileges of long tenure can
be particularly devastating.

SLOWING WAGE GROWTH AND WIDENING
INEQUALITY
In the last two decades, family income growth has stagnated and
incomes have become more unequally distributed. In fact, the real
incomes of the bottom 60 percent of American families were lower
in the early 1990s than for the analogous families at the end of the
1970s. Underlying the rising disparity in the fortunes of American
families has been a rise in labor market inequality that has shifted
wage and employment opportunities in favor of the more educated
and the more experienced. Less educated workers suffered substantial losses in real earnings during the 1980s. Here we consider the
dimensions, and some likely causes, of slow income growth and
widening inequality.




114

SLOW INCOME GROWTH
Income trends have been discouraging for about two decades
—the median family today has virtually the same real income as
the median family 20 years ago. This stagnation is a marked departure from the substantial income growth that occurred over previous generations.
From 1947 to 1973 the real income of the median American family increased by a robust 2.8 percent a year, more than doubling.
In contrast, from 1973 to 1992 the income of the typical American
family was essentially stagnant, rising by only 0.1 percent a year
after adjusting for inflation. (The trend from 1979 to 1989—roughly
equivalent years in the economic cycle—is similar.) At the pace of
income growth from 1973 to 1992, it would take centuries for real
median family income to double.
Although the labor force participation decisions of women and
changes in the composition of families have affected family income,
the major trends in family income are dominated by trends in real
wages. Chart 3-9 shows the changes in wages and total hourly
compensation, adjusted for inflation, since 1948. Both wages and
compensation suffered abrupt slowdowns in growth rates around
1973.
GROWING INEQUALITY
Families have been affected unevenly by recent income trends.
Real incomes at the top have increased smartly, real incomes at
the middle have essentially stagnated, and real incomes at the bottom have fallen. Box 3-2 discusses the implications of these developments for employment and unemployment.
From 1973 to 1992, the average real income of the upper 20 percent of families rose 19 percent, or about 1 percent per year. This
is well below the rate for the 1950s and 1960s, but far better than
for the rest of the population. Between 1973 and 1992, the average
income of the middle 20 percent of families rose a paltry 4 percent
in real terms. Lower income families fared even worse. Among the
bottom 20 percent of families, mean real income fell by 12 percent
from 1973 to 1992. Chart 3-10 shows the growth of mean family
incomes for different income groups over the periods before and
after 1973. It makes clear just how abrupt the changes in the distribution of income growth have been. A trend toward greater
equality in the 1960s and toward greater inequality in the 1970s
and 1980s is apparent in both income and consumption measures
of economic well-being. Rising inequality of family incomes during
the 1980s is apparent in both pretax and posttax income measures.




115

Chart 3-9 Real Hourly Compensation and Wages
The growth of real compensation per hour and of real hourly wages has declined
since 1973.
1982-84 dollars
14.00
Hourly Compensation
12.00

Hourly Wages

10.00

8.00

6.00

4.00

j

I

I

|

|

|

I

|

1948
1952
1956
1960
1964
1968
1972
1976
Note: Compensation and average hourly earnings deflated by CPI-U-X1.
Sources: Department of Commerce and Department of Labor.

|

|

|

1980

1984

1988

1992

Box 3-2.—Growing Inequality of Employment and
Unemployment

The falling relative wages of those with less experience and
schooling may explain, at least in part, some of the observed
changes in employment-to-population ratios for certain demographic groups. The black and teenage populations tend to
have less schooling than the average for all Americans. Consequently, the wages they command have fallen, making work
less attractive. To the extent that the shift in demand away
from less-educated workers is manifest in fewer available jobs
instead of lower wages, these groups face higher unemployment rates as well.
EXPLAINING SLOW WAGE GROWTH
Stagnant wages and slow total compensation growth since the
early 1970s largely reflect a substantial slowdown in productivity
growth. From 1947 to 1973 productivity rose at a compound annual
rate of 3.1 percent, and inflation-adjusted compensation per hour




116

Chart 3-10 Average Annual Growth of Mean Family Income by Income Quintile
Family incomes in alt income groups grew more or less evenly, but slightly faster for
lower income groups, before 1973.
1947-73

Average annual percent change
2.99

3

2 65

2.79

2.76

2.46

2
1
•

n

Lowest

Second

}••"

Fourth

Third
Quintile

Highest

1973-92

0.93
0.50
0.19

I

-0.69

I

I

I

-0.18

Second

Third
Quintile

Fourth

Highest

Source: Department of Commerce.

grew at a similar rate. From 1973 to 1979 the rate of productivity
growth fell to an average of 0.8 percent a year, and compensation
growth fell with it. Since 1979 the productivity growth rate has
picked up only slightly, averaging 1.2 percent on an annual basis.
Chart 3-11 shows the close relation between productivity and real
compensation. Boxes 3-3 and 3-4 discuss some of the other effects
of productivity growth.
The productivity slowdown has been intensely studied. Many
partial explanations have been given, but no complete accounting
has been made.
EXPLAINING THE GROWTH OF INEQUALITY
Several factors have contributed to widening inequality. One
major factor is increasing returns to education and experience. The
college-high school wage premium increased by over 100 percent
for workers aged 25 to 34 between 1974 and 1992, while increasing
20 percent for all workers 18 years old and over (Chart 1-8). In addition, among workers without college degrees, the average wages
of older workers increased relative to those of younger workers.
Since the relative supply of educated workers has increased at the




117

Chart 3-11

Productivity Growth and Price Reductions, 1950-90

Productivity growth in an industry leads to lower relative prices.

Average annual percent change in relative prices
2.0
s.

• Construction

1 Other services
1.0

-

•

F E^ \ ^
I
R

0.0
H Mining
Retail trade

•

Transportation

•
-1.0 --

Wholesale trade

Agriculture

•
Manufacturing

-2.0
-1.0

1

1

1

0.0

1.0
2.0
Average annual percent change in productivity
Note: FIRE = finance, insurance, and real estate.
Source: Department of Commerce.

1
3.0

same time that wage disparities have grown, the demand for educated workers must have increased faster than their supply. Some
have suggested that increasing trade has undermined demand for
less educated workers in the United States, since they are plentiful
elsewhere in the world. So far, however, several studies have been
unable to discern any substantial impact of trade on wage inequality, however. If increased trade were the cause of growing wage inequality, the relative prices of goods that use highly educated labor
would be rising relative to those of goods that use less highly educated labor. But studies have found no evidence of such a change
in relative prices. Similarly, if increased trade were responsible for
increased wage inequality, the growth of wage differentials would
lead firms in all sectors to substitute less educated labor for more
educated labor. Instead, studies find that virtually all manufacturing industries have increased their relative use of educated labor
despite growing wage differentials. Rising wage differentials with
greater use of educated labor suggest that demand for skilled labor
has been rising broadly in the economy. Thus it appears that most
of the demand shift toward highly educated workers must have
originated domestically.




118

Box 3-3.—Consequences of Productivity Growth
Rising productivity has been shown to have a variety of beneficial effects:
• The prices of goods produced by industries that have had
rapid productivity growth have fallen relative to those of
goods from industries with slower productivity growth.
Chart 3-11 shows average productivity growth and price
changes by industry for the 1950-90 period.
• Periods of rapid productivity growth have been accompanied by increases in real wages. The prices of products
in industries experiencing productivity growth also decline relative to wages. This decline in product prices
means that real wages tend to rise during periods of
rapid productivity growth.
• Periods of rapid productivity growth have also been periods of low inflation. Productivity growth allows nominal
wages to increase without putting pressure on prices.
• Periods of rapid productivity growth have not been associated with large increases in unemployment In periods
when productivity growth was more rapid, such as the
1960s, unemployment rates have tended to be low. In
contrast, periods with slow rates of productivity growth,
such as the 1970s, have been periods of relatively high
unemployment.
Since the use of more-educated labor has increased in all industries, a logical explanation of this trend is technical change. For example, one study shows that people who work with personal computers earn a substantial wage premium over those who do not,
and that this can account for half of the increasing gap between
the wages of college and high school graduates.
Although changes in labor demand induced by changes in the
composition of trade do not appear to explain much of the increase
in income inequality, the internationalization of the U.S. economy
may affect wages in other ways. For example, the threat of increased import competition or of the relocation of a factory to another country may undermine worker bargaining power or cause a
decline in the number of workers employed in unionized firms. At
this time, no reliable studies have properly quantified how important such effects have been. In addition, there is no guarantee that
the future will resemble the past. Trade could become a more important factor in bringing down the wages of less educated workers
in the future. On the other hand, technical change could move in




119

Box 3-4.—Why Productivity Growth Does Not Cause
Unemployment

Productivity growth need not cause an increase in unemployment because, as productivity rises, more goods can be produced with the same number of workers. This means a cost
saving, which must result in either increased profits, increased
wages, or lower prices. If profits or wages increase, those benefiting from the increase will increase their spending. If prices
fall, consumers' incomes will go further and they will buy
more. In any case, the increased spending will lead to the purchase of more goods and services, which will create new jobs
offsetting losses from the productivity increase. If the new jobs
created are not equal in number to the jobs lost, there will be
a tendency for wages to change to equate supply and demand
for labor. Nonetheless, in the short run some workers are likely to have to change jobs. As the discussion of the costs of job
loss makes clear, this can be a traumatic experience for the established worker.
the direction of economizing on educated labor and making better
use of less educated labor.
In addition to rapidly increasing demand for educated labor, two
institutional factors seem to have contributed to rising wage inequality: the decline of unions and the erosion of the minimum
wage by inflation. In the early 1970s, 27 percent of the work force
were union members. By 1990 that fraction had declined to 16 percent, and it has probably fallen further since. Several studies conclude that this decline can account for about 20 percent of the increase in wage inequality.
In 1970 the minimum wage was 50 percent of the average hourly
wage of private production and nonsupervisory workers. By 1992 it
had fallen to 40 percent of the average. This erosion of the minimum wage has allowed a substantial fattening of the lower tail of
the wage distribution and contributed to increasing wage inequality. The effect of the minimum wage on the distribution of income
is less obvious, since it is possible that the decline in the inflationadjusted minimum wage may have caused an increase in employment of low-wage workers.
Immigration has increased the relative supply of less educated
labor and appears to have contributed to the increasing inequality
of income, but the effect has been small. A study of the effects of
immigration between 1980 and 1988 found that it explains less
than 1 percent of the change in the college-high school wage differential. Although immigration flows were considerably larger in
the late 1980s than the early 1980s, this study makes it seem un-




120

likely that immigration could explain more than a few percent of
the total change in this differential.

JOB QUALITY
The Administration is concerned about increasing the quality as
well as the quantity of jobs in the American economy. Job quality
encompasses a number of factors beyond wage levels—including job
security, employer-provided benefits such as pensions and health
insurance, and hours of employment.
HOURS OF WORK
Average weekly hours in manufacturing were consistently higher
through December 1993 than during most previous recoveries since
1958 (excluding the short recovery in 1980-81), and they reached
a post-World War II high of 41.7 hours per week in November
1993. This was slightly above the previous peak of 41.6 hours per
week reached in February 1966 (Chart 3-12). Factory overtime
hours also reached a record in November at 4.4 hours per week,
the highest level since the data series began in 1956.
Chart 3-12 Average Weekly Hours of Production and Nonsupervisory Workers
Average weekly hours in manufacturing are at a postwar high, while average
hours for all industries show a long-term decline.
Hours
42

Manufacturing

40

38

36

34

32

Total Private Nonfarm

I

I

!

I

I

I

I

I

I

L

. I

I

I

1947 1950 1953 1956 1959 1962 1965 1968 1971 1974 1977 1980 1983 1986 1989 1992
Source: Department of Labor.




121

In contrast, over the past half-century, average weekly hours
worked by production and nonsupervisory employees on nonfarm
private payrolls have declined significantly from 40.3 hours per
week in 1947 to 34.5 hours per week in 1993. The patterns of average weekly hours of all private sector workers and those in manufacturing have diverged over the last 50 years.
In keeping with their long-term trend, average weekly hours of
all private nonfarm workers have been lower since the trough of
the last recession than during comparable periods following the
three previous recessions after 1970. Average hours typically rise
during recoveries, as employers respond to rising demand by using
their existing work forces more intensively before they begin significant hiring of new employees. The increase in average hours
since the 1991 recession trough has generally been in line with previous recoveries since 1970—although in recent months the increase in hours has been higher than in recent recoveries.
Popular accounts have suggested that Americans are working
more. How can this be if hours worked on the average job are declining? The answer is that women's labor force participation is up,
so that average hours of paid work per person are up. How do
workers feel about their hours of work? Most studies find that, on
average, people would like to work more hours if they were paid
their hourly rate for the additional hours.
JOB STABILITY
The slow pace of job creation and the relatively high unemployment rate in the current recovery, along with continuing corporate
downsizing and increased use of part-time and temporary workers,
have led to the perception that employment is becoming less stable
than in the past. The fear is that a decline in permanent employment will lead to a largely "contingent" work force, meaning that
there will no longer be an understanding between worker and employer that a job will last for a long time. Is the current sense of
less stable employment the result of the recent recession, or are
long-term forces at work?
There are several different approaches to measuring the stability
of employment. To some extent, growth of the contingent work
force can be measured directly. We can also look at how likely individuals are to stay with an employer, at the dynamics of firm size,
and at changes in the industrial composition of employment.
No official statistics are kept on the number of workers employed
on a contingent basis. One study that examined employment practices at a number of large firms in 1985 found that slightly less
than 1.5 percent of the labor they used was explicitly hired on a
temporary basis.




122

We do, however, know how many workers are employed in the
personnel supply industry (largely temporary workers). This number has increased dramatically since the early 1970s, and particularly rapidly in the current recovery. From the trough of the recession in March 1991 to December 1993, employment in the personnel supply industry grew by 687,000 workers. This was 26 percent
of all employment growth over this period.
Taking a longer perspective, employment in the temporary help
industry has grown from less than one-third of 1 percent of total
employment in the early 1970s to nearly 1.3 percent today (Chart
3-13). While growth has been explosive, the fraction of the work
force employed on a contingent basis is probably still less than 3
percent.
Chart 3-13 Help Supply Industry Employment as Share of Total Employment
Temporary workers are a small but increasing share of total employment.
Percent
1.4

1.2

-

1.0

-

0.8

0.6

0.4

0.2

00

I
I
I
J
I
L .._
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
Note: Values before 1982 are estimated from the relationship between help supply industry employment
and personnel supply industry employment after 1982.
Source: Department of Labor.

1992

Another potential indicator of declining job stability is the growing use of part-time workers. Like temporary workers, part-time
workers usually do not receive pension and health benefits and
tend to have a weak attachment to their firms. Several authors
have included them when enumerating the contingent work force.
Between August 1990 and December 1993, part-time employment increased by 6.4 percent, compared with only a 1.7-percent




123

increase for full-time employment. But part-time employment always expands during recessions, and the increased use of part-time
workers during this recession is not significantly different from the
pattern of past recessions, given sluggish output growth. Over the
last several decades, however, there has been a small secular increase in the fraction of the labor force working part-time, but it
has not been a steady increase. The fraction grew considerably
from the late 1960s through the early 1980s, reaching a peak in
1983. It then declined through the rest of the 1980s and increased
moderately in the 1990 recession. The fraction of workers working
part-time by choice has remained nearly constant since the early
1970s (Chart 3-14).
Chart 3-14 Part-Time Employment: Total and Voluntary
Since the late 1960s the use of part-time workers has grown, but the number
working part-time by choice has not.
Percent of employment

/

\

Total

18

16

-

*
14

s'

12

Voluntary

10

I

!

1960

o

1963

I

1966

I

I

I

I

I

I

I

1969

1972

1975

1978

1981

1984

1987

1990

Source: Department of Labor.

What accounts for the secular shifts toward temporary and parttime employment? One possibility is that the underlying demand
for goods and services has become more volatile, leading firms to
desire less permanent work forces so that they can more easily respond to shifting needs. If this were so, we should observe greater
volatility in the industrial composition of employment or in firm
size. Such evidence is lacking, however. Data from the Census of
Manufactures show no long-term increase in variability of firm




124

size. No data are available on volatility of firm size in the rest of
the economy.
A simple measure of the amount of reallocation of labor between
industries is the sum of changes in the share of each industry's employment in total employment for those industries that are increasing their employment share. (This is equal to the absolute value of
the sum of the decreases in the share of employment in each industry with a shrinking share.) When total employment is constant,
this measure is simply interpreted as the fraction of the work force
being reallocated between industries. According to this measure,
the rate of change in the industrial structure across all industries
increased in 1990 and 1991, which is typical for a recession. The
rate of change in industry composition typically declines during recoveries, and the current recovery fits this pattern, with churning
declining in 1992 and 1993 (Chart 3-15).
Chart 3-15 Reallocation of Employment Between Industries
The rate of reallocation of employment between industries follows business
conditions but shows no upward trend.
Percent of nonfarm employment
3.0

2.5

-

1949 1952 1955 1958 1961 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991
Note: The series measures one half the sum of the absolute value of changes in industry employment shares.
Source: Department of Labor.

Has the rate of change of the industrial composition of employment trended upward over time? Chart 3-16 shows that the answer is no. There is a big spike in 1975 after the first oil shock,
but no trend. Over the entire 1949-93 period, the average rate of
reallocation was 0.9 percent per year. Recent experience appears

1 5 1 - 4 4 4
0 - 9 4 - 5


125

consistent with the past. Since 1980, the average rate of
reallocation has also been 0.9 percent per year.
How are we to reconcile what we know to be major changes in
the industrial composition of employment (such as those due to defense cutbacks) with the fact that there has been no apparent increase in the rate of industrial change? Evidently the economy is
typically experiencing significant changes in its structure. Just as
horseshoes gave way to tires and mechanical adding machines gave
way to electronic calculators, industries today continue to grow and
die.
If job instability is increasing, it does not appear to be because
of changes in the volatility of firm size or industry demand. If there
are significant changes in job stability, apparently they are happening at the individual level. If individuals' attachments to their
jobs are becoming more tenuous, we should observe a drop in the
length of time workers spend with each employer, and an increase
in the probability that a worker will leave his or her firm in any
given year. But analysis of the Current Population Survey shows
the fraction of workers holding jobs for 8 years or more to have
been 30 percent in 1979, and 31 percent in 1983, 1987, and 1991.
A constant fraction of workers holding long-term jobs might hide
changes in the experience of individuals. For example, older workers are more likely than young workers to stay with the same employer. The aging of the work force might therefore have brought
about an increase in average job tenure, even if individuals at any
particular age were experiencing greater job instability. Two studies that have attempted to examine this question provide mixed
evidence. Both find that employment for nonwhites and college
graduates has become less stable, but both also find that employment stability for some groups has increased. No strong trend toward increasing overall instability can be found in either study. It
is impossible to rule out increasing overall instability on the basis
of these studies, but if there has been an increase it is either too
recent or too subtle to be reflected in the aggregate tenure statistics discussed in the previous paragraph.
Whether or not job security is decreasing, two things are clear.
First, there has aiways been a great deal of instability in the U.S.
labor market. Second, there is no question that there is a perception that job security is decreasing. This may be due entirely to the
normal increase in job losses during the recent recession, to media
accounts of mass layoffs at companies that used to offer unusually
stable jobs, or to increases in job instability that simply are not reflected in aggregate statistics. Alternatively, a constant rate of job
loss combined with greater income inequality has meant an increase in income (as opposed to employment) insecurity.




126

BENEFITS
One of the concerns raised by the growing use of contingent
workers is that fewer workers will be covered by employer-provided
health insurance and retirement income programs. In fact, there is
some evidence that this has occurred, at least for some recent periods. The timing of these changes, however, does not appear to correspond to the timing of increases in temporary or part-time work,
but the changes are troubling nonetheless.
After rising for several decades, the fraction of workers covered
by employer-provided health insurance has fallen since the mid1980s. However, it is likely that this fall represents less than 10
percent of all workers. Nonetheless, since 1985 the fraction of the
population covered by job-related health insurance has remained
roughly constant (around 60 percent). Evidently the decline in coverage per worker is being offset by the increase in the number of
households with more than one person working.
Retirement income is another area where different surveys suggest different conclusions. Business tax records show no decline in
the fraction of workers covered by retirement income programs;
however, studies examining defined-benefit pension coverage find a
decline in the late 1980s. The difference is at least in part due to
the growth of tax-exempt retirement savings plans provided by employers. These tend to be less generous than defined-benefit retirement plans, so that there has at least been a decline in the quality
of retirement security plans, if not in the quantity. Even here the
story is mixed. At least one recent study finds that pension coverage has begun to increase again in the 1990s.

TOWARD A COMPREHENSIVE WORK FORCE
POLICY
The labor market has changed. Although there is little evidence
of any recent abrupt changes in the fundamental behavior of the
labor market, three aspects of the longer term picture are worthy
of concern: (1) the slow growth of incomes and increasing income
inequality; (2) increasing unemployment and nonemployment, particularly for certain groups; and (3) the high rates of job loss and
dislocation that are normal for our economy.
Real income has grown very slowly since the early 1970s, and the
real incomes of the least well-off have actually fallen. The Administration's policies address these problems at four levels.
First, the primary source of income growth is productivity
growth. To increase productivity growth, we must invest more in
research and development of new technologies. To take advantage
of technical progress, we must invest more in new plant and equipment. Second, U.S. employers have learned new ways to organize




127

work that make better use of the vast pool of talent in our work
force. These participatory techniques are particularly effective in
organizations adapting to rapid technical change but have wider
applicability as well. Third, to deal with the problems of income
growth and inequality, we must invest more and invest more equitably in education and training for our work force. Finally, in order
to promote investment and to ensure that incomes grow with increasing productivity, the Administration's macroeconomic policies
aim to encourage full employment built on a sound fiscal foundation.
The Administration's main vehicle for encouraging investments
of all sorts has been to reduce Federal borrowing so as to make
room in credit markets for private borrowers. As noted in Chapter
2, deficit reduction has resulted in much lower interest rates, making it easier for firms and individuals to undertake productivity-enhancing investments. As the recovery continues, we expect to see
more individuals and firms taking advantage of these opportunities. Funding for research is also a high priority for this Administration,
In addition to promoting capital formation and technical change,
the Administration aims to increase the productivity of the work
force by helping employers make better use of their workers
through increased worker participation. Numerous studies have
now demonstrated that cooperative techniques increase productivity substantially in a wide range of enterprises. By helping to disseminate information on what successful firms have been able to
accomplish, the Administration hopes to speed the adoption of
these practices throughout the economy.
Improvements in education and training to boost the skills and
enhance the flexibility of the U.S. work force are top priorities. To
this end, the Administration is increasing spending and reorganizing programs to increase effectiveness. From increasing funding for
Head Start to proposals for developing "lifelong learning," the Administration hopes to address education and training needs everywhere in our society. The Administration's Goals 2000: Educate
America Act and the Improving America's Schools Act aim to ensure a quality education for all students, first by guaranteeing all
students a safe environment for learning, and then by setting national standards for students and teachers. To ensure that all postsecondary students have access to the means to finance their higher education, the Congress has passed legislation proposed by this
Administration establishing a direct lending program where the
rate at which the loan will be paid back will depend on the recipient's income.
Recognizing the need to coordinate education and job training,
the Departments of Education and Labor have joined in an unprec-




128

edented partnership to develop a number of new programs. Government programs have traditionally provided extensive support for
those going to college. The School-to-Work initiative of the Departments of Education and Labor will help those who begin their careers with a high school diploma to obtain meaningful work-based
training. This training will go hand in hand with a new system of
skill standards and certification, which will make the skills workers learn more portable and consequently more valuable. The Administration's Workforce Security Act will provide training and job
search assistance to dislocated workers who are having difficulty
finding new work. The aim is to transform our unemployment system into a reemployment system. The Administration's proposed
welfare reform plan will provide funds for training to some of the
most disadvantaged in our society: mothers and fathers with children in poverty.
Another part of the Administration's answer to the problem of
growing inequality is the substantial increase in the earned income
tax credit that has been put in place. This tax credit, primarily for
low-wage workers with children, along with the full range of other
government transfer programs, will lift many families with a fulltime worker out of poverty. It is described in detail in Chapter 1.
Increased productivity growth is the answer to stagnant real
wages, and improved training and education—particularly for the
least advantaged—is a major part of the solution to growing inequality. But we cannot expect firms to purchase new equipment
unless there is demand for more products, and we cannot expect
workers to train for jobs that do not exist. Therefore, an integral
goal of the Administration's economic policies is the return to full
employment.
Maintaining a high rate of economic growth is also essential for
dealing with the second major labor market trend of the last two
decades: increased unemployment. The analysis presented above
suggests that most of the increase in average unemployment over
the 1970s and 1980s was due to slack aggregate demand. There is
also some indication of a permanent increase in the natural rate
of unemployment in the 1970s. Whatever the cause of the increase
in the natural rate, the Administration's Workforce Security Act
should help reduce the natural rate by facilitating a more efficient
matching of workers and employers.
An initial step toward the establishment of a reemployment system was taken last fall with the passage of legislation extending
Federal emergency unemployment benefits. That legislation put in
place for the first time a system of worker profiling to help identify
workers who are likely to experience long-term unemployment, and
to provide them with a package of job search assistance services.
Several controlled experiments have now shown such services to be




129

effective in reducing the duration of unemployment. Once fully in
place, the Workforce Security Act will provide both job search assistance and long-term training to those who lack the skills necessary to secure good employment. This will help reduce mismatch
unemployment and the natural rate of unemployment.
Existing training programs for dislocated workers have been
criticized as ineffective. The new programs proposed by the Administration address this problem by emphasizing long-term training
and continuing postsecondary education. The large human capital
literature shows substantial potential benefits from this approach
to increasing worker skills.
Dislocated workers have always faced problems with income security and health care. With growing income inequality, the normally high rates of dislocation in our economy mean greater income
insecurity. The Administration is moving to make job transitions
easier for displaced workers in a number of ways. The Workforce
Security Act will help ease transitions and help those who need it
with retraining for a new career. The Administration's health care
plan will provide universal coverage, relieving one of the major
worries of a dislocated worker—what to do if a family member becomes ill after health coverage from the lost job has lapsed.
Overall, the labor, education, health, and welfare programs proposed by the Clinton Administration hold out the hope of lower unemployment rates, reduced inequality, and stronger income growth
for American workers and their families.




130

CHAPTER 4

Health Care Reform
THE UNITED STATES SPENDS far more per capita on and devotes a much larger share of its income to health care than does
any other country. In 1993, one out of every seven dollars that
Americans spent—14.3 percent of gross domestic product (GDP)—
went to health services. In 1991, the most recent year for which
comparable international data are available, the United States
spent 13.2 percent of GDP on health care, while no other industrialized country spent more than 10 percent. Indeed the average for
all the industrialized countries of the Organization for Economic
Cooperation and Development (OECD) was only about 8 percent.
Yet despite this massive commitment of resources, the United
States insures a much smaller fraction of its population than do
most other industrial countries, and ranks comparatively poorly on
such important overall indicators of health outcomes as life expectancy and infant mortality. Tens of millions of Americans remain
uninsured and live in constant fear of bankruptcy should they become ill. Tens of millions more have inadequate insurance or risk
becoming uninsured if they lose their jobs.
For the lucky Americans who have comprehensive benefits and
little worry about becoming uninsured, the current system buys
care of high quality and provides genuine health security. For others less fortunate, the system works less well or not at all. And
even the lucky suffer from the shortcomings of the current system,
as the costs of covering services for the uninsured and some of the
costs for those served by government programs are shifted onto
hospitals and other providers and ultimately onto private sector insurance premiums.
Health care spending is not only high but growing rapidly. In almost every year of the last three decades, health care costs have
increased at more than twice the rate of total income. In the 1980s,
real per capita health care spending increased at an annual rate
of 4.4 percent in the United States, compared with an average of
only 3.2 percent in Canada, France, Germany, Japan, and the
United Kingdom. Current projections indicate that, without reform,
the United States will devote nearly 18 percent of its GDP to
health care by the turn of the century.
At the level of the individual, the family, and the firm, the inexorable growth in health care spending means ever-increasing insur-




131

ance premiums and ever-higher medical bills. And at the level of
Federal and State and local governments, rising health care costs
mean that health expenditures claim larger and larger budget
shares, with less left over for essential competing demands like
public safety, infrastructure maintenance and expansion, and improvements in education and training. Despite a sustained reduction in real discretionary spending, the Congressional Budget Office projects that escalating health care costs will be the dominant
force pushing Federal budget deficits back up as the 20th century
nears its end.
The facts speak for themselves: The United States faces a health
care crisis that demands a solution, both for the health of its citizens and for the health of its economy over the long run.
For analytical purposes, this crisis can be divided into four separate but interrelated parts. First, the current system fails to provide health security for millions of Americans, both insured and
uninsured. Insured Americans do not have health security when
they face the prospect of losing their coverage if they lose or change
their jobs. Some estimates suggest that such worries may reduce
job mobility by as much as 25 percent. The health security of the
uninsured is still more precarious: Even when they do manage to
obtain care, the evidence indicates that they receive less treatment,
are sicker, and suffer higher mortality rates than the insured. It
is simply not true, as some claim, that all Americans get decent
care when they need it.
Shortcomings in private insurance markets are a second and related problem. Under the current system people who are less
healthy pay more, sometimes much more, for insurance than people
who are healthy. Insurance for those with preexisting conditions is
often either unavailable or available only at prices that put it out
of reach for many Americans. And many insurance policies simply
do not cover a variety of large financial risks—exactly the kinds of
risks that insurance is designed to address in the first place.
The third problem in our current health care system is the lack
of effective competition, which in turn weakens the incentives for
both providers and consumers to make cost-conscious decisions. Inadequate competition is a major reason why the costs of the American health care system are so high. Studies suggest that a variety
of common procedures are often performed in circumstances where
they are inappropriate or of equivocal value on purely medical
grounds. Fee-for-service providers clearly have an incentive to provide more care, including care that is inappropriate, because they
are generally reimbursed for each additional test or procedure they
perform. Consumers often do not have the information they need
to evaluate whether a particular service is indicated, and some do
not have the choice among providers that might allow them to




132

make cost-conscious decisions. In addition, many consumers have
weak incentives to choose among health care services on the basis
of cost, and among health care plans on the basis of price. Finally,
because many insurance policies do not cover preventive care, consumers may underutilize cost-effective services at earlier stages of
medical need.
The fourth problem with our current system is the burden it
places on public sector budgets. Large and growing public health
care expenditures force governments to make painful choices
among cutting other spending programs, increasing revenues, or increasing budget deficits—each of which can have adverse consequences for long-term economic growth.
None of these four problems can be solved in isolation. For example, in the absence of systemwide reform, arbitrary caps on Federal
health care programs, which some have proposed, would simply
shift still more of government program costs onto the private sector. According to one recent estimate, uncompensated care and government programs that reimbursed hospitals below market prices
shifted $26.1 billion onto the private sector in 1991. Caps on government programs would simply aggravate this problem. Similarly,
any attempt to provide universal coverage without complementary
measures to improve competition and sharpen the incentives for
more cost-conscious decisions would mean even more dramatic increases in systemwide costs. And reforms designed only to address
the most glaring shortcomings of private insurance markets would
not solve either the problem of providing health security for all
Americans or the problem of escalating public health care bills.
In short, a piecemeal approach will not work. Health care reform
requires a comprehensive solution. At the same time, it requires a
solution that preserves what is good about the current system and
that maintains choice at all levels. This is indeed a daunting challenge, but one that the Nation can ill afford to ignore.

UNIVERSAL COVERAGE AND HEALTH
SECURITY
Providing universal health coverage and security for all Americans is an essential objective of health care reform. Chart 4-1
shows the sources of health insurance for the American population.
According to the Current Population Survey, over 15 percent of
Americans—nearly 39 million people—were uninsured throughout
1992. That is one of the highest shares in the industrialized world.
While some people remain uninsured for long periods of time, many
more experience brief episodes during which they lack coverage, for
instance when they lose a job. The Survey of Income and Program
Participation (SIPP) found that over three times as many people




133

are uninsured at some time during a given year as are uninsured
throughout the year. The SIPP estimates that more than one in
four Americans were uninsured at some point in a 28-month period
from 1987 to 1989.
Chart 4-1 Distribution of Population by Source of Health Insurance Coverage: 1991
Most Americans receive health insurance through their employers. Fifteen percent of
Americans are uninsured.
Employment Based 55.6%

m& Uninsured 15.4%
Other Private 7.3%

CHAMPUSandVA
Medicare 12.4%

1.0%

Medicaid 8.2%

Note: Detail does not sum to 100 percent due to rounding.
Source: Employee Benefit Research Institute.

The fact that so many people are uninsured at least some of the
time means that the prospect of being uninsured may influence the
behavior of a large number of Americans. As long as people can
lose their health coverage simply by changing employment, health
insecurity will remain a barrier to changing jobs or starting new
businesses. An important rationale for universal coverage is therefore to increase mobility and employment opportunities for those
who already have insurance but do not have health security.
Similarly, many people remain on welfare because they will lose
their medicaid coverage if they take a job. Some estimates indicate
that up to one-quarter of recipients of aid to families with dependent children (AFDC) would take a job if private health insurance
equivalent to that provided by medicaid were available to them. A
second rationale for universal coverage is thus to reduce the number of people on welfare and to further the Administration's goal
of welfare reform.




134

A third rationale for universal coverage is to improve the health
of the uninsured. The uninsured do use health care—they do not
simply do without. It is estimated that those without insurance for
all of 1994 will consume about $1,200 of medical care per capita—
60 percent of which will be paid for by governments and private
payers, not by the uninsured themselves (Chart 4-2). This expenditure is roughly half the over $2,300 per capita consumed by those
who are currently insured.
Chart 4-2 Sources of Payment for Health Care by Insurance Status: 1994 Estimates
About 60 percent of care for the uninsured is financed by governments, other private payers,
bad debt, free care, or workers' compensation.

Uninsured All Year

Any Private Insurance

(Per capita spending = $1,224)

(Per capita spending = $2,332)

$95

[ J Out-of-Pocket

\/A

Insurance

| | | Government

$129

j _ J Bad debt, free care,
and workers' compensation

Source: Department of Health and Human Services.

While the uninsured do receive care, it is often neither timely
nor appropriate. The uninsured are more likely than the insured
to receive care in the emergency room, are less healthy when they
are admitted to a hospital, and receive less treatment than people
with similar diagnoses once admitted. Some studies indicate—and
common sense suggests—that the health of the uninsured suffers
as a result.
Indeed, without reform, the problem of adverse health outcomes
for the uninsured is likely to worsen over time. Historically, governments and private payers have shouldered the burden of financing care for the uninsured. As health care costs continue to esca-




135

late, however, these payers may become less willing to bear this
burden.
Perhaps surprisingly, providing universal health insurance to
cover those currently uninsured will not require a large increase in
total health expenditures. While the uninsured are poorer than the
population as a whole, they are also younger and healthier. Almost
all of the elderly already have insurance—through medicare.
Among the nonelderly population, 24 percent of those with employer-sponsored insurance are between the ages of 45 and 64,
compared with only 17 percent of the uninsured. Only 9 percent of
the privately insured are between the ages of 18 and 24, compared
with 18 percent of the uninsured. And while uninsured adults often
perceive themselves to be in poorer general health than the population as a whole, they are less likely than the insured to have
chronic conditions (Table 4-1). Estimates that account for these demographic and health factors generally find that insuring the uninsured would increase national health spending by less than 10 percent.
TABLE

4-1.—Health Perception and Health Status by Type of Insurance
Coverage, 1987
[Percent]
Insurance coverage
Characteristic

Private,
employment
related

Uninsured

Self-reported general health perception:
Fair

10.6

Poor

1.3

2.4

33.1

26.1

Any chronic condition

18.1

Note—The sample is composed of adults aged 18 to 64.
Source: Department of Health and Human Services.

A fourth rationale for universal coverage is to solve the "free
rider" problem. At least some of the uninsured could afford to purchase insurance but choose to go without because they feel they do
not need it, and because they know that if they do become sick they
will be cared for on an emergency basis at little cost to themselves.
For some, relying on such "free" catastrophic insurance can be
more attractive than purchasing insurance in the private market.
By requiring that all individuals pay something for coverage,
health reform can help eliminate this problem.
Finally, as discussed below, universal coverage is essential if everyone in the population is to share equally in the costs of insurance (Box 4-1).




136

Box 4-1.—Moral Hazard and Adverse Selection
All insurance markets face two potential problems. The first,
called moral hazard, involves incentives. Insurance may encourage those who are covered to use insured services more
than they otherwise would, or it may discourage the insured
from taking steps to lower their need for such services. Insurance against any kind of risk—including health risks—always
involves some element of moral hazard. When people use
health services more than they would without insurance, the
total amount insurers must pay increases, and they in turn
must increase their prices. Furthermore, because individuals
pay less than the full social cost of the services they receive,
too much of society's resources will be devoted to such services.
The second problem is adverse selection. People who know
that they are more at risk than others of falling ill are more
likely to purchase health insurance. Therefore, insurers who
set their prices at the average cost for the population as a
whole are likely to discover that their prices do not cover their
costs, because their customers are on average sicker than the
population at large. To address this problem, insurers have incentives both to charge prices that exceed the cost of covering
the average person and to select risks as best they can. The
higher prices of insurance that result from adverse selection
have the perverse effect of discouraging some healthy people
from purchasing insurance. Because of the adverse selection
problem, all people must be required to purchase insurance if
each of them is to be charged the average cost of providing insurance.

INSURANCE MARKET REFORM
Private insurance markets have a number of shortcomings that
impede the realization of universal coverage.
INSURING MAJOR RISKS AND PREEXISTING
CONDITIONS
Economic theory suggests that at a minimum well-functioning insurance markets should insure against the expenses that accompany large medical risks because those are precisely the ones that
cause the most financial hardship to individuals and families, are
the least susceptible to moral hazard, and have the lowest administrative costs as a share of benefits. In our current system, however,
private insurance markets often fail even when judged against this
minimal standard.




137

About 80 percent of conventional health insurance policies have
limits—generally ranging from $250,000 to over $1 million—on the
amount that the insurer will pay over the policyholder's lifetime.
Many insurers also initially exclude coverage of "preexisting conditions"—health problems that exist before the policy takes effect. A
typical rule, for example, is to exclude for 6 months a condition
that was present in the 6 months prior to joining a plan. Some estimates suggest that up to 80 million Americans have preexisting
conditions that could be excluded from any new coverage or would
require payment of a higher premium.
Both the exclusion of coverage for preexisting conditions and the
limitations on maximum lifetime payments are ways that insurers
respond to the adverse selection problem discussed in Box 4-1.
Such practices also reflect the fact that insurers who know in advance about the likely health status of their potential policyholders
can choose which risks they are willing to insure and which they
are not, and can choose to charge different prices to different individuals based on this assessment.
Such common insurance practices may be privately optimal for
individual insurers, but they are not socially efficient. People with
preexisting conditions and people who have exhausted their lifetime insurance limits may still require care, and someone must
bear the costs. If they cannot obtain private insurance and they
have exhausted their own funds, either they will get insurance
through public sector programs, such as medicaid, or the costs of
their care will be shifted onto the premiums of those who are able
to obtain insurance. By compelling all insurers to cover preexisting
conditions and by eliminating limitations on lifetime payments, the
government could reduce the adverse selection problem in private
insurance markets and thereby improve how they function.
COMMUNITY RATING
A second essential component of insurance reform is "community
rating"—charging everyone in a large group the same price regardless of individual differences in demographic or health status. Currently, health insurance is often experience rated—the price for
members of a particular group is based in whole or in part on that
group's expected utilization of insured services. However, there are
strong reasons for requiring community rating.
The rationale for any kind of insurance is to spread costs
throughout the insured population. Complete health insurance
would spread the cost of care across everyone in the population, regardless of their health status. Similarly, complete insurance would
guarantee that the price paid by each individual for coverage would
be the average cost of such coverage for the population. In contrast,
experience rating means that the price one pays for insurance var-




138

ies depending on one's health status. But at least for those health
problems and their associated costs that individuals cannot influence by their behavior, experience rating is at odds with the basic
function of insurance—to insure against risk.
In principle, of course, one can distinguish between those health
risks that individuals can influence and those that they cannot,
and apply experience rating to the former. In practice, however,
this is often difficult to do, because it would require detailed monitoring of personal behavior. In addition, many major health risks,
with the obvious exception of those associated with smoking, are
linked quite imperfectly to individual behavior, or the medical profession's understanding of the linkage remains rudimentary. Based
on these considerations, community rating of health insurance, and
continued public programs to deter smoking, are appropriate elements of health insurance reform.
However, community rating is difficult to enact without complementary reforms. The adverse selection issue described in Box
4-1 is one potential problem, which universal coverage could address by requiring people to have coverage. A related problem
stems from the fact that insurers who are compelled to charge a
community rate will have incentives to seek out the healthiest consumers, because they can be covered for the lowest cost and thus
are likely to yield insurers the highest profits. This risk selection
may involve high administrative costs, for example in determining
the medical history of each member of a group. Resources devoted
to this activity increase the overall costs of health care without providing any additional health benefits.
Several steps could be taken to minimize the possibility of such
selection. First, a system of "risk adjustment payments" could be
designed—monetary transfers from plans that have a healthier mix
of enrollees to plans with a sicker mix of enrollees. If risk adjustment perfectly compensated for true differences in health risk, it
would eliminate the incentives for selection on the part of insurers.
Second, all insurers could be required to offer the same package
of benefits, thereby eliminating the opportunity to use the variations in the benefits package to attract better risks. Finally,
"guaranteed issue" and "guaranteed renewability" of insurance
could be required—that is, people could not be denied the right to
enroll initially or renew enrollment in a health plan because of demographic or health status.
REDUCING ADMINISTRATIVE COSTS
In part because of the experience rating practices of insurance
companies, there is insufficient standardization across insurers.
Providers must deal with different insurers using different claim
forms and covering different sets of services. Lack of standardiza-




139

tion results in high administrative expenses. In 1991 over 6 percent of all health care expenditures went for administrative expenses. This exceeds total spending on all public health service programs.
Standardizing benefits and billing procedures and increasing the
automation of bill payment could produce substantial administrative savings. Grouping small firms and individuals into larger purchasing pools would have the same effect. As Chart 4-3 shows, the
administrative load charged by commercial insurers for small
groups (1 to 4 employees) averages about 40 percent of claims
paid—in contrast to only about 5V2 percent for large groups (over
10,000 employees).
Chart 4-3 Administrative Expenses of Commercial Insurers as Percent of Claims Paid
Administrative expenses are much higher in proportion to claims paid for small groups than for
large groups.
Percent
50

40

40.0
35.0
30.0

30

25.0

20

18.0
16.0

10
5.5

illlli

mi
5-9

10-19

20-49

•I
50-99

Group size

100-499

5002,499

10.000+

Source. Hay/Huggins Company, Inc.

CREATING A MORE EFFICIENT MARKET AND
CONTAINING COSTS
The third problem with the current health care system is that it
appears to be far from efficient. As already noted, the United
States spends a larger share of its GDP on health care than any
other industrialized nation. If Americans valued medical care more




140

than people in other countries do, this might not be cause for concern. But the facts suggest otherwise.
Although the fraction of national resources devoted to health care
in the United States is partially explainable by our higher income,
Chart 4-4 reveals that the United States is an outlier—we spend
considerably more per capita on health care yet achieve a somewhat lower life expectancy than our higher income would predict.
Nor can these differences be explained away by the age of the
American population. In fact, the percentage of the population over
65 is lower in the United States than in most of the other OECD
countries. Since older people tend to use more medical care than
younger people, the age distribution of the American population
suggests that the United States should spend a smaller rather than
a larger fraction of GDP on health care than do other industrialized countries.
Chart 4-4 Health Expenditure and Life Expectancy in Industrial Countries
The United States spends more on health care yet has lower life expectancy than
would be expected given its level of income.
Deviation from predicted life expectancy (years)
D

Better outcome,
higher expenditure

Better outcome,
lower expenditure
4

Greece
#

#

2

Japan
•
Ireland

0

•

#

-2

< *

U.K

•
Luxembourg

•
•

»

t

#
A
J
Canada
France
Italy

U.S.

Germany

-4 Worse outcome,
higher expenditure

Worse outcome,
lower expenditure
-1,000

I
-500

Turkey
0

500

1,000

Deviation from predicted health spending per capita (dollars)
Note: Health spending and life expectancy are deviations from what would be expected given per capita income.
The sample consists of the member countries of the OECD.
Sources: Organization for Economic Cooperation and Development and the World Bank.

It has been suggested that sociodemographic factors such as the
greater prevalence of violence in American life may explain why
health care spending in the United States is comparatively high.
Existing research based on partial estimates suggests, however,
that violent crime may add only about 2 percent to national health




141

expenditures. No comparative studies have assessed whether violence is a more important determinant of health care spending in
the United States than elsewhere.
At least part of the higher health care costs in America stem
from inefficiencies of various sorts. First, there are the administrative inefficiencies in the insurance market discussed earlier. Inadequate competition among providers and inadequate incentives for
cost-conscious behavior by both providers and consumers are a second major source of inefficiency in the current health care system.
Traditional fee-for-service plans, which pay providers for each test
and procedure they perform, are used by 58 percent of private sector employees who receive health insurance through their employers. Such plans have built-in incentives encouraging providers to
perform more care than may be appropriate. These incentives are
sometimes reinforced by self-referral arrangements whereby providers prescribe tests or other services from laboratories or clinics
in which they have a direct financial interest. For example, one
study found that doctors who performed and charged for their own
radiological tests prescribed them at least four times as often and
charged higher fees than did doctors who referred their patients to
unaffiliated radiologists.
Providers sometimes have an incentive to overprescribe tests and
procedures because they fear malpractice suits. Available estimates
suggest that such "defensive medicine" accounts for about 3 percent
of total health spending.
Even when there are many providers in a particular health care
market, competition among them is often weak. Only 53 percent of
people insured through an employer, for example, can choose
among alternative health care plans, and often the choice of a
capitated plan, such as a health maintenance organization (HMO),
is not available. Many small firms do not offer multiple policies.
One study found that only 5 percent of workers in firms with less
than 25 employees were offered any choice among health care
plans. As a result, many consumers have only limited choices
among both plans and providers. Consumers also may not have a
choice of hospitals, since hospital selection is usually left to doctors,
who choose on the basis of where they practice and may not choose
on the basis of price.
Moreover, effective consumer choice depends on adequate
consumer information. But many consumers rely primarily on their
providers for advice about what services are indicated in a particular situation. Consumers often do not even know the prices of medical goods and services, and they seldom have the information they
would need to evaluate the quality of the services they receive.
This means that providers are often in a position to influence both
the supply and the demand sides of their markets. In short, con-




142

sumers are ill equipped to bring strong competitive pressures to
bear on providers to make cost-conscious decisions.
Nor do consumers themselves have strong incentives to exert
such pressure. Even when they have a choice, consumers usually
face weak incentives to opt for a low-cost health care plan. Many
employers pay a fixed percentage—generally 80 percent—of whatever plan an employee chooses. Thus, when an employee selects a
less expensive plan, 80 cents of each dollar saved goes to the employer and only 20 cents to the employee.
As the earlier discussion of moral hazard suggested, the current
system of insurance may also encourage some consumers to use
more care or more-expensive care options than they would if they
were forced to pay higher out-of-pocket costs for services. On the
other hand, if consumer copayments or deductibles were increased
to reduce utilization, some of the value of insurance would be lost.
Higher copayments might also discourage utilization of preventive
services, with potentially adverse effects on health outcomes. Furthermore, even drastic increases in deductibles would provide only
limited incentives. Table 4-2 shows that even if all families had a
$5,000 deductible, only 29 percent of health dollars would be spent
by individuals or families paying the full marginal cost of care.
TABLE 4-2.—Distribution of Population and Health Spending by Spending
Category, Estimates for 1994
Percent of
spending

Percent of
population

Annual health spending (dollars)
0

7.8

00

1-500

26.0

1.4

501-1 000

13.1

2.5

1,001-3,000

252

134

3,001-5,000

10.4

12.0

5 001-10 000

9.3

19.4

10,001-30,000

6.5

31.0

Over 30 000

1.6

20.3

Note.—Health spending is in 1994 dollars. The estimates pertain to the noninstitutionalized population under the age of
65, excluding people who receive aid to families with dependent children or supplemental security income. The distribution
presented is for health insurance units.
Source: Department of Health and Human Services.

Available evidence indicates that the weakness of effective competition in the health care marketplace results in substantial fraud
and abuse as well as inappropriate care or care of equivocal value.
Some estimates suggest that fraud and abuse may account for
about 10 percent of total health care spending. And, as noted above
and summarized in Chart 4-5, as much as one-third of some common procedures may be performed in cases where they are inappropriate or of equivocal value on medical grounds.




143

Chart 4-5 Estimates of Inappropriate Care for Five Common Procedures
Studies have shown that as many as one-third of some procedures may be inappropriate or
of equivocal value.

Coronary Bypass
Surgery

Coronary Angiogram Pacemaker Insertion
H | Appropriate

j

| Equivocal

\_j

Carotid Artery
Surgery
Inappropriate

Upper G.I. Endoscopy

Source: The RAND Corporation.

There are often large differences in the amounts of medical care
that people receive in different regions of the country, and even in
different areas within the same region. These geographic differences may be evidence of resource misallocation. In 1989, for example, medicare physician payments per capita were 57 percent
higher in Detroit than in New York City. Other research has found
that the level of use of hospital beds in a community is determined
primarily by the number of beds in that community. People in
areas with more hospital beds are not any healthier than people
who live in areas with fewer beds, but they are more likely to die
in a hospital.
EXPLAINING COST INCREASES
Not only are the costs of the American health care system high,
but they are rising rapidly as well (Box 4—2). Several factors have
been identified as possible sources of cost growth, including the
aging of the population; the growth in incomes and the reductions
in cost sharing by consumers; slow productivity growth in most
health care services; and technological change.




144

By itself, the aging of the population can explain about 5 to 10
percent of the growth in health care spending. Some estimates of
individual behavior based on controlled experiments suggest that
roughly another quarter can be explained by more-rapid income
growth and the reduction in the cost-sharing component of heaUh
insurance over the last 40 years.
Health care costs may also have risen rapidly because so much
medical care consists of personally provided services rather than
goods. On average, over long periods of time, the prices of personal
services rise faster than the prices of goods because productivity
advances more rapidly in goods production than it does in services.
Unfortunately, there is no reliable estimate of the magnitude of
this factor. If there were no productivity growth at all in the health
sector, the relative price of health care would be expected to rise,
on average, at the economy-wide productivity growth rate—about I
to IV-2 percent per year in recent years, which is about one-quarter
to one-third of the observed increase in relative prices. There is,
however, almost certainly some productivity growth in health care,
so the so-called cost disease factor cannot account for even this
much extra health inflation.
Finally, many health economists believe that technological
change itself drives health care costs upward. Once again, however,
no reliable measures of its quantitative importance are available.
In theory, the introduction of a new technology may increase or decrease health care costs, depending on whether it substitutes for or
complements existing methods of treatment and, if the former, on
whether it costs more or less than the technology currently available. In addition, some technological change may consist of applying previously existing technologies to different diagnoses.
Technology's influence on future trends in health care costs is
difficult to predict. Medical science is on the brink of new technologies made possible by the revolution in genetic research, and
these may prove to be less costly substitutes for existing technologies. In addition, as historians of technological progress have
demonstrated, technological change is not entirely exogenous—its
form depends on the incentive environment in which it occurs. A
health care reform that encourages more cost-conscious decisions
by providers and consumers may in fact encourage new technologies that are more cost effective. Finally, an increase in competitive pressure in health care markets will exercise greater price
discipline on both existing and new technologies and thereby moderate their effects on the growth of health care spending.
WHO PAYS FOR HEALTH CARE?
Table 4-3 shows who paid for health care in 1991, and where the
money was spent. The largest amount of health care spending (38




145

Box 4-2.—Recent Reductions in Health Care Inflation
The rate of inflation in the health sector slowed in 1993,
largely as a result of slower growth in prices for health services, including physicians and hospital care:
Year ending
December
(percentages)

Inflation rate of:
Average
1983-91

1993

1992

Total CP1

3.9

2.9

2.7

Health care

7.3

6.6

5.4

Excess of health care inflation
over total

3.4

3.7

2.7

Source: Department of Labor.

Historically, health care inflation tends to move in parallel
with inflation in the rest of the economy, but at a higher average level. In 1993 the gap between health care inflation and
overall inflation narrowed somewhat, but the change does not
appear to be statistically significant.
Some have argued that the recent slowdown in health inflation is a sign that reform of the health care system is not required. But despite the slowdown, the relative price of health
care continues to increase: The medical care component of the
consumer price index grew at twice the rate of total consumer
price inflation in 1993. Moreover, this argument overlooks several other important motives for health reform: the lack of
health security and universal coverage, the failures of the insurance market, and the burden of health care expenditures on
government budgets. The cost problem will not be solved without reforms that increase competition in the health care marketplace.
percent) is for hospital care. Payments to physicians and other
health care professionals are the second-largest category, at 29 percent of total spending. The remainder of personal health care is for
home and nursing home care (9 percent), and drugs and other personal care outside of hospitals and nursing homes (12 percent). The
costs of insurance administration are estimated at 6 percent of
health spending. Finally, public health activities and research and
construction total 6 percent of spending.
Health spending is financed in four principal ways. Businesses
pay for health care directly through health insurance premiums
($153 billion in 1991) and workers' compensation and disability insurance ($18 billion). Total business spending ($171 billion) was
about 23 percent of total health spending and 6.3 percent of total




146

TABLE 4-3.-

Sources and Uses of Health Care Funds, 1991
[Billions of dollars!
Private spending
Household

Business
Uses of funds

Government

Total
Workers'
compensation

Premiums'

Outofpocket

Premiums

Nonpatient
revenue

Medicare

Employer

Medicaid

Other

Total

752

153

18

52

144

33

123

101

40

91

Hospital care

289

64

8

22

10

15

73

43

17

38

Physician care

142

42

7

14

26

0

33

7

11

3

Cther professionals,
dental visits

73

18

1

6

30

4

4

4

5

1

Home health and nursing
home care

70

1

0

0

27

2

7

31

0

1

Drugs, vision, other
personal care

87

6

1

2

52

2

3

12

2

7

Administration

44

22

1

7

0

1

3

4

6

0

Public health

25

0

0

0

0

0

0

0

0

25

Research and construction

23

0

0

0

0

9

0

0

0

14

1

Includes household and employer premiums.
Source: Health Care Financing Administration.

compensation. Households pay for health care through insurance
premiums ($52 billion in 1991) and out-of-pocket expenses ($144
billion). Total household spending of $196 billion was 26 percent of
national health spending. The average household spent about
$2,100 on health care in 1991. The health care industry receives
additional nonpatient revenues of $33 billion (4 percent of total
spending) from such activities as parking lot receipts.
Finally, governments pay for 47 percent of all health spending
($355 billion), most of it for medicare and medicaid. There is additional spending on health insurance for government employees and
on activities of the Department of Veterans Affairs, the Department of Defense, and the Public Health Service. About 21 percent
of Federal Government revenues and over 21 percent of State and
local government revenues are devoted to health care.
Governments also subsidize health care indirectly, by excluding
employer-provided health insurance from taxable income. In 1991
this tax expenditure cost the Federal Government an estimated
$36 billion in individual income taxes. The government lost Social
Security revenues as well, although Social Security payments in
the future will also be somewhat lower.
Chart 4-6 shows the evolution of these payment sources over
time. Between 1965 and 1991, payments by health insurers, medicare, and medicaid increased from 24 percent to 62 percent of total
health care spending. Other government spending fell from 25 to




147

14 percent, and out-of-pocket spending declined from 46 percent to
20 percent of the total. The dramatic extension of insurance coverage—in both the public and the private sectors—may be both a
response to and a cause of increased costs.
Chart 4-6 Sources of Health Care Financing as Percent of Total Expenditures
Health insurance and government-financed expenditures have been rising as a share of total
spending, while out-of-pocket expenditures have been falling.

1965

1967

1969

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

Source: Health Care Financing Administration.

While Table 4-3 shows who is responsible for paying for health
care, it does not show the economic incidence—whose income is ultimately reduced because of high health care costs. In response to
higher costs, businesses have several options: They can reduce
health benefits; lower workers' wages or other benefits so that total
compensation does not rise; reduce employment; lower returns to
shareholders; reduce payments to other factors of production; reduce investment in plant and equipment or research and development; or raise prices to their customers.
Economic theory suggests that most of the increase in health
care costs will be reflected in lower wages. The reason is simple.
Firms are indifferent between spending a dollar on wages or on
health premiums. But since wages are taxed while health insurance premiums are not, employees should be willing to "buy" increased health insurance by sacrificing wages until the marginal
dollar of health insurance is worth one dollar of after-tax wages, or




148

about 65 to 70 cents for a typical family. At this point, the worker
should also be indifferent between contributing more to health insurance or to wages.
Empirical research suggests that the dominant long-run response
of businesses to rising health care costs has indeed been to lower
the rate of increase of workers' wages. Between 80 and 100 percent
of increases in health care spending appears to be reflected in
lower wages. As noted in Chapter 1, the share of wages in total
compensation has been falling since 1960, while the share of business health insurance spending has increased markedly.
When firms slow wage increases to offset rising health insurance
costs, they limit the increase in their total labor costs, and thus
limit the job losses that might otherwise result. The slower wage
growth due to rising business health expenditures has led to slower
increases in incomes than would otherwise have occurred. If business spending on health care were the same share of compensation
today as it was in 1975, wages per employee could be over $1,000
higher.
If increases in business spending on health insurance are not entirely balanced by reductions in other forms of labor payments,
total compensation will rise. In this case, some other business decisions are likely to be affected, such as employment, pricing, or investment decisions. Empirical research, however, has not explored
such alternative responses in any depth.
In summary, the economic literature on the incidence of health
care costs suggests that employees eventually pay for most of their
employer-provided health coverage by taking home lower cash
wages. Reforms that enhance the efficiency of the health care market will allow employees to have both more health care coverage
and higher take-home pay at the same time. Greater efficiency will
therefore translate into an improvement in living standards for society as a whole.

HEALTH CARE AND GOVERNMENT BUDGETS
The final problem in the current health care system is the growing burden it places on government finances. Because governments
pay for such a large share of health spending, increases in health
costs contribute directly to pressures on Federal, State, and local
budgets. Public sector spending on health care grew over 2 percentage points faster than private sector spending in the 1970s, and at
about the same rate as private sector spending in the 1980s. The
result has been an increasing share of health spending by governments. In addition, as was pointed out in Chapter 1, health spending is growing four times as rapidly as any other component of the
Federal budget. Over the two decades ending in 1991, Federal




149

health spending increased from 9 percent to 21 percent of total
Federal revenues (Chart 4-7). Similar changes have occurred in
State and local government spending.
Chart 4-7 Government Spending on Health Care as Percent of Total Government Revenues
Federal and State and local spending on health care account for increasing shares of total
government revenues.

1965

1967

1969

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

Sources: Department of Commerce and Department of Health and Human Services.

The Federal Government has responded to increasing health care
costs in part by attempting to limit the reimbursement rates paid
by public programs to health care providers. This approach in turn
has resulted in the substantial shifting of costs to the private sector described earlier. In the absence of systemwide reform, the imposition of caps on Federal health care programs would either further aggravate the cost-shifting problem or gradually limit access
to care.
Without health care reform, escalating health care costs will continue to confront the Federal Government—as well as State and
local governments—with painful choices among additional taxes,
cuts in spending on education and other programs that promote
economic prosperity, or increases in budget deficits. As already
noted, projected increases in Federal spending on medicare and
medicaid are the main force behind a projected increase in the Federal deficit toward the end of this century.




150

THE ARCHITECTURE OF THE HEALTH
SECURITY ACT
The Administration's approach to health care reform, while bold
and comprehensive, builds on the strengths of the current marketbased system. The Administration considered but rejected radical
approaches such as a single-payer system or government-set health
care prices in favor of restructuring the current system and relying
on the forces of market competition. The Administration's framework preserves and expands consumer choice among providers and
preserves the current employer-based system of health insurance.
The Administration's plan also allows large firms to continue operating self-insured plans. Such firms generally provide comprehensive benefits, and many have managed to control health care
spending. Indeed, the Administration's plan reflects many of the
lessons learned from the experience of such firms.
ELEMENTS OF REFORM
To address the Nation's health care problems, meaningful reforms must address the four interrelated issues identified in the
preceding discussion: universal coverage and health security; reform of the private insurance system; efficiency improvements and
cost control; and sustained deficit reduction. The Health Security
Act, which the Administration proposed in 1993, contains reforms
that simultaneously meet these objectives. The principal features of
the Administration's reforms are outlined in this section and discussed in greater detail in the remainder of this chapter.
Universal Coverage
The Health Security Act guarantees all Americans a health insurance package with a comprehensive set of benefits. The medicare program will be left largely unchanged, and medicare will remain the insurer for most Americans over the age of 65. Most medicaid recipients under 65 will be absorbed into the new system.
With very few exceptions, all other Americans will receive their
health insurance from the "health alliances" described below.
Universal coverage is essential for the reasons noted earlier.
Comprehensive benefits are equally important if health security for
all Americans is to be achieved. Some reform proposals promise
universal coverage but guarantee coverage only for catastrophic expenses. In practice, people with high incomes may be able to afford
additional coverage beyond catastrophic, but many other Americans cannot. Plans that guarantee only catastrophic coverage leave
many people without genuine health security—subject to the risk
that their insurance coverage will deteriorate if they lose their jobs,
just when their incomes are falling.




151

Since the Administration's comprehensive benefits package includes a prescription drug benefit for the under-65 population, the
Administration's proposal also calls for a comparable drug benefit
to be added to the medicare program. In addition, the proposal includes funding for long-term care services, primarily to expand the
amount of home- and community-based care.
Reforming Insurance Markets
Under the Health Security Act, individuals and families will receive coverage through regional or corporate "health alliances"—
pools of individuals who purchase from a set of health plans. No
insurer will be able to impose restrictions on preexisting conditions
or lifetime limitations on insurance benefits, or to deny people the
right to initiate or renew enrollment because of demographic or
health status. Insurers will have to charge a community rate to everyone in an alliance.
Because there will be only one regional alliance in each geographic area, and coverage will be universal, healthy people in each
area will naturally be pooled with sicker people. Pooling health
risks makes insurance affordable for everyone. It also provides the
healthy with the knowledge that their insurance premiums will not
rise if they or a family member become ill.
Eliminating exclusions for preexisting conditions and lifetime
limitations on benefits guarantees that large financial risks will be
covered. Providing for guaranteed issue and guaranteed renewability allows individuals to exercise their choices among health plans.
Efficiency Improvements and Cost Savings
To encourage cost-conscious decisions, the Health Security Act allows consumers a choice among several plans with identical benefits, gives them information about the quality of competing plans
and their customers' satisfaction, and allows them to receive more
of the savings if they choose a less expensive health plan. In addition, the act sets a limit on the growth of premiums in the alliances.
Promoting choice among health plans is essential to controlling
costs. By encouraging plan choice, the act attempts to create a
more efficient health care delivery system and thus lower overall
spending.
The act's proposed limits on the allowable growth of premiums
are intended to guarantee control over the growth of costs, in case
enhanced private incentives fail to have the anticipated effect.
These limits are an important safeguard because they reduce the
risk to the government of runaway health spending.
Deficit Reduction
Over time, cost savings from the provisions just described and
from reimbursement changes in public programs will provide budg-




152

etary savings for the Federal Government. As noted above, longrun success in keeping the Federal deficit under control is directly
tied to success in reducing the growth rate of Federal health care
spending. In the short term, the Health Security Act entails some
new Federal costs—discounts for the poor and for small and lowaverage-wage businesses, a new drug benefit for medicare, and coverage of long-term care. The savings from slowing the rate of
growth of health care spending start right away, but they are small
at first. Over time, these savings grow larger, and deficit reduction
increases accordingly.
Maintaining Choice
The Health Security Act allows families, doctors, firms, and
States to make significant choices about the nature of their involvement in the new health care system.
Households will get to choose their own doctors, and many families that currently have no choice over their health plan will be
given several options. Doctors will get to choose the plan or plans
in which they work, and may remain in the fee-for-service sector
if they wish. Large firms may choose to form corporate alliances or
to join regional alliances. And each State will be allowed to adjust
its health care system to its particular circumstances—including
the establishment of a single-payer system if it so chooses.
PROVIDING COMPREHENSIVE BENEFITS
All health plans organized under the Health Security Act must
offer the same set of comprehensive benefits. These benefits include
hospital services; services of health professionals; clinical preventive services; mental illness and substance abuse services; family
planning services; hospice care; home health care; extended care
services; ambulance services; outpatient laboratory, radiology, and
diagnostic services; outpatient prescription drugs and biological
agents; outpatient rehabilitative services; durable medical equipment and prosthetic and orthotic devices; vision care; and pediatric
dental care. The guaranteed benefit package to be in effect through
the year 2000 provides the level of benefits currently offered by a
typical medium-sized to large firm. In the year 2001 the benefit
package expands to include services not fully covered previously—
principally, adult dental benefits and broader coverage for mental
illness and substance abuse.
Health plans will offer one of three forms of cost sharing. The
first is a "higher cost-sharing" option similar to those in traditional
fee-for-service plans. There is a general deductible of $200 per year
for a single individual and $400 per year for a family, with separate deductibles for mental illness and substance abuse treatment,
prescription drugs, and dental services. After the deductible is met,
the insured individual pays 20 percent of the cost of most services.




153

The second option is a "lower cost-sharing" option similar to those
in HMOs. This option has only a $10 copayment for most services,
a $5 copayment for prescription drugs, and higher copayments for
services such as hospital emergency room services, inpatient mental illnesses services, outpatient psychotherapy, and orthodontic
care. Preventive services are covered without cost sharing under either schedule. The final option is "combination cost sharing" similar to that in preferred provider organizations (PPOs). This option
follows the lower cost sharing for services provided inside a network and the higher cost sharing for services outside of the network. Under all cost-sharing schedules, out-of-pocket payments will
not exceed $1,500 per year for a single individual or $3,000 for a
family. All of the cost-sharing limits are in 1994 dollars and are indexed in subsequent years to the rate of premium growth.
ORGANIZING THE INSURANCE MARKET
The organizing mechanism for health insurance under the
Health Security Act is the health alliance. The alliance is the
"broker" between consumers and plans—negotiating with health
plans and offering choices to consumers, and accepting premium
payments from consumers and distributing them to plans.
The act creates two types of health alliances: regional alliances
and corporate alliances. Regional health alliances are designed for
workers in firms with fewer than 5,000 employees, nonworkers,
and most medicaid recipients. Each State will have one or more regional alliances, but alliances may not overlap geographically.
Boundaries of the regional alliances may not be drawn to segregate
people with high expected health care costs in one area. Firms with
over 5,000 employees will have the option to form a corporate alliance, but they must provide the guaranteed package and will not
receive any discounts on their premium contributions.
The alliance structure is designed to enhance competition and
thus produce efficiency savings. Within an alliance, consumers
have a choice of health plans. Plans will be either fee-for-service,
PPOs, or HMOs. HMOs must offer consumers the opportunity to
purchase a point-of-service option, allowing them to use care outside the HMO as in a fee-for-service plan if they choose. All plans
will offer the same set of benefits, so individuals will not fear
changes in covered services if they switch plans.
There will be an annual open enrollment period during which
consumers can switch from one health plan to another without loss
of coverage. To increase consumers' ability to evaluate competing
plans, the alliance will also publish price and quality data about
the different plans. Consumers are required to pay the cost of the
plan they select, less the amount their employers are required to
contribute. Employers are allowed to supplement their required




154

contribution, within limits. Outside of collective bargaining agreements, employers must offer the same supplementation to every
worker in a given rating pool (rating pools are described in the
next section). The supplementation cannot cause the total employer
contribution to exceed the premium of the highest cost plan for
that rating pool in the alliance. Employers who choose to contribute
more must give full rebates to employees who choose a plan that
costs less. Thus, the consumer will realize the full savings (subject
to taxes) from choosing a less expensive health plan.
Individuals may also use after-tax dollars to purchase health coverage for benefits beyond the guaranteed package or for supplemental policies to reduce out-of-pocket payments. The Health Security Act specifies a floor for coverage below which individuals
should not fall, rather than a ceiling on the generosity of health
benefits an individual can receive.
On the provider side, the health alliance solves many of the problems inherent in the current market. As a requirement for selling
insurance in an alliance, plans must agree to community rating,
guaranteed issue, and guaranteed renewability, and must cover individuals with preexisting conditions. The health alliance must accept all qualified health plans into the alliance, with the exception
that the alliance can exclude plans that charge over 120 percent of
the average premium.
Some economists have argued that the Federal Government
should tax employer contributions for health insurance as if these
benefits were paid as wages. Such a tax change would raise the
price to consumers of more-expensive health plans, thereby providing an incentive to limit health care spending. There are several
ways to reform the tax treatment of health benefits. First, employees could be prohibited from contributing pretax dollars to health
insurance under certain employee benefit arrangements called "cafeteria plans." This limitation is a part of the Health Security Act.
Second, employer payments for covered services beyond the guaranteed benefit package—whether in reduced cost sharing or in additional services—could be considered taxable income. This limitation is scheduled to occur in the year 2004 under the Health Security Act. Finally, all or part of the cost of a guaranteed benefit
package above some level could be considered taxable income. This
change is not part of the Health Security Act.
PAYING FOR INSURANCE
The Health Security Act classifies people into four rating pools:
singles, couples with no children, families with children and one
adult, and families with children and two adults. Table 4-4 shows
the estimated premiums in 1994 for policies for these four pools.
For a two-adult family with children, for example, the national av-




155

erage premium in 1994 is estimated to be $4,360. The actual premiums will vary by region of the country, as health spending does
currently.
TABLE 4-4.—Estimated Premiums in the Regional Alliance, 1994
Payments by.
Rating pool

Average
premium

Employer
Family
(20 percent)

Per-family
requirement
(80 percent)

Average number of workers
per family

Per-worker
requirement

$1,932

$386

$1,546

1.00

$1,546

Couples (no children)

3,865

773

3,092

1.45

2,125

One-adult family

3,893

779

2.479

4,360

872

1 3,409

1.38

Two-adult family

Singles

Note—Premiums are national averages. Actual premiums will differ from alliance to alliance. Employer payments for
one-adult and two-adult families are pooled.
Source: Administration estimates.

Employers are required to pay 80 percent of the average premium for each family. Single individuals are considered to have
one worker per family. An employer of a full-time single worker
therefore pays 80 percent of the $1,932 premium cost, or $1,546.
In the case of childless couples, there are on average in the United
States about 1.45 workers per family. Since 80 percent of the premium for childless couples is $3,092, the amount per worker is only
$3,092 divided by the number of workers per family, or $2,125. Employers must pay this amount for each worker. Workers in families
with children—whether the family has one adult or two—are
pooled. The alliance computes total requirements ($3,409 per family) and divides this by the number of workers per family (about
1.38 as a national average). The employer payment for a full-time
worker in a family with children is therefore $2,479. Because these
amounts are independent of the number of workers in a family,
employers do not have to coordinate payments with employers of
other family members. This system is thus relatively simple to administer.
Employer payments for part-time workers are prorated, based on
the percentage of a 120-hour month (about 30 hours per week) that
the person works. If the employee works 60 hours per month, the
employer would owe one-half of an employer premium. No employer payment is required if the individual works fewer than 40
hours per month. Thus, an employee who worked at two 60-hourper-month jobs would be credited with two half-payments, or one
full-time payment. An employee who did not work at any job for
at least 40 hours per month is treated as a nonworker.
Self-employed people will make their own employer payments, as
they do now. However, if a self-employed worker also has wage and




156

salary income, payments from the employer will be credited against
the amount owed on the worker's self-employment income. Thus, a
worker who earns wages or a salary for half the year and is selfemployed for the other half would owe only half of an employer
payment on his or her self-employment earnings, with discounts
available for those with low self-employment earnings. In addition,
self-employed people will be able to deduct all their payments for
health insurance in computing taxable income, compared with the
25-percent deductibility under current law.
The equivalent of at least one employer premium must be collected for each family. In cases where no family member receives
employer coverage, or the family members worked less than 12 fulltime months in a year, the balance of the premium is the responsibility of the family. If the family members worked 6 full-time
months, for example, the family would owe one-half of an employer
share, the employer having paid the other half.
Finally, each family owes any difference between the employer
contribution and the price of the plan they select (but low-income
families will be eligible for discounts on their share). For the average family, this difference will be 20 percent of the total premium,
or $872 in the case of a family with children. If the family chooses
a more expensive plan, it will pay the additional cost. If the family
chooses a less expensive plan, it will keep the savings.

PROVIDING DISCOUNTS
The government provides discounts on the cost of insurance to
small and low-wage businesses and low-income families. There are
five types of discounts in the Health Security Act, which are detailed in Table 4-5: discounts to families on their 20-percent share
of the premium; discounts to families that (for reasons just explained) owe some of the employer payment; discounts to early retirees; discounts to firms; and discounts to low-income families facing high out-of-pocket payments. The cost of providing these discounts is made up by government payments.
Low-income families in the regional alliances receive a discount
on their 20-percent share of the premium. No payment at all is required on the first $1,000 of income. The discount phases out at
150 percent of the poverty line—about $23,000 for a family of four
in 1994. Income for these purposes is defined as adjusted gross income plus tax-exempt interest income. The $1,000 disregard and
the poverty line are indexed to the consumer price index.
Additional discounts are provided for families that owe part of an
employer payment. No payment is required if nonwage income is
below $1,000, and full payment is expected if nonwage income is
greater than 250 percent of the poverty level, or about $39,000 for
a family of four in 1994. Nonwage income is defined as adjusted


15
0 - 9 4 - 6
http://fraser.stlouisfed.org/1 - 4 4 4
Federal Reserve Bank of St. Louis

157

TABLE

4-5.—Discounts Under the Health Security Act in 2000
[Billions of dollars]

Discount

Employer
Household
Nonretiree

Purpose

Amount

Limit firm payments to 7.9 percent of payroll or less

29

Limit payment for 20 percent share of premiums and for time spent not
working

47

Nonworker discounts to re- Limit employer payments for time spent not working
tirees.
Eliminate remaining employer payment
Early retirees
Lower cost sharing for poor families
Out-of-pocket
Allowance for behavioral effects and unfavorable economic circumstances
Cushion
Total

7
5
3
13
103

Source: Administration estimates.

gross income less unemployment compensation and wage and salary and self-employed income (up to $60,000 per year), and including tax-exempt interest. Labor income is excluded from this calculation because it is assumed that families have already "paid" for
their employer's contribution through lower wages and salaries.
Beginning in 1998, if a retired individual is between the ages of
55 and 64, has less than $90,000 in income, and meets the Social
Security earnings test, the government pays the entire employer
share of the retiree's premium. This discount supplants any payment for the employer share that the individual or his or her employer would have made. The largest benefit to corporations with
early retirees, however, will come not from this special provision
for retirees (which will save firms about $2 billion), but from community rating of premiums, which will save about $7 billion. From
1998 through 2000, firms that are currently providing health insurance to their retirees must pay the government 50 percent of the
savings they realize from this provision.
Total household discounts are expected to be $59 billion in the
year 2000. This total includes $47 billion in nonretiree discounts,
$7 billion in low-income discounts given to retirees, and almost $5
billion in additional discounts to early retirees.
Some firms will also receive discounts on their required payments. Contributions from each firm in the regional alliances are
capped at 7.9 percent of payroll. If a firm's required payments
would be greater than 7.9 percent of payroll, the government pays
the overage. Small, low-wage firms are capped at even lower percentages of payroll, as detailed in Table 4-6. Employer discounts
total $29 billion in 2000 (Table 4-5), about three-quarters of which
are for firms with fewer than 25 employees.
Finally, low-income individuals can receive discounts for their
out-of-pocket payments if they live in areas where there are no




158

TABLE

4-6.—Caps on Premiums by Firm Size
[Percent of total payroll]
Firm size (number of workers)

Average wage (dollars)
50-74

75 and over

4.4

5.3

7.9

5.3

6.2

7.9

5.3

6.2

7.1

7.9

18 000-21000

6.2

7.1

7.9

7.9

21,000-24,000

7.1

7.9

7.9

7.9

Over 24,000

7.9

7.9

7.9

7.9

Less than 25

25-49

Less than 12 000

3.5

12 000-15 000

4.4

15,000-18,000

Source: Administration estimates.

health plans that offer lower cost sharing or that charge premiums
at or below the average-cost plan. These discounts end at 150 percent of the poverty level. The total cost of these discounts is estimated to be $3 billion in the year 2000.
Numerous behavioral effects could influence the discounts the
government is obligated to pay. For example, firms that have high
average wages, and therefore pay the full premiums for their workers, may find it in their interest to contract out for low-wage services from firms that receive discounts. To allow for this and other
behavioral reactions, the projected discounts were increased by 15
percent above the static estimate, or $13 billion in the year 2000.
USING SAVINGS TO GUARANTEE HEALTH SECURITY
AND REDUCE THE DEFICIT
At the broadest level, the Health Security Act is designed to finance new spending and deficit reduction out of savings from reduced expenditures relative to the no-reform baseline. Savings are
expected to result from reduced administrative costs, consumers
switching to less expensive plans, and lower costs from improved
incentives.
Insurance reform will save money through lower underwriting
costs. On net, the cost of insurance administration should decline
by about 3.5 percent of claims paid. Since current premiums for the
population that will be included in the health alliances are about
$200 billion, the savings from the insurance reforms in the health
alliances should be about $7 billion annually.
There are also likely to be savings from consumers switching to
lower cost plans. Several studies have found that managed care arrangements have lower health spending than open-ended plans.
The most comprehensive forms of managed care—group and staff
model HMOs—save an estimated 15 percent on health spending by,
for example, finding alternatives to hospitalization.
A number of governments and corporations have experimented
with paying a fixed amount for health insurance, regardless of the




159

plan the employee chooses, and have found that these payment
rules have a large effect on individual choices. The State of Minnesota, for example, implemented a fixed-dollar contribution for
public sector employees in 1989. Between 1988 and 1993, the share
of employees in the highest cost plan fell from 42 to 17 percent,
while the share in the lowest cost plan increased from 28 to 54 percent. The State of Wisconsin implemented a similar system for its
public employees in 1984. In one year, enrollment in HMOs increased by over 60 percent. Similar responses have been observed
in several private companies.
Finally, there is the case of California, which passed laws in the
early 1980s increasing the ability of plans to contract selectively
with providers. Since then, growth in health care costs has been
much lower in California than in other States. Between 1982 and
1991, real per capita costs for hospitals, physicians, and prescription drugs increased 2.8 percent annually in California, compared
with 4.8 percent annually in the rest of the United States. As a result, California's per capita costs fell from 18 percent above the average State in 1982 to 2 percent above the average in 1991.
As a backup to the market incentives it provides, the Health Security Act places a limit on the growth of premiums in regional and
corporate alliances. Up to the year 2000, growth in total premiums
is constrained to the growth of inflation and population, plus an adjustment factor ranging from 1.5 percent in 1996 to zero in 1999
and 2000 (Table 4-7). This reduction in growth rates is in anticipation of one-time savings in health expenditures. After 2000 the
growth rate of spending is expected to increase, but not to the level
in the current system.
TABLE

4-7.—Allowed Growth Rates of Alliance Premiums
[Percent]

Growth rate
Baseline
Reformi
Adjustment factor 2

1995

1996

9.0
9.0

9.5
5.8
1.5

1997

1998
9.2
5.3
1.0

9.0
4.8
.5

1999
8.9
4.3
.0

2000
9.0
4.2
.0

1

Projected average annual growth rates. Some alliances may experience higher annual growth rates prior to 1998.
Adjustment factor added to inflation plus population growth to find reform growth limits.
Source: Baseline projections are from Congressional Budget Office, updated for higher estimates of inflation by the
Administration. Reform projections are Administration estimates.
2

Each year, plans will submit bids on the premiums they propose
for serving the alliance population. If an alliance's expected weighted-average premium is above the premium limit, and plans do not
voluntarily reduce their bids, the premiums of the plans that exceed the limit will be reduced so that the cap is met.




160

An example will illustrate the process. If the average premium
in one year is $4,000 and the target growth rate is 5 percent, the
allowed increase in the average premium in the next year is $200.
Suppose there are two plans with equal enrollments, one of which
wants to increase the premium by $100 and the other by $400.
Under the cap, the second plan would be allowed to increase its
premium by only $300, so that the average increase would be $200.
Finally, if more people than expected join high-cost plans, so that
actual premiums exceed the target, the premium target is reduced
in the next 2 years to recoup the overage.
Chart 4-8 shows the projected change in national health expenditures under the act. Spending initially increases, because of the
extension of coverage to the uninsured. By 1998, when universal
coverage is complete, spending is above baseline by 0.3 percent of
GDP. Over time, however, the savings from the market reforms—
or, as a backstop, from the caps on premium growth—rise and
spending falls relative to the baseline. In 1999 and 2000, spending
is projected to grow at almost the rate of nominal GDP, so that
health care as a share of GDP rises by only 0.2 percentage point.
By the end of the decade, health expenditures with reform are projected to be below the level estimated to occur without reform.
Both the new Federal health spending and deficit reduction are
financed out of savings in the existing system (Table 4-8). Spending rises with the implementation of universal coverage, but the
slower growth of costs generates savings to the government. Health
reform is essentially deficit-neutral in the first 4 years and deficitreducing thereafter. By 2000, new Federal spending is projected to
be $94 billion, and savings are projected to be $132 billion, yielding
deficit reduction of $38 billion.
The new spending comes in five principal areas, detailed for the
year 2000 in Table 4-9. First, net premium and other discounts
total $42 billion. These discounts are the difference between $103
billion in gross spending and $61 billion in medicare and medicaid
"offsets," as people leave these programs and receive coverage in
the alliances instead. There is additional spending for the Department of Veterans Affairs, public health (including WIC [women, infants, and children] expansions and funding for academic medical
centers), administration ($10 billion), the prescription drug benefit
to the medicare program ($17 billion), and long-term care. Finally,
allowing 100-percent tax deducibility of health insurance premiums for the self-employed will cost $3 billion in forgone revenues.
These new costs are financed by seven sources of funds. First, a
tobacco tax will raise $11 billion, and a 1-percent payroll assessment on corporations that choose to form their own corporate alliances will raise $5 billion. There are also savings in public sector




161

Chart 4-8

Health Expenditures as Percent of GDP

Health expenditures will increase in the short term but will fall below baseline by the
end of the decade.
Percent
IO

Without Reform
\

1.
74

17
16.7
^ 1 6 . 7
16.2

T

,'*'
With Reform

16
15.6

,-''

15
^

5

^

14.6
I

I

I

i

I

I

i

1994
1995
1996
1997
1998
1999
2000
Note: Baseline is from the Congressional Budget Office, updated with Administration economic assumptions.
Source: Administration estimates.

TABLE 4—8.—New Federal Spending and Savings Due to Reform
[Billions of dollars]

Item
Mew spending
Savings
Change in deficit

1995

1996
23.5
26.7
-3.2

3.5
14.5
—110

1997
50.9
44.0
6.9

1998
79.4
74.7
4.8

1999
88.8
107.0
-18.2

2000
92.1
129.8
-37.7

Note.—A negative number for change in deficit denotes a reduction in the deficit.
Source: Administration estimates.

programs. Medicare savings are projected at $39 billion in the year
2000. These savings result from 28 specific changes, ranging from
lower hospital payment updates to increased premiums for the
high-income elderly. Medicaid savings are projected to be $27 billion in 2000, due to lower payments for hospitals that treat the uninsured (since everyone will be covered) and slower growth of costs
for medicaid beneficiaries in the health alliances, resulting from
the improved incentives. Other programs such as those of the Department of Veterans Affairs, the Department of Defense, and the
Federal Employees Benefit Program are projected to realize sav-




162

TABLE

4-9.—Sources and Uses of Federal Funds Under Reform, 2000
[Billions of dollars]
Source

Tobacco tax

11

Corporate assessment..
Medicare
Other Federal programs
Other revenue effects ...

35

Debt service

2

Gross spending
Offsets
Net
Veterans Administration, Public Health, New Administration
Medicare drug benefit
Long-term care
100 percent tax deduction for self-employed

130

Total

Amount

Discounts:

5

39
27
11

Medicaid

Use

Amount

Total spending
Deficit reduction

103
-61
42
10

17
20
3
92
38

Source: Administration estimates.

ings of $11 billion from slower cost growth, the provisions related
to early retirees, and the increase in payments from private payers.
Additional revenue amounting to $35 billion comes from a combination of factors, including additional tax revenue from the reduction
in employer health care costs over time, removing health insurance
premiums from "cafeteria plans" offered by employers, payments
from corporations with early retirees, dedicated premium revenue
for academic health centers, and other tax changes. Finally, the
plan generates $2 billion in lower debt service as a result of deficit
reduction in years prior to 2000.
To protect the Federal budget against open-ended commitments,
the Health Security Act sets a ceiling on discounts that can be paid
(Box 4-3). Authorized discount payments that are not utilized in
any one year can be carried forward into future years to increase
the maximum payment. This reduces the probability that the limits
will be exceeded.

ECONOMIC EFFECTS OF THE HEALTH
SECURITY ACT
The Health Security Act is certain to have impacts both on the
overall American economy and on the health care sector in particular.
MACROECONOMIC EFFECTS
One important concern about health care reform is its effect on
employment. Because employer mandates to provide insurance may
initially increase labor costs to firms that are not now providing or




163

Box 4-3.—Capped Entitlements
Both the premium discounts and the new long-term care program are "capped entitlements." The long-term care program is
an entitlement to States, not to individuals. The amount of
money that States may receive is specified explicitly. Federal
liability is limited to that amount, even if demand is greater
than predicted. Similarly, there is no authority to pay for premium discounts beyond what is provided in the Health Security Act. In the event that spending is projected to exceed the
amount in the legislation, the President must submit to the
Congress a plan for addressing the issue. The Congress will
then act on this plan through an expedited process.
The notion of a capped entitlement is not new. A number of
Federal entitlement programs operate under a budget limit, including the social services block grant and payments to States
for AFDC work programs. The legislated appropriation sets a
limit on how much can be spent in total. Then, if spending is
expected to be above projections, the government must change
the eligibility requirements, change the benefits, or pass a supplementary appropriation.
are underproviding insurance, fears have arisen that labor demand
might decline as a consequence of reform.
In fact, however, changes in employer-paid health insurance
costs can have several effects on workers other than changes in employment. As noted earlier, the dominant effect of increases in
health care costs in the past has been a reduction in the real wages
received by employees.
Chart 4 9 shows projections of total employer health insurance
—
payments with and without health reform. While reform will have
different effects on different firms, total employer spending is essentially unchanged through 1998 and then declines relative to the
baseline. This pattern reflects the balance of spending increases
from the employer mandate and spending reductions from cost savings. Through 1998 these effects are roughly equal, resulting in little additional business spending. Between 1998 and 2000, the savings increase but there is no increase in spending. The result is a
net savings in employer payments.
There are many things employers can do with the savings from
reform: They can hire more workers, pay higher returns to shareholders, or increase employee compensation. Empirical evidence
suggests, however, that as total employer payments fall over time,
the likely result will be a corresponding increase in workers' wages.
By the year 2000, wage and salary compensation could therefore




164

Chart 4-9 Business Spending on Health Insurance
Business spending will increase slightly after reform but will fall below baseline by the end
of the decade.
Billions of dollars

Without Reform

303

300 -

280 256

260 -

With Reform

2 3 6 ^

240 218

220 -

^ >

200 -

180

180
I

I

I

I

I

l

l

1994
1995
1996
1997
1998
1999
2000
Note: Business spending is for services and populations that will be in regional or corporate health alliances.
Source: Administration estimates.

increase by $20 billion to $30 billion, or about 0.6 percent of payroll.
Although reform is unlikely to lead to a large reduction in the
demand for labor, it could affect the supply. Some individuals who
work mainly to obtain health insurance may voluntarily leave the
labor force after health reform is passed. Evidence from continuation of coverage (COBRA) laws passed by the Federal Government
and many State governments suggests that the number of people
deciding to retire is about 1 percent higher when they have the option to purchase coverage through their former employer after retirement. These estimates must be raised to account for the lower
price of insurance under reform; with this adjustment, it is estimated that about 350,000 to 600,000 additional people will be retired as a result of the provisions in the Health Security Act.
On the other hand, some welfare recipients are likely to decide
to enter the labor force when health benefits become universal. A
welfare recipient currently receiving medicaid benefits who then
takes a job incurs a "tax" of two-thirds or more on earnings because
of the resulting reduction in AFDC benefits, food stamps, and medicaid benefits. Once health care is guaranteed universally, the loss




165

of income associated with leaving welfare should fall by up to 10
percentage points. A number of studies suggest that many more
welfare recipients will decide to work in response to these lower
implicit tax rates.
Weighing all this evidence, several private sector economists
have concluded, as has this Council, that the net effect of health
reform on employment is likely to be small: at most plus or minus
one-half of 1 percent of total employment. The reason is that a
number of offsetting factors are in the plan, some of which will increase employment and some of which will reduce it. On net, these
factors are likely to cancel out.

SECTORAL EFFECTS
Health reform will affect different firms differently (Table 4-10).
Firms that are not now providing insurance will face increased
costs after reform. Firms that are currently offering coverage, however, will on average enjoy cost reductions. These gains come from
spreading the cost of universal coverage over everyone in the population, from premium discounts, and from slower growth of costs
over time. Putting these two groups together, the average firm will
experience cost reductions of about $230 per worker in 2000. There
will also be changes in the distribution of spending across industries. Industries that have traditionally provided generous benefits
to much of their work force, such as manufacturing, will see expenditure reductions compared with industries in which most firms
do not currently provide insurance.
TABLE

4-10.—Employer Payments for Health Care: Baseline and Reform,
2000

Insurance status of firm

Number of workers
(millions)

Average spending per worker (dollars)
Reform

Baseline

Change

122.7

2.478

2.245

Currently offers insurance

96.3

3,092

2.482

-€10

Does not offer insurance

24.4

0

1.292

1.292

All

-233

Source: Urban Institute.

Employment is expected to increase in the health sector in the
short run, because of increased spending on the uninsured and
underinsured. Universal coverage by itself will increase health-related employment by more than 400,000 jobs, although employment will not increase uniformly throughout the sector. Resources
are likely to shift from administration to providing care. As the
growth rate of health spending falls, employment in health care
will grow less rapidly than without reform. The number of employees will still increase over time, however.




166

Health care reform should set the stage for increased productivity growth. As administrative expense and inappropriate care decrease and the health care industry becomes more productive, the
economy should be able to produce more output than it would have
without reform. As a result, Americans will be able to consume
health services of the same or better quality as before, as well as
more of other goods and services. This productivity increase will
raise living standards, which is the principal objective of this Administration's economic policies.

CONCLUSION
Reforming the Nation's health care system is integral to the
health of both our citizens and our economy. One-seventh of the
Nation's economy is currently characterized by weak competition,
inadequate information, and inappropriate incentives. The Administration's health care reform proposal builds on the strengths of
the current system while correcting its shortcomings. It preserves
consumer choice and our employer-based private insurance system.
It relies on enhanced market competition and improved incentives
to provide health security for all Americans, slow rising health care
costs, and address our long-run budget deficit problem.




167




CHAPTER 5

Microeconomic Initiatives to
Promote Efficiency and Productivity
AS WORKERS AND CONSUMERS, we conduct our economic affairs through markets. These markets provide us with a vast array
of products and services to purchase, and a host of different ways
to earn our livelihoods.
Yet markets are not flawless. They may, for example, become
controlled by monopolies, generate excessive pollution, or lead to
insufficient investment in research and development. Through collective action, we can sometimes correct such "market failures,"
and thereby improve the ability of private markets to serve social
goals. When targeted microeconomic policies are successful, they
reduce the costs of production and distribution, place goods and
services in the hands of those who value them most, and maximize
the increase in social well-being that derives from trade in the private marketplace. For these reasons, well-chosen government initiatives are as important for microeconomic policy as they are for
macroeconomic policy.
The United States has a long history of employing targeted
microeconomic policies to improve the performance of private enterprise in significant industries. Roughly three-fourths of the Nation's investment in canal construction before the Civil War was
publicly financed. Land grants and other subsidies encouraged the
development of intercontinental railroads during the second half of
the 19th century. Since 1914, the Extension Service of the Department of Agriculture, a cooperative venture of Federal, State, and
local governments, has vastly improved the Nation's agricultural
productivity by spreading information about modern farming techniques. Our massive national commitment to create high-technology industries critical to our defense, such as computers and jet
aircraft, dates from the Second World War. Targeted microeconomic policies such as these have been employed throughout the
history of the Republic, regardless of the political party in power.
The Administration's initiatives described in this chapter are
aimed at both correcting failures of private markets and improving
the functioning of the Federal Government. The initiatives are organized around three themes: promoting efficiency in the public




169

and private sectors, addressing environmental externalities, and
promoting technology.

PROMOTING EFFICIENCY IN THE PUBLIC AND
PRIVATE SECTORS
In all modern industrialized nations, some goods and services are
provided directly by the government, others almost entirely
through unregulated private markets, and still others by the private sector through regulated markets. Because none of these
methods of conducting our economic affairs is flawless, it is important to develop ways of improving the performance of each. For this
reason, the Administration has developed initiatives to promote a
more effective government, more competitive markets, and more efficient regulation.
CREATING A MORE EFFECTIVE GOVERNMENT
Governmental activities, however well-intended, are not always
performed as efficiently as possible. There are two important
sources of what might be termed "government failure."
First, as recognized by both the framers of the Constitution and
modern scholars of public choice, all political systems provide interest groups with an incentive for "rent seeking," that is, manipulation of collective action for private benefit. Rent-seeking behavior
can bias public actions away from maximizing aggregate social welfare. It can, for example, lead government agencies to make decisions that benefit a particular interest group even though they are
costly to society as a whole.
Second, the government—in providing services to citizens, in hiring and managing personnel, in procuring supplies, and in making
investments—generally does not face the same competitive pressures as private industry to serve customers well and minimize
costs. Competition among the political parties; oversight by the Office of Management and Budget (OMB), by the Congress, and by
heads of agencies; and public scrutiny through the media provide
a partial but incomplete substitute for market competition. Frequently, internal governmental regulations, such as personnel and
procurement rules or reporting requirements, are introduced to address these problems. But these are blunt instruments that may
create significant managerial inefficiencies of their own.
The Administration has placed a high priority on governmental
reform—or "reinventing government." A major objective is to improve the performance of government by introducing market-like
mechanisms and benefit-cost tests wherever possible. Such mechanisms are designed to reduce rent seeking and the governmental
inefficiencies resulting from the lack of competitive pressures.




170

The National Performance Review
The National Performance Review (NPR), directed by the Vice
President, took a fresh look at the way the Federal Government
performs its tasks, with less emphasis on the related issue, routinely considered in the budgetary process, of whether those functions should be performed at all.
The NPR identified 384 ways that the Federal Government could
save money without reducing the level of service and, indeed, often
while improving governmental performance. Its report concluded
that, by shifting to a market-like focus on customer service, by introducing competition where possible, and by streamlining internal
government processes to facilitate better management, we could
have a government that "works better and costs less."
The Administration has moved rapidly to introduce the NPR reforms. One important element is a set of recommendations to improve the procurement process. These include changing laws and
regulations to make it easier for the government to buy commercially produced goods and services, to raise the threshold for the
use of simplified acquisition procedures, and to amend contract protest rules to streamline contracting and discourage frivolous protests. These reforms can be accomplished while preserving oversight by the Congress and OMB, which is necessary to protect
against fraud and abuse. Other NPR recommendations identify
ways to streamline management control; improve customer services; shift to mission-driven, results-oriented budgeting; improve financial and human resource management; integrate information
technology into the business of government; and improve the functioning of every executive branch department (Box 5-1). In a similar effort, the Defense Department has conducted a "bottom-up" review of its activities.
A New Framework for Regulatory Review
The President's Executive Order 12866 on Regulatory Planning
and Review provides a framework for developing regulations that
serve the best interests of the American people without imposing
unreasonable burdens on business. The order directs agencies to
promulgate only those regulations made necessary by law or compelling public need, such as correcting market failures. The regulatory philosophy that underlies the order calls on agencies to assess all the costs and benefits of the available alternatives when
deciding whether and how to regulate, including the alternative of
not regulating. Further, the order requires that, to the extent permitted by statute, agencies select a regulatory approach that maximizes the net benefits to the public (benefits less costs). Applying
this test to public regulation will lead affected firms in the private




171

Box 5-1.—Selected National Performance Review
Recommendations
• Allow agencies to create innovation capital funds from
retained savings to invest in innovations that can improve service and provide a return on investment.
• Provide line managers with greater budget flexibility to
achieve results by expediting the reprogramming of
funds within agencies.
• Use electronic funds transfer to pay and reimburse expenses for all Federal employees, to make payments to
other agencies, and to pay for purchases from the private sector.
• Create competitive enterprises within the government to
manage real property on a fee basis, and give Federal
managers the authority to choose their source of property management services.
• Establish a corporation to provide air traffic control
services.
sector to roughly mimic what a properly functioning market would
do absent the market failure that necessitates regulation.
In conducting benefit-cost analyses of regulatory alternatives, the
order directs agencies to consider all the benefits and costs—those
that are easily measured as well as those that are not. This approach addresses one major criticism of centralized regulatory review in previous Administrations: that the use of a benefit-cost test
was subject to bias against appropriate regulations whenever the
costs of regulation were more readily quantified than the benefits—
which happens frequently.
In addition, the order encourages agencies to act to limit any
economic distortions their regulations cause. Agencies must, for example, design regulations to achieve their objectives in the most
cost-effective manner. To the extent feasible, agencies must specify
performance standards rather than specify a behavior or manner of
compliance. Agencies must also consider alternatives to direct regulation that provide economic incentives to encourage the desired behavior.
This framework does not apply solely to new regulatory initiatives. The Executive order also sets forth a procedure for review of
existing regulations to ensure that they too maximize the net benefits to society. This wide-ranging review of old and new regulations
alike promises to improve the performance of the public sector by
making regulation more effective.




172

PROMOTING COMPETITION
Competition among the providers of goods and services is the
most effective method ever devised for organizing most economic
activity. Competition simultaneously leads to low production costs,
innovation in product design and production techniques, low prices
for consumers, and the allocation of goods and services to those
who value them most. For these reasons, our economy must rely
upon competition to the maximum extent possible, and the government should act to promote and strengthen competition throughout
the private sector. When market failures necessitate public regulation or public provision of services, the resulting public policies
should rely on market-like mechanisms to the extent feasible, in
order to realize the benefits of competition.
Antitrust Enforcement
For more than a century, the antitrust laws have been, in the
words of the Supreme Court, "a comprehensive charter of economic
liberty aimed at preserving free and unfettered competition as the
rule of trade." The antitrust laws address market failures arising
from the exercise of market power (Box 5-2). These laws are enforced directly by the Department of Justice, the Federal Trade
Commission, the States, and private plaintiffs.
Over the past dozen years, Federal antitrust enforcement has
emphasized challenges to mergers among competitors in concentrated industries and the prosecution of bid-rigging schemes by
government contractors. Frequently, the defendants were small
firms. Federal antitrust enforcement efforts are now being
refocused to encompass harmful conduct by large firms, affecting
broad sectors of the economy, through means in addition to merger
or bid rigging.
For example, the Justice Department is vigorously pursuing a
court case charging the major domestic airlines with widespread
price fixing from 1988 to 1992. The conspiracies were allegedly accomplished in a novel way: through the computerized exchange of
prospective fare information. In terms of the magnitude of the violation and the size of the firms involved, this alleged price-fixing
scheme recalls the electrical equipment conspiracy of the 1950s.
The government's actions to promote and protect competition go
beyond filing lawsuits. When appropriate, government agencies
issue guidelines that will encourage procompetitive behavior and
minimize the private costs of understanding and complying with
the law. Merger guidelines are the best examples, but the two Federal antitrust agencies have also recently promulgated enforcement
guidelines to promote competitive behavior among health care providers.




173

Box 5-2*—Market Power
Firms are said to exercise market power when they reduce
output below what a competitive industry would sell, in order
to raise prices above competitive levels. Firms may achieve
market power collectively—for example, through an agreement
among competitors to raise prices—or unilaterally, as by engaging in practices that inhibit the ability of current or potential rivals to compete. Firms may also obtain market power
through government action, as when imports are blocked by
tariffs or quotas.
The exercise of market power is harmful for several reasons.
First, an industry in which market power is exercised produces
less and employs fewer workers than would a competitive industry. Second, sellers who exercise market power in effect tax
buyers unfairly, forcing them to pay more for their products
than they would have paid under competition. Finally, firms
exercising market power may tend to innovate less than competitors, because they recognize that a successful new product
could cannibalize their existing market share and decrease the
value of their capital. (In some industries, however, large firms
exercising market power may be more likely than small or
competitive firms to take the risk of investing in large-scale innovations.)
Although market power is costly to society, these problems
are of limited concern in markets in which new competition
can quickly and easily appear. Then the exercise of market
power is likely to be nonexistent or temporary, and new entrants attracted by the opportunity to share monopoly profits
will tend to shift resources into their most socially valuable
uses. In some circumstances, moreover, society accepts some
exercise of market power in order to achieve another economic
benefit otherwise unavailable. For example, since the founding
of the United States, the award of a patent monopoly as a
prize for a successful invention has been the cornerstone of
government policy to encourage research and promote innovation.
The antitrust guidelines for health care respond to the concern
that health providers may have delayed cooperative cost-cutting arrangements because of uncertainty about antitrust restrictions. To
give providers some security, the guidelines establish a number of
"antitrust safety zones," which describe circumstances under which
the government will not normally challenge cooperative ventures.
One example is a safety zone for hospital mergers if either of the




174

merging hospitals averages fewer than 100 beds and less than 40
patients per day over a 3-year period. Another is a safety zone for
physician networks (such as preferred provider organizations, or
PPOs) that comprise no more than 20 percent of the doctors in
each specialty in the relevant geographic market, so long as the
network members share substantial financial risk. Mergers or joint
ventures by physicians that fall outside the safety zones are not
necessarily antitrust violations but will be evaluated individually to
determine their legality. The two Federal antitrust agencies have
also committed to reduce uncertainty by providing advice to health
care providers on an expedited basis.
Other government agencies have also taken steps to limit the
exercise of market power. For example, a widely reported investigation by the Department of Transportation helped ensure that an established air carrier would not use anticompetitive practices to exclude a new entrant.
Government can go beyond simply preventing anticompetitive
practices; it can act to stimulate competition directly. Thus, the Department of Transportation has provided new airlines with assistance in complying with its regulations. Partly as a result of the department's actions to promote competition, 18 new cargo, charter,
and scheduled passenger carriers began service during 1993, and
20 more new carriers are awaiting certification to begin passenger
jet service.
Spectrum Auctions
As the Transportation Department's efforts to foster new air carriers suggest, competition can be promoted by encouraging entry.
The Federal Communications Commission (FCC) will soon seek to
promote competition in this way by allocating portions of the electromagnetic spectrum for telecommunications services. Legislation
enacted in August 1993 authorizes the FCC to auction most of the
new licenses to use spectrum, and requires the FCC to begin issuing licenses for personal communications services (PCS) by May
1994. The allocation of spectrum to PCS will encourage competition
between new firms offering PCS and existing cellular providers.
The auction mechanism will ensure that the spectrum goes to those
private parties who place the highest value on it. The auction will
also raise billions of dollars for the government, by selling the right
to the use of a scarce public resource instead of giving it away.
MORE EFFICIENT REGULATION OF NATURAL
MONOPOLIES
Economists have long recognized that competition will perform
poorly in certain industries that are "natural monopolies" (Box 53). In Europe, natural monopolies have often been turned into government enterprises. The traditional U.S. response is to impose




175

rate regulation. For example, State public utility commissions typically regulate the local distribution of electricity, water, natural
gas, and telephone service, and Federal agencies regulate interstate pipelines and long-distance telephone service.
Box 5-3.—Natural Monopoly

An industry is a natural monopoly if a single firm can serve
the market at lower total cost than two or more firms. A natural monopoly may result when an industry's production technology is characterized by economies of scale, that is, when
average production costs decline as output rises. A natural monopoly may also have economies of scope, in which two or more
related products can be produced more cheaply by a single firm
than by separate firms. The size of the market interacts with
the production technology in determining whether an industry
is a natural monopoly. For example, if most of the cost reductions from producing at scale are achieved at low levels of output relative to market demand, the market is not likely to be
a natural monopoly.
In an unregulated market, some natural monopoly industries
would be served by a single firm that exercises market power.
Entry would be deterred even though the incumbent firm
charges a price in excess of its long-run average cost. Potential
entrants, tempted by the opportunity to undercut the incumbent's price, would refrain from doing so because they would
recognize that the incumbent would lower its price in response
and could sustain that lower price profitably while the entrant
could not. One way to avoid the exercise of market power in
such a case is to regulate the natural monopolist's prices.
Oil Pipeline Rate Regulation
For nearly 90 years the Federal Energy Regulatory Commission
(FERC) and its predecessors have regulated rates charged by interstate oil pipelines. Over this period, many if not most pipelines
have likely been natural monopolies. Pipeline rates were set
through a cost-of-service methodology, similar to the approach that
State public utility commissions typically employ to determine
rates for electricity, gas, water, and telephone service.
Under the cost-of-service approach, the regulated firm is allowed
to earn enough revenues to cover its expected costs of operations
plus a fair return on capital to its investors. The regulator sets
prices on the regulated firm's individual services in such a way
that the firm's expected revenues (based on forecasts of buyer demand) will reach the permitted level. Although this method is generally successful at preventing regulated firms from charging mo-




176

nopoly prices, it has been criticized on several grounds. Cost-ofservice rate setting can be expensive to administer, as the regulatory commission typically engages in a trial-type hearing before
determining rates. In addition, if the regulator adjusts rates rapidly when operating costs change, the regulated firm may lack a
strong incentive to keep costs low, reduce costs further, or innovate.
Incentive methodologies for setting rates promise to reduce inefficiencies created by the cost-of-service methodology. One form of incentive regulation is a "price cap." The regulator sets a maximum
price (or a price path, often set to decline over time) for a collection
of regulated services, and permits the firm to set whatever rates
it chooses for individual services so long as the price cap is not exceeded. If the regulator and the firm are willing to live by a price
cap for a long time, the administrative costs of regulation are
greatly reduced. In addition, the regulated firm is given a strong
incentive to reduce costs and to innovate: As long as the price cap
is not revised downward, the firm gets to keep any additional profits that result from cost savings. Finally, if the price cap applies
to the average rate for a broad collection of services, this form of
incentive regulation permits the regulated firm to exercise significant discretion in rate design. The resulting rates may distort
consumer choice less than those set by regulators. For such reasons, in 1989 the FCC adopted price cap regulation for the longdistance telephone rates charged by American Telephone and Telegraph Co. (AT&T).
In 1993, FERC replaced cost-of-service rate setting for oil pipelines with an incentive methodology. The new approach generally
starts with cost-of-service-based rates and caps rate increases for
pipeline services at 1 percent below the increase in the producer
price index for finished goods. Moreover, wherever the scope of the
natural monopoly has narrowed, permitting the pipeline to demonstrate that it lacks significant market power, the regulatory constraint may be removed in favor of relying on competition to determine prices and output.

Telecommunications Regulation
The rapid pace of innovation in telecommunications is creating
new industries, transforming old ones, and promising to change the
way we live and work. In the coming years, American households
and businesses will have access to a National Information Infrastructure (Nil)—an interconnected web of networks linking computers, databases, consumer electronics, and communications devices that will put vast amounts of information at every user's fingertips. The technologies to create, manage, manipulate, and use
information will fuel economic growth, promote the international




177

competitiveness of U.S. industry, and create challenging, high-paying jobs.
Many of the innovations that are creating the new information
infrastructure are also shrinking the scope of natural monopoly in
the provision of telecommunications services. Microwave technology
made competition in long-distance telephone service possible. The
development of low-cost private branch exchange (PBX) technology
has carved out a competitive market for carrying telephone calls
within office buildings. For many business customers the local telephone monopoly now ends at the street rather than continuing into
the building. Competitive access providers now sell alternative
high-capacity services that allow some business customers to complete calls while bypassing some or all of the local telephone company's network. It is now feasible and increasingly practical for
telephone lines to carry video programming, for cable lines to carry
telephone calls, and for wireless providers to carry both. If and
when these developments end the natural monopoly in local telephone and video service altogether, competition can replace regulation as the best economic mechanism for setting prices and providing telecommunications services to buyers.
The information highways that will be central to the emerging
information infrastructure will be built in part with fiber optic
lines, coaxial cable, and copper wire, and in part through wireless
technologies such as cellular telephone, PCS, and direct broadcast
satellites. The private sector will make the necessary investments,
and the government will promote those investments by encouraging competition. In consequence, the market will determine, to the
extent possible, which technologies provide the most value relative
to cost and, accordingly, how the information highways will be
built.
The Administration's regulatory policies will promote competition
among the firms that build and operate the information highways,
and among the firms that sell their services and programming
through the network. Under the Administration's legislative proposals, for example, local telephone monopolies will be required to
unbundle the services they offer and to interconnect with new entrants on a nondiscriminatory basis. This will facilitate new competition in local telephone service by allowing new providers to
combine, for example, switching provided by the telephone company with their own transmission facilities. The legislative proposals will also set forth a process by which local telephone companies
will be permitted to provide new competition in the interstate longdistance telephone market. The Administration's proposals will
identify safeguards that will protect against regulatory evasion
through transfer pricing (strategic pricing of goods and services
sold to affiliates) and the abuse of monopoly power until the time




178

that competition in local telephone service makes rate regulation
unnecessary.
Rapid developments in technology and the marketplace will create new challenges for telecommunications regulation. Old regulatory structures based on the natural monopoly paradigm are not
appropriate for a market now characterized by mixed elements of
competition and monopoly. Accordingly, the Administration will
propose adding a new title to the Communications Act of 1934,
specifying a flexible regulatory framework for this new environment. The new framework can adapt to technological and marketplace developments, to protect consumers from monopolies without
discouraging investment, innovation, or the growth of competition.
In addition, the Administration's legislative initiative will give the
FCC broad power to forbear from regulating when markets become
effectively competitive, and the power to preempt State and local
regulation made unnecessary by the emergence of competition.
The Administration's policies will also promote universal service,
to avoid creating a permanent class of information "have-nots," and
open access to the network, to allow all service and information
providers to reach potential customers. The government will also
encourage research and development designed to create new technologies and new applications, as discussed below along with other
technology initiatives.

ADDRESSING ENVIRONMENTAL
EXTERNALITIES
The notion of tradeoffs is among the most fundamental in economics: nothing is free; everything has an opportunity cost. In private markets, tradeoffs are handled automatically, as consumers
choose among alternative goods and services and producers choose
among alternative inputs. Prices guide these decisions. Tradeoffs
involving the environment cannot be made so easily, however, because use of the environment is generally unpriced. As a result,
firms and individuals, in their marketplace decisions, do not always make the best tradeoffs from the standpoint of society as a
whole. The effects of failing to price environmental goods and services are examples of externalities (Box 5-4). When externalities are
significant, the government can often design policies that improve
the functioning of markets and thereby increase aggregate social
welfare.
The Administration has sought to encourage the development of
environmental technologies to mitigate tradeoffs and foster economic growth. Improvements in the technologies for preventing and
treating pollution, and efforts to spread knowledge about technologies already available, can free resources for other socially ben-




179

Box 5-4.—Externalities
An externality, or spillover, is a type of market failure that
arises when the private costs or benefits of production differ
from the social costs or benefits. For example, if a factory pollutes, and neither the firm nor its customers pay for the harm
that pollution causes, the pollution is an externality. In the
presence of this negative (harmful) externality, market forces
will generate too much of the activity causing the externality,
here the factory's production, and too much of the externality
itself, here the pollution. In the case of beneficial externalities,
firms will generate too little of the activity causing the externality, and too little of the externality itself, because they are
not compensated for the benefits they offer. For example, the
development of laser technology has had beneficial effects far
beyond whatever gains its developers captured, improving
products in industries as diverse as medicine and telecommunications. Too little research and development and other activities generating positive externalities will take place in the absence of some governmental intervention.
To remedy market failures and induce the market to provide
the efficient level of the externality-causing activity, the private parties involved in the activity must face the full social
costs and benefits of their actions. Policymakers may employ a
variety of tools to accomplish this result, such as taxes, user
fees, subsidies, or the establishment or clarification of property
rights.
eficial purposes or permit the attainment of higher environmental
goals without increasing the burden on the economy. Given the
worldwide explosion in environmental regulatory activity—in the
Far East, in eastern Europe, in Mexico, and elsewhere—the development of more-effective and lower cost pollution control technology
can also increase our export competitiveness. In fact, we already
enjoy considerable success in this area. The United States is now
the world leader in exports of environmental equipment. In a global market for environmental technologies of $295 billion in 1992,
the $134 billion U.S. share is the largest by far. Our trade surplus
in pollution control equipment has been increasing and was $1.1
billion in 1991.
The Administration has also sought to improve the "technology"
of regulating the use of natural and environmental resources. This
effort involves seeking a better balance among conflicting interests
in the use of natural resources, and developing approaches to regulate pollution that rely more on economic incentives and eliminate
the economic distortions of some current regulations. Examples of




180

improving the technology for regulating the environment are found
in the Administration's plan for managing the old growth forests
of the Pacific Northwest, in its approach to grazing on Federal
lands, in the Climate Change Action Plan, and in the Administration's position favoring the reauthorization of the Comprehensive
Environmental Response, Compensation, and Liability Act, better
known as "Superfund." To better assess where interventions to improve the environment will benefit the economy, the Administration is also engaged in efforts to define sustainable development
and develop "green" GDP accounts.
MANAGING RESOURCES ON FEDERAL LANDS
The Federal Government owns vast tracts of land, primarily in
the West. These lands contain natural resources of economic importance to both local communities and the Nation, including timber
and other forest products, forage for grazing livestock, and mineral
deposits. They are also sources of extremely valuable environmental amenities, such as open space for recreational uses like
wildlife viewing, scenery, camping, hiking, and hunting; fish and
wildlife (including endangered species) habitat; watershed protection; and many others.
Improving the "technology" of regulating the use of these Federal
lands is a centerpiece of Administration policy. Two principles
guide that policy: (1) reducing inefficiencies caused by improper
pricing and regulatory restrictions, and (2) ensuring that both pricing and regulation will achieve a better balance among competing
uses of these resources, particularly between extractive (timber,
grazing, mining) and environmental uses. These principles can be
seen at work in the Administration's plans for managing old
growth forests in the Pacific Northwest and for rangeland reform.
Old Growth Forests, Spotted Owls, and Timber
The controversy over logging in the old growth forests and spotted owl habitat of the Northwest provides a case study in reconciling environmental and economic objectives and illustrates how a
careful balancing of competing interests can result in progress on
all fronts.
The forest products industry is a major industry in the Pacific
Northwest, where it is heavily dependent on timber from Federal
lands. Much of the Federal land on which this logging has taken
place consists of mature forest stands. Referred to as "old growth,"
this mature forest is the habitat of the northern spotted owl, a
threatened species, and many other plants and animals.
For several years Federal forest policy in the Northwest failed to
take appropriate account of impacts on environmental quality and
biodiversity. In particular, timber harvests on Federal lands were
accelerated substantially in the mid- and late 1980s: Such harvests




181

in the habitat of the spotted owl rose from 2.4 billion board feet
(bbf) in 1982 to 6.7 bbf in 1988. According to experts, these levels
were too high to be sustained indefinitely. Legal challenges to Federal timber policy resulted in injunctions blocking the sale of timber on Federal forest lands in the spotted owl region, in part because agencies within the Federal Government had failed to work
cooperatively to comply with environmental and forest management laws. The injunctions had a severe impact on the timber industry, albeit in large part because harvest levels had been extraordinarily and unsustainably large.
The Administration put a high priority on resolving the problems
associated with forest management policy in the Pacific Northwest.
Accordingly, in July 1993 the Administration announced a "Forest
Plan for a Sustainable Economy and a Sustainable Environment."
The plan attempts to end the uncertainty caused by legal wrangling and confusion and ameliorate the impact of economic dislocation, while achieving full compliance with existing laws. It also
seeks to maintain and improve the ecosystem as a whole, balance
the interests of competing uses of the ecosystem for environmental
and economic purposes, and create a political consensus to avoid
economic instability.
The plan provides for the maximum legally defensible harvest
from Federal forests in the spotted owl region (about 1.2 bbf annually). The process of adjustment to the new, lower harvest levels
will be smoothed by an economic adjustment plan that is expected
to create more than 8,000 new jobs and 5,400 retraining opportunities in the region in 1994. Many of the new jobs will be in enterprises that improve water quality, expand the prospects for commercial fishing, and improve forest management in the region.
The plan focuses on maintaining and improving the environmental quality of watersheds in the region, recognizing how the
complex interactions of flora, fauna, and human activities affect
that ecosystem. It establishes old growth reserves and protects over
6.5 million acres of old growth forest (about 80 percent of existing
old growth). It also establishes 10 "adaptive management areas" for
experimentation into better ways of integrating ecological and economic objectives.
Rangeland Reform
The Federal Government owns extensive rangelands throughout
the West. While these lands are used primarily for grazing cattle
and sheep, increased demand for environmental uses has fueled
controversy over Federal management. The controversy over rangeland reform shows the importance of integrating pricing with regulation to use the Nation's resources more efficiently and strike a
better balance between economic and environmental objectives.




182

A central point of contention involves the fees that the Federal
Government charges ranchers to graze animals on Federal land.
These fees should reflect both the value of the forage used by an
additional animal and the external environmental costs of grazing
an additional animal (such as the value of reductions in recreation
or water quality). Charging ranchers the marginal value of forage,
the first component, encourages efficient use of the range. By preventing overgrazing, it protects the condition of the range for
future grazing uses. It also promotes long-run efficiency in the livestock industry: Prices for forage that are too low encourage excessive investment in the industry. Forage value varies from tract to
tract because of differences in forage productivity, location, proximity to roads and other transportation, rainfall, and access to water.
But it can still be measured easily and reliably using the value of
private rangelands in nearby locations. The second component, the
external costs of grazing, cannot be determined from private market transactions. But economists have developed ways of inferring
the value of open space or other environmental amenities from the
costs people willingly incur to use them or from sophisticated survey methods.
Current Federal management policies are relics of an earlier era
when the Federal Government used resource subsidies to encourage settlement of the West. One result is that grazing fees on Federal lands average only 17 to 37 percent of the value of grazing on
comparable private lands. Moreover, the formula used to calculate
Federal grazing fees has kept those fees from increasing along with
private grazing lease rates. Promoting efficiency thus means both
increasing grazing fees and ensuring that Federal grazing fees
change from year to year in accordance with changes in rent on private grazing land. The Administration's plans for rangeland reform
do both. The current proposal calls for phasing in a new fee structure that more than doubles current fees, and for using an updating formula that will adjust Federal fees at the same rate that private fees change.
Pricing reform must be accompanied by changes in regulation.
For example, Federal grazing permits have "use-it-or-lose-it" provisions, under which decreases in the number of animals grazed may
result in the loss of a grazing permit or a reduction in the number
of animals that the permitholder may graze in the future. This policy prevents ranchers from temporarily reducing the number of animals grazed to improve range condition. The Administration's plan
allows the terms of grazing permits to be rewritten to allow ranchers to vary the number of animals they graze in response to
changes in weather or economic conditions. The plan also includes
provisions to strengthen environmental management.




183

CLIMATE CHANGE ACTION PLAN
Certain gases emitted into the atmosphere by industrial, automotive, and other combustion have been implicated as a threat to
the global climate: By preventing reflected solar radiation from escaping into space, these "greenhouse gases" may be causing a generalized warming of the planet. For this reason, an international
agreement to reduce greenhouse gas emissions, the Framework
Convention on Climate Change, was signed in 1992. The previous
Administration had adopted what was called a "no regrets" policy;
it was willing to take steps to reduce emissions only if those actions
would be beneficial for other reasons—that is, even if greenhouse
gas emissions were ultimately found unrelated to changes in the
global climate. In contrast, this Administration sees cost-effective
policies to reduce greenhouse gas emissions as appropriate "insurance" against the threat of climate change. Accordingly, the President, in his Earth Day speech on April 21, 1993, issued a "clarion
call" for the creation of a cost-effective plan to reduce U.S. greenhouse gas emissions to 1990 levels by the year 2000.
The President's call resulted 6 months later in the Climate
Change Action Plan, containing nearly 50 initiatives that cover reductions in all significant greenhouse gases and will affect most
sectors of the economy. The plan was based on the understanding
that the climate change threat results from all greenhouse gases,
that it depends on net emissions (after accounting for greenhouse
gas "sinks" such as forests and oceans), and that the problem is
global. The strategies adopted to address the externalities associated with greenhouse gas emissions were chosen on the basis of a
qualitative assessment of the cost-effectiveness of the alternatives,
in part by selecting policies that make markets work better.
Some of the strategies expand upon initiatives of this and previous Administrations to promote energy-saving technology. For example, the Green Lights program improves the diffusion of technology by providing consumers and firms with information about
environmentally friendly products such as energy-saving lights that
promise to reduce electricity generation and the resulting emissions. Other strategies reduce emissions by making government
more efficient. Two examples are (1) reform of regulations that
block the seasonal use of natural gas (a low-polluting alternative
to coal) by electric utilities, and (2) removal of regulatory impediments to private investments in upgrading Federal hydroelectric
facilities.
Parking Cashout
Greenhouse gas emissions will also be reduced by improving the
pricing of activities that generate externalities. The parking
cashout policy attempts to correct a distortion in private incentives
resulting from the tax treatment of employer-provided parking.




184

Currently, the Internal Revenue Code allows employers to deduct
any costs for employer-provided parking as a business expense, and
lets workers exclude the benefits from their taxable income (up to
$155 a month). As a result, 95 percent of automobile commuters receive free or subsidized parking, more than half of them in central
business districts. All told, U.S. companies claim $52 billion per
year in parking-related deductions from this free or subsidized
service.
The Climate Change Action Plan proposes that Federal tax laws
be modified to require that firms offer employees the option of taking the cash value of their employer-provided parking benefit as
taxable income rather than accepting their free parking space. The
program would apply initially only to those firms with more than
25 employees that make monthly cash payments for their employees to park in lots owned by third parties. Thus, only about 15 percent of employer-provided parking would be covered at first, although the program would expand later as new parking leases are
negotiated.
This policy change should reduce the overuse of automobiles for
commuting resulting from the current parking subsidy, by making
commuters face more of the social costs of driving. As consumers
shift to carpools and public transportation, greenhouse gas emissions, other pollutants, and traffic congestion should all be reduced.
Other distortions of the choice between commuting by car and by
public transit will remain uncorrected, however, to the extent that
current regulation of automobile emissions does not fully capture
their environmental, congestion, and health costs.
International Strategies for Greenhouse Gas Reductions
One hundred and sixty-one countries signed the Framework Convention on Climate Change in 1992, agreeing that it is necessary
to stabilize greenhouse gas concentrations at a level that will prevent "dangerous anthropogenic interference with the climate system." Because this is a global problem, the Climate Change Action
Plan addressed what is termed "joint implementation"—the cooperative effort between countries or entities within them to reduce
greenhouse gas emissions. The plan recognizes that there may be
enormous cost savings to meeting global goals for greenhouse gas
reductions if acceptable international strategies can be developed to
reduce emissions where it is cheapest to do so, rather than have
each country pursue its emissions reduction goals on its own. Some
important questions need resolution, however, such as how reductions are to be identified, monitored, and enforced. To begin testing
the joint implementation concept, the plan creates a pilot program
that evaluates investments by U.S. firms and government assistance to foreign countries for new greenhouse gas emission reductions; measures, tracks, and scores these reductions; and, in gen-




185

eral, lays a foundation for broader, more formal policy initiatives
in the future.
SUPERFUND REAUTHORIZATION: THE
ADMINISTRATION POSITION
The Comprehensive Environmental Response, Compensation,
and Liability Act, better known as Superfund, was enacted in 1980
and amended in 1986 in response to widespread concerns that improperly disposed-of wastes threatened human health and valuable
natural resources, such as groundwater aquifers. The act has been
unsatisfactory in addressing this problem. Fewer than 20 percent
of the 1,300 disposal sites on the priority list drawn up by the Environmental Protection Agency (EPA) have been fully "cleaned up,"
although 3,500 separate actions have been taken to remove wastes
posing an immediate threat to health.
At the same time, the costs of the program have been substantial, running almost $7 billion per year. This figure includes direct
draws on the Superfund trust fund collected from the oil and chemical industries to pay for EPA expenses (including $1.6 billion in
spending on cleanups where no private parties can be assigned responsibility), $3.2 billion in spending by Federal agencies that own
or contributed to hazardous waste sites, and $2 billion in spending
by private parties, much of which goes to lawyers' fees and other
transactions costs in an effort to escape or reduce liability. Some
estimates put the total cost of cleaning up the 3,000 sites projected
to be on the EPA's National Priority List (NPL) over the next 30
to 40 years at $130 billion to $150 billion, with $200 billion to $300
billion more needed for Federal facility cleanups.
In response to the poor cost-effectiveness and slow pace of this
program, the Administration has proposed several significant reforms. The two most important involve the standards and processes
governing the cleanup strategy chosen at a site, and the process for
assigning and financing liability.
Remedy Selection
Under the current law, remedial measures at Superfund sites are
chosen with a preference for treatment and permanent cleanup of
soil and water. They are also selected to meet high standards of
cleanliness: land generally must become suitable for residential
use, and water often must achieve drinking quality. Costs have little weight in remedy selection; they come into play only to identify
the cheapest of the set of remedies meeting other criteria.
The Administration's position establishes more-reasonable goals
and processes for cleanup decisions. It sets uniform national goals
for health and environmental protection to guide remedy selection.
It substitutes a concern for long-term reliability as a factor to consider in remedy selection, in place of the preference for treatment




186

and permanence (except for treatment of "hot spots"). It explicitly
recognizes containment as a legitimate cleanup strategy. It limits
the use of State and Federal standards designed for other pollution
contexts. Finally, it introduces greater flexibility and community
input into the determination of appropriate land use for the site,
permitting some sites to be designated for industrial use, with appropriately lower levels of cleanup required.
The Administration's proposal also offers a streamlined approach
to remedy selection at individual sites. With EPA approval, parties
will be able to avail themselves of a set of cost-effective "generic"
remedies established by the EPA that apply to certain frequently
encountered types of waste disposal problems. Alternatively, they
can formulate designs that meet national cleanup levels that are
based on realistic assumptions and practices concerning risks. If
the party liable for cleanup believes it can devise an even cheaper
remedy that can meet the national health standards, it can perform a site-specific risk analysis to make its case to EPA. This option allows parties to propose remedies based on the ultimate goal
of protecting health and the environment, rather than on the "intermediate" targets of reductions in soil or water concentrations,
and helps tailor remedies chosen for a site to its particular features.
Most important, a factor in the remedy selection process at individual sites will be a comparison of the reasonableness of costs
against several measures of effectiveness. This approach introduces
discipline, transparency, and recognition of tradeoffs into the remedy selection process, while retaining consideration of other factors
such as community acceptance and meeting the primary criterion
of protecting health and the environment. Cost will also be considered in decisions on whether to defer final cleanups for cases where
a new technology is on the horizon to replace a current one that
has disproportionately high costs.

The Liability System
The transactions costs associated with cleanups, especially litigation expenses, have been massive under current law. One study
found that these costs account for 19 to 27 percent of all Superfund
costs. Transaction costs are substantial in part because liability
under current law is strict, joint and several, and retroactive: A
party that contributed waste to a site used by others can be held
liable for the entire cost of cleanup, and a party is liable for the
results of its dumping even if its action was legal at the time. As
a result, potentially responsible parties (PRPs) have strong incentives to contest their liability (resulting in high enforcement costs
to-the EPA), to sue other PRPs to recover costs, and to sue their
insurance companies when the latter refuse to pay related claims.




187

The Administration's proposal seeks to limit these transactions
costs by streamlining the liability allocation process and making it
more fair. The new allocation process is based upon nonbinding arbitration, in which PRPs are assigned a share of liability based on
factors such as the volume and toxicity of their wastes. PRPs who
settle for their assigned shares would surrender their rights to pursue other PRPs for contribution, be protected from suits by other
PRPs, and be offered, for a fee, protection from future liability arising from remedy failure or undiscovered harms. As an added incentive to settle, the EPA would pay settling parties for their share
of the "orphan shares"—the share of liability attributed to an identified but insolvent party—but nonsettling parties could still be
held liable for all or part of the "orphan share."
The Administration proposal also addresses the growing problem
of Superfund-related insurance litigation. The problem arises because insurance contracts written before Superfund was enacted
did not expressly allocate Superfund liabilities. Subsequently,
courts in some States have interpreted those contracts to require
insurance companies to assume most Superfund liabilities, but
courts in some other States have held the opposite. The scope of
insurers' liability in most States is undecided. Building on a proposal originally suggested by the insurance industry, the Administration proposal calls for creation of an Environmental Insurance
Resolution Fund financed through fees and assessments on property and casualty insurers. If the PRPs can show sufficient insurance coverage before 1986, the fund would be used to settle their
insurance claims for cleanup and restoration costs at pre-1986 NPL
sites, as well as some costs at non-NPL sites, at rates determined
simultaneously for all of a PRP's sites. The combination of the allocation process and the insurance settlement process should substantially reduce transactions costs and increase fairness.
SUSTAINABLE DEVELOPMENT AND GREEN
ACCOUNTING
According to the 1987 report of the World Commission on Environment and Development, sustainable development is that which
"meets the needs of the present without compromising the ability
of future generations to meet their own needs." In short, future
generations must be able to attain a quality of life, in both economic and environmental terms, equal to ours if they desire. To
make this possible, the present generation must leave the future
with the wherewithal—the "social capital," consisting of human,
natural, and physical (manmade) capital—to create our kind of life
or a life of at least equal quality to ours. Although this definition
is widely accepted, its interpretation remains subject to debate.
One controversy concerns the extent to which the three types of




188

capital can substitute for one another, given the underlying scientific principles and economic behavior, while keeping the resulting development sustainable.
However this controversy is resolved, it will be necessary to
measure social capital and the value its use brings in order to understand whether a growth path for the economy is sustainable.
This is the province of "green accounting," an idea first raised in
1969. Much of the recent research effort to augment the national
income and product accounts to incorporate previously unmeasured
aspects of social welfare focuses on identifying the net change in
the stock of social capital resulting from environmental
externalities. This research effort seeks to identify the loss (depreciation) of social capital caused by pollution, the value of the reduction of finite resources (such as fossil fuels and minerals), the loss
from overharvesting of renewable resources (such as forests and
fisheries), and the value of the environmental services (e.g., clean
air) derived from investments in pollution control equipment.
The President has made it a priority of his Administration to
augment the national accounts to incorporate these aspects of social capital. In his 1993 Earth Day speech the President directed
that "green" gross domestic product (GDP) measures be developed
to improve existing national income and wealth accounts that ignore the cost of pollution or the loss of natural resources. In the
first phase of fulfilling this mandate, the Commerce Department's
Bureau of Economic Analysis will publish modified GDP accounts
in 1994 to reflect the depletion of selected natural resources and
will continue to explore measures that incorporate additional environmental values. This effort will be aided by the Department of
Interior's forthcoming National Biological Survey, an effort to inventory the biological and ecological resources of the Nation.

PROMOTING TECHNOLOGY
Technological progress fuels economic growth. It creates new industries and reinvigorates old ones. It can enable small businesses
to do high-quality design and manufacturing work that previously
required the resources of big business. It can help big businesses
achieve the speed, flexibility, and closeness to customers that once
were a defining characteristic of small business. Technology helps
to make our work force more productive and, in doing so, improves
the Nation's standard of living. Every recent generation has seen
its dreams turn into technological marvels, new products from new
industries that have transformed the way we live and work: from
the telephone, radio, airplanes, and x-rays, to television, xerography, computers, and magnetic resonance imaging equipment. Ad-


151-444
0 - 9 4 - 7


189

vances in technical know-how have accounted for at least one-quarter of our Nation's economic growth over the past half-century.
During the past two decades, powerful trends have altered the
environment for American technology development. Commercial
technology has become increasingly science-based and interdisciplinary. International competition has intensified as other nations
have advanced in wealth and technological sophistication. The Nation's defense capability has become increasingly dependent on
technologies developed and applied first in commercial markets. A
microelectronics-based revolution in production has transformed
the organization of office and factory work, increasing the need for
a well-trained and flexible work force.
By the end of the 1980s, many analysts believed that these
trends required a reexamination of the existing approaches of government and industry for supporting technology development and
diffusion. Accordingly, in its first year the Administration has supported tax incentives for investments in research and development
(R&D) and new businesses, liberalized export controls, shifted Federal resources toward basic research and civilian technology, invested in worker skills, and promoted defense conversion. In addition, the Administration's technology initiatives, such as the promotion of the National Information Infrastructure discussed above,
the Partnership for a New Generation of Vehicles, and the creation
of a Manufacturing Extension Partnership, rely on an alliance of
government and industry. They also require rigorous attention to
the economic rationales for cooperative efforts and then to the details of project design and assessment, to ensure that market failures are corrected, not made worse, by government action.
PRINCIPLES OF TECHNOLOGY POLICY
The Administration's technology initiatives aim to promote the
domestic development and diffusion of growth- and productivityenhancing technologies. They seek to correct market failures that
would otherwise generate too little investment in R&D, with programs that avoid "government failure."
The Economics of Appropriability
New technologies often fail to attract sufficient private sector investment because their technical risk is high or because of limited
appropriability—that is, the new technologies create economic and
social benefits beyond what the investing firms can capture for
themselves. Indeed, despite intellectual property protection, the social returns to innovation have been estimated to exceed the private returns by between 35 and 60 percent.
The most important innovations generate spillover benefits for
interconnected sectors, creating economic gains well beyond any
that eventually accrue to their inventors. These innovations include




190

risky "pathbreaking" technologies that pay off in the creation of
new industries (or the transformation of existing industries), and
lower risk "infratechnologies" that can enhance the productive performance of a broad spectrum of firms and industries but that receive low levels of investment because of barriers to appropriability
and implementation. For example, the development of refrigerated
steamships at the end of the nineteenth century increased the
availability of perishable agricultural products throughout the
world. Most of this benefit ultimately accrued to farmers and consumers rather than to the inventors of refrigerated steamships.
Similarly, the principle of interchangeable parts in manufacturing,
originally developed for the production of firearms, soon was adopted for use in the fabrication of clocks, hardware, sewing machines,
and other manufactured products.
The appropriability problem is not limited to basic research, but
frequently extends to so-called precommercial technology development and eventual commercial applications. Indeed, technological
progress is full of feedbacks where developments downstream alter
the course of behavior upstream, as well as the degree of ultimate
market success. A sharp distinction between basic research and
precommercial development activities is difficult to draw. Investments that are necessary to the utilization and adoption of research results—investments in information gathering, work force
training, or the integration of new production equipment into automated systems—can also create spillover benefits that the investing firm cannot perfectly appropriate. In addition, new manufacturing processes that lower cost or improve quality may not be patentable, and new ideas embodied in computer software can often be
imitated rapidly without violating the originators intellectual property rights. In all of these cases, public actions can offset the effects
of underinvestment by the private sector that is caused by limitations on appropriability.
Avoiding "Government Failure"
The goal of technology policy is not to substitute the government's judgment for that of private industry in deciding which potential "winners" to back. Rather, the point is to correct a genuine
and significant market failure—underinvestment in basic research
and in precommercial R&D resulting from the divergence between
private and social returns to those activities. A complementary goal
is to design the technology investments that the government itself
makes in public goods—national security, public health, education,
a clean environment, an efficient transportation system—in ways
that maximize the potential external benefits for the Nation's commercial technology base. In both cases, technology policy enhances
the Nation's economic and social welfare.




191

Investments in R&D are risky. Like all risky investments, public
or private, government-supported explorations sometimes drill dry
holes—such as the efforts during the 1960s and 1970s to develop
synthetic fuels, a supersonic transport, and a fast breeder reactor.
Yet even research that never delivers an enormous economic payoff
for itself often contributes useful technical knowledge and lessons
for the future. And when the drilling strikes oil, as with government support of R&D for computers and integrated circuits, jet engines and airframes, and biotechnology and medical equipment, the
initial gusher can generate an entire field of newly productive,
wealth-enhancing, job-creating economic activity. For this reason,
the success of government R&D policy must be measured by the
rate of return on the entire portfolio of R&D investments supported
by the public.
We can learn from both the gushers and the dry holes about how
to design programs to promote investments in basic and
precommercial R&D to maximize their prospects for success. Federal R&D investment programs leading to successful commercial
products tend to share certain design features: They are insulated
from the demands of distributional politics; they subject potential
projects to rigorous technical and economic evaluation; and they
recognize that product specifications must be developed with an eye
toward manufacturability and a balance between product performance and cost that will be acceptable to commercial customers. Accordingly, the Administration's efforts to promote innovative technology contain design features that are meant to limit the possibility of "government failure" in the implementation of technology policy:
• To ensure that R&D funded by the government in cooperative
ventures with the private sector has direct market applications, participating firms must bear a significant share of program costs. In most cases, the Administration's technology
partnerships require that private firms cover at least 50 percent of the costs.
• To ensure that both the timing and the content of government
investments in technology-based infrastructure impart maximum leverage on industry's competitive efforts, research
frameworks for collaborative R&D should be initiated and designed by private industry and should be closely coordinated
with industry investment patterns.
• To insulate publicly supported R&D efforts from political pressures exerted on behalf of special interests, evaluations of competing R&D proposals should be conducted by independent experts in the relevant scientific, technological, and economic
fields. Political considerations should not be allowed to influ-




192

ence a project's technical objectives, the location of R&D facilities, or the way that management of the project is structured.
• Investments in a broad array of technical fields, including materials sciences, manufacturing product and process technologies, biotechnology and biomedical sciences, and telecommunications and computer-related technologies, should
compete for a finite flow of funds. This competition will help
to ensure that expanded Federal support for precommercial
R&D does not get captured by the champions of any particular
technology or by any particular set of firms.
• Government investments in basic and precommercial R&D
should be reviewed while in progress to determine whether
funding should continue. Such reviews are difficult because the
success of an R&D project is often not apparent for many
years, but rigorous assessments can nevertheless be made by
independent expert panels at regular intervals.
A New Approach
An enduring American approach to promoting technology development and diffusion evolved just after the Second World War. The
United States channeled public investment into basic research at
universities and government laboratories, then supported the initial application of the results in products and production processes
procured by public agencies. New technologies first developed for
(and procured by) the Department of Defense, the Department of
Energy, or the National Aeronautics and Space Administration
(NASA), or supported by the National Science Foundation or the
National Institutes of Health (NIH), would then diffuse, or "spin
off," into commercial use. In this manner, the Federal Government
supported the development and diffusion of jet aircraft and engines, semiconductor microelectronics, computers and computercontrolled machine tools, Pharmaceuticals and biotechnology, advanced energy and environmental technologies, advanced materials, and a whole host of other commercially successful technologies.
This system worked well as long as military systems represented
the leading-edge applications of new industrial technologies and as
long as foreign competitors, with direct support from their own governments, did not pose a significant competitive challenge. In many
areas of basic research supported outside the defense establishment, including biomedical research and the development of pharmaceuticals, biotechnology, and medical diagnostic devices, the system continues to work well. But the circumstances that allowed the
United States to rely primarily on a defense-led model have
changed. With the end of the cold war, demand for new defense
systems is now less than it was. Commercial product spinoffs from
military research have also diminished from their heyday of the




193

1950s and 1960s, and American companies face intense international competition from increasingly capable foreign firms. On
the other hand, these changes also create exciting new opportunities: Innovative defense technologies are now more likely to emerge
first in commercial products and production techniques, and American companies are taking advantage of expanded opportunities in
foreign markets. Accordingly, the Administration's technology initiatives are shifting the composition of Federal R&D from military
to civilian concerns, and the composition of military R&D toward
the development of so-called dual-use technologies—those with applications to both military and commercial products.
THE ADMINISTRATION'S TECHNOLOGY INITIATIVES
The Administration's investments in growth- and productivityenhancing technologies encompass a wide range of physical and
human resource priorities. They finance basic research and leverage private funds for technology development and commercialization. They promote the diffusion and adoption of advanced manufacturing technologies by U.S. industry. They facilitate defense
conversion by easing defense suppliers into civilian markets, focusing military R&D on dual-use technologies, and freeing the Pentagon to purchase commercial products and processes. They seek to
promote the development of a national telecommunications infrastructure for the information age. Finally, they create partnerships
with industry and academia to ensure that the government's investments to solve pressing problems in energy, transportation,
and the environment simultaneously work to promote the Nation's
economy and overall standard of living.
Basic Research
The Administration worked with the Congress to increase budget
authority for basic research in all categories to $13.8 billion in fiscal year 1994. This includes a 7.2-percent increase in the National
Science Foundation's budget to a total of $1.9 billion. The National
Science Foundation will continue to provide strong support for fundamental research critical to manufacturing, advanced materials,
environmental technologies, and biotechnology. It has also doubled
its support for modernizing academic research facilities and instrumentation. In addition, basic space science research is continuing
at NASA, representing an investment of $1.9 billion in fiscal 1994.
The Department of Defense has been appropriated $1.2 billion for
basic research in fiscal 1994; the Department of Energy will support an additional $1.7 billion in basic research, in areas including
materials science, chemical science, engineering and geoscience,
high-energy nuclear physics, and nuclear fusion. Finally, the Administration continues to support basic research conducted through
the National Institutes of Health, which account for over 40 per-




194

cent of federally sponsored basic research. NIH is projected to
spend nearly $6 billion for basic research in fiscal 1994, exceeding
last year's level by almost $300 million (or 5 percent).
Technology Development and Commercialization
Through the Commerce Department's Advanced Technology Program and through the hundreds of cooperative research and development agreements that have been signed between private firms
and researchers at many of America's 726 Federal laboratories, the
government is investing in industrial projects to develop and to
promote commercialization of technologies with high payoff potential. The Nation's antitrust laws have also been clarified to avoid
discouraging beneficial private research collaborations.
The Advanced Technology Program (ATP). The ATP is administered by the Commerce Department's National Institute of Standards and Technology (NIST). In four competitions completed over
the past 4 years, the ATP has made 89 awards to 66 companies
and 23 joint ventures. The projects receiving awards have included
ventures to develop a way to control personal computer programs
through "natural language" instructions; a pen-based characterrecognition system for the Chinese language, with the goal of enhancing software exports to Chinese-speaking companies; and a
technology for preserving patients' bone marrow during chemotherapy.
The ATP is designed to avoid government failure. Government
acts as the catalyst, but the ATP relies on industry to define and
carry out its R&D projects. Independent expert panels select
projects through rigorous competitions based on both technical and
business merit. The ATP provides technology development funds
under cooperative research agreements. It requires single-company
applicants to pay their own indirect costs, and joint ventures to
provide matching funds. In general, award recipients may patent
inventions or copyright software developed under an ATP award,
but the government retains a nonexclusive license.
The total of ATP awards plus private sector funds over the life
of the first 89 awards amounts to over $500 million. The Administration has proposed to increase the ATP budget from $68 million
in 1993 to $750 million in 1997, and $200 million has been appropriated for the program in 1994. In addition to announcing about
100 new awards to industry in fiscal 1994, the ATP will embark
on a set of "strategic" program competitions. These competitions
will focus on particular technology areas recommended by industry
as having especially significant potential to generate large economic and social payoffs.
Cooperative Research at Government Laboratories. The Nation's
726 Federal laboratories, especially the three large, multiprogram
nuclear weapons laboratories (Los Alamos and Sandia in New Mex-




195

ico and Lawrence Livermore in California), offer a repository of
vast technical expertise that can be leveraged to enhance the competitive performance of American industry. As part of its plan to
alter the balance between military and civilian objectives in the
Federal R&D budget, the Administration has authorized the weapons labs to redirect at least 10 to 20 percent of their defense program budgets to commercial technology-transfer activities with industry. The Department of Energy's 31 laboratories, which employ
over 23,000 scientists and engineers and perform $6 billion in civilian and military research annually, already have in place over 650
cooperative research and development agreements (CRADAs) with
private firms, totaling $1.4 billion in combined public and private
funds. CRADAs are also used to structure public-private partnerships involving laboratories at NIST and the Department of Defense. A similar program is in place at NASA.
Using CRADAs, Federal laboratories have already begun or
strengthened jointly financed collaborations with companies and industry consortia in a number of research and production
prototyping projects. These have covered semiconductor production
equipment, flat panel display technology, new technologies for textile manufacturing, the investigation of new polymer blends,
biosensors, new aerospace alloys, and microscopic-sized machines
known as microelectromechanical systems. These partnerships may
begin a longer term process of redirecting the defense-oriented labs'
missions toward civilian needs—ranging from the development of
energy-efficient and environmentally sustainable industries to the
invention of new medical, manufacturing, and transportation technologies—while utilizing the labs' expertise in such fields as highperformance computing, communications, and new materials.
Collaboration in Research and Development. Competition promotes R&D, but collaboration can also promote both research and
the effective commercialization of research results. When firms
have complementary skills or information, an R&D joint venture
among them may speed the development and commercial adoption
of a new technology. And when firms have similar skills or information, an R&D joint venture may avoid costly duplication of effort. Yet allowing collaboration in R&D risks facilitating undesirable cooperation in the firms' other activities. For example, it may
make it easier to engage in price fixing or other anticompetitive
practices in the sale of the products manufactured by the firms collaborating on research. This risk is small if collaboration is limited
to early-phase R&D, however.
The Congress balanced these concerns in 1984 when it passed
legislation guaranteeing that collaborative research would violate
the antitrust laws only if the collaboration were found unreasonable. That legislation also provided that research joint ventures




196

could register with the government and thereby limit their antitrust exposure to actual damages, rather than face the usual treble
damage penalty for antitrust violations. Legislation enacted in
1993 extends these protections to production joint ventures, thereby removing a barrier to collaborative efforts to implement new
manufacturing techniques and production processes. Because these
aspects of the production process can be understood as research
into product commercialization, this extension serves a purpose
similar to that of the 1984 legislation.
Development and Diffusion of Advanced Manufacturing
Technology
Anecdotal examples abound of technologies developed in the
United States, such as numerically controlled machine tools, that
were commercially exploited first or more successfully abroad.
These anecdotes point to market failures other than imperfect
appropriability that also contribute to insufficient adoption and utilization of research results. For example, firms may face unnecessarily high transactions costs for obtaining information, and firms
with good ideas but limited sources of collateral or internal finance
may find themselves unable to raise funds in the capital markets.
The effort to commercialize a new technology often presents
firms with an array of organizational challenges: New manufacturing processes and distribution channels must be developed, workers
must be retrained, and new suppliers and perhaps even new customers must be identified. In meeting these challenges, firms develop a great deal of valuable information—from manufacturing
know-how to marketing insights—some of which cannot be protected as intellectual property or trade secrets.
On the other hand, firms sometimes have difficulty gaining access to other types of technological know-how developed inside
other companies and the ways different firms have met implementation challenges. Adoption of advanced manufacturing technology
is typically a "systems" problem. Suppliers must be able to sell
components that fit into complex automated production systems.
Buyers must be assured of compatibility among machines, robots,
transfer lines, and the like, or they will not adopt the technology.
To help remedy these market failures, and so promote more
rapid and extensive commercialization and diffusion of important
new technologies, the Administration is expanding NIST's Manufacturing Extension Partnership (MEP) program. Manufacturing
Technology Centers (MTCs) form the backbone of the program.
MTCs offer impartial advice to small and medium-sized manufacturers from people with extensive industrial experience. This advice is backed by hands-on technical assistance. MTCs will be
linked among themselves to a set of smaller Manufacturing Outreach Centers (MOCs), geared to areas with smaller concentrations




197

of industry. MOCs will be affiliated with technical colleges, vocational schools, and State technical assistance centers. Together
MTCs and MOCs will help firms to identify, evaluate, install,
adapt, and then commercially exploit appropriate advanced technology in their manufacturing and business operations. The Administration anticipates that 100 centers will be established nationwide by 1997, up from 7 at the outset of this Administration.
Linkages have also been formed between the MEP and other
Federal agencies with roles to play in the delivery of technical assistance, work force training, and small business support services.
These agencies include the Department of Energy, NASA, the
Small Business Administration, and the Department of Labor. In
addition, the Department of Energy dedicated over $400 million to
advanced manufacturing-related technologies in fiscal 1993 and
has under way or in negotiation more than 115 advanced manufacturing cooperative projects involving over 60 companies. One of
these is the AMTEX Partnership, a model collaboration between
the Department of Energy's national laboratories and the American
textile industry. Finally, the deployment portion of the Administration's defense conversion Technology Reinvestment Project (discussed below) includes an additional $87 million for manufacturing
extension programs.
Telecommunications Infrastructure for the Information Age
All Americans have a stake in the construction of the advanced
National Information Infrastructure described earlier in this chapter. Private industry is already developing and deploying the Nil,
and, as explained above, it is the private sector that should build
and own the Nil of the future. There nevertheless remain essential
roles for the government to play in ensuring the growth of an affordable and universally accessible telecommunications infrastructure. Many of the key breakthroughs in telecommunications and
computing stemmed from research funded by the Federal Government. For example, the Internet and laser technology both grew
out of government-sponsored research.
The Administration will continue the High-Performance Computing and Communications program, which funds R&D into morepowerful computers, faster computer networks, and more-sophisticated software. A key objective of this program is the application
of computers to economically important problems. The Department
of Energy has funded several collaborations among national laboratories, universities, and industry, applying these computing technologies to materials, chemistry, energy, and environmental
problems. Beyond that, the Administration has created a new component of the program, emphasizing information infrastructure
technologies and applications. This program will develop and apply
high-performance computing and high-speed networking tech-




198

nologies for use in the fields of health care, education, libraries,
manufacturing, and provision of government information. Additional research on information technologies and applications will be
conducted by the Department of Energy's national laboratories.
Finally, the government is supporting an array of Nil pilot and
demonstration projects. Federal matching grants will be awarded
on a competitive basis to school districts, libraries, State and local
governments, health care providers, universities, and other nonprofit entities to connect institutions to existing networks, to enhance those networks, and to permit users to interconnect among
different networks. The program is presently funded at $28 million
per year and is planned to grow in coming years to $100 million
annually. Its goal is to ensure that every school and library in the
country is connected. In addition, NASA has launched the Advanced Communications Technology Satellite, an experiment to
test pioneering concepts and technologies that promise to advance
on-demand, flexible communications services.
Transportation, Energy, and the Environment: New
Technologies for Growth
Environmental improvements have traditionally been viewed as
something we trade off for increased economic performance. Yet, as
noted earlier in this chapter, a strong environmental policy framework can encourage innovation, strengthen key competitive industries, and improve our environment simultaneously. Environmental
policy can create new demand for the goods and services of the environmental protection industries, which then increase employment
and production to meet this demand. Policies that call for leadingedge environmental solutions can induce U.S. industry to respond
with novel, world-class technologies. This response positions U.S.
industry to meet the rapidly growing world demand for advanced
"green" technologies, providing additional economic and environmental benefits for U.S. consumers and producers.
Accordingly, this Administration is developing an environmental
policy framework whose objective is to maintain and strengthen environmental protection while also promoting economic and technological development. The Administration is working with the U.S.
business and research communities to promote the development
and deployment of new technologies that simultaneously prevent
pollution, increase energy efficiency and the efficiency of the Nation's transportation infrastructure, and promote economic growth.
Clean technologies—such as energy-efficient light bulbs and motors, alternative fuel vehicles, computerized traffic management
systems, and advanced steelmaking—reduce many kinds of pollutants. Such technologies can also reduce the energy needs of U.S.
companies, trimming costs and improving international competi-




199

tiveness. Again, the hoped-for result is both enhanced environmental quality and greater long-term economic growth.
Partnership for a New Generation of Vehicles. This initiative,
begun in September 1993, is a joint effort of the Federal Government and the three leading domestic automobile manufacturers.
The initiative aims to develop the technologies necessary to create
a new type of automobile, one that is both safer and up to three
times more fuel efficient than today's cars. In both its goals and its
implementation, the program is characteristic of this Administration's technology policy. It focuses on developing technologies that
may generate technological progress in two important areas: in
making U.S. automobile producers more technologically competitive
in the international marketplace and in reducing air pollution. The
initiative is structured as a set of public-private partnerships in
R&D. One such partnership seeks to develop a "hybrid" vehicle
that combines electric propulsion with conventional heat engine
systems to increase efficiency and meet tight emission standards.
The Environmental Technologies Initiative. The EPA has
launched the Environmental Technologies Initiative to stimulate
technological innovation to meet the Nation's environmental objectives. The initiative aims to create a more productive environmental technology marketplace and works toward incorporating environmental considerations into the design of new technologies and
into upgrades of existing technologies. This program is also designed to aid the Administration's defense conversion effort by facilitating the use of military bases for demonstrations of environmental remediation or "cleanup" technologies. In addition, the EPA
and the Commerce Department are jointly developing environmental technology programs at NIST regional technology centers;
and the EPA has undertaken a new collaborative venture with the
Small Business Administration to help small businesses access information on pollution prevention. These and other domestic initiatives also support the Administration's strategic framework for environmental technologies exports, which engages U.S. environmental businesses in the design and implementation of market-specific export assistance and export financing strategies.
The NICE3 program (National Industrial Competitiveness
through Energy, Environment, and Economics), jointly administered by the EPA and the Department of Energy, aims to promote
innovative technologies that simultaneously improve energy efficiency, reduce waste generation, and increase economic competitiveness and productivity. The program also seeks to improve
cooperation between State agencies and industry. In addition, the
President has directed the Department of Energy and the EPA to
accelerate the commercialization of advanced, energy-efficient technologies through the formation of partnerships with key market




200

players. These partnerships may include contests for new technology introductions; working with government procurement agencies to leverage their purchasing power to acquire qualifying products; and working with utilities to coordinate incentives for markets for new technologies. For instance, the Department of Energy,
together with the EPA and utilities, is using such partnerships to
create a new market for manufacturers of chlorofluorocarbon-free
refrigerators (chlorofluorocarbons have been implicated in degradation of the atmospheric ozone layer).
Finally, the Department of Energy is engaged in developing and
deploying innovative environmental remediation and cleanup technologies to deal with the cleanup of military bases slated for closure, as well as of contaminated facilities and sites administered by
the Energy Department itself.
Other Transportation Technology Initiatives. The Department of
Transportation has begun a series of outreach seminars entitled
"Promoting Transportation Applications in Defense Conversion and
Other Advanced Technologies." In addition, the department has initiated studies aimed at having a prototype demonstration of an
automated intelligent vehicle highway system by 1997. The Defense Department's Advanced Research Projects Agency (ARPA)
has selected six regional coalitions—in Hawaii, Sacramento, Los
Angeles, Indianapolis, Atlanta, and Boston—to work on electric and
hybrid electric vehicle technology and infrastructure. A team of officials from the Departments of Defense and Transportation is also
investigating how to augment the existing satellite-based global positioning system for use in improving air navigation and collision
avoidance. The Department of Energy's Clean Cities program
makes use of the Federal Government's purchasing power to accelerate the introduction of alternative fuel vehicles (and an alternative refueling infrastructure) into urban areas in order to reduce
emissions. Finally, the Administration is continuing to fund research into an array of next-generation transportation technologies,
including high-speed ground transportation, advanced subsonic
planes, and supersonic air transports.
Facilitating Defense Conversion
The share of gross domestic product (GDP) devoted to national
defense is expected to shrink from 6.5 percent in 1986 to 3.3 percent in 1997. This decline in defense spending, resulting from the
end of the cold war, is smaller relative to the size of the economy
than the cutbacks that followed World War II and the Korean and
Vietnam wars, and much more gradual. Yet the impact on particular regions, such as southern California, is severe, and three additional factors work to make the economic adjustment this time
more difficult. First, the economy's recovery from the recession of
1990-91 was weaker than the average postwar recovery, while ef-




201

forts to cut the massive Federal budget deficit leave little room for
fiscal expansion to stimulate economic growth. Second, many defense firms and workers are more isolated from commercial market
practice than during earlier builddowns, because the defense procurement system that has evolved over time has erected a wall between commercial sectors and defense. Third, technological innovation and the economic growth it generates may be hard hit by the
defense retrenchment, because nearly 60 percent of Federal support for domestic R&D was defense related and because roughly
one-fifth of the Nation's engineers work in defense-related areas.
The end of the cold war was an unanticipated event with serious
economic consequences for several domestic economic sectors. Our
Nation has long accepted a collective responsibility to ease the
transition for those most heavily affected by major economic
shocks, for example by providing unemployment insurance and disaster relief. This principle readily extends to transitional assistance
when the shock results from a large and unanticipated structural
economic change, particularly when government is effectively the
agent of that change.
For workers, the problem of large, regionally concentrated economic dislocations is made worse by a capital market imperfection.
It is often difficult for workers to borrow for retraining and relocation because their human capital cannot serve as collateral. Such
capital market transactions are particularly difficult to arrange for
people who have just lost a job or who have incurred a capital loss
on their home—a frequent consequence of geographically concentrated defense cuts. Moreover, dislocated workers may have a
difficult time learning about job opportunities in other regions or
occupations.
Defense conversion is also difficult for firms. Although many defense contractors have access to knowledge, production facilities,
and skilled workers that could be valuable if channeled to commercial applications, the many years spent designing their organizations to serve the needs of one customer—the Defense Department—often leave them without crucial skills or the right organizational configuration to serve the commercial marketplace. To the
extent that these firms lack internal funds to finance new investment, and to the extent they are unable credibly to demonstrate to
lenders and other capital providers their potential to serve other
lines of business, these resources will not be able to move to their
most efficient uses.
The Administration's 5-year, $22 billion Defense Reinvestment
and Conversion Initiative addresses these problems of the post-cold
war transition.
Workers. The initiative provides $5 billion over 5 years for worker adjustment, including funding for retraining displaced defense




202

workers and early retirement benefits for military personnel with
at least 15 years of service. In addition, the Administration is sponsoring pilot programs to train defense workers and personnel leaving the military for national service as teachers, health care workers, and law enforcement personnel.
Communities. The Administration is also expanding the Defense
Department's Office of Economic Adjustment, so that communities
affected by scheduled military base closures have the resources and
technical assistance necessary to plan a smoother adjustment to
new economic activities. More resources are being devoted to the
Commerce Department's Economic Development Administration, to
target help to communities hardest hit by the defense industry
drawdown. Meanwhile the Defense Department is working with
the EPA and other public and private bodies to make sure that the
process of environmental cleanup and restoration at closed military
bases does not hamper local economic recovery.
Technology: The Technology Reinvestment Project. The Administration's Technology Reinvestment Project (TRP) is an effort to promote the development of dual-use (commercial and military) technologies and to help small defense firms make the transition to
commercial production. The TRP is jointly implemented by a sixagency council representing the Departments of Commerce, Energy, Transportation, and Defense, NASA, and the National
Science Foundation, and is chaired by an official from ARPA. Onehundred and sixty-two projects had been selected for TRP support
as of early December 1993, totaling nearly $1 billion in combined
public and private funds (the Federal share is about $415 million).
The TRP funds three types of projects: technology development
(46 projects), technology deployment (70), and manufacturing education and training (46). Examples include construction of a highway bridge from composite plastics, development of a new jaws-oflife rescue device powered by pyrotechnic cartridges, and the exploration of medical uses for a noninvasive diagnostic device that
measures oxygen levels in the blood. The TRP is also funding the
development of a new manufacturing engineering curriculum at a
State college, a manufacturing technology center to help defense
suppliers adapt to other fields, and a project to retrain laidoff defense engineers in pollution-prevention and remediation.
MARITECH. The Defense Department's MARITECH (maritime
technology) initiative, a defense conversion program focused on
shipbuilding, is structured similarly to the TRP. This 5-year, $220
million program will supply matching funds to help U.S. shipyards
shift production from military to commercial markets.




203

TECHNOLOGY POLICY, GROWTH, AND
COMPETITIVENESS
Government must work with American industry to provide a
sound communications and transportation infrastructure and a
solid science and industrial technology base. These are among the
prerequisites for economic growth. Yet to be effective in a market
economy, technology policy must leverage private investment, not
direct it. It must be sensitive to those reasons why markets by
themselves may lead to insufficient investment. The Administration's technology initiatives take their inspiration from a long
American history of public-private partnerships, from the Agricultural Extension Service to the Arpanet (now the Internet worldwide computer network). These initiatives seize strategic opportunities inherent in the shifting composition of Federal R&D from
military to civilian concerns, help remedy the underinvestment in
R&D created by the limitations on private appropriability of its
economic returns, and focus Federal R&D funds on facilitating the
commercialization and commercial diffusion of technology. Together
these technology initiatives are essential to promote U.S. economic
competitiveness, meaning not only the ability of American firms to
sell high-quality goods and services in the international marketplace, but more importantly, the ability to do so while maintaining
high and rising wages and living standards for the American
people.




204

CHAPTER 6

The United States in the World
Economy
SOON AFTER TAKING OFFICE, the President described the
basic principles and goals of his Administration's international economic policy in a February 1993 speech at American University.
He committed the United States to active global engagement to
promote world trade and growth, to aid the development of less
prosperous nations, to address the emerging problems of global environmental degradation, and to encourage market reform in Russia and other parts of the former Soviet empire. The President affirmed that the United States would continue to champion open
markets and expanded trade: In the President's words, "We must
compete, not retreat." Acting upon these words, the Administration
successfully concluded two of the most important trade agreements
in the Nation's history: the North American Free Trade Agreement
(NAFTA) and the Uruguay Round Agreement under the General
Agreement on Tariffs and Trade (GATT).
Like previous Administrations, Democratic and Republican alike,
this Administration recognizes that international trade—the voluntary exchange of goods and services across national borders—is
a means of increasing standards of living and economic well-being
both at home and abroad. During the last half-century, world trade
has grown enormously, largely as a result of American leadership
in liberalizing global markets. Trade has been a major engine of
growth for the world economy since World War II, in marked contrast to the 1930s, when protectionism worsened and helped spread
global economic depression. As economists have long predicted,
freer trade has been a win-win strategy for both the United States
and its trading partners, allowing all to reap the benefits of enhanced specialization, lower costs, greater choice, and an improved
international climate for investment and innovation. American industries—both their workers and their owners—have benefited
from increased export markets and from cheaper imported inputs.
American consumers have been able to purchase a wider variety of
products at lower prices than they could have without the expansion of trade.
Recent changes in the global economy pose new challenges and
new opportunities for the United States as we maintain our com-




205

mitment to an open international trading system. The new opportunities come from the explosion of global markets, while the new
challenges come from the development of new global competitors.
During much of the last 50 years, the United States was the only
global economic superpower. But now there are three: the European Union (EU, the deeper integration of the European Community), Japan, and the United States; and all increasingly interdependent as a result of trade and capital flows, and increasingly
competitive. All three superpowers face both intensifying competition from and expanding market opportunities in the rapidly industrializing countries of East Asia, which continue to increase their
export competitiveness even as they open their own markets to
greater trade and investment. Meanwhile the global trading system
is being transformed by the emergence of new democratic and market-oriented regimes in central and eastern Europe, the former Soviet Union, Latin America, and Asia—regimes that have made substantial progress in tearing down their protectionist barriers and
are now actively encouraging exports, accepting imports, and seeking foreign capital for development.
This Administration is committed to a high-wage strategy to enable the United States to take advantage of the new opportunities
and to meet the new challenges of the changing global marketplace. This strategy consists of two distinct but interrelated parts:
trade policies that will promote trade and foster more-open markets both at home and abroad; and domestic policies that will help
American companies remain the world's productivity and technological leaders, and American workers remain the most skilled and
productive in the world. This two-part strategy reflects the fundamental goal of the Administration's other economic policy initiatives: higher living standards for all Americans. Realizing this goal
requires that America compete not on the basis of lower wages, but
on the basis of superior productivity, technology, and quality. It
also requires that our trade policy be complemented by domestic
policies designed to increase labor force skills and facilitate the adjustment of American workers and communities to changing economic circumstances—whatever their source. Other chapters in
this Report have analyzed the domestic economy. This chapter addresses the international dimension.

TRENDS IN U.S. TRADE
Trade has become increasingly important to the American economy. As shown in Chart 6-1, the share of exports of goods and
services in real gross domestic product (GDP) has gradually risen
and now stands at a postwar high of 11.6 percent. Between 1985
and 1993, U.S. merchandise exports increased from $222 billion to




206

$460 billion in current dollars, and by 95 percent in real terms. By
1992, the United States had regained its status as the world's largest exporter, and one in six American manufacturing jobs was directly or indirectly related to exports.
Chart 6-1 U.S. Trade as Share of Real Gross Domestic Product
The importance of trade to the U.S. economy has risen more or less steadily
for three decades.
Percent of real GDP
14

Imports of
Goods and Services 4

12 r-

10

f

4

1965

J
1968

|
1971

L
1974

1977

1980

1983

Exports of
Goods and Services

1986

1989

1992

Source: Department of Commerce.

Imports have also grown in significance. As Chart 6-1 shows, the
share of imports of goods and services in GDP has increased steadily and is also at a postwar high of 13.2 percent. Perhaps the most
striking development has been the increasing role of multinational
corporations in U.S. trade and, indeed, the growing importance of
intrafirm trade—cross-border trade between the separate operations of a single firm. By 1990, multinational firms accounted for
over 75 percent of total U.S. merchandise trade, and around 40
percent of U.S. merchandise trade was intrafirm. And whereas
intrafirm trade initially involved mainly U.S.-based multinationals,
more recently it has been led by foreign-based firms, especially
Japanese firms.
The impact of international trade on the national economy is not
restricted to exports and imports. International trade also affects
the fortunes of producers who do not directly export or import but
interact with producers who do. According to input-output analy-




207

ses, which take such intersectoral or interproducer relations into
account, when the indirect effects of trade are included, exports accounted for nearly four-fifths of the increase in domestic production
of manufactures between 1987 and 1992. Moreover, exports have
become more dependent on imports. Between 1982 and 1987, the
most recent years for which data are available, the import content
of exports rose from 10 percent to 14 percent. Thus exports are becoming more important for the economy, and imports are becoming
more important for exports. Overall, international trade is increasingly vital to American prosperity.
The growth of U.S. trade has been accompanied by significant
changes in both its sectoral and its regional composition. As shown
in Chart 6-2, real exports of nonagricultural merchandise and services have grown rapidly during the past quarter-century (Box 6-1),
while the contribution of agricultural exports has remained relatively small. At the same time, the relative contributions of particular sectors within nonagricultural merchandise trade have been
shifting (Table 6-1).
Chart 6-2 U.S. Exports of Goods and Services
Exports of services and nonagricultural goods have grown rapidly since
the late 1960s.
Billions of 1987 dollars
500

Nonagricultural
Merchandise^

300

200
Services

100
Agricultural
Merchandise
j

1967

|

1970

1973

1976

1979

Source: Department of Commerce.




208

1982

1985

1988

1991

Box 6-1.—U.S. Exports: More Than Peanuts

In 1992, American service firms exported to nonafflliates
abroad:
• over two-thirds as much in passenger fares ($17.4 billion), such as seats on U.S.-flagged air carriers, as the
United States exported civilian aircraft ($24.5 billion)
• more educational services ($6.1 billion) than the United
States exported corn ($5.7 billion)
• more financial services ($5.4 billion) than the United
States exported wheat ($4.6 billion)
• more equipment installation and repair services ($2.8
billion) than the United States exported agricultural machinery ($2.1 billion)
• more information services, including computer and data
processing and database services ($2.6 billion), than the
United States exported aluminum ($1.2 billion)
• more legal services ($1.4 billion) than the United States
exported vegetable oils ($1.0 billion)
• more management consulting services ($0.78 billion)
than the United States exported milled rice ($0.72 billion) or peanuts ($0.21 billion).
TABLE 6-1.—U.S. Merchandise Trade by Industry, 1972 and 1992
[Percent of total]

1972

Industry
Exports

18.5
3.1
3.2
8.4
3.9
1.5
1.2
1.7
27.0
16.9
.3
2.8
3.7
7.8

Agricultural and forest products
Minerals
Fuels
Chemicals
Textiles, apparel, leather products, and footwear
Paper
Nonmetallic minerals products
Iron and steel
Machinery
Transportation equipment
Furniture and fixtures
Instruments
Miscellaneous manufactures
Other industries

1992
Imports

15.4
5.8
8.5
3.6
8.8
2.3
2.3
5.3
14.0
17.5
.7
1.6
6.5
7.5

Exports

11.7
2.3
2.6
10.4
3.4
1.5
.9
1.0
30.5
17.7
.9
3.6
5.7
7.9

Imports

6.2
2.3
11.1
5.4
10.5
1.6
1.8
1.9
24.8
15.7
1.4
3.1
7.7
6.3

Note -The classifications are based on the SITC Revision 1 coding system, Import figures have been adjusted to net out
reexports.
Detail may not add to 100 percent due to rounding.
Source: United Nations, Commodity Trade Statistics Division.




209

An important sectoral development in recent years has been the
growth of high-technology products and industries in both U.S. exports and imports. In 1992, the United States exported $107 billion
in advanced technology products, up in nominal terms from $83 billion in 1989. Imports of these products also increased—from $56
billion in 1989 to $72 billion in 1992. Aerospace, information and
communications, and electronics together contributed the predominant share of U.S. high-technology exports. These sectors, along
with a few high-technology product lines within other industrial
sectors, are considerably more export-intensive than U.S. manufacturing as a whole. Indeed, aircraft and computers and office equipment have the highest ratios of export sales to value added among
all manufacturing industries.
Heightened foreign competition and the globalization of production (technology respects no border) have made many high-technology industries relatively import-intensive as well. In fact, the
most export-intensive of America's high-technology industries (with
the marked exceptions of plastics and aircraft) are now also the
most import-intensive. The electronics industries have been the
arena of the most dramatic penetration of the U.S. high-technology
market, both because Japanese and East Asian electronics producers have become more formidable competitors, and because American electronics multinationals have spread their own production
around the world.
Just as the commodity composition of U.S. trade has been changing, so has its geographical composition. As shown in Table 6-2,
the shares of U.S. exports going to and imports coming from developing countries have risen, while the shares to and from industrial
countries have fallen. These trends reflect the fact that the developing countries as a group have been growing more rapidly than
the industrial countries.
TABLE 6-2.—U.S. Merchandise Trade by World Region, 1972 and 1992
[Percent of total]

1992

1972
Region
Exports

Exports

Imports

66.8
10.0
26.8
30.0

Developing countries
Asia
Middle East
Western Hemisphere
Other
,
1
Membership as of 1992.
Note-Detail may not add to totals due to rounding.
Source: International Monetary Fund.

210

58.5
10.7
230
24.9

18.0
17.6
22.1

27.6

41.5

42.3

8.9
4.1
14.6
5.6

Japan
European Community1
Other

16.3
24.0
32.1

33.2

Industrial countries




Imports

9.6
1.6
12.6
3.8

16.6
4.5
16.9
3.5

22.8
3.1
13.0
3.4

72.4

57.7

The fast-growing countries of Asia have provided a rapidly expanding market for U.S. exports; their share of the total nearly
doubled from 9 percent in 1972 to 17 percent in 1992. Indeed, by
1992 our trans-Pacific trade was 50 percent greater than our transAtlantic trade. The increasing importance of Asia in U.S. trade appears to contradict the common contention that the world is devolving into three trading blocs centered on Europe, Asia, and North
America. Nor is such a conclusion supported by more-sophisticated
evidence. When researchers have modeled the pattern of trade
flows among different countries, they have found no real evidence
that intraregional trade flows in Asia are unusually large once economic fundamentals are taken into account. The observed increases
in intraregional flows can be explained largely in terms of differences in economic growth rates and geographical proximity.
Likewise, when researchers have looked at financial flows, exchange-rate determination, and the like, there is little evidence
that a "y en bloc" is developing in Asia.
In addition to leading the world in trade, the United States leads
the world in the stock of foreign direct investment, both as investor
and as recipient. In 1992, U.S. firms owned 25 percent, and the
United States hosted 22 percent, of the world's foreign direct investment stock. The largest hosts of outward U.S. foreign direct investment (ranked in order of importance) are the United Kingdom,
Canada, Germany, Switzerland, and Japan, which together account
for nearly half the total (Table 6-3). Similarly, five industrial countries (again ranked in order of importance)—Japan, the United
Kingdom, the Netherlands, Canada, and Germany—account for
more than three-quarters of existing foreign direct investment in
the United States. The predominant role of high-wage industrial
countries in both inward and outward foreign direct investment in
the United States refutes the popular notion that such investment
is motivated primarily by the search for lower wages. In fact, many
foreign investment decisions are motivated by other considerations,
most often the need to have an active presence in large or rapidly
expanding markets or the need to overcome trade and other barriers that impede access.
It is sometimes argued that outward foreign direct investment
"exports" jobs. However, the parallel expansion of two-way foreign
direct investment and intrafirm trade suggests that such investment is more likely to complement rather than substitute for trade,
creating high-wage jobs domestically rather than destroying them.
Several recent studies have concluded that foreign direct investment is more likely to create trade than reduce it. Another recent
study found that inward foreign direct investment brings with it
competition, new technologies, and new management techniques,




211

TABLE

6-3.—Stock of U.S. Outward and Inward Foreign
Direct Investment, 1992
Country

Billions of dollars

NVESTMENT BY U.S. FIRMS ABROAD (OUTWARD):
United Kingdom
Canada
Germany
Switzerland

77.8
68.4
35.4
28.7
26.2

Jdpdn
All countries

486.7

INVESTMENT BY FOREIGN FIRMS IN THE UNITED STATES (INWARD):
96.7
94.7
61.3
39.0
29.2

Japan
United Kingdom
Netherlands
Canada
Germany
All countries

419.5

Note.—All figures are on a historical cost basis.
Source: Department of Commerce, Bureau of Economic Analysis.

each of which has contributed to the resurgence in U.S. productivity, further enhancing national competitiveness.
TRADE, JOBS, AND WAGE INEQUALITY
In the short run, both the level of output and the level of employment in the American economy depend on the level of aggregate
demand. One component of aggregate demand is net exports, the
difference between exports and imports. Thus, as long as there is
slack in the economy, an increase in net exports will stimulate production and create jobs. For example, most scholars estimate that
NAFTA will create additional American jobs over the next several
years because it will boost U.S. net exports to Mexico. Once the
American economy nears full employment, however, additional net
exports could create upward pressure on prices as well. Even when
the economy is at full employment, however, and even if trade liberalization increases both imports and exports equally, leaving net
exports unchanged, the American economy still reaps the benefits
of freer trade in the form of greater productive efficiency, lower
prices, and higher living standards.
Despite the possible benefits of trade liberalization for the level
of employment in the short run, and the certain benefits of trade
liberalization for living standards in the long run, some observers
worry that expanding trade with developing countries will depress
the wages of low-skilled American workers. As explained in Chapter 3, wage inequality has, in fact, increased over the past two decades as the share of trade in the U.S. economy has grown. Not surprisingly, concerns have been voiced that greater international
trade may be responsible for greater inequality in the wage distribution.




212

Such concerns are plausible and are consistent with economic
theory. Skilled labor is relatively abundant in the U.S. economy.
According to theory, when the United States trades with economies
in which unskilled labor is relatively abundant, we will tend to export products requiring skilled labor and import products using unskilled labor. The relative prices of skill-intensive goods will therefore rise in the United States, and U.S. production will expand in
export industries and contract in industries that compete with imports. Demand for skilled labor will rise, while demand for unskilled labor falls. These changes in labor demand will raise the
wages of skilled workers relative to those of unskilled workers.
Thus, on a priori grounds, one might expect an expansion of trade
with developing countries to lead to greater wage inequality in the
United States.
Despite the plausibility of the theoretical argument, however,
several studies find that it is difficult to discern any substantial
impact of trade on wage inequality. Economists have posited a systematic relationship between the relative prices of goods and the
relative returns to factors of production. If increased trade with developing countries were the cause of growing wage inequality, the
relative prices of goods that use highly skilled labor would be rising
relative to those of goods that use unskilled labor. However, one
study has found no evidence that the relative price of skill-intensive goods has risen in the United States. Indeed, it is difficult to
find any evidence of the changes in relative prices that would be
required for changes in trade patterns to have altered the relative
returns to different types of labor.
Similarly, if increased trade were responsible for increased wage
inequality, the growth in wage differentials would lead firms in all
sectors to substitute unskilled labor for skilled labor. Instead, studies find that virtually all manufacturing industries have increased
their relative use of skilled labor despite growing wage differentials. Rising wage differentials along with greater use of skilled
labor suggests that demand for skilled labor has been rising broadly in the economy. As expected, these wage differentials have led
to an upgrading of skills in the work force, allowing firms to meet
their rising demand for skilled labor.
Taken together, this evidence (little change in relative prices,
and economy-wide increases in the demand for skilled labor) suggests that growing demand for skilled labor has resulted from
widespread changes within industries rather than from changes in
the structure of production engendered by greater trade. The preponderance of evidence indicates that the primary sources of growing wage inequality are domestic rather than foreign. As discussed
in Chapter 3, the sources of wage inequality are difficult to pinpoint, but to the extent that growing inequality can be explained,




213

technical change has been offered as the leading candidate. Increased trade with developing countries may have reinforced some
of the changes in wages caused by technological change, but careful
studies have failed to discern a sizable impact of trade on wage inequality.
Two explanations of this finding have been offered. First, although trade with developing countries has been growing, most
U.S. trade—about 60 percent—still involves other industrialized
countries whose skill levels and wages are similar to those in the
United States. Second, while trade is a growing part of the U.S.
economy, it remains a relatively small part. Only extremely large
changes in the composition of trade could have a discernable impact on wages and wage disparity in the U.S. economy.
Nonetheless, the expansion of trade will inevitably disadvantage
some workers in the short run. One goal of Administration policy,
as described in Chapter 3, is to facilitate the adjustment of the
labor force to changing economic circumstances whatever the putative source of change. It is by recognizing both the opportunities
and the challenges presented by the changing global economy that
the Administration seeks to achieve a productive and stable basis
for U.S. engagement in the world economy.

THE ADMINISTRATION'S TRADE INITIATIVES
The Clinton Administration supports the goal of freer trade on
a reciprocal basis. In pursuit of that goal, the Administration is
dedicated to working with the private sector and its trading partners to open foreign markets through bilateral, regional, and multilateral trade agreements. At the same time, the Administration believes that trade policy should complement, not substitute for,
domestic policies to enhance the global competitiveness of American companies and their workers and to make the United States
an attractive production location for both domestic and foreign
firms.
DOMESTIC INITIATIVES: THE NATIONAL EXPORT
STRATEGY
The Administration's trade policy begins at home with an activist
commitment to promote American exports both by reducing domestic barriers to them and by improving the efficiency of our export
promotion programs. Working within the interagency Trade Promotion Coordinating Committee, created by the Congress to reduce
the fragmentation of our export promotion programs, the Administration unveiled a new National Export Strategy in September
1993. This strategy reflected six underlying themes: streamlining
and combining functions across agencies, allocating resources stra-




214

tegically, involving the private sector and State and local governments, effectively advocating the interests of U.S. exporters abroad,
measuring performance, and reducing export controls (restrictions
on exports to meet national security, antiproliferation, or foreign
policy objectives). Among the actions to be undertaken immediately
are:
• Revising outmoded export controls on high-technology products. The specific technical revisions are expected to reduce
regulation significantly on an estimated $35 billion worth of
high-technology exports. For example, export restrictions that
previously affected sales of even some personal computers to
many foreign markets have been relaxed.
• Consolidating all Federal export promotion services in one location to facilitate "one-stop shopping." Initially, four centers
will be created; more will be added until a national network
has been created.
• Providing high-level government advocacy on behalf of U.S.
firms pursuing major foreign government procurement opportunities through an interagency "Advocacy Network" and an
"Advocacy Center" located in the Department of Commerce.
• Improving our export finance programs by combating the "tied
aid" practices of other nations, increasing the limits on insurance guarantees by the Overseas Private Investment Corporation, broadening assistance to U.S. companies seeking to participate in activities funded by the multilateral development
banks (such as the World Bank), and combining into one agency the infrastructure feasibility funds that are the seed money
for U.S. firms' participation in major infrastructure projects
abroad.
Taken together, the actions outlined in the National Export
Strategy are expected to increase both the responsiveness and the
efficiency of export promotion efforts.
BILATERAL NEGOTIATIONS
Along with these unilateral actions, the Administration has engaged numerous foreign countries in bilateral trade talks. The most
prominent of these efforts has been with Japan.
The U.S.-Japan Framework Talks
Japan presents a special case for the United States. Japan is the
world's second-largest economy, after the United States, and our
second-largest trading partner, after Canada. And it is with Japan
that the United States maintains its largest bilateral merchandise
trade imbalance: a deficit of $49.6 billion in 1992 (Table 6-4). (In
the same year, we enjoyed a $13.3 billion surplus with Japan in
services trade.) Japan's large surplus with the United States is an
important part of its large global current account surplus (the cur-




215

rent account is a broader measure of trade that includes both goods
and services), which stood at $118 billion in 1992.
TABLE

6-4.—U.S. Merchandise Trade Balances with
Selected Countries, 1987-92
[Billions of dollars]
"Greater China"

European
Community

Year

Japan
Total

People's
Republic of
China

Hong Kong

Rest of
world

Taiwan

1987

-20.6

-56.3

-25.9

-2.8

-5.9

-17.2

1988

-9.2

-51.8

-20.6

-3.5

-4.6

-12.6

-36.9

1989

1.2

-49.1

-22.6

-6.2

-3.4

-13.0

-38.9
-42.5

-49.3

1990

6.3

-41.1

-24.4

-10.4

-2.8

-11.2

1991

17.0

-43.4

-23.7

-12.7

-1.1

-9.8

-16.6

1992

9.0

-49.6

-28.4

-18.3

-0.7

-9.3

-15.5

Note.—Exports are f a s . and imports are customs value.
China, Hong Kong, and Taiwan have been grouped together as "Greater China" for analytical convenience.
Detail may not add to totals due to rounding.
Source: Department of Commerce, Bureau of the Census.

Moreover, certain of Japan's trade patterns appear to differ from
those of other major industrial countries. Japan has an unusually
low share of manufactured imports in domestic consumption, an
unusually low share of intraindustry trade, an unusually small
stock of inward foreign direct investment, an unusually small share
of domestic sales accounted for by foreign-owned firms, and an unusually high share of intrafirm trade, which is predominantly controlled, moreover, by Japanese rather than foreign-based firms.
Manufactured imports play a relatively small role in the Japanese economy, with the share of manufactured imports in consumption less than half that of the other major industrialized countries
(Table 6-5). And while this measure has risen considerably in the
other countries, it has remained relatively unchanged in Japan for
20 years.
TABLE 6-5.—Selected Trade Indicators for Six Industrialized Countries,
1990
Indicator
Import share of domestic
manufactures (percent)

Japan
consumption

United
States

Germany

United
Kingdom

France

Italy

of
5.9

15.3

15.4

17.7

13.7

12.6

Intraindustry trade index

.58

.83

.73

.79

.77

.67

Foreign firms' share of domestic sales (percent)

1.2

16.4

14.0

124.1

28.4

1 Data for 1989.
2 Not available.
Note.—Intra-European Community trade has been excluded from the intraindustry trade and import share calculations.
Sources: Institute for International Economics; United Nations, Commodity Trade Statistics Division; World Bank; and
Department of Commerce.




216

Another interesting aspect of Japan's trade pattern is its relatively low level of intraindustry trade—trade in differentiated
manufactures within a given industry. (One common example is
trade in different makes and models of automobiles.) As economies
develop and the demands of firms and consumers become more
complex, individual firms become less able to produce the vastly
broader range of products required to satisfy all demands.
Intraindustry trade then increases, as firms penetrate each others'
domestic markets to supply those particular products in which they
specialize. Intraindustry trade, it is sometimes argued, is of particular importance because the adjustment costs associated with an
expansion of intraindustry trade are thought to be lower than for
a comparable expansion of interindustry trade—import-competing
firms can retool and specialize rather than disappear. If this is so,
expansion of intraindustry trade should be more compatible with
trade liberalization.
Japan also exhibits an unusually high share of intrafirm trade.
Intrafirm trade is important both as a major channel of trade and
because intracorporate transactions may be less responsive to normal price and cost determinants than are arm's-length transactions.
This issue is of considerable interest with regard to Japan because of Japan's unusual pattern of intrafirm trade. For most countries, intrafirm trade is dominated by shipments from parent firms
to their foreign affiliates. That is to say, intrafirm trade is exportoriented. Japan is unusual in that Japanese parents dominate
trade in both exports and imports. Some researchers have attributed this dominance to the prominent role of giant trading companies and keiretsu relationships in Japanese trade and argue that
this pattern of trade is consistent with imperfectly competitive Japanese domestic markets. (Keiretsu are large groups of Japanese
firms that share financial, production, personnel, and other linkages.)
Table 6-6 reports data on U.S. bilateral trade with Europe and
Japan. Intrafirm trade is a more important part of U.S.-Japan
trade than of U.S.-Europe trade. Three-quarters of all U.S. imports
from Japan are intrafirm (compared with less than 50 percent for
trade with Western Europe), and 36 percent of U.S. exports to
Japan are intrafirm (compared with 32 percent for Western Europe).
Japanese markets are not completely closed. Indeed, some U.S.
firms excel in Japan. On the whole, however, the role of foreign
firms and foreign goods is strikingly small (Table 6-5).
Explanations of Japan's apparent distinctiveness fall into two
broad groups, one emphasizing direct trade and industrial policy
interventions and the other emphasizing structural characteristics




217

TABLE 6-6.—Intrafirm Trade as Share of Total U.S. Exports to and
Imports from Europe and Japan, 1992
[Percent of total]

Region

U.S. imports
from
region

to

Europe

32.4

Japan

36.2

46.3
75.0

World total

30.6

45.0

Note.—Intrafirm trade is defined as merchandise trade between "related parties" (that is, between affiliates of the same
firm).
Source: Department of Commerce, Bureau of the Census.

of the economy. Domestic industrial support policies in Japan have
included subsidies to producers and to research and development
consortia, preferential tax treatment, preferential access to credit,
government procurement preferences, establishment of producer
cartels, and lax antitrust enforcement. External policies have included trade protection, restrictions on inward foreign direct investment, and control over high-technology trade. These policies have
been applied to both infant and senescent industries.
With a few notable exceptions, including agriculture, Japanese
tariffs and import quotas are not significant trade barriers. Yet Japan's market is regarded by many as effectively closed to imports
of many foreign manufactures, especially those that directly compete with Japanese goods. Structural barriers alleged to deter imports include reliance on bureaucratic control to ensure product
safety; domestic cartels, discriminatory pr-ctices by the keiretsu,
and weak enforcement of competition policies; inadequate intellectual property protection; government procurement procedures that
favor domestic suppliers; imperfect capital markets that inhibit inward foreign investment; and impediments in the distribution
channels for imported products—to name a few.
Estimating the impact of the mostly overt barriers to trade in
primary products is relatively straightforward. One recent study
concluded that complete elimination of all agricultural trade barriers in Japan might increase the incomes of U.S. producers by 28
percent of the value of bilateral agricultural exports. This would
occur through a combination of higher export volumes to Japan and
higher prices on exports to all markets. Comparable figures for potential gains in minerals and, importantly, services, are not available.
What attracts the most attention, however, is the potential gain
in manufactures. And here the story is far more controversial because the subtle nature of Japan's trade barriers poses difficult
problems for economists trying to assess their impact. In consequence, researchers have eschewed direct measurement of these
barriers and focused instead on inferring their impact indirectly by




218

examining differences in predicted and actual trade volumes. These
studies have been virtually unanimous in their conclusion that Japan's low volume of manufactured imports cannot be entirely explained by economic fundamentals.
In addition to examining quantities, one can look at prices. If
markets were really open, traded goods should sell at "international prices" adjusted for transport costs. A number of studies
have concluded that traded-goods prices are far higher in Japan
than in other countries. Among these surveys were two involving
exact brand and model comparisons conducted by the Department
of Commerce and the Japanese Ministry of International Trade and
Industry as part of the Structural Impediments Initiative talks.
The 1991 survey found that two-thirds of the products covered
were on average 37 percent more expensive in Japan than in the
United States; the 1989 survey obtained quantitatively similar results. Additional evidence comes from Japanese researchers who
used Japan's input-output table to calculate the tariff-equivalents
of Japanese nontariff barriers. In some sectors they discovered tariff-equivalents of 500 percent and higher.
The question naturally arises as to why these price differences
are not eliminated through arbitrage. Such large price differentials
could perhaps be dismissed as the product of exchange-rate misalignment, were they temporary, but their persistence suggests
that they are the product of market closure. Indeed, one recent
study concluded that Japanese manufactured imports might increase by more than 20 percent if the price differentials were eliminated.
These studies, which extrapolate well beyond the historical experience and are therefore unavoidably imprecise, have reached a variety of conclusions as to the importance of economic policy in determining Japanese trade patterns. The preponderance of evidence,
however, points to the closed nature of the Japanese market. According to one recent comprehensive study, if Japan were to eliminate all formal and informal barriers to trade, U.S. exports to
Japan would initially increase by somewhere in the range of $9 billion to $18 billion per year.
It should be made clear, however, that even if these barriers
were eliminated, the bilateral balance would not change by this full
amount: Japanese imports would increase initially, but the resultant depreciation of the yen and reallocation of resources would
boost Japanese exports and reduce Japanese imports, at least partly offsetting the initial change in the balance. Moreover, liberalization would occur over an extended period of time, making it potentially difficult to disentangle changes in the balance due to liberalization from those due to macroeconomic developments, even in retrospect but this in no way diminishes the desirability of obtaining




219

greater access to the Japanese market, though. With more-open
markets not only will American firms sell more but, because of the
exchange-rate adjustments, many American firms will receive more
for what they sell. Moreover, Japanese consumers will benefit—for
the same reasons that American consumers benefit—from opening
trade: Both will have access to a greater variety of goods at lower
prices. Open markets are a win-win situation in which both sides
gain.
The existence of such a large, technologically dynamic, and distinctive economy as Japan poses special trade problems for the
United States. Current U.S. policy centers around the United
States-Japan Framework for a New Economic Partnership, announced in July 1993. The Framework is the successor to the
1985-86 Market Oriented Sector Selective (MOSS) talks and the
SII talks already mentioned. The Framework document adopted at
the time of the 1993 Tokyo economic summit calls for macroeconomic, sectoral, and structural reforms and cooperation on global issues of common interest such as the environment. In particular, Japan committed itself to "actively pursue the medium-run
objectives of promoting strong and sustainable domestic demandled growth...intended to achieve...a highly significant decrease in
its current account surplus...." Japan also committed to "promoting
a significant increase in global imports of goods and services." For
its part, the United States "will...actively pursue the medium-term
objectives of substantially reducing the fiscal deficit, promoting domestic saving, and strengthening its international competitiveness."
The sectoral and structural parts of the talks are organized into
five baskets: government procurement, regulatory reform and competitiveness, other major sectors (in the first instance, automobiles
and auto parts), economic harmonization, and implementation of
existing arrangements and measures. Topics under the government
procurement basket include Japanese procurement practices in
such sectors as computers, supercomputers, satellites, medical technology, and telecommunications, as well as overall government procurement policies in both countries. Regulatory issues include policies and practices relating to financial services, insurance, competition policy, retail and wholesale distribution, and U.S. export
competitiveness. Economic harmonization covers foreign direct investment, intellectual property rights, access to technology, and
long-term buyer-supplier relationships. The implementation basket
is concerned with carrying out existing agreements between the
two countries (including SII). The Framework agreement explicitly
states that the United States and Japan are committed to the multilateral trading system and that "benefits under this Framework
will be on a Most Favored Nation basis."




220

The Framework represents a departure from previous negotiations in two substantive ways. The first is the use of "objective criteria" to assess progress. The Framework agreement states that
"assessment will be based upon sets of objective criteria, either
qualitative or quantitative or both as appropriate," on which the
two governments will agree. In this sense the negotiation is results-oriented, with both governments agreeing that "tangible
progress must be achieved." By establishing objective criteria,
progress can be independently verified, allowing negotiators to
agree on those areas where problems have successfully been resolved and to focus on those where progress is lacking.
The other innovation of the Framework talks is procedural: By
explicitly incorporating biannual meetings between the President of
the United States and the Prime Minister of Japan, the Framework
dramatically raises the political profile of the negotiations. The
hope is that this will significantly increase the pressure on policymakers to make steady progress on resolving outstanding issues.
Trade with China
China is also an important focus of U.S. trade policy because of
its size, its reforming economy, and its large trade surplus with the
United States, which reached $18.3 billion in 1992.
It is misleading to focus exclusively on China's bilateral balance
with the United States. Table 6-4 reports trade balances for China,
Taiwan, and Hong Kong and aggregates them as "Greater China."
It becomes apparent that the increase in the U.S. deficit with
China has been largely offset by declines in the U.S. deficits with
Taiwan and Hong Kong. These developments are the result of large
realignments in exchange rates since the late 1980s that have encouraged firms to relocate labor-intensive activities, such as the
production of shoes, garments, and toys, from Hong Kong and Taiwan to China, where wage rates are lower. In other words, the
growing U.S.-China trade imbalance represents in part a geographic reallocation of production, not a fundamental change in
U.S. trade relations.
With regard to China, U.S. trade policy centers on prison labor
and workers' rights, intellectual property rights, market access,
textiles, services, and the issue of China's most-favored-nation
(MFN) status. In the area of intellectual property rights, the United States and China signed a memorandum of understanding in
January 1992. China agreed to provide product patent protection
beginning January 1, 1993, and to adhere to international conventions on the protection of copyrights. A process has been established to enforce the memorandum, although there has been little
actual progress on enforcement thus far.
In October 1992 the United States and China signed a market
access agreement, under which China committed itself to increase


http://fraser.stlouisfed.org/- 4 4 4
151
0 - 9 4 - 8
Federal Reserve Bank of St. Louis

221

the transparency of its trade regime, to remove import restrictions
such as licensing requirements and quotas from hundreds of products, and to liberalize its import administration substantially. The
United States agreed to liberalize restrictions that limit Chinese
access to technology, providing greater opportunities for U.S. producers. China is largely in compliance with the market access
agreement, although some issues remain unresolved with respect
to transparency, quotas, and agricultural trade. The Administration is continuing to push for greater access in these areas, as well
as for better access to the Chinese market for U.S. providers of financial, maritime, and air transport services.
A memorandum of understanding on exports to the United
States produced by prison labor was concluded in 1992 and provides for prison inspections. China has begun to allow U.S. officials
access to prisons to investigate allegations, and there has been a
decline in such allegations since the memorandum was signed.
China continues to be denied coverage under investment guarantees of the Overseas Private Investment Corporation, however.
Coverage was suspended in 1990 on the grounds that China was
not taking steps to extend internationally recognized workers'
rights to its citizens.
In the case of textiles, conflicts have arisen over China's shortcomings in implementing the terms of the Multi-Fiber Arrangement, which regulates trade in textiles and apparel. Chinese producers have at times resorted to fraudulent practices to evade restrictions on Chinese exports of textiles and apparel to the United
States. The most common technique has been to ship goods produced in China to third countries, and from there reexport them to
the United States under the third countries' quotas. In January
1994 the United States and China reached a new agreement on
this issue. In the long run, the transshipment problem can be
solved through China's entry into GATT and the tariffication of the
U.S. import control system as envisioned in the Uruguay Round
agreement (discussed below). In the meantime, however, the United States will continue its two-track policy of negotiations with the
Chinese government combined with criminal prosecutions for customs fraud.
The last major remaining U.S.-China issue is the annual renewal
of China's MFN status. Under the terms of the Jackson-Vanik
Amendment to the Trade Act of 1974, MFN status can be extended
to nonmarket economies only if the President grants a waiver certifying that the country does not impede emigration. (The law was
originally designed to encourage the Soviet Union to permit the
emigration of Soviet Jews.) China first gained MFN status in the
U.S. market in 1980, and renewal was routine until the Tiananmen
Square incident in 1989. Since then, renewal of China's MFN sta-




222

tus has become increasingly controversial, with renewal in 1994
tied explicitly to human rights improvements.
In each trade area, the Administration is carefully monitoring
Chinese implementation of the bilateral agreements and will use
all means at its disposal to ensure compliance. Successful implementation will lay the foundation for Chinese accession to GATT
and a far closer economic relationship between the United States
and China.
Trade and the Reform Process in the Former Socialist Bloc
Another crucial focus of the Administration's foreign economic
policy is support of the reform process in the countries of central
and eastern Europe and the former Soviet Union, especially Russia.
Never before has a country of Russia's size and influence (with a
population of 150 million, a large conventional military presence,
and nuclear weapons) attempted such a rapid metamorphosis. Because of the immediate implications of Russian economic reform for
world peace, world economic growth, and the U.S. economy, the
President has made support of the reforms one of his top foreign
policy objectives. This involves both providing assistance to domestic reforms and facilitating the integration of Russia into the world
trading system.
Most of the fundamental issues in economic reform—including
liberalization (the freeing of prices), privatization (the transfer of
ownership to private entities), and stabilization (the reduction of
inflation and the budget deficit)—are essentially Russia's domestic
policy decisions. Nevertheless, outside organizations including the
International Monetary Fund, the World Bank, the Group of Seven
(G-7), and the U.S. Government have important roles to play. Indeed, along with its G—7 partners, the United States has been actively assisting the cause of economic reform in Russia. In April
1993 the G-7 pledged $15 billion of debt rescheduling and $28.4
billion in other assistance. By the end of November over half of this
total had been approved.
Economic assistance packages such as the one presented in
Tokyo constitute a significant source of finance for reform policies.
But Russian exports to the West represent another, perhaps even
more important, source of hard-currency revenues. Because the
trade patterns of Russia and the other transitional economies were
formerly based on arbitrary central planning decisions, not market
forces, these countries have encountered difficulties in establishing
normal commercial relations with other countries. The transition to
a market economy has involved dramatic changes in both the product content and geographical composition of trading patterns. After
most of these changes have been effected, Russia may be a substantial participant in world trade. Russia's share of U.S. trade is
quite small (0.4 percent of total U.S. trade), but one study found




223

that if the states of the former Soviet Union were like typical industrial economies, their share of world exports would eventually
rise to over 10 percent, from around 4 percent in 1988. Through the
first 9 months of 1993, Russia's two most important exports to the
United States were aluminum ($326 million) and crude oil ($131
million), which together accounted for more than 40 percent of the
total.
Expanding trade with economies in transition from socialism
raises special problems for the application of U.S. antidumping
laws, which divide the world into market and nonmarket economies
(NMEs), with separate methodologies for assessing dumping specified for each. (Russia, for example, is classified as an NME.) For
market economies, dumping is determined to have occurred when
a foreign producer charges lower prices in the U.S. than in its
home market (or, alternatively, prices below its costs in the home
market). In the case of NMEs, since neither prices nor input costs
are market determined, they are not used in dumping investigations. Instead, U.S. law instructs the Commerce Department to
construct cost estimates based on costs in a "surrogate" country at
a similar stage of development. In practice, the surrogates are often
at quite dissimilar stages of development, thus potentially tilting
the calculation toward finding large dumping margins. For example, the Department of Commerce has used Swiss, Canadian,
Dutch, French, German, and Japanese producers as surrogates for
Chinese firms in antidumping petitions. Perhaps the best known
example, however, is that of Polish golf carts, described in Box 6
—
2.
Box 6-2.—The Case of the Polish Golf Carts

In the mid-1970s an antidumping petition was filed against
Polish electric golf carts* Because Poland was an NME that
had no golf courses and therefore little domestic demand for
golf carts, the U.S. authorities rightly concluded that it was
impossible to compare the prices at which the carts were sold
in the United States with prices in Poland. Instead, the authorities employed a surrogate-country approach: they attempted to estimate what golf carts cost in a country similar
to Poland. Canada was chosen. Unfortunately, Canada didn't
produce golf carts either, so the final determination was based
on an estimate of what golf carts would have cost in Canada—
if Canada had actually produced them.
Reclassification of NMEs such as Russia as market economies
would not necessarily solve the problem, however, since they would
then become subject to U.S. countervailing duty law at a time




224

when their subsidies to state-owned producers remain sizable. As
a result, either the market or the nonmarket methodology may impede imports from economies in transition.
This situation is particularly problematic since allowing Russia
and other economies in transition to export the goods in which they
have comparative advantage benefits both these economies (which
obtain valuable hard-currency revenues as well as experience in
world markets) and Western nations (which obtain goods produced
relatively more efficiently than they can be produced in the West).
Open market access is therefore a positive-sum means of encouraging the reform process.
REGIONAL INITIATIVES
Some issues cannot be handled on a bilateral basis, and the Administration has been deeply engaged in a number of regional efforts. The most prominent of these has been the North American
Free Trade Agreement, which will solidify the ongoing reforms in
Mexico and help expand U.S.-Mexican trade.
The North American Free Trade Agreement
In November 1993 the Congress ratified the North American
Free Trade Agreement, which went into effect on January 1, 1994.
NAFTA creates a free-trade area of 370 million consumers and over
$6.5 trillion of annual output, linking the United States to Canada
and Mexico, our largest and third-largest trading partners. Building on the earlier United States-Canada Free-Trade Agreement,
NAFTA will contribute to productive efficiency, enhance the ability
of North American producers to compete globally, and raise the
standard of living of all three countries. By improving the investment climate in North America, and by providing innovative companies with a larger market, NAFTA will also increase economic
growth.
NAFTA will help reinforce the market reforms already under
way in Mexico (Box 6-3). Mexico's reforms have raised its rate of
economic growth, making it an increasingly important export market for the United States. A stable and prosperous Mexico is important to the United States for both economic and geopolitical reasons. The United States shares a border roughly 2,000 miles long
with Mexico; and as economic opportunities in Mexico improve,
Mexican workers will have fewer incentives to migrate to the United States. NAFTA will help forge a lasting relationship between
the two countries, based on open trade and cooperation.
In addition to dismantling trade barriers in industrial goods,
NAFTA includes agreements on services, investment, intellectual
property rights, agriculture, and strengthening of trade rules.
There are also side agreements on labor adjustment provisions,
protection of the environment, and import surges.




225

Box 6-3.—Mexican Economic Reforms
Mexico is one of the outstanding economic success stories of
the last decade. After the debt crisis of 1982, the Mexican government began a broad program of economic reform, which has
continued through the early 1990s. Fiscal policy changes,
which moved the primary budget (that is, excluding interest
payments) from a deficit of about 7 percent of GDP in 1982 to
a sustained surplus, were the first step. More-fundamental reform began in December 1987 when the Mexican government
implemented a concerted program that combined macroeconomic stabilization with microeconomic liberalization.
Stabilization efforts in 1989-91 were pursued through a fiscal policy of tight spending controls and tax reform that broadened the tax base and lowered tax rates, while maintaining a
roughly stable level of revenue. Monetary and exchange-rate
policies were combined to reduce inflation while preventing
large exchange-rate movements. Finally, incomes policies were
used to reduce expectations of inflation and any inflationary
inertia.
The microeconomic reforms were sweeping. More than 80
percent of the 1,155 public sector enterprises in existence in
1982 have already been privatized or liquidated. Privatization
has enhanced microeconomic efficiency and reduced the fiscal
demands imposed by badly run state-owned enterprises. In addition, Mexico joined GATT in 1986. Tariffs were cut sharply
and many nontariff barriers to trade, such as quotas and import licenses, were removed. Finally, a renegotiation and restructuring of Mexico's external debt eased its debt burden and
greatly reduced the uncertainty associated with debt service.
The results of these reforms have been impressive. Inflation
fell from approximately 160 percent in 1987 to 12 percent in
1992. At the same time, real GDP growth rose from -3.8 percent in 1986 to 4.5 percent in 1990 before slowing somewhat
to 2.6 percent in 1992. The recent passage of NAFTA should
strengthen the reform effort in Mexico and make a positive
contribution to its economic performance in the future.
NAFTA and Industrial Trade. As a result of NAFTA, existing duties on most goods from member countries either were eliminated
on January 1, 1994, or will be phased out in 5 or 10 years (for certain sensitive items, up to 15 years). Among those industrial goods
for which trade is now tariff-free are computers, medical equipment, agricultural equipment, internal combustion engines, and
telephone switches, all of which previously faced tariffs of 10 per-




226

cent or more in the Mexican market. Approximately 65 percent of
U.S. industrial and agricultural exports to Mexico will be eligible
for duty-free treatment within 5 years. NAFTA will also eliminate
quotas and import licenses that are not essential for such purposes
as protecting human health.
NAFTA and Services Trade. NAFTA will allow U.S. service firms
to provide their services directly from the United States on a nondiscriminatory basis, with any exceptions clearly spelled out. For
investors, NAFTA assures nondiscriminatory treatment: Americans
will generally be able to establish, acquire, and operate firms on
the same basis as Mexicans in Mexico and Canadians in Canada.
NAFTA also protects U.S. investors against restrictions on their repatriation of capital, profits, and royalties, and against expropriations without full compensation. Investors can seek monetary relief
from an international arbitral panel for violation of their rights.
Virtually all types of inventions, including Pharmaceuticals and
agricultural chemicals, are protected under NAFTA provisions that
require patents to be granted for both products and processes developed by firms in member countries. The agreement also protects
copyrights for computer programs and databases, and rental rights
for computer programs and sound recordings. Service marks and
trade secrets are also covered, along with integrated circuit masks
both directly and as components of other products.
NAFTA and Agricultural Trade. NAFTA will virtually eliminate
barriers to trade in agricultural commodities between the United
States and Mexico over a 15-year period. All restrictions on products representing about 50 percent of U.S.-Mexico agricultural
trade were lifted as soon as the agreement took effect. Products
such as frozen beef, strawberries, and cut flowers—all of which previously were subject to tariffs of 20 percent or more in the Mexican
market—now trade tariff-free. For the remaining products, the
phaseout will take between 5 and 15 years. The phaseout for most
tariffs imposed by the United States will simply involve an annual
reduction in the tariff rate.
In cases where the existing trade barrier is a nontariff barrier,
such as an import license or quota, the phaseout process is more
complicated. First, the license or quota will be replaced by a "tariffrate quota," allowing a limited quantity of the good to be imported
at a low (or zero) tariff rate, but charging a tariff for quantities
above the limit. Second, the tariff-rate quota will be phased out
gradually over a 10- to 15-year period by increasing the quantity
limit and/or reducing the tariff rate applied to imports above the
limit.
With respect to the other bilateral flows, U.S.-Canada trade liberalization will continue as specified under the earlier free-trade
agreement, with tariffs on all agricultural goods eliminated by




227

1998, while nontariff barriers on a few products (poultry, eggs,
dairy products, and sugar) are maintained. In a separate agreement under NAFTA, Mexico and Canada will eliminate tariffs on
their bilateral trade (except for the four products listed above). All
three countries agreed to work for the elimination of agricultural
exports subsidies.
As a consequence of these changes under NAFTA, U.S.-Mexico
agricultural trade is expected to grow significantly. U.S. corn growers, for example, can expect to export more corn to Mexico, while
Mexican farmers can expect to export more fresh vegetables to the
Untied States.
NAFTA-Plus: The Side Agreements. The Clinton Administration
accepted NAFTA as negotiated by its predecessor, but argued that
more was needed. The result was the negotiation of three innovative side agreements.
The North American Agreement on Labor Cooperation represents
the first attempt to manage the terms of the potential change in
labor markets brought about by an accord between the United
States and a trading partner. The agreement involves such issues
as restrictions on child labor, health and safety standards, and
minimum wages. The supplemental labor agreement was developed
around three fundamental principles: (1) enhanced collaboration,
cooperation, and information exchange among the three countries;
(2) increased efforts to make each country's labor laws and their
implementation explicit and highly visible; and (3) increased use of
effective mechanisms to encourage the enforcement of national
labor laws. The agreement establishes procedural mechanisms for
enforcement, including channels of public communication, exchanges of information, discussion of issues, and various levels of
consultations. If a solution cannot be reached, the agreement provides for binding arbitration and assessment of penalties. In addition to signing the labor side agreement, the Mexican government
has pledged to link increases in the Mexican minimum wage to
productivity increases. Moreover, the United States has retained
its right to use its domestic trade laws, such as Section 301 of the
1974 trade act, with respect to labor issues not covered under
NAFTA.
The North American Agreement on Environmental Cooperation
explicitly ensures our right to safeguard the environment. NAFTA
maintains all existing U.S. health, safety, and environmental
standards. It allows States and cities to enact even tougher standards, while providing mechanisms to encourage all parties to harmonize their standards upward. The environmental side agreement
creates a new North American Commission on Environmental Cooperation, with a Council made up of the three countries' top environmental officials. The Commission will have a Secretariat with




228

a permanent staff. There is a "layered" enforcement mechanism to
ensure that countries obey their own environmental laws. The
mechanism starts with "sunshine" provisions that guarantee public
participation in monitoring the enforcement of environmental laws.
Trade sanctions are then provided for, if other avenues are not sufficient to resolve disputes. Besides the Commission, two new institutions will be established to fund and implement environmental
infrastructure projects along the U.S.-Mexican border.
The side agreement on import surges creates an early warning
mechanism to identify those sectors where explosive trade growth
may do significant harm to domestic industry. The side agreement
also establishes that, in the future, a working group can provide for
revisions in the treaty text based on the experience with the existing safeguard mechanisms.
During the transition period, safeguard relief is available in the
form of a temporary snapback to pre-NAFTA duties if an import
surge threatens serious injury to a domestic industry. And, unless
a NAFTA member's exports account for a substantial share of total
imports and contribute significantly to the injury or its threat,
these exports must be excluded from safeguard actions taken by
other members against imports from all countries.
Other NAFTA Issues. NAFTA preserves the right of each member
to retain its own contingent protection laws (such as antidumping
and countervailing duty laws), but in reviewing determination
under these laws, binational panels will replace domestic judicial
review (as in the case of the United States-Canada Free-Trade
Agreement). The panel will apply to domestic law of the importing
country, and its decision is final. Either the importing or the exporting country may request a review of a panel's determination.
In other areas, such as intellectual property rights, dispute resolution is layered. First, a country may request consultations, and
should these fail to resolve the dispute, it may call a meeting of the
Trade Commission, which will include Ministers from each country.
If the Commission is unable to resolve the dispute, it is submitted
to an arbitral panel which issues a report. If the panel upholds the
complaint, but the disputants are still unable to reach a resolution,
the complaining country is authorized to suspend benefits as appropriate.
The North American Development Bank (NADBank) was created
to address concerns about the environment and about worker dislocation. It will serve as a major lending institution to finance, coordinate, and implement environmental, infrastructure, and community development projects, both along the border and elsewhere,
related to continuing North American integration. NADBank will
be organized to invest specifically in the environmental, physical,
and social infrastructure that will be needed to bring about an up


229

ward convergence in environmental and social standards and practices between Mexico and the United States. In this way it will facilitate the adjustment of workers adversely impacted by NAFTArelated trade liberalization. The bank will be capitalized to provide
$2 billion to $3 billion in loans and guarantees and will be able to
leverage additional private and public funds, to generate an estimated total of $20 billion in project finance.
The Economic Impact of NAFTA. NAFTA may be the most thoroughly studied trade agreement in history. A review of the major
studies of NAFTA's economic impact indicates a broad consensus
on key points in the NAFTA debate: (1) All three NAFTA countries
gain from the agreement. (2) In the United States, labor will gain
from increased employment, increased wages, or both. (3) Increased
investment in Mexico will not come at the expense of investment
in the United States. The few studies reaching contrary conclusions
have been strongly criticized by academic and other professional
economists.
In a letter to the President, 286 academic economists, including
13 Nobel Prize winners, expressed their support for NAFTA, stating, "While we may not agree on the precise employment impact
of NAFTA, we do concur that the agreement will be a net positive
for the United States, both in terms of employment creation and
overall economic growth." Nineteen out of twenty studies surveyed
found that NAFTA would benefit the United States; the lone negative assessment was based on the unrealistic assumption that factories literally would be dismantled in the United States and
moved to Mexico.
It has been estimated that the agreement will increase export
employment in the United States by 200,000 jobs; on average Mexican export-related jobs pay wages 12 percent higher than the national average. Moreover, studies of NAFTA have found that gains
would occur even among groups sometimes alleged to be adversely
affected. For example, it was found that union workers will benefit
from NAFTA because the growing sectors of U.S. exports to Mexico
are disproportionately unionized. Likewise, African-American workers are more heavily concentrated in industries that export to Mexico than in Mexican import-competing sectors. As a result, AfricanAmericans too may benefit disproportionately from the agreement.
Finally, by contributing to the creation of more and better jobs in
Mexico, NAFTA will discourage illegal immigration from Mexico to
the United States.
In summary, NAFTA is an epochal agreement, and its passage
was a triumph of facts over fear. It is the world's first free-trade
agreement between industrial and developing countries. Its side
agreements embody innovative ideas to deal with environmental
and labor issues. The best available evidence shows that NAFTA




230

will create good, high-paying jobs for American workers. It will
strengthen the ability of U.S. firms to compete in the global marketplace. It will help the Mexican and Canadian economies as well,
providing a disincentive for illegal transborder migration and other
illegal activities. The Administration's trade policy can be described
as "export activism"—the United States will work actively to open
foreign markets, and in return we will keep our market open.
NAFTA is a key component of this activist strategy.
Asia-Pacific Economic Cooperation
The Asia-Pacific Economic Cooperation (APEC) was begun in
1989 to encourage economic cooperation among countries of the Pacific region. In the past quarter-century, the United States' APEC
partners—Australia, Brunei, Canada, China, Hong Kong, Indonesia, Japan, Malaysia, Mexico, New Zealand, Papua New Guinea,
the Philippines, the Republic of Korea, Singapore, Chinese Taipei
(Taiwan), and Thailand—have increased their combined share of
world income and trade by more than half (Box 6-4). These economies now account for more than half of all U.S. trade, or more than
triple U.S. trade with the European Union. Even if Canada and
Mexico are excluded from the calculation, U.S. trade with other
APEC countries is 76 percent greater than our trade with the EU
countries.
One consequence of this rapid growth is striking: as long as the
Asian countries grow faster than the United States, they will become more important in our trade while we will become less important in theirs. Therefore past trade strategies based on threats of
market closure are liable to become less and less effective.
This analysis suggests that, to achieve its trade policy goals in
the region, the United States will increasingly have to act in concert with other countries rather than unilaterally. Thus it may be
desirable to begin establishing the appropriate institutional infrastructure for cooperation now, and APEC is the leading candidate.
The United States held the rotating chairmanship of APEC in 1993
and hosted the annual Ministerial meeting in Seattle in November,
which was attended by economic policymakers from each of its
members. The President elevated the importance of APEC by
hosting the first-ever meeting of APEC leaders in Seattle.
At the APEC Ministerial meeting, a group of private individuals
previously commissioned by the APEC Ministers to serve as an
Eminent Persons Group presented its report. The report described
the threats to trade and investment in the region and recommended ways to promote regional trade liberalization and cooperation. The Ministers indicated that those recommendations
closely linked to ongoing work in APEC should be implemented
promptly. These include recommendations to achieve a common set
of investment principles, harmonize standards, and create a mecha-




231

Box 6-4.—The Asian "Miracle"
Per capita gross national product (GNP) in East Asia grew,
on average, by over 5 percent per year between 1965 and 1990.
During the same period, per capita GNP in the industrialized
countries that make up the Organization for Economic Cooperation and Development (OECD) grew by less than 2.5 percent per year. What explains this relatively rapid growth in
East Asia? A recent World Bank book argues that a major part
of the explanation is that the average OECD member was
much more technologically advanced than the average East
Asian country in 1965. By adopting and adapting techniques
from the industrial countries, the East Asian countries were
able to increase both productivity levels and per capita GNP at
a rapid pace.
This is undoubtedly true. But other countries that were poor
in 1965 did not grow as fast as the successful East Asian nations. Why did East Asia experience faster growth? One key
factor is almost certainly the macroeconomic environment: inflation and budget deficits were kept relatively low, and national currencies were kept from becoming overvalued. Macroeconomic policies encouraged, or at least did not discourage,
high saving and investment rates as well as strong export
growth. Governments also emphasized education. The focus
was primarily on the quality of basic education, rather than on
higher education. As a result of these policies, East Asian
countries accumulated substantial physical and human capital,
which spurred relatively rapid growth in GNP per capita.
The impact of other, more interventionist policies on growth
in several East Asian countries remains a source of controversy. Some government interventions in the market may
have improved economic performance, particularly when they
were not excessively distortionary, were administered competently, were aimed at particular market imperfections, and
were adapted to meet changing circumstances*
The Asian countries are expected to account for increasing
shares of world income and trade. By 2000 it is likely that Asia
will have surpassed North America and Europe as the world's
largest economic zone. As its share of world income rises, so
will its share of world trade—the Asian share of U.S. trade is
projected to rise to 40 percent by the end of the decade.




232

nism for resolving trade and investment disputes. Other recommendations, relating to deepening and broadening the Uruguay
Round of GATT, were singled out for additional study. The APEC
leaders instructed the Eminent Persons Group to elaborate on their
recommendations relating to longer term trade liberalization in a
report to be presented to the leaders in 1994 in Indonesia.
MULTILATERAL INITIATIVES: THE URUGUAY ROUND
The most far-reaching of the Administration's market-opening efforts has been on a global scale: the Uruguay Round negotiations
of GATT, whose 116 participating countries account for approximately 85 percent of world trade. GATT was created after World
War II to reduce tariffs and remove nontariff barriers to international trade. In seven rounds of GATT-sponsored multilateral
trade negotiations (the Uruguay Round is the eighth), the member
countries have lowered tariffs and agreed on codes of conduct for
nontariff barriers.
In the Uruguay Round negotiations, effectively completed on December 15, 1993, the United States and other GATT members
agreed not only to lower tariffs on merchandise trade, but also to
integrate into GATT certain areas of trade and investment that
had not been subject to effective GATT discipline, including agriculture, textiles, trade in services, investment, and intellectual
property rights. The Uruguay Round also made progress in reforming multilateral dispute settlement procedures and other multilateral trade rules, including those dealing with nontariff measures.
The Congress is expected to ratify this agreement this year.
The stakes in the Uruguay Round negotiations were enormous.
In the short run, failure to complete the Round would have significantly undermined business confidence around the globe and might
have contributed to the erosion of the open trading system. In the
long run, the successful completion of the Round will mean a major
boost to the world economy. Preliminary studies suggest that the
likely gains to the U.S. economy alone are more than $100 billion
but less than $200 billion annually by 2005 (Box 6-5). These efficiency gains will manifest themselves in the form of more and better jobs for American workers.
The Round achieved major reductions in trade barriers facing industrial products. Key provisions of the market access agreement
include the following:
• Tariffs imposed by major industrial countries are to be eliminated, and those of many developing countries either eliminated or sharply reduced, in the following areas: construction
equipment, agricultural equipment, medical equipment, steel,
beer, distilled spirits, Pharmaceuticals, paper, toys, and furniture.



233

Box 6-5.—The Economic Impact of the Uruguay Round
Even before the Uruguay Round was completed, researchers
were attempting to quantify its likely effects on the American
economy. Studies based on existing formal economic models
unanimously conclude that these effects will be beneficial. It is
quite likely that new studies incorporating some of the Round's
final accomplishments in such areas as intellectual property
protection will yield even larger estimates of benefits.
The Uruguay Round will increase American output because
the specialization encouraged by more-open markets will raise
productivity. As foreign markets open, we will produce more of
the goods that make use of the highly skilled, highly productive U.S. work force. Economic models offer a range of estimates of the output gain from greater specialization. A recent
OECD study estimates those gains to be 0.4 percent of GDP for
the United States. But this is almost certainly a gross under*
estimate of the impact of the Round, because it ignored a host
of important factors, including gains from specialization within
the manufacturing sector. Another study by World Bank and
OECD economists estimates even smaller gains, but focuses on
agriculture. Studies that more adequately capture gains from
specialization suggest that the benefit to the U.S* economy is
likely to be approximately 1 percent of GDP after the Uruguay
Round tariff cuts are fully phased in.
Other important sources of benefit are not captured by the
existing models, which do not quantify the impact of trade liberalization in services or enhanced protection of intellectual
property rights. In addition, higher productivity will result in
increased investment and innovation, providing an important
additional benefit. These additional gains are difficult to quantify, but they are almost certainly sizable and may even exceed
the more easily quantified gains. The total gain 10 years after
implementation of the agreement begins is then likely to be
more than $100 billion but less than $200 billion annually.
Major U.S. trading partners agreed to deep tariff cuts, ranging
from 50 to 100 percent, on important electronics items including semiconductors, computer parts, and semiconductor manufacturing equipment.
Tariffs of industrial and major developing countries on chemical products are to be harmonized at very low rates (zero, 5.5,
or 6.5 percent, according to product).
The agreement significantly increased access to markets representing approximately 85 percent of world trade by reducing
tariffs on certain specific items of key interest to U.S. export


234

ers. Progress in textiles and apparel was particularly significant. For decades, international trade in textiles and apparel
products has effectively been exempted from GATT rules. Instead, the Multi-Fiber Arrangement establishes a procedure for
limiting textile and apparel exports from developing to industrial countries. Under the final Uruguay Round agreement,
products covered by the Multi-Fiber Arrangement will be free
of quotas after 10 years, and textiles will be integrated into
general GATT rules. Tariffs will be reduced as well.
Throughout the Uruguay Round negotiations, one of the most
contentious issues was agricultural trade liberalization. The final
agreement on agriculture strengthens the long-term rules for agricultural trade and sharply limits national policies that distort that
trade. U.S. agricultural exports will benefit significantly from reductions in foreign export subsidies and from market opening by
our trading partners.
The United States was successful in its effort to obtain meaningful rules and explicit commitments to reduce export subsidies, cut
domestic subsidies, and increase market access. Agricultural export
subsidies and trade-distorting domestic farm subsidies are not only
to be reduced, but for the first time will be subject to explicit multilateral disciplines. The United States also prevailed in establishing
the principle of comprehensive tariffication, which will lead to the
eventual removal of all import quotas and other nontariff import
barriers. Nontariff barriers will first be replaced by tariffs, ensuring minimum or current access, and then these tariffs will gradually be reduced.
Progress in creating a more hospitable trading system for hightechnology products was achieved on two fronts. First, the United
States was able to win greater protection for intellectual property
rights, such as patents, copyrights, and trademarks. This is very
important for a diverse set of U.S. industries, including the electronics industry (where semiconductor masks will be protected), the
pharmaceutical industry (patents), and the communications industry (protection of copyrights).
Second, the Uruguay Round agreement sets forth multilateral
rules governing subsidies. Because of the beneficial social spillovers
associated with research and development activities, government
support cannot and should not be ruled out altogether. The challenge for the multilateral trading system is to find rules that permit governments to support innovations that benefit all nations
while precluding rent-shifting subsidies designed to benefit one nation at the expense of others. The Uruguay Round agreement
makes progress in this respect by establishing clearer rules and
stronger disciplines in the subsidies area. It also makes
nonactionable certain subsidies relating to basic research, regional



235

development, and environmental cleanup, provided they are subject
to conditions designed to limit their distorting effects.
Negotiators were able to agree on comprehensive GATT rules
governing trade and investment in services (the so-called General
Agreement on Trade in Services, or GATS), such as telecommunications, professional, and financial services. The agreement contains a strong national-treatment provision: Member countries
must accord to service suppliers of other countries treatment no
less favorable than that accorded their own suppliers. GATS also
includes a market access provision that incorporates disciplines on
discriminatory measures that governments frequently impose to
limit competition. These measures include restrictions on the number of firms allowed into the market, "economic need" tests, and
mandatory local incorporation rules. Because of the breadth and
complexity of these issues, not as much progress was made as was
desirable. To realize additional progress, GATS establishes a procedural framework for further negotiation.
The Uruguay Round negotiations also yielded systematic prohibitions on trade-related investment measures. For example, the
agreement prohibits so-called local content requirements, which
force foreign firms to use a set amount of locally produced inputs
as a condition for investment. It also prohibits "trade balancing" requirements, under which a foreign affiliate must export as much of
its production as it imports for use as inputs. These requirements
have bedeviled U.S. firms operating abroad in the past.
Lastly, the Uruguay Round agreement prohibits so-called voluntary export restraints and other, similar measures that are often
used as safeguards outside GATT rules. It also provides specific
time limits for the formation and operation of dispute settlement
panels and requires the automatic adoption of panel reports (except
in the case of unanimous veto). Previously, any country, including
the country against which the complaint was lodged, could effectively block the implementation of a panel's decision. The new procedures will greatly expedite the resolution of international trade
disputes. The members of GATT agreed to establish a new multilateral organization, to be called the World Trade Organization
(WTO), to enforce these new agreements.
In summary, the U.S. negotiators in the Uruguay Round were
successful in negotiating broad-ranging multilateral trade liberalization. This was accomplished by reducing existing barriers and
bringing areas of trade that had been largely outside the GATT
system, such as agriculture, textiles, intellectual property, and
services, under the GATT rubric. At the same time, GATT procedures have been strengthened to ensure that signatories meet their
obligations, without compromising our ability to implement our national trade or other laws (Box 6-6). The liberalization of global



236

trade resulting from these substantive and procedural achievements will raise real incomes in the United States by billions of
dollars annually in the coming years.

Box 6-6.—-The Uruguay Round and U.S. Trade Laws
The Uruguay Round final agreement contains a number of
provisions that will enhance dispute resolution and facilitate
better enforcement of U.S. rights. The agreement both moves
GATT procedures closer to U.S. laws and complements U.S.
laws for dealing with unfair foreign trade practices.
Section 301 of the Trade Act of 1974 provides the basis for
actions to enforce U.S, rights under trade agreements and to
respond to foreign practices that impede or restrict U.S. exports. When disputes arise in areas covered by GATT* Section
301 requires the United States to use GATT dispute resolution
procedures before undertaking unilateral action. The Uruguay
Round brings agriculture, textiles, and services under GATT
rules for the first time and enhances the speed and effectiveness of GATT dispute resolution procedures. As a result, the
United States can now use GATT to accomplish objectives that
formerly required unilateral action. When disputes arise in
areas outside the GATT framework, the United States can still
use Section 301 to combat unfair foreign trade practices.
The Uruguay Round brings GATT closer to U.S. practices in
other areas. For example, in dealing with food safety measures,
the Uruguay Round agreement allows countries to choose their
own levels of safety but requires that each country's standards
have a scientific basis and not be used as disguised trade barriers. Because U.S. laws already have a scientific basis, it is
unlikely that they will be susceptible to challenge. Other countries, however, have used food safety regulations in an arbitrary manner to block imports. The agreement adopts similar
provisions for dealing with technical barriers to trade, such as
so-called conformity assessment procedures (registration, inspection, and laboratory accreditation procedures, among others) used to evaluate conformance with technical regulations.
Antidumping is another area in which the post-Uruguay
Round GATT will become more like U.S. trade laws. The United States has a transparent process for implementing its antidumping laws. The Uruguay Round agreement will make foreign antidumping actions more transparent, which should help
U.S. exporters by improving the fairness of other countries'
antidumping procedures.




237

THE TRADE POLICY AGENDA
By lowering tariffs and providing a framework for cooperation in
international trade, GATT has contributed significantly to a more
harmonious world trading regime. But new issues in trade policy
are coming to the fore as the world economy evolves. Among the
important new issues confronting GATT and the new WTO will be
issues relating to trade and the environment, competition policies,
and regionalism.
TRADE AND THE ENVIRONMENT
Trade and environmental issues have become intertwined in recent years. Some accuse GATT of being hostile to the environment,
while others argue that some countries' environmental policies are
thinly veiled protectionism. In reality, protectionism often contributes to environmental degradation by encouraging inappropriate
patterns of production. An obvious example is agricultural protection, which stimulates agricultural production in poorly suited locations. Farmers in these areas overuse chemicals or exhaust scarce
water resources to compensate for their natural disadvantages,
thereby contributing to environmental degradation. Freer trade
would encourage more-appropriate patterns of production and improve the environment even as it increased living standards.
Standard economic analysis suggests offsetting government action when prices fail to reflect environmental costs (Chapter 5). But
trade restraints are rarely the best solution to environmental problems. If the environmental problem is limited to one country,
domestic policies, not trade protection, should be employed. If pollution or other environmental problems spill across borders, international rules and cooperation will be necessary. But here again
trade protection will seldom be the most effective remedy.
Sometimes trade sanctions are used (or threatened) as a way to
enforce environmental agreements. For example, the 1987
Montreal Protocol, which seeks to reverse the depletion of the
upper-atmosphere ozone layer caused by the release of chlorofluorocarbons and other chemicals, requires trade actions against
countries that do not abide by the environmental standards in the
agreement. A second example is the Convention on International
Trade in Endangered Species of Wild Fauna and Flora (CITES),
which aims to protect endangered species of wildlife by restricting
and monitoring their trade.
During 1993, the possibility of using trade sanctions for environmental purposes was raised, pursuant to a recommendation of
CITES, in the case of trade by China and Taiwan in rhinoceros and
tiger parts, and in regard to Norwegian whaling practices under
the Pelly Amendment to enforce the International Whaling Con


238

vention moratorium on whaling. In both cases, however, sanctions
were deferred.
The founders of GATT could not have foreseen the present importance of environmental problems. Some headway in harmonizing trade and environmental concerns has already been made in
the environmental side agreement to NAFTA. And the preamble to
the agreement establishing the WTO recognizes the importance of
environmental concerns. The WTO negotiators have also agreed to
develop a work program on trade and the environment to ensure
the responsiveness of the multilateral trading system to environmental objectives.
INTERNATIONAL TRADE AND COMPETITION POLICY
As tariff and nontariff barriers to trade fall and as national
economies become more integrated into the world trading system,
differences in national business practices and laws become more
important determinants of trade outcomes. Currently there are no
multilateral rules to redress possibly restrictive practices in the
way companies compete—such as price fixing, price discrimination,
and the preferential supplier and distributor relationships characteristic of Japan's keiretsu. Many nations, including the United
States, rely on antitrust laws to prevent anticompetitive business
practices by domestic firms in their domestic market.
National antidumping laws are the most commonly used remedy
in such circumstances. But unlike domestic antitrust laws, which
generally increase competition and lower prices, national antidumping laws sometimes reduce competition and raise prices. Both
in the United States and elsewhere, antidumping laws go beyond
preventing anticompetitive practices—which should be their rationale—and often have the effect of protecting domestic industries
from foreign competition. For example, a recent study found that,
during the Reagan Administration, nontariff barriers including
antidumping actions probably reduced U.S. manufactured imports
by around a fifth—largely by discouraging foreign producers from
entering the U.S. market or by discouraging those that do export
here from lowering their prices.
If sound competition policies were present and effectively enforced in more nations, and if such laws were more easily enforceable against foreign misconduct, they could serve as the first line
of defense against restrictive business practices by both domestic
and foreign firms. The United States is currently pursuing this
goal through such bilateral mechanisms as antitrust cooperation
agreements.
Here NAFTA is a step in the right direction. The agreement commits its signatories to cooperate in the area of competition law enforcement, and imposes discipline on certain government-des


239

ignated monopolies. It also establishes a trilateral committee to
consider the relationship between trade and competition policy in
the NAFTA countries. Some other free-trade areas have gone further. For example, in the European Union and the Australia-New
Zealand Free Trade Area, antidumping laws do not apply to trade
among member countries, since this is considered internal trade,
subject to organization-wide competition policies.
Until there is greater convergence and international cooperation
in the enforcement of antitrust laws against cross-border conduct,
international disputes over unfair pricing between corporations of
different national origins will often continue to play out in one of
two ways: through the application of national competition laws,
with the continuing difficulties associated with their international
enforcement, or through the application of overly restrictive national trade laws. As part of the Uruguay Round, the WTO Council
for Trade in Goods will consider provisions on investment policy
and competition policy in the future. The OECD is also pursuing
a work program in this area.
REGIONALISM
Although there may be significant benefits to trade liberalization
on a regional basis, some nonmember countries could be hurt
through trade and investment diversion, as trade and investment
are preferentially shifted from them to the member countries. One
way to mitigate these concerns is for members of a free-trade area
to move toward a customs union whose common external tariff
would match the lowest tariff within the region prior to the formation of the customs union. Another possibility would be to open regional arrangements to new members. It has also been suggested
that GATT rules be amended to allow compensation for
nonmembers hurt by regional liberalization agreements. These and
other proposals to deal with regional free-trade associations may
need to be discussed in GATT in order to preserve the benefits of
regional trade liberalization while addressing the concerns of outsiders.

FOREIGN EXCHANGE MARKET
DEVELOPMENTS
The international value of the dollar, as measured by its tradeweighted average exchange rate, rose by an astonishing 50 percent
between the end of 1980 and early 1985. By mid-1988, however,
the dollar had returned to its 1980 level, and since then it has continued on a slight downward trend, with much narrower fluctuations than earlier in the 1980s. The large appreciation and subsequent depreciation of the dollar had a marked impact on the com


240

petitive position of U.S. firms. Had they been offset by differences
between the inflation rates of the United States and its trading
partners, these large swings in the value of the dollar would have
had no impact on our competitiveness. Inflation differentials, however, were much smaller than the exchange-rate swings. As a result, the dollar appreciated and then depreciated in both real and
nominal terms by roughly equal amounts.
Chart 6-3 shows indexes of the value of the dollar relative to the
currencies of our major trading partners. In addition to the nominal effective exchange rate, which does not adjust for inflation differences, the chart shows two measures of the real effective exchange rate: one in which relative consumer prices are used for the
inflation adjustment, and one in which relative unit labor costs are
used. The chart clearly demonstrates the high correlation between
nominal and real exchange-rate movements since 1980. In addition,
the chart shows that relative unit labor costs in manufacturing
have declined sharply since their 1985 peak. Partly as a result,
U.S. manufacturing firms have become extremely competitive in
world markets.
Chart 6-3 Nominal and Real Effective Dollar Exchange Rates
The value of the dollar has been more stable in the 1990s than during the 1980s.
Index, 1985=100
120
110 ~

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993
Real effective
exchange rate

Relative unit labor
costs (manufacturing)

Nominal effective
exchange rate

Note: Indexes are based on units of foreign currency per U.S. dollar. A decline in any of the indexes indicates
falling relative costs and increasing competitiveness.
Source: International Monetary Fund.




241

The dollar ended 1993 roughly where it began. After rising
sharply in the second half of 1992, it varied in a narrow range in
1993 (Chart 6-4). The relatively small movements in the dollar's
effective exchange rate masked considerable changes in the value
of the dollar relative to individual currencies, however. The U.S.
dollar rose relative to the Canadian dollar and most continental
European currencies but declined sharply relative to the yen.
Chart 6-4 Exchange Rates of the Dollar Against Selected Currencies
The dollar strengthened against the Canadian and German currencies after mid-1992
but weakened against the yen.
Index, January 1992=100
120

115

--

110

-

Canadian $

-y^^^^K

105 -

f

~^T
1

/^

^..r.^.y

100 -

/iv^Effective
N

/
x
N

^j

\

N

/

D
M

95 \

/
\

/
\

90 -

/
\

/
\

85

80

_ J

Yen

-

I

1

1992
Note: Indexes are based on units of foreign currency per U.S. dollar.
Source: International Monetary Fund.

1993

The appreciation of the dollar relative to the European currencies
occurred despite low short-term and falling (until November) longterm interest rates in the United States. Since low and falling interest rates are frequently associated with currency depreciations,
this may at first appear puzzling. The decline in European interest
rates during 1993 explains the apparent puzzle.
The stability of the dollar and the cyclical behavior of the Japanese and European economies are important in understanding the
likely impact of the President's deficit reduction package on the
U.S. current account. As Chapter 2 points out, deficit reduction is
generally associated with an increase in net exports. This expansion in net exports provides a stimulus that partially offsets the
impact of spending cuts and tax increases on domestic demand.



242

The weakness in the economies of our major trading partners has,
on the other hand, reduced demand for U.S. exports. Some of the
boost to export demand that can be expected to result from the deficit reduction package may therefore be delayed until economic activity picks up in Europe and Japan. But by 1995 export demand
should begin to rise.

THE EUROPEAN MONETARY SYSTEM
The European Monetary System (EMS) was created in March
1979 to limit exchange-rate variability among the European currencies (Box 6-7). A majority of countries in the EMS agreed to
participate in the system's Exchange Rate Mechanism (ERM),
under which most member countries were required to maintain
their exchange rates within 2.25 percent of "central rates" between
their currency and each of the other members' currencies. When an
exchange rate between two members' currencies moves to the limits of the band, both central banks are required to intervene to prevent the exchange rate from moving outside the band. In the event
of irresistible pressure on a member country's exchange rate,
realignments of the country's central rate are permitted.
Inflation in most European economies declined by the mid-1980s,
moving toward the rates of Germany and the Netherlands. Countries concentrated on maintaining their parities with respect to the
deutsche mark, since Germany had for historical reasons established an unwavering commitment to price stability. Increasingly,
then, the deutsche mark became the monetary anchor for the EMS.
By linking their monetary policies to German policy, other ERM
members brought their inflation rates down. French inflation, for
example, declined from over 10 percent at the start of the 1980s
to under 3 percent in 1992.
To some observers, the disinflation achieved within the EMS
highlights an important rationale for pegging exchange rates. An
alternative view holds that disinflation was not simply a product
of the EMS but was worldwide in scope. During the 1980s, for example, inflation also declined in the United Kingdom, which did
not join the ERM until 1990, and in the United States and Canada.
So perhaps the relative stability of EMS parities in recent years
was as much the result as the cause of a convergence in inflation
rates.
Realignments took place relatively frequently in the first years
of the EMS but not thereafter. Between 1979 and 1987 there were
11 realignments; these tended to be small as well as frequent and
thereby occurred without major crises. After January 1987, essentially no realignments took place until September 1992.




243

Box 6-7.—Exchange-Rate Volatility and International Trade

Proponents of the ERM argue that stabilizing exchange rates
is important for expanding trade. Exchange-rate volatility,
they argue, is a source of uncertainty to firms engaging in
trade because it adds volatility to the domestic currency value
of future foreign currency transactions. Firms therefore face
greater uncertainty in revenues and profits from foreign sales
when exchange rates are more volatile. This added uncertainty, it is claimed, discourages firms from engaging in trade
and from making the investments that support trade.
Such claims seem plausible, but they enjoy little empirical
support. The volume of U.S. trade did grow slightly faster between 1950 and 1971, when the dollar was fixed, than between
1973 and 1993, when the dollar floated. Relative to GDP, however, trade volumes grew more quickly in the second period. In
addition, studies that have examined the extent to which
greater exchange-rate volatility inhibits trade flows have generally failed to find a robust relationship. One possible explanation is that financial markets provide firms with risk
management tools that can be used to hedge exchange-rate
movements. For example, a firm can buy currencies forward to
fix the domestic currency value of future payments. Whatever
the explanation, it is difficult to find empirical support for an
adverse impact of exchange-rate volatility on trade volumes.

THE EUROPEAN CURRENCIES IN TURMOIL
The EMS has experienced a series of crises since the summer of
1992. Germany adopted tight monetary policies in response to inflationary pressures that arose following German reunification in
1990. As a result, German short-term interest rates, which had
been rising since 1988, continued to rise, reaching nearly 10 percent by the summer of 1992.
German policy, in turn, created a dilemma for other ERM participants. Maintaining fixed parities with the deutsche mark required
them to tighten monetary policy despite stagnating or declining
output, rising unemployment, and low rates of inflation.
When investors are free to choose among assets denominated in
different currencies, the rates of return they expect to receive for
comparable degrees of risk cannot vary too far from one currency
to another. Expected exchange-rate changes are important in determining expected rates of return on assets denominated in different
currencies. If, for example, investors expect the French franc to depreciate relative to the deutsche mark, they will move funds from
French franc deposits into deutsche mark deposits unless they are



244

compensated by a higher franc interest rate. Thus interest rates on
franc-denominated assets would have to rise above the interest rate
on deutsche mark assets to prevent sustained flows of capital out
of franc assets and into deutsche mark assets.
Speculative pressures motivated by the possibility of a change in
parities precipitated a crisis in September 1992. In the United
Kingdom, where output had declined by more than 4 percent from
its previous peak and the unemployment rate had topped 10 percent, pressure increased to realign or to drop out of the EMS so
that interest rates could be lowered. Finland and Sweden, although
not formal participants in the ERM, had been unilaterally maintaining pegged exchange rates, and so faced similar dilemmas as
their economies went through deep and prolonged recessions. In
September 1992, Finland, the United Kingdom, and Italy decided
to allow their currencies to float, with the last two effectively leaving the ERM. Sweden followed in November. Spain, Portugal, and
Ireland all devalued within the ERM between September 1992 and
January 1993.
A second crisis erupted in mid-July 1993, following additional
signs of growing slack in the European economies. Massive speculative capital flows occurred. Belgium, Denmark, France, and Portugal all raised interest rates and intervened heavily to defend
their currencies. Nonetheless, the Belgian franc, the French franc,
and the Danish krone dropped through their ERM floors. Selling
pressures on these currencies continued, and on August 2, 1993,
the countries participating in the ERM decided to widen the bands
around the (unchanged) central parities to ±15 percent (Chart 65). (A separate agreement maintains bands of ±2.25 percent for the
deutsche mark and the Dutch guilder.) Since all currencies were
well within the wider bands, central banks were not obliged to intervene and the speculative crisis stopped.
The wider bands allow the participating countries much greater
latitude to change interest rates independently. For the most part,
however, the authorities have not used this ability to push interest
rates down. Instead, they have sought to maintain relatively stable
exchange rates with the deutsche mark and have cut interest rates
only in parallel with Germany. By the end of 1993 the Belgian,
Danish, French, Portuguese, and Spanish currencies were within or
near the old ERM limits relative to the deutsche mark. The United
Kingdom aggressively cut interest rates after leaving the ERM in
September 1992.
THE MAASTRICHT TREATY ON ECONOMIC AND
MONETARY UNION
In the Maastricht Treaty of 1991, the members of the European
Community agreed to replace the EMS with an Economic and Mon-




245

Chart 6-5 French Franc-Deutsche Mark Exchange Rates
Last summer's exchange-rate crisis precipitated a widening of the Exchange
Rate Mechanism's intervention bands.
Francs per DM
4.0

Upper intervention limit
3.8

September 16-17, 1992:
Pound and lira leave ERM

3.6

-

3.4

December 8, 1993:
Franc returns to
narrow bands

August 2, 1993:
Bands widened \

-

3.2

3.0

Lower intervention limit
2.8

1992

1993

Note: The Exchange Rate Mechanism prescribes intervention bands for participating members of
the European Monetary System.
Sources: Council of Economic Advisers and Board of Governors of the Federal Reserve System.

etary Union (EMU), a common currency, and a European Central
Bank overseeing a single monetary policy. Under the treaty,
progress toward EMU would take place in stages, with the final
stage—under which exchange rates are fixed irrevocably—coming
no later than 1999.
The treaty establishes conditions for implementing a common
currency and monetary policy (Box 6-8). As of late 1993, no country in the European Union met these conditions. With reunification
swelling its public sector deficit, even Germany failed to meet the
criteria.
The process of ratifying the Maastricht Treaty was completed in
1993, although the timing of full implementation will depend in
part on the achievement of the agreed conditions. In May 1993,
Danish voters reversed the outcome of the previous year's referendum and accepted the treaty. The British House of Commons then
approved the treaty in July. The final steps in the ratification process were completed when court challenges to the treaty failed in
July in the United Kingdom and in October in Germany. The
Maastricht Treaty entered into force on November 1, 1993, creating
the European Union.




246

Box 6-8.—Criteria for Joining the Economic and Monetary
Union
Countries acceding to EMU must meet several strict criteria:
• The entering country's inflation rate must not exceed the
average of the lowest three members' rates by more than
1.5 percentage points.
• Its interest rate on long-term government bonds cannot
exceed those of the three lowest-inflation members by
more than 2 percentage points.
• The country's general-government budget deficit must
not exceed 3 percent of GDP, and outstanding government debt must not exceed 60 percent of GDP.
• For at least 2 years, the country's currency must have
remained within its narrow ERM band without realignment.
Shortly after completing the ratification process, the EU countries selected Frankfurt as the home of the new European Monetary Institute, the forerunner of the European Central Bank. Despite their failure to complete the first stage (bringing all countries
within narrow ERM bands), the EU countries are proceeding with
the timetable set out in the Maastricht Treaty.

CONCLUSIONS
The year 1993 proved to be the most important year for American trade policy in half a century, thanks to developments that
vastly increased the prospects for free and open trade.
During the past year, the Administration completed two landmark negotiations. The first created a North American Free Trade
Area encompassing the United States, Canada, and Mexico. In
many respects this agreement is historically unprecedented: It is
the first free-trade agreement between industrialized and developing countries; it is the first trade agreement to incorporate environmental provisions explicitly; and it contains technical innovations
in areas such as dispute settlement that may become models for
the global trade regime.
The Administration did not stop there, however. It also led a successful conclusion of the Uruguay Round of GATT, the most farreaching global trade agreement in history. This agreement will reduce trade barriers, protect the legitimate interests of U.S. producers in areas such as intellectual property rights where none existed
before, and bring areas of trade such as agriculture and textiles
into the multilateral system for the first time.



247

Besides bringing these endeavors to fruition, the Administration
launched several new trade initiatives and breathed new life into
some old ones. The Administration made major progress in establishing APEC as a prominent forum for advancing our interests in
the critical Asia-Pacific region. In addition, the United States
reached a new bilateral agreement with Japan. Complementing the
new international initiatives, the Administration also launched a
new National Export Strategy to promote American exports.
This Administration understands that expanding trade relations
are not only inevitable but critical to the future health of the U.S.
economy. It is determined to ensure that the growing interdependence with our trading partners brings benefits to the United States.
To this end the United States Government is committed to act unilaterally, bilaterally, regionally, plurilaterally, and globally to open
markets to maintain the ability of U.S. firms to compete around
the world. Through increasing integration into the global economy,
we can achieve ever-rising living standards for all of our people.




248

Appendix A
REPORT TO THE PRESIDENT ON THE ACTIVITIES
OF THE
COUNCIL OF ECONOMIC ADVISERS DURING 1993







LETTER OF TRANSMITTAL
COUNCIL OF ECONOMIC ADVISERS

Washington, B.C., December 31, 1993
MR. PRESIDENT:

The Council of Economic Advisers submits this report on its
activities during the calendar year 1993 in accordance with the
requirements of the Congress, as set forth in section 10(d) of the
Employment Act of 1946 as amended by the Full Employment and
Balanced Growth Act of 1978.
Sincerely,




Laura D'Andrea Tyson, Chair
Alan S. Blinder, Member
Joseph E. Stiglitz, Member

251

Council Members and their Dates of Service
Name
idwin G Nourse
Leon H. Keyserling
John D. Clark
Roy Blcugh
Robert C. Turner
\rthur F. Burns
Neil H. Jacoby
Walter W. Stewart
Raymond J. Saulnier
Joseph S. Davis
Paul W. McCracken
Karl Brandt
Henry C. Wallich
Walter W. Heller
James Tobin
Kermit Gordon
Gardner Ackley
John P. Lewis
Otto Eckstein
Arthur M. Okun
James S. Duesenberry
Merton J. Peck
Warren L Smith
Paul W. McCracken
Hendrik S. Houthakker
Herbert Stein
Ezra Soiomon
Marina v.N. Whitman
Gary L. Seevers
William J. Fellner
Alan Greenspan
Paul W. MacAvoy
Burton G. Malkiel
Charles L. Schultze
William D. Nordhaus
Lyle E. Gramley
George C. Eads
Stephen M. Goldfeld
Murray L. Weidenbaum
William A. Niskanen
Jerry L. Jordan
Martin Feldstein
William Poole
Beryl W. Sprinkel
Thomas Gale Moore
Michael L. Mussa
Michael J. Boskin
John B. Taylor
Richard L Schmalensee
David F. Bradford
Paul Wonnacott
Laura D'Andrea Tyson
Alan S. Blinder
Joseph E. Stiglitz




Position

Oath of office date

Chairman
Vice Chairman
Acting Chairman
Chairman
Member
Vice Chairman
Member
Member
Chairman
Member
Member
Member
Chairman
Member
Member
Member
Member
Chairman
Member
Member
Member
Chairman
Member
Member
Member
Chairman
Member
Member
Member
Chairman
Member
Member
Chairman
Member
Member
Member
Member
Chairman
Member
Member
Chairman
Member
Member
Member
Member
Chairman
Member
Member
Chairman
Member
Chairman
Member
Member
Chairman
Member
Member
Member
Member
Chair
Member
Member

August 9, 1946
August 9, 1946
November 2, 1949
May 10, 1950
August 9, 1946
May 10, 1950
June 29, 1950
September8, 1952
March 19, 1953
September 15, 1953
December 2 1953
April 4, 1955
December 3, 1956
May 2, 1955
December 3, 1956
November 1, 1958
May 7, 1959
January 29, 1961
January 29, 1961
January 29, 1961
August 3, 1962
November 16, 1964
May 17, 1963
September 2, 1964
November 16, 1964
February 15, 1968
February 2, 1966
February 15, 1968
July 1 1968
February 4, 1969
February 4, 1969
February 4, 1969
January 1, 1972
September 9 1971
March 13, 1972
July 23, 1973
October 31, 1973
September 4, 1974
June 13, 1975
July 22, 1975
January 22, 1977
March 18, 1977
March 18, 1977
June 6, 1979
August 20, 1980
February 27, 1981
June 12, 1981
July 14, 1981
October 14, 1982
December 10 1982
April 18, 1985
July 1, 1985
August 18, 1986
February 2, 1989
June 9, 1989
October 3, 1989
November 13, 1991
November 13, 1991
February 5, 1993
July 27, 1993
July 27, 1993

252

Separation date
November 1, 1949.
January 20, 1953.
February 11, 1953.
August 20, 1952.
January 20, 1953.
December 1, 1956.
February 9, 1955.
April 29, 1955.
January 20, 1961.
October 31, 1958.
January 31, 1959.
January 20, 1961.
January 20, 1961.
November 15, 1964.
July 31, 1962.
December 27, 1962.
February 15, 1968.
August 31, 1964.
February 1, 1966.
January 20, 1969.
June 30, 1968.
January 20, 1969.
January 20 1969
December 31, 1971.
July 15, 1971.
August 31, 1974.
March 26 1973
August 15, 1973.
April 15, 1975.
February 25, 1975.
January 20, 1977.
November 15, 1976.
January 20, 1977.
January 20, 1981.
February 4, 1979.
May 27, 1980.
January 20, 1981.
January 20, 1981.
August 25, 1982.
March 30, 1985.
July 31, 1982.
July 10, 1984.
January 20, 1985.
January 20, 1989.
May 1, 1989.
September 19, 1988.
January 12, 1993.
August 2, 1991
June 21, 1991
January 20, 1993.
January 20, 1993.

Report to the President on the Activities of the
Council of Economic Advisers During 1993
The Statutory Mission of the Council
The Council of Economic Advisers was established by the Employment Act of 1946 to provide the President with objective economic analysis and advice on the development and implementation
of a wide range of domestic and international economic policy issues.
The Chair of the Council
The inauguration of President Clinton brought changes to the
membership of the Council of Economic Advisers. In February
1993, Laura D'Andrea Tyson was appointed Chair of the Council
and a Member of the President's Cabinet. Dr. Tyson is on leave
from the University of California, Berkeley, where she is Professor
of Economics and Business Administration and Research Director
of the Berkeley Roundtable on the International Economy. As
Chair of the Council, Dr. Tyson is responsible for communicating
the Council's views on economic developments to the President
through personal discussions and written reports. She is the Council's chief public spokesperson.
Dr. Tyson represents the Council at Cabinet meetings and various other high-level meetings including those of the National Security Council focusing on economic issues, daily White House senior
staff meetings, budget team meetings with the President, and
many other formal and informal meetings with the President, senior White House staff, and other senior government officials.
Dr. Tyson is one of six members of the Principals Committee of the
newly established National Economic Council and is a member of
the Domestic Policy Council. She guides the work of the Council of
Economic Advisers and exercises ultimate responsibility for the
work of the professional staff. Dr. Tyson succeeded Michael J.
Boskin, who returned to Stanford University, where he is the
Friedman Professor of Economics; he is also a Senior Fellow at the
Hoover Institution on War, Revolution and Peace.


151-444 O 

253
94

-

9

The Members of the Council
Alan S. Blinder and Joseph E. Stiglitz are the other new Members of the Council of Economic Advisers. They succeeded Paul
Wonnacott, who is now a Senior Fellow at the Institute for International Economics, and David F. Bradford, who returned to
Princeton University. Dr. Blinder is on leave from Princeton University where he is the Gordon S. Rentschler Memorial Professor
of Economics. Dr. Stiglitz is on leave from Stanford University
where he is the Joan Kenney Professor of Economics. Members of
the Council are involved in the full range of issues within the
Council's purview and are responsible for the daily supervision of
the work of the professional staff. Members represent the Council
at a wide variety of interagency and international meetings and assume mgyor responsibility for selecting issues for the Council's attention.
The small size of the Council permits the Chair and Members to
work as a team on most policy issues. The Chair works on the
whole range of economic issues under the Council's purview. There
continues to be, however, an informal division of subject matter
among the Members. Dr. Stiglitz is primarily responsible for microeconomic and sectoral analysis and regulatory issues. Dr. Blinder
is primarily responsible for domestic and international macroeconomic analysis and economic projections. All three Members,
under Dr. Tyson's lead, are heavily involved in international trade
issues and participate in the deliberations of the National Economic Council.
MACROECONOMIC POLICIES
The Council advised the President on all major macroeconomic
issues in 1993. The Council prepared for the President, the Vice
President, and the White House senior staff a comprehensive series
of memoranda on the statistical releases that help monitor U.S.
economic activity. It also prepared special analyses of economic policy issues and briefing papers on significant economic events, such
as the 1993 floods in the Midwest (and the earthquake in southern
California early in 1994).
The Council participated in discussions of macroeconomic policy
issues with officials from the Department of the Treasury, the Office of Management and Budget (OMB), and other members of the
President's economic policy team. It was a leading participant in
the formulation of the Administration's economic policies through
various Cabinet and sub-Cabinet working groups. The Council also
played an important role in setting priorities within the fiscal 1994
and 1995 budgets.
The Council analyzed the macroeconomic effects of all major Administration policy proposals, including the President's deficit re-




254

duction budget package, the North American Free Trade Agreement, and the Uruguay Round of the General Agreement on Tariffs
and Trade (GATT). In addition, the Council carefully monitored the
response of the interest-sensitive sectors of the economy to the
sharp reduction in long-term interest rates that followed the proposal and enactment of the President's deficit reduction plan.
The Council, the Department of the Treasury, and the OMB—the
economic "Troika"—produced the economic forecasts that underlie
the Administration's budget projections. Dr. Blinder, in collaboration with Dr. Tyson and Council senior economists, led this forecasting effort. Two official forecasts are released each year. The
first is published early in the year and is relied upon for the President's budget calculations. An update is then published in the summer as part of the Administration's mid-session budget review. In
preparing its forecasts, the Troika took particular care to present
economic assumptions that were not unduly optimistic so as to
maintain the credibility of the Administration's budget projections
and its economic plan. Leading private sector forecasters visited
the Council before the forecasting rounds to share their views on
the economic outlook.
The Council worked to improve the public's understanding of economic issues and the quality of economic information through regular briefings with the White House financial and general press
corps, periodic discussions with distinguished outside economists,
and meetings with leading business executives. The Chair and the
other Members made numerous presentations to outside organizations to explain the Administration's economic strategy and policies. Dr. Tyson, Dr. Blinder, and Dr. Stiglitz regularly exchanged
information and met with the Chairman and Members of the Board
of Governors of the Federal Reserve System to discuss the economic
outlook and monetary policy.
Finally, the Council worked to improve the quality of government
economic statistics. The Council urged increased funding for economic and demographic statistics in interagency discussions and in
deliberations over Federal budget priorities.
INTERNATIONAL ECONOMIC POLICIES
International economic issues were a high priority for the Council in 1993. All three Members continued the Council's active role
in the Organization of Economic Cooperation and Development
(OECD). Dr. Tyson attended the OECD's Economic Policy Committee meeting in Paris in May and served as its Acting Chair in November. Dr. Blinder led the U.S. delegation to the OECD to assess
U.S. economic policy and was a member of the U.S. delegation to
OECD Working Party 3 on macroeconomic policy coordination.
Dr. Stiglitz headed the U.S. delegation to OECD Working Party 1
meetings on microeconomic and structural issues. Senior staff




255

members represented the Council at the semiannual Short-Term
Economic Projections meetings at the OECD in Paris, and at the
annual Asia-Pacific Economic Experts Meeting in Sydney. The goal
of these meetings was to support the coordination of macroeconomic policies to promote economic growth. The Chair and the
other Members helped formulate Administration policies that
brought to completion two major trade agreements, the North
American Free Trade Agreement and the Uruguay Round of GATT,
and provided economic analyses of the implications of those agreements for the U.S. economy. The Council also participated in formulating other Administration policies in the international arena,
including such important initiatives as the National Export Strategy, and the ongoing evaluation of the economic relationship between the United States and the People's Republic of China.
Dr. Tyson and Dr. Blinder were deeply involved in the negotiations of the United States-Japan Framework for a New Economic
Partnership, with Dr. Blinder making two trips to Japan as part
of the negotiations. The Council also engaged in discussions with
Japan's Economic Planning Agency on the current account imbalances and other macroeconomic issues. The Council was involved
throughout the year in Administration policies for advancing economic reform in the former Soviet Union. Dr. Stiglitz traveled to
Russia and Ukraine and established an official relationship with
the Russian Government's Working Center for Economic Reform.
The Council provided the President with regular briefings on
international developments and was particularly active in the preparations for the Asia-Pacific Economic Cooperation (APEC) Ministerial meeting and the first-ever APEC leaders' meeting hosted by
the President in Seattle.
MICROECONOMIC POLICIES
The Council was an active participant in a broad range of Administration microeconomic initiatives in 1993. Dr. Tyson and the
Secretary of Transportation jointly led the Administration's Working Group on Aviation, which developed the Administration's Civil
Aviation Initiative. At the request of the President, Dr. Tyson also
served on the National Commission for a Strong, Competitive Airline Industry. The Council also assisted in the development of the
Administration's Domestic Natural Gas and Oil Initiative, issued
by the Department of Energy.
Dr. Stiglitz played an important role in the development of two
Executive Orders—one on regulatory planning and review and another on the Nation's infrastructure. Each order directs executive
branch agencies to rely upon cost-benefit analysis when identifying
appropriate regulatory approaches and when determining which infrastructure projects should be undertaken. Dr. Stiglitz also serves
as co-chair of a committee of the Administration's Regulatory




256

Working Group studying cost-benefit analysis methodology and he
participated in a number of working groups on financial markets
and economic development. Dr. Tyson and Dr. Stiglitz are also
working closely with the Vice President and other Administration
officials in developing legislative proposals for telecommunications
regulation. In addition, Dr. Tyson and the other Members are involved in analyzing various proposals for bank regulatory agency
consolidation.
Dr. Tyson was a member of the Health Care Task Force headed
by the First Lady and the Council was deeply involved with the
health care reform effort over the past year, especially in analyzing
the economic effects of reform options. The Council also helped develop the tax, empowerment zone, and enterprise communities provisions of the 1993 Omnibus Budget Reconciliation Act (OBRA). Dr.
Tyson is a member of the President's Community Enterprise
Board. In addition, the Council participated in the development of
the Administration's work force security and welfare reform initiatives and in the design of the Administration's defense reinvestment initiative. Dr. Tyson was appointed a member of the President's National Science and Technology Council and was appointed
the Administration's representative on the Competitiveness Policy
Council. Dr. Tyson and Dr. Stiglitz both served on the Administration's Welfare Reform Task Force.
Dr. Stiglitz was particularly active in the Administration's environmental policymaking efforts. He chaired the Subcommittee on
Economics Research on Natural Resources and Environment, created to identify key research areas in economics common to many
environmental quality and natural resource management issues.
He has also been actively involved in developing the Administration's proposals for Superfund reauthorization, Clean Water Act reauthorization, and the President's Climate Change Action Plan.
WEEKLY ECONOMIC BRIEFINGS
Dr. Tyson conducts a weekly economic briefing for the President,
the Vice President, and the President's other senior economic and
policy advisers. Dr. Blinder and Dr. Stiglitz also attend. The Council, in cooperation with the Office of the Vice President, prepares
a written Weekly Economic Briefing of the President, which serves
as the basis for the oral briefing. The briefing includes analysis of
current economic developments, more extended treatments of a
wide range of economic issues and problems, and summaries of
news on different regions and sectors of the economy.
The Staff of the Council of Economic Advisers
The professional staff of the Council consists of the Chief of Staff,
the Senior Statistician, fourteen senior economists, six staff econo-




257

mists, and two research assistants. The professional staff and their
areas of concentration at the end of 1993 were:
Chief of Staff
Thomas P. O'Donnell
Senior Economists
Jonathan B. Baker
David M. Cutler
Robert E. Cumby
William T. Dickens
Constance R. Dunham
Warren E. Farb
Sally M. Kane
Alan J. Krupnick
Erik R. Lichtenberg
Mark J. Mazur
Marcus Noland
Matthew D. Shapiro
Jay S. Stowsky
Robert F. Wescott

Regulation, Industrial Organization, and
Law
Health
International Economics
Labor, Welfare, and Education
Financial Markets and Foreign Assistance
Business and Regional Analysis
Climate Change and Natural Resources
Environment and Natural Resources
Agriculture, International Trade, and
Natural Resources
Public Finance
International Economics
Macroeconomics and the Weekly Economic
Briefing of the President
Technology, Defense Conversion, and
Regional Economic Development
Macroeconomics and Forecasting
Senior Statistician
Catherine H. Furlong
Staff Economists

Kevin C. Murdock
Kimberly J. O'Neill
Peter R. Orszag
Jeremy B. Rudd
Elizabeth A. Schneirov
Darryl S. Wills

Technology and Finance
Health and Public Finance
International Economics
Macroeconomics and Forecasting
Regulation, Industrial Organization, and
Environment
Labor, Welfare, and Agriculture
Research Assistants
D. W. Clark Dees
James C. Hritz
Statistical Office

Mrs. Furlong manages the Statistical Office. The Statistical Office maintains and updates the Council's statistical information,




258

prepares the Economic Indicators and the statistical appendix to
the Economic Report, and verifies statistics in Presidential and
Council memoranda, testimony, and speeches.
Susan P. Clements
Linda A. Reilly
Brian A. Amorosi
Margaret L. Snyder

Statistician
Statistical Assistant
Research Assistant
Secretary
The Administrative Office

Elizabeth A. Kaminski
Catherine Fibich

Administrative Officer
Administrative Assistant
Office of the Chair

Alice H. Williams
Sandra F. Daigle
Lisa D. Branch
Francine P. Obermiller

Executive Assistant to the Chair
Executive Assistant to the Chair and
Assistant to the Chief of Staff
Executive Assistant to Dr. Blinder
Executive Assistant to Dr. Stiglitz
Staff Secretaries
Mary E. Jones
Rosalind V. Rasin
Mary A. Thomas

Mrs. Thomas also served as Executive Assistant for the Weekly

Economic Briefing of the President.
Michael Treadway provided editorial assistance in the preparation of the 1994 Economic Report.
Sherman Robinson, University of California, Berkeley, served
during the summer and early fall of 1993 as a senior economist
specializing in the North American Free Trade Agreement. Omri S.
Dahan, Michelle R. Dorman, Mark H. Fithian, Ian B. Goldberg,
and Jennifer Howard served as student assistants during the year.
Suzanne M. Tudor returned to serve as Dr. Blinder's Executive Assistant during Lisa Branch's leave of absence. Volunteers during
the year were Diana Billik, William P. Cowin, Matthew T.
Henshon, John D. Levin, and Megan R. Sweeney.
DEPARTURES
James D. Foster, who served as Special Assistant to the Chairman, resigned in January 1993 to accept a position with the Tax
Foundation. Shelley A. Slomowitz, Staff Assistant to the Chairman,
also resigned in January 1993.
The Council's senior economists, in most cases, are on leave of
absence from faculty positions at academic institutions or from




259

other government agencies or research institutions. Their tenure
with the Council is usually limited to 1 or 2 years. Most of the senior economists who resigned during the year returned to their previous affiliations. They are Kwok-Chiu Fung (University of California, Santa Cruz), Sherry Glied (Columbia University), Andrew S.
Joskow (Department of Justice), Steven B. Kamin (Board of Governors of the Federal Reserve System), Michael M. Knetter (Dartmouth College), Howard D. Leathers (University of Maryland),
Deborah J. Lucas (Northwestern University), Andrew B. Lyon
(University of Maryland), and Raymond L. Squitieri (Department
of the Treasury). John H. Kitchen went on to a new position at the
Department of the Treasury. Jonathan B. Wiener accepted a position on the faculty of the Duke University Law School.
Kevin Berner, staff economist, accepted a position with McKinsey
and Company, Inc., Cleveland, Ohio. Junior staff economists (now
designated staff economists) are generally graduate students who
spend 1 year with the Council and then return to complete their
dissertations. Those who returned to their graduate studies in 1993
are: Christopher J. Acito (University of Chicago), Lucy P. Allen
(Yale University), Sherif Lotfi (Columbia University), and Natalie
J. Tawil (Massachusetts Institute of Technology). Joshua B. Michael accepted a position with The Eiger Development Corporation,
Seattle, Washington. Bret M. Dickey, research assistant, began
graduate studies at Stanford University. Janet J. Twyman, staff
secretary, resigned in 1993.
Public Information
The Council's Annual Report is the principal medium through
which the Council informs the public of its work and its views. It
is an important vehicle for presenting the Administration's domestic and international economic policies. Annual distribution of the
Report in recent years has averaged about 45,000 copies. The Council also has primary responsibility for compiling the monthly Economic Indicators, which is issued by the Joint Economic Committee
of the Congress and has a distribution of approximately 10,000.




260

Appendix B
STATISTICAL TABLES RELATING TO INCOME,
EMPLOYMENT, AND PRODUCTION







CONTENTS
NATIONAL INCOME OR EXPENDITURE:
Page

B-l.
B-2.
B-3.
B-4.
B-5.
B-6.
B-7.
B-8.
B-9.
B-10.
B-ll.
B-12.
B-13.
B-14.
B-15.
B-16.
B-l7.
B-18.
B-19.
B-20.
B-21.
B-22.
B-23.
B-24.
B-25.
B-26.
B-27.
B-28.
B-29.
B-30.
B-31.

Gross domestic product, 1959-93
Gross domestic product in 1987 dollars, 1959-93
Implicit price deflators for gross domestic product, 1959-93
Fixed-weighted price indexes for gross domestic product, 1987
weights, 1959-93
Changes in gross domestic product and personal consumption expenditures, and related implicit price deflators and fixedweighted price indexes, 1960-93
Selected per capita product and income series in current and
1987 dollars, 1959-93
Gross domestic product by major type of product, 1959-93
Gross domestic product by major type of product in 1987 dollars,
1959-93
Gross domestic product by sector, 1959-93
Gross domestic product by sector in 1987 dollars, 1959-93
Gross domestic product by industry, 1947-91
Gross domestic product by industry in 1987 dollars, fixed 1987
weights, 1977-91
Gross domestic product of nonfinancial corporate business, 195993
Output, costs, and profits of nonfinancial corporate business,
1959-93
Personal consumption expenditures, 1959-93
Personal consumption expenditures in 1987 dollars, 1959-93
Gross and net private domestic investment, 1959-93
Gross and net private domestic investment in 1987 dollars, 195993
Inventories and final sales of domestic business, 1959-93
Inventories and final sales of domestic business in 1987 dollars,
1959-93
Foreign transactions in the national income and product accounts, 1959-93
Exports and imports of goods and services and receipts and payments of factor income in 1987 dollars, 1959-93
Relation of gross domestic product, gross national product, net
national product, and national income, 1959-93
Relation of national income and personal income, 1959-93
National income by type of income, 1959-93
Sources of personal income, 1959-93
Disposition of personal income, 1959-93
Total and per capita disposable personal income and personal
consumption expenditures in current and 1987 dollars, 1959-93
Gross saving and investment, 1959-93
Personal saving, flow of funds accounts, 1946-93
Median money income (in 1992 dollars) and poverty status of
families and persons, by race, selected years, 1971-92




263

268
270
272
274
276
277
278
279
280
281
282
283
284
285
286
287
288
289
290
291
292
293
294
295
296
298
300
301
302
303
304

POPULATION, EMPLOYMENT, WAGES, AND PRODUCTIVITY:
Page

B-32.
B-33.
B-34.
B-35.
B-36.
B-37.
B-38.
B-39.
B-40.
B-41.
B-42.
B-43.
B-44.
B-45.
B-46.
B-47.
B-48.

Population by age group, 1929-93
Population and the labor force, 1929-93
Civilian employment and unemployment by sex and age, 1947-93
Civilian employment by demographic characteristic, 1954-93
Unemployment by demographic characteristics, 1954-93
Civilian labor force participation rate and employment/population ratio, 1948-93
Civilian labor force participation rate by demographic characteristic, 1954-93
Civilian employment/population ratio by demographic characteristic, 1954-93
Civilian unemployment rate, 1948-93
Civilian unemployment rate by demographic characteristic,
1950-93
Unemployment by duration and reason, 1950-93
Unemployment insurance programs, selected data, 1962-93
Employees on nonagricultural payrolls, by major industry, 194693
Hours and earnings in private nonagricultural industries, 195993
Employment cost index, private industry, 1979-93
Productivity and related data, business sector, 1947-93
Changes in productivity and related data, business sector, 194893

305
306
308
309
310
311
312
313
314
315
316
317
318
320
321
322
323

PRODUCTION AND BUSINESS ACTIVITY:
B-49.
B-50.
B-51.
B-52.
B-53.
B-54.
B-55.
B-56.
B-57.
B-58.

Industrial production indexes, major industry divisions, 1947-93 ..
Industrial production indexes, market groupings, 1947-93
Industrial production indexes, selected manufactures, 1947-93
Capacity utilization rates, 1948-93
New construction activity, 1929-93
New housing units started and authorized, 1959-93
Business expenditures for new plant and equipment, 1947-94
Manufacturing and trade sales and inventories, 1950-93
Manufacturers' shipments and inventories, 1950-93
Manufacturers' new and unfilled orders, 1950-93

324
325
326
327
328
330
331
332
333
334

Consumer price indexes for major expenditure classes, 1950-93
Consumer price indexes for selected expenditure classes, 1950-93.
Consumer price indexes for commodities, services, and special
groups, 1950-93
Changes in special consumer price indexes, 1958-93
Changes in consumer price indexes for commodities and services,
1929-93
Producer price indexes by stage of processing, 1947-93
Producer price indexes by stage of processing, special groups,
1974-93
Producer price indexes for major commodity groups, 1950-93
Changes in producer price indexes for finished goods, 1955-93

335
336

PRICES:
B-59.
B-60.
B-61.
B-62.
B-63.
B-64.
B-65.
B-66.
B-67.




264

338
339
340
341
343
344
346

MONEY STOCK, CREDIT, AND FINANCE:
B-68.
B-69.
B-70.
B-71.
B-72.
B-73.
B-74.
B-75.
B-76.

Money stock, liquid assets, and debt measures, 1959-93
Components of money stock measures and liquid assets, 1959-93..
Aggregate reserves of depository institutions and monetary base,
1959-93
Commercial bank loans and securities, 1972-93
Bond yields and interest rates, 1929-93
Total funds raised in credit markets by nonflnancial sectors,
1984-93
Mortgage debt outstanding by type of property and of financing,
1940-93
Mortgage debt outstanding by holder, 1940-93
Consumer credit outstanding, 1952-93

Page
347
348
350
351
352
354
356
357
358

GOVERNMENT FINANCE:
B-77.
B-78.
B-79.
B-80.
B-81.
B-82.
B-83.
B-84.
B-85.
B-86.
B-87.

Federal receipts, outlays, surplus or deficit, and debt, selected
fiscal years, 1929-95
Federal receipts, outlays, and debt, fiscal years, 1982-95
Federal budget receipts, outlays, surplus or deficit, and debt, as
percentages of gross domestic product, 1934-95
Federal and State and local government receipts and expenditures, national income and product accounts, 1959-93
Federal and State and local government receipts and expenditures, national income and product accounts, by major type,
1959-93
Federal Government receipts and expenditures, national income
and product accounts, 1976-93
State and local government receipts and expenditures, national
income and product accounts, 1959-93
State and local.government revenues and expenditures, selected
fiscal years, 1927-91
Interest-bearing public debt securities by kind of obligation,
1967-93
Maturity distribution and average length of marketable interestbearing public debt securities held by private investors, 196793
Estimated ownership of public debt securities by private investors, 1976-93

359
360
362
363
364
365
366
367
368
369
370

CORPORATE PROFITS AND FINANCE:
B-88.
B-89.
B-90.
B-91.
B-92.
B-93.
B-94.
B-95.

Corporate profits with inventory valuation and capital consumption adjustments, 1959-93
Corporate profits by industry, 1959-93
Corporate profits of manufacturing industries, 1959-93
Sales, profits, and stockholders' equity, all manufacturing corporations, 1952-93
Relation of profits after taxes to stockholders' equity and to
sales, all manufacturing corporations, 1947-93
Sources and uses of funds, nonfarm nonfinancial corporate business, 1947-93
Common stock prices and yields, 1955-93
Business formation and business failures, 1950-93




265

371
372
373
374
375
376
377
378

AGRICULTURE:
Page

B-96.
B-97.
B-98.
B-99.
B-100.
B-101.

Farm income, 1940-93
Farm output and productivity indexes, 1948-91
Farm input use, selected inputs, 1948-92
Indexes of prices received and prices paid by farmers, 1950-93
U.S. exports and imports of agricultural commodities, 1940-93
Farm business balance sheet, 1950-92

379
380
381
382
383
384

INTERNATIONAL STATISTICS:
B-102. International investment position of the United States at yearend, 1984-92
B-103. U.S. international transactions, 1946-93
B-104. U.S. merchandise exports and imports by principal end-use category, 1965-93
B-105. U.S. merchandise exports and imports by area, 1984-93
B-106. U.S. merchandise exports, imports, and trade balance, 1972-93
B-107. International reserves, selected years, 1952-93
B-108. Industrial production and consumer prices, major industrial
countries, 1967-93
B-109. Civilian unemployment rate, and hourly compensation, major industrial countries, 1967-93
B-110. Foreign exchange rates, 1969-93
B-lll. Growth rates in real gross domestic product, 1975-93

385
386
388
389
390
391
392
393
394
395

NATIONAL WEALTH:
B-112. National wealth, 1946-92
B-113. National wealth in 1987 dollars, 1946-92

396
397

SUPPLEMENTARY TABLE:
B-114. Selected historical series on gross domestic product and related
series, 1929-58




266

398

General Notes
Detail in these tables may not add to totals because of rounding.
Unless otherwise noted, all dollar figures are in current dollars.
Symbols used:
p Preliminary.
Not available (also, not applicable).
Data in these tables reflect revisions made by the source agencies from
January 1993 through early February 1994.




267

NATIONAL INCOME OR EXPENDITURE
TABLE B-l.—Gross domestic product, 1959-93
[Billions of dollars, except as noted; quarterly data at seasonally adjusted annual rates]
Gross private domestic investment

Personal consumption expenditures

Fixed investment
Year or quarter

Gross
domestic
product

Nonresidential
Total

Durable
goods

Nondurable
goods

Services

Total
Total
Total

Structures

Producers'
durable
equipment

Residential

Change
in
business
inventories

1959

494.2

318.1

42.8

148.5

126.8

78.8

74.6

46.5

18.1

28.3

28.1

4.2

1960
1961
1962
1963
1964

513.3
531.8
571.6
603.1
648.0

332.4
343.5
364.4
384.2
412.5

43.5
41.9
47.0
51.8
56.8

153.1
157.4
163.8
169.4
179.7

135.9
144.1
153.6
163.1
175.9

78.7
77.9
87.9
93.4
101.7

75.5
75.0
81.8
87.7
96.7

49.2
48.6
52.8
55.6
62.4

19.6
19.7
20.8
21.2
23.7

29.7
28.9
32.1
34.4
38.7

26.3
26.4
29.0
32.1
34.3

3.2
2.9
6.1
5.7
5.0

1965
1966
1967
1968
1969

702.7
769.8
814.3
889.3
959.5

444.6
481.6
509.3
559.1
603.7

63.5
68.5
70.6
81.0
86.2

191.9
208.5
216.9
235.0
252.2

189.2
204.6
221.7
243.1
265.3

118.0
130.4
128.0
139.9
155.2

108.3
116.7
117.6
130.8
145.5

74.1
84.4
85.2
92.1
102.9

28.3
31.3
31.5
33.6
37.7

45.8
53.0
53.7
58.5
65.2

34.2
32.3
32.4
38.7
42.6

9.7
13.8
10.5
9.1
9.7

1970
1971
1972
1973
1974

1,010.7
1,097.2
1,207.0
1,349.6
1,458.6

646.5
700.3
767.8
848.1
927.7

85.3
97.2
110.7
124.1
123.0

270.4
283.3
305.2
339.6
380.8

290.8
319.8
351.9
384.5
423.9

150.3
175.5
205.6
243.1
245.8

148.1
167.5
195.7
225.4
231.5

106.7
111.7
126.1
150.0
165.6

40.3
42.7
47.2
55.0
61.2

66.4
69.1
78.9
95.1
104.3

41.4
55.8
69.7
75.3
66.0

2.3
8.0
9.9
17.7
14.3

1975
1976
1977
1978
1979

1,585.9
1,768.4
1,974.1
2,232.7
2,488.6

1,024.9
1,143.1
1,271.5
1,421.2
1,583.7

134.3
160.0
182.6
202.3
214.2

416.0
451.8
490.4
541.5
613.3

474.5
531.2
598.4
677.4
756.2

226.0
286.4
358.3
434.0
480.2

231.7
269.6
333.5
406.1
467.5

169.0
187.2
223.2
274.5
326.4

61.4
65.9
74.6
93.9
118.4

107.6
121.2
148.7
180.6
208.1

62.7
82.5
110.3
131.6
141.0

-5.7
16.7
24.7
27.9
12.8

1980
1981
1982
1983
1984

2,708.0
3,030.6
3,149.6
3,405.0
3,777.2

1,748.1
1,926.2
2,059.2
2.257.5
2,460.3

212.5
228.5
236.5
275.0
317.9

682.9
744.2
772.3
817.8
873.0

852.7
953.5
1,050.4
1,164.7
1,269.4

467.6
558.0
503.4
546.7
718.9

477.1
532.5
519.3
552.2
647.8

353.8
410.0
413.7
400.2
468.9

137.5
169.1
178.8
153.1
175.6

216.4
240.9
234.9
247.1
293.3

123.3
122.5
105.7
152.0
178.9

-9.5
25.4
-15.9
-5.5
71.1

1985
1986
1987
1988
1989

4,038.7
4,268.6
4,539.9
4,900.4
5,250.8

2,667.4
2,850.6
3,052.2
3,296.1
3,523.1

352.9
389.6
403.7
437.1
459.4

919.4
952.2
1,011.1
1,073.8
1,149.5

1,395.1
1,508.8
1,637.4
1,785.2
1,914.2

714.5
717.6
749.3
793.6
832.3

689.9
709.0
723.0
777.4
798.9

504.0
492.4
497.8
545.4
568.1

193.4
174.0
171.3
182.0
193.3

310.6
318.4
326.5
363.4
374.8

185.9
216.6
225.2
232.0
230.9

24.6
8.6
26.3
16.2
33.3

1990
1991
1992
1993 "

5,546.1
5,722.9
6,038.5
6,374.0

3,761.2
3,906.4
4,139.9
4,390.6

468.2
457.8
497.3
537.7

1,229.2
1,257.9
1,300.9
1,350.2

2,063.8
2,190.7
2,341.6
2,502.7

808.9
736.9
796.5
892.0

802.0
745.5
789.1
875.2

586.7
555.9
565.5
622.9

201.6
182.6
172.6
178.6

385.1
373.3
392.9
444.4

215.3
189.6
223.6
252.3

6.9
-8.6
7.3
16.8

1982:
1983:
1984:
1985:
1986:
1987:
1988:
1989:

3,195.1
3,547.3
3,869.1
4,140.5
4,336.6
4,683.0
5,044.6
5,344.8

2,128.7
2,346.8
2,526.4
2,739.8
2,923.1
3,124.6
3,398.2
3,599.1

246.9
297.7
328.2
354.4
406.8
408.8
452.9
458.3

787.3
839.8
887.8
939.5
963.7
1,029.4
1,105.8
1,173.5

1,094.6
1,209.3
1,310.4
1,446.0
1,552.6
1,686.4
1,839.5
1,967.3

464.2
614.8
722.8
737.0
697.1
800.2
814.8
825.2

510.5
594.6
671.8
704.4
715.9
740.9
797.5
795.0

397.7
426.9
491.5
511.3
491.7
514.3
560.2
568.8

168.9
154.6
184.1
195.4
168.4
180.0
186.8
198.0

228.8
272.3
307.3
315.9
323.3
334.3
373.4
370.8

112.8
167.7
180.4
193.1
224.2
226.5
237.3
226.2

-46.3
20.2
51.0
32.6
-18.8
59.3
17.3
30.2

I
V

5,461.9
5,540.9
5,583.8
5,597.9

3,679.3
3,727.0
3,801.7
3,836.6

479.8
466.0
467.3
459.5

1,201.7
1,213.6
1,241.0
1,260.7

1,997.8
2,047.5
2,093.4
2,116.4

828.9
837.8
812.5
756.4

819.3
804.5
804.1
780.3

586.2
582.1
594.1
584.4

203.6
203.2
203.8
195.7

382.5
378.9
390.3
388.7

233.2
222.4
209.9
195.8

9.6
33.3
8.4
-23.9

1991:1.
II
Ill
IV

5,631.7
5,697.7
5,758.6
5,803.7

3,843.6
3,887.8
3,929.8
3,964.1

448.9
452.0
465.1
465.2

1,252.3
1,259.2
1,260.0
1,260.0

2,142.4
2,176.6
2,204.8
2,239.0

729.1
721.5
744.5
752.4

749.0
744.5
745.0
743.5

566.8
561.0
552.6
543.3

192.2
188.4
178.0
171.7

374.6
372.6
374.6
371.5

182.2
183.6
192.4
200.3

-19.9
-23.0
-.5
8.9

1992:1
II
Ill
IV

5,908.7
5,991.4
6,059.5
6,194.4

4,046.5
4,099.9
4,157.1
4,256.2

484.0
487.8
500.9
516.6

1,278.2
1,288.2
1,305.7
1,331.7

2,284.4
2,323.8
2,350.5
2,407.9

750.8
799.7
802.2
833.3

755.9
786.8
792.5
821.3

547.0
566.3
569.2
579.5

173.9
174.5
170.8
171.1

373.1
391.7
398.4
408.3

208.9
220.6
223.3
241.8

-5.1
12.9
9.7
12.0

1993:1
II
Ill
IV "...

6,261.6
6,327.6
6,395.9
6,510.8

4,296.2
4,359.9
4,419.1
4,487.4

515.3
531.6
541.9
561.9

1,335.3
1,344.8
1,352.4
1,368.4

2,445.5
2,483.4
2,524.8
2,557.2

874.1
874.1
884.0
935.8

839.5
861.0
876.3
924.1

594.7
619.1
624.9
653.0

172.4
177.6
179.1
185.2

422.2
441.6
445.8
467.8

244.9
241.9
251.3
271.1

34.6
13.1
7.7
11.7

IV..
IV..
IV..
IV..
IV..
IV..
IV..
IV..

1990:1
II

See next page for continuation of table.




268

TABLE B-l.—Gross domestic product. 1959-93—Continued

[Billions of dollars, except as noted; quarterly data at seasonally adjusted annual rates]
Government
purchases

Net exports of goods and
services

Year or
quarter

Federal
Net
exports Exports Imports

Total
Total

National
defense

Nondefense

State
and
local

Final
sales of
domestic
product

Gross
domestic purchases '

Addendum:
Gross
national
product 2

Percent change
from preceding
period
Gross
domestic
product

Gross
domestic
purchases '

1959

-1.7

20.6

22.3

99.0

57.1

46.4

10.8

41.8

490.0

495.8

497.0

8.7

9.1

1960
1961
1962
1963
1964

2.4
3.4
2.4
3.3
5.5

25.3
26.0
27.4
29.4
33.6

22.8
22.7
25.0
26.1
28.1

99.8
107.0
116.8
122.3
128.3

55.3
58.6
65.4
66.4
67.5

45.3
47.9
52.1
51.5
50.4

10.0
10.6
13.3
14.9
17.0

44.5
48.4
51.4
55.8
60.9

510.1
528.9
565.5
597.5
643.0

510.9
528.4
569.1
599.8
642.5

516.6
535.4
575.8
607.7
653.0

3.9
3.6
7.5
5.5
7.4

3.0
3.4
7.7
5.4
7.1

1965
1966
1967
1968
1969

3.9
1.9
1.4
-1.3
-1.2

35.4
38.9
41.4
45.3
49.3

31.5
37.1
39.9
46.6
50.5

136.3
155.9
175.6
191.5
201.8

69.5
81.3
92.8
99.2
100.5

51.0
62.0
73.4
79.1
78.9

18.5
19.3
19.4
20.0
21.6

66.8
74.6
82.7
92.3
101.3

693.0
756.0
803.8
880.2
949.8

698.8
767.9
812.9
890.6
960.7

708.1
774.9
819.8
895.5
965.6

8.4
9.5
5.8
9.2
7.9

8.8
9.9
5.9
9.6
7.9

1970
1971
1972
1973
1974

1.2
-3.0
-8.0
.6
-3.1

57.0
59.3
66.2
91.8
124.3

55.8
62.3
74.2
91.2
127.5

212.7
224.3
241.5
257.7
288.3

100.1
100.0
106.9
108.5
117.6

76.8
74.1
77.4
77.5
82.6

23.3
25.9
29.4
31.1
35.0

112.6
124.3
134.7
149.2
170.7

1,008.4
1,089.2
1,197.1
1,331.9
1,444.4

1.009.5
1,100.2
1,215.0
1,349.0
1,461.8

1,017.1
1,104.9
1,215.7
1,362.3
1,474.3

5.3
8.6
10.0
11.8
8.1

5.1
9.0
10.4
11.0
8.4

1975
1976
1977
1978
1979

13.6
-2.3
-23.7
-26.1
-23.8

136.3
148.9
158.8
186.1
228.9

122.7
151.1
182.4
212.3
252.7

321.4
341.3
368.0
403.6
448.5

129.4
135.8
147.9
162.2
179.3

89.6
93.4
100.9
108.9
121.9

39.8
42.4
47.0
53.3
57.5

192.0
205.5
220.1
241.4
269.2

1,591.5
1,751.7
1,949.4
2,204.8
2,475.9

1,572.3
1,770.7
1,997.8
2,258.8
2,512.5

1,599.1
1,785.5
1,994.6
2,254.5
2,520.8

8.7
11.5
11.6
13.1
11.5

7.6
12.6
12.8
13.1
11.2

1980
1981
1982
1983
1984

-14.7
-14.7
-20.6
-51.4
-102.7

279.2
303.0
282.6
276.7
302.4

293.9
317.7
303.2
328.1
405.1

507.1
561.1
607.6
652.3
700.8

209.1
240.8
266.6
292.0
310.9

142.7
167.5
193.8
214.4
233.1

66.4
73.3
72.7
77.5
77.8

298.0
320.3
341.1
360.3
389.9

2,717.5
3,005.2
3,165.5
3,410.6
3.706.1

2,722.8
3,045.3
3,170.2
3,456.5
3,879.9

2,742.1
3,063.8
3,179.8
3,434.4
3,801.5

8.8
11.9
3.9
8.1
10.9

8.4
11.8
4.1
9.0
12.2

1985
1986
1987
1988
1989

-115.6
-132.5
-143.1
-108.0
-79.7

302.1
319.2
364.0
444.2
508.0

417.6
451.7
507.1
552.2
587.7

772.3
833.0
881.5
918.7
975.2

344.3
367.8
384.9
387.0
401.6

258.6
276.7
292.1
295.6
299.9

85.7
91.1
92.9
91.4
101.7

428.1
465.3
496.6
531.7
573.6

4,014.1
4,260.0
4,513.7
4,884.2
5,217.5

4,154.3
4,401.2
4,683.0
5,008.4
5,330.5

4,053.6
4,277.7
4,544.5
4,908.2
5,266.8

6.9
5.7
6.4
7.9
7.2

7.1
5.9
6.4
6.9
6.4

-71.4
-19.6
-29.6
-65.7

557.1
601.5
640.5
660.1

628.5
621.1
670.1
725.8

1,047.4
1,099.3
1,131.8
1,157.1

426.5
445.9
448.8
443.4

314.0
322.5
313.8
303.6

112.5
123.4
135.0
139.8

620.9
653.4
683.0
713.7

5,539.3
5,731.6
6,031.2
6,357.2

5,617.5
5,742.5
6,068.2
6,439.7

5,567.8
5,737.1
6,045.8

5.6
3.2
5.5
5.6

5.4
2.2
5.7
6.1

IV.... - 2 9 . 5
IV.... - 7 1 . 8
IV.... -107.1
IV.... -135.5
IV.... -133.2
IV.... -143.2
IV... -106.0
IV... -73.9

265.6
286.2
308.7
304.7
333.9
392.4
467.0
523.8

295.1
358.0
415.7
440.2
467.1
535.6
573.1
597.7

631.6
657.6
727.0
799.2
849.7
901.4
937.6
994.5

281.4
289.7
324.7
356.9
373.1
392.5
392.0
405.1

205.5
222.8
242.9
268.6
278.6
295.8
296.8
302.5

75.9
66.9
81.9
88.3
94.5
96.7
95.2
102.6

350.3
367.9
402.2
442.4
476.6
509.0
545.7
589.3

3,241.4
3,527.1
3,818.1
4,107.9
4,355.4
4,623.7
5,027.3
5,314.6

3,224.6
3,619.1
3,976.2
4,276.0
4,469.8
4,826.2
5,150.7
5,418.7

3,222.6
3,578.4
3,890.2
4,156.2
4,340.5
4,690.5
5,054.3
5,365.0

,.

1990
1991
1992
1993 p
1982:
1983:
1984:
1985:
1986:
1987:
1988:
1989:

1990: I
II....
III...
IV...

-73.9
-61.3
-78.7
-71.6

542.0
553.5
555.3
577.6

615.9
614.8
634.0
649.2

1,027.7
1,037.3
1,048.3
1,076.5

422.7
423.6
423.2
436.5

312.1
312.5
309.1
322.5

110.6
111.2
114.1
114.0

605.0
613.7
625.1
640.0

5,452.4
5,507.6
5,575.3
5,621.8

5,535.9
5,602.2
5,662.4
5,669.5

5,482.1
5,559.3
5,599.9
5,630.0

9.1
5.9
3.1
1.0

8.9
4.9
4.4
.5

1991:1
II....
III...
IV...

-34.0
-11.5
-19.8
-13.0

576.5
600.7
603.0
625.7

610.6
612.2
622.8
638.8

1,093.0
1,099.9
1,104.0
1,100.2

450.2
449.4
446.8
437.4

331.4
326.3
321.2
311.2

118.7
123.0
125.6
126.2

642.9
650.5
657.3
662.8

5,651.6
5,720.8
5,759.1
5,794.8

5,665.8
5,709.2
5,778.4
5,816.7

5,656.1
5,710.6
5,766.2
5,815.5

2.4
4.8
4.3
3.2

-.3
3.1
4.9
2.7

1992:1
-7.0
II.... -33.9
III... - 3 8 . 8
IV... - 3 8 . 8

633.7
632.4
641.1
654.7

640.7
666.3
679.9
693.5

1,118.5
1,125.8
1,139.1
1,143.8

445.5
444.6
452.8
452.4

312.3
310.4
316.7
315.7

133.1
134.2
136.1
136.7

673.0
681.2
686.2
691.4

5,913.9
5,978.6
6,049.9
6.182.5

5,915.8
6,025.3
6,098.3
6,233.2

5,927.6
5,996.3
6,067.3
6,191.9

7.4
5.7
4.6
9.2

7.0
7.6
4.9
9.1

-48.3
1993:1
II.... - 6 5 . 1
III... -71.9

651.3
660.0
653.2
675.8

699.6
725.0
725.1
753.5

1,139.7
1,158.6
1,164.8
1,165.3

442.7
447.5
443.6
439.7

304.8
307.6
301.9
300.0

137.9
140.0
141.7
139.7

697.0
711.1
721.2
725.6

6,227.1
6,314.5
6,388.2
6,499.0

6,309.9
6,392.7
6,467.8
6,588.5

6,262.1
6,327.1
6,402.3

4.4
4.3
4.4
7.4

5.0
5.4
4.8
7.7

IV

-77.7

1

Gross domestic product (GDP) less exports of goods and services plus imports of goods and services.
GDP plus net receipts of factor income from rest of the world.
Source-. Department of Commerce, Bureau of Economic Analysis.
2




269

TABLE B-2.—Gross domestic product in 1987 dollars, 1959-93
[Billions of 1987 dollars, except as noted; quarterly data at seasonally adjusted annual rates]
Personal consumption
expenditures

Gross private domestic investment

Fixed investment
Year or
quarter

Gross
domestic
product

Nonresidential
Total

Durable
goods

Nondurable
goods

Services

Total
Total
Total

Structures

Producers'
durable
equipment

Residential

Change
in
business
inventories

1959

1,928.8

1,178.9

114.4

518.5

546.0

296.4

282.8

165.2

74.4

90.8

117.6

13.6

1960
1961
1962
1963
1964

1,970.8
2,023.8
2,128.1
2,215.6
2,340.6

1,210.8
1,238.4
1,293.3
1,341.9
1,417.2

115.4
109.4
120.2
130.3
140.7

526.9
537.7
553.0
563.6
588.2

568.5
591.3
620.0
648.0
688.3

290.8
289.4
321.2
343.3
371.8

282.7
282.2
305.6
327.3
356.2

173.3
172.1
185.0
192.3
214.0

80.8
82.3
86.1
86.9
95.9

92.5
89.8
98.9
105.4
118.1

109.4
110.1
120.6
135.0
142.1

8.1
7.2
15.6
16.0
15.7

1965
1966
1967
1968
1969

2,470.5
2,616.2
2,685.2
2,796.9
2,873.0

1,497.0
1,573.8
1,622.4
1,707.5
1,771.2

156.2
166.0
167.2
184.5
190.8

616.7
647.6
659.0
686.0
703.2

724.1
760.2
796.2
837.0
877.2

413.0
438.0
418.6
440.1
461.3

387.9
401.3
391.0
416.5
436.5

250.6
276.7
270.8
280.1
296.4

111.5
119.1
116.0
117.4
123.5

139.1
157.6
154.8
162.7
172.9

137.3
124.5
120.2
136.4
140.1

25.1
36.7
27.6
23.6
24.8

1970
1971
1972
1973
1974

2,873.9
2,955.9
3,107.1
3,268.6
3,248.1

1,813.5
1,873.7
1,978.4
2,066.7
2,053.8

183.7
201.4
225.2
246.6
227.2

717.2
725.6
755.8
777.9
759.8

912.5
946.7
997.4
1,042.2
1,066.8

429.7
475.7
532.2
591.7
543.0

423.8
454.9
509.6
554.0
512.0

292.0
286.8
311.6
357.4
356.5

123.3
121.2
124.8
134.9
132.3

168.7
165.6
186.8
222.4
224.2

131.8
168.1
198.0
196.6
155.6

5.9
20.8
22.5
37.7
30.9

1975
1976
1977
1978
1979

3,221.7
3,380.8
3,533.3
3,703.5
3,796.8

2,097.5
2,207.3
2,296.6
2,391.8
2,448.4

226.8
256.4
280.0
292.9
289.0

767.1
801.3
819.8
844.8
862.8

1,103.6
1,149.5
1,196.8
1,254.1
1,296.5

437.6
520.6
600.4
664.6
669.7

451.5
495.1
566.2
627.4
656.1

316.8
328.7
364.3
412.9
448.8

118.0
120.5
126.1
144.1
163.3

198.8
208.2
238.2
268.8
285.5

134.7
166.4
201.9
214.5
207.4

-13.9
25.5
34.3
37.2
13.6

1980
1981
1982
1983
1984

3,776.3
3,843.1
3,760.3
3,906.6
4,148.5

2,447.1
2,476.9
2,503.7
2,619.4
2,746.1

262.7
264.6
262.5
297.7
338.5

860.5
867.9
872.2
900.3
934.6

1,323.9
1,344.4
1,368.9
1,421.4
1,473.0

594.4
631.1
540.5
599.5
757.5

602.7
606.5
558.0
595.1
689.6

437.8
455.0
433.9
420.8
490.2

170.2
182.9
181.3
160.3
182.8

267.6
272.0
252.6
260.5
307.4

164.8
151.6
124.1
174.2
199.3

-8.3
24.6
-17.5
4.4
67.9

1985
1986
1987
1988
1989

4,279.8
4,404.5
4,539.9
4,718.6
4,838.0

2,865.8
2,969.1
3,052.2
3,162.4
3,223.3

370.1
402.0
403.7
428.7
440.7

958.7
991.0
1,011.1
1,035.1
1,051.6

1,537.0
1,576.1
1,637.4
1,698.5
1,731.0

745.9
735.1
749.3
773.4
784.0

723.8
726.5
723.0
753.4
754.2

521.8
500.3
497.8
530.8
540.0

197.4
176.6
171.3
174.0
177.6

324.4
323.7
326.5
356.8
362.5

202.0
226.2
225.2
222.7
214.2

22.1
8.5
26.3
19.9
29.8

1990
1991
1992 p
1993 .

4,897.3
4,861.4
4,986.3
5,132.7

3,272.6
3,258.6
3,341.8
3,452.5

443.1
426.6
456.6
489.7

1,060.7
1,048.2
1,062.9
1,088.1

1,768.8
1,783.8
1,822.3
1,874.7

746.8
675.7
732.9
820.9

741.1
684.1
726.4
805.5

546.5
514.5
529.2
591.3

179.5
160.2
150.6
151.4

367.0
354.3
378.6
439.9

194.5
169.5
197.1
214.2

5.7
-8.4
6.5
15.4

1982: IV
1983: IV
1984: IV
1985: IV
1986: IV
1987:IV
1988: IV
1989: IV

3,759.6
4,012.1
4,194.2
4,333.5
4,427.1
4,625.5
4,779.7
4,856.7

2,539.3
2,678.2
2,784.8
2,895.3
3,012.5
3,074.7
3,202.9
3,242.0

272.3
319.1
347.7
369.6
415.7
404.7
439.2
436.8

880.7
915.2
942.9
968.7
1,000.9
1,014.6
1,046.8
1,058.9

1,386.2
1,443.9
1,494.2
1,557.1
1,595.8
1,655.5
1,716.9
1,746.3

503.5
669.5
756.4
763.1
705.9
793.8
785.0
769.5

548.4
640.2
708.4
732.9
725.9
733.9
764.1
744.6

417.2
449.6
509.6
525.5
495.5
510.6
538.8
536.7

173.2
162.6
189.5
198.3
170.4
177.9
175.7
179.8

244.0
287.0
320.1
327.2
325.0
332.7
363.1
356.9

131.2
190.6
198.8
207.4
230.5
223.3
225.3
208.0

-44.9
29.3
47.9
30.2
-20.1
59.9
20.9
24.9

1990: I
II
Ill
IV

4,892.3
4,917.1
4,906.5
4,867.2

3,264.4
3,271.6
3,288.4
3,265.9

454.8
441.8
442.4
433.2

1,059.8
1,060.6
1,065.0
1,057.5

1,749.8
1,769.2
1,781.1
1,775.2

766.5
773.9
751.0
695.7

761.8
745.8
740.1
716.6

550.2
544.5
551.2
540.2

182.9
181.6
180.9
172.8

367.3
363.0
370.3
367.4

211.6
201.2
189.0
176.3

4.7
28.1
10.9
-20.9

1991: I
II
Ill
IV

4,837.8
4,855.6
4,872.6
4,879.6

3,242.7
3,256.9
3,267.1
3,267.5

420.3
422.0
432.6
431.5

1,048.2
1,051.1
1,049.3
1,044.0

1,774.2
1,783.8
1,785.2
1,792.0

667.8
659.8
682.8
692.3

685.2
682.1
683.8
685.2

521.4
517.8
512.8
506.1

169.0
165.2
155.6
151.0

352.5
352.6
357.2
355.2

163.8
164.3
171.0
179.1

-17.4
-22.3
-.9
7.1

1992: I
II
IV

4,922.0
4,956.5
4,998.2
5,068.3

3,302.3
3,316.8
3,350.9
3,397.2

446.6
447.5
459.0
473.4

1,052.0
1,055.0
1,062.9
1,081.8

1,803.7
1,814.3
1,829.0
1,842.0

691.7
737.0
739.6
763.0

696.7
724.4
730.0
754.3

510.5
528.8
533.8
543.7

152.8
152.9
148.8
148.0

357.7
375.9
385.1
395.7

186.2
195.6
196.2
210.6

-5.0
12.6
9.6
8.7

1993: I
II

5,078.2
5,102.1
5,138.3
5,212.1

3,403.8
3,432.7
3,469.6
3,503.9

471.9
484.2
493.1
509.9

1,076.0
1,083.1
1,093.0
1,100.1

1,855.9
1,865.4
1,883.5
1,893.9

803.0
803.6
813.4
863.6

773.7
790.6
806.9
851.0

562.3
584.3
594.8
623.8

148.2
151.1
151.2
155.1

414.1
433.2
443.6
468.7

211.4
206.2
212.1
227.2

29.3
13.0
6.5
12.7

See next page for continuation of table.




270

TABLE B-2.—Gross domestic product in 1987 dollars, 1959-93—Continued
[Billions of 1987 dollars, except as noted; quarterly data at seasonally adjusted annual rates]
Net exports of goods and
services
Year or
quarter

Government
purchases
Federal

Net
Exports Imports
exports

Total
Total

National
defense

Nondefense

State
and
local

Final
sales of
domestic
product

Gross
domestic purchases 1

Addendum:
Gross
national
product2

Percent change
from preceding
period
Gross
domestic
product

Gross
domestic
purchases *

1959..

-21.8

73.8

95.6

475.3

265.7

209.6

1,915.2

1,950.6

1,939.6

5.5

5.8

I960..
1961..
1962..
1963..
1964..

-7.6
-5.5
-10.5
-5.8
2.5

89.9
95.0
101.8
115.4

96.1
95.3
105.5
107.7
112.9

476.9
501.5
524.2
536.3
549.1

259.0
270.1
287.3
285.7
281.8

217.9
231.4
236.9
250.6
267.3

1,962.7
2,016.6
2,112.5
2,199.6
2,324.9

1,978.5
2,029.3
2,138.6
2,221.4
2,338.1

1,982.8
2,037.1
2,143.3
2,231.8
2,358.1

2.2
2.7
5.2
4.1
5.6

1.4
2.6
5.4
3.9
5.3

1965..
1966..
1967..
1968..
1969..

-6.4
-18.0
-23.7
-37.5
-41.5

118.1
125.7
130.0
140.2
147.8

124.5
143.7
153.7
177.7
189.2

566.9
622.4
667.9
686.8
682.0

282.1
319.3
350.9
353.1
340.1

284.8
303.1
317.0
333.7
341.9

2,445.4
2,579.5
2,657.5
2,773.2
2,848.2

2,476.9
2,634.2
2,708.9
2,834.4
2,914.5

2,488.9
2,633.2
2,702.6
2,815.6
2,890.9

5.5
5.9
2.6
4.2
2.7

5.9
6.4
2.8
4.6
2.8

1970
1971
1972
1973
1974

-35.2
-45.9
-56.5
-34.1
-4.1

161.3
161.9
173.7
210.3
234.4

196.4
207.8
230.2
244.4
238.4

665.8
652.4
653.0
644.2
655.4

315.0
290.8
284.4
265.3
262.6

209.6
191.3
185.8

74.8
74.1
76.8

350.9
361.6
368.6
378.9
392.9

2,868.0
2,935.2
3,084.5
3,230.9
3,217.2

2,909.1
3,001.8
3,163.6
3,302.7
3,252.2

2,891.5
2,975.9
3,128.8
3,298.6
3,282.4

.0
2.9
5.1
5.2
-.6

-.2
3.2
5.4
4.4
-1.5

1975
1976
1977
1978
1979

23.1
-6.4
-27.8
-29.9
-10.6

232.9
243.4
246.9
270.2
293.5

209.8
249.7
274.7
300.1
304.1

663.5
659.2
664.1
677.0
689.3

262.7
258.2
263.1
268.6
271.7

184.9
179.9
181.6
182.1
185.1

77.8
78.3
81.4
86.5
86.6

400.8
401.1
401.0
408.4
417.6

3,235.6
3,355.3
3,499.0
3,666.3
3,783.2

3,198.6
3,387.1
3,561.1
3,733.3
3,807.4

3,247.6
3,412.2
3,569.0
3,739.0
3,845.3

4.9
4.5
4.8
2.5

-1.6
5.9
5.1
4.8
2.0

1980
1981
1982
1983
1984

30.7
22.0
-7.4
-56.1
-122.0

320.5
326.1
296.7
285.9
305.7

289.9
304.1
304.1
342.1
427.7

704.2
713.2
723.6
743.8
766.9

284.8
295.8
306.0
320.8
331.0

194.2
206.4
221.4
234.2
245.8

90.6
89.4
84.7
86.6
85.1

419.4
417.4
417.6
423.0
436.0

3,784.6
3,818.6
3,777.8
3,902.2
4,080.6

3,745.7
3,821.2
3,767.7
3,962.8
4,270.5

3,823.4
3,884.4
3,796.1
3,939.6
4,174.5

-.5
1.8
-2.2
3.9
6.2

-1.6
2.0
-1.4
5.2
7.8

1985
1986
1987
1988
1989

-145.3
-155.1
-143.1
-104.0
-73.7

309.2
329.6
364.0
421.6
471.8

454.6
484.7
507.1
525.7
545.4

813.4
855.4
881.5
886.8
904.4

355.2
373.0
384.9
377.3
376.1

265.6
280.6
292.1
287.0
281.4

89.5
92.4
92.9
90.2
94.8

458.2
482.4
496.6
509.6
528.3

4,257.6
4,395.9
4,513.7
4,698.6
4,808.3

4,425.1
4,559.6
4,683.0
4,822.6
4,911.7

4,295.0
4,413.5
4,544.5
4,726.3
4,852.7

3.2
2.9
3.1
3.9
2.5

3.6
3.0
2.7
3.0
1.8

1990
1991
1992
1993 ".

-54.7
-19.1
-33.6
-79.3

510.5
543.4
578.0
596.4

565.1
562.5
611.6
675.7

932.6
946.3
945.2
938.6

384.1
386.5
373.0
355.1

283.6
281.3
261.2
242.7

100.4
105.3
111.8
112.5

548.5
559.7
572.2
583.4

4,891.6
4,869.8
4,979.8
5,117.3

4,951.9
4,880.5
5,019.9
5,211.9

4,916.5
4,874.5
4,994.0

1.2
-.7
2.6
2.9

-1.4
2.9
3.8

1982:
1983:
1984:
1985:
1986:
1987:
1988:
1989:

IV..
IV..
IV..
IV..
IV..
IV..
IV..
IV..

-19.0
-83.7
-131.4
-155.4
-156.0
-136.0
-102.7
-67.4

280.4
291.5
312.8
312.0
342.9
386.1
438.2
487.7

299.4
375.1
444.2
467.4
498.9
522.1
540.9
555.0

735.9
748.1
784.3
830.5
864.8
893.0
894.5
912.6

316.0
322.2
341.7
363.7
377.5
391.6
378.4
376.1

229.4
242.9
254.3
272.1
282.2
295.0
285.7
281.5

86.6
79.3
87.4
91.6
95.3
96.6
92.7
94.7

419.9
425.9
442.6
466.7
487.3
501.4
516.1
536.5

3,804.5
3,982.8
4,146.2
4,303.3
4,447.2
4,565.6
4,758.7
4,831.8

3,778.6
4,095.8
4,325.5
4,488.9
4,583.1
4,761.5
4,882.4
4,924.1

3,791.7
4,046.6
4,216.4
4,349.5
4,430.8
4,633.0
4,789.0
4,875.1

1990: I
II
III...
IV...

-60.8
-58.9
-62.2
-36.8

501.8
511.1
508.6
520.4

562.6
570.0
570.7
557.2

928.1
930.6
929.2
942.4

385.4
384.7
379.6
386.5

285.3
285.0
278.5
285.7

100.1
99.8
101.1
100.8

542.8
545.9
549.6
555.8

4,893.6
4,889.0
4,895.6
4,888.0

4,959.1
4,976.0
4,968.6
4,904.0

4,916.4
4,933.4
4,920.9
4,895.4

3.5
1.5
-.9
-3.2

1.4
-.6
-5.1

1991: I
II
III..
IV..

-21.6
-13.3
-25.0
-16.4

519.4
542.9
546.9
564.2

541.0
556.2
571.9
580.7

948.9
952.3
947.6
936.2

393.8
393.6
386.6
372.1

292.0
288.7
279.4
264.9

101.8
104.9
107.2
107.2

555.1
558.7
561.0
564.1

4,855.2
4,878.0
4,873.5
4,872.5

4,859.4
4,869.0
4,897.6
4,896.0

4,859.3
4,867.5
4,880.3
4,890.9

-2.4
1.5
1.4
.6

-3.6
.8
2.4
-.1

1992: I
II

-15.2
-38.0
-42.5
-38.8

571.0
570.2
579.3
591.6

586.2
608.2
621.8
630.3

943.1
940.7
950.2
946.9

372.1
369.2
377.0
373.7

261.2
257.9
264.4
261.3

110.9
111.3
112.5
112.4

571.0
571.5
573.2
573.2

4,926.9
4,943.8
4,988.6
5,059.6

4,937.1
4,994.5
5,040.7
5,107.1

4,939.0
4,962.2
5,006.4
5,068.4

3.5
2.8
3.4
5.7

3.4
4.7
3.8
5.4

1993: I
II

-59.9
-75.2
-86.3
-95.6

588.0
593.2
591.9
612.5

647.9
668.4
678.2
708.1

931.3
941.1
941.7
940.1

357.6
359.4
353.7
349.8

246.0
246.4
240.1
238.2

111.5
113.0
113.7
111.6

573.7
581.6
588.0
590.4

5,048.9
5,089.1
5,131.8
5,199.4

5,138.1
5,177.4
5,224.6
5,307.7

5,080.7
5,104.1
5,145.8

IV "
1

Gross domestic product (GDP) less exports of goods and services plus imports of goods and services.

2

GDP plus net receipts of factor income from rest of the world.

Source: Department of Commerce, Bureau of Economic Analysis.




271

2.9

2.5
3.1
3.7
6.5

T A B L E B-3.—Implicit price deflators for gross domestic product,

1959-93

[Index numbers, 1987 = 100, except as noted; quarterly data seasonally adjusted]
Personal consumption
expenditures

Year or quarter

Gross
domestic
product

Gross private domestic investment:
Fixed investment
Nonresidential

Total

Durable
goods

Nondurable
goods

Services

Total
Total

Structures

Producers'
durable
equipment

Residential

1959

25.6

27.0

37.4

28.6

23.2

26.4

28.1

24.4

31.2

23.9

1960
1961
1962
1963
1964

26.0
26.3
26.9
27.2
27.7

27.5
27.7
28.2
28.6
29.1

37.7
38.3
39.1
39.7
40.4

29.1
29.3
29.6
30.1
30.5

23.9
24.4
24.8
25.2
25.6

26.7
26.6
26.8
26.8
27.1

28.4
28.2
28.6
28.9
29.2

24.2
24.0
24.1
24.4
24.7

32.1
32.2
32.4
32.6
32.8

24.0
24.0
24.0
23.8
24.1

1965
1966
1967
1968
1969

28.4
29.4
30.3
31.8
33.4

29.7
30.6
31.4
32.7
34.1

40.6
41.3
42.3
43.9
45.2

31.1
32.2
32.9
34.3
35.9

26.1
26.9
27.8
29.0
30.2

27.9
29.1
30.1
31.4
33.3

29.6
30.5
31.5
32.9
34.7

25.4
26.3
27.2
28.6
30.5

32.9
33.6
34.7
36.0
37.7

24.9
25.9
26.9
28.4
30.4

1970
1971
1972
1973
1974

35.2
37.1
38.8
41.3
44.9

35.6
37.4
38.8
41.0
45.2

46.4
48.3
49.2
50.3
54.1

37.7
39.0
40.4
43.7
50.1

31.9
33.8
35.3
36.9
39.7

34.9
36.8
38.4
40.7
45.2

36.5
39.0
40.5
42.0
46.4

32.7
35.2
37.8
40.7
46.3

39.4
41.7
42.2
42.7
46.5

31.4
33.2
35.2
38.3
42.4

1975
1976
1977
1978
1979

49.2
52.3
55.9
60.3
65.5

48.9
51.8
55.4
59.4
64.7

59.2
62.4
65.2
69.1
74.1

54.2
56.4
59.8
64.1
71.1

43.0
46.2
50.0
54.0
58.3

51.3
54.5
58.9
64.7
71.2

53.3
56.9
61.3
66.5
72.7

52.0
54.7
59.2
65.2
72.5

54.1
58.2
62.4
67.2
72.9

46.6
49.6
54.6
61.3
68.0

1980
1981
1982
1983
1984

71.7
78.9
83.8
87.2
91.0

71.4
77.8
82.2
86.2
89.6

80.9
86.4
90.1
92.4
93.9

79.4
85.7
88.6
90.8
93.4

64.4
70.9
76.7
81.9
86.2

79.2
87.8
93.1
92.8
93.9

90.1
95.3
95.1
95.7

80.8
92.5
98.6
95.5
96.1

80.9
88.5
93.0
94.8
95.4

74.8
80.9
85.2
87.3
89.7

1985
1986
1987
1988
1989

94.4
96.9
100.0
103.9
108.5

93.1
96.0
100.0
104.2
109.3

95.4
96.9
100.0
102.0
104.2

95.9
96.1
100.0
103.7
109.3

90.8
95.7
100.0
105.1
110.6

95.3
97.6
100.0
103.2
105.9

96.6
98.4
100.0
102.8
105.2

98.0
98.5
100.0
104.6
108.9

95.7
98.4
100.0
101.9
103.4

92.0
95.8
100.0
104.2
107.8

1990
1991
1992
1993 P

113.3
117.7
121.1
124.2

114.9
119.9
123.9
127.2

105.7
107.3
108.9
109.8

115.9
120.0
122.4
124.1

116.7
122.8
128.5
133.5

108.2
109.0
108.6
108.7

107.3
108.0
106.9
105.3

112.3
114.0
114.6
117.9

104.9
105.4
103.8
101.0

110.7
111.8
113.4
117.8

1982.1V
1983: IV
1984: IV....
1985: IV
1986: IV
1987: IV....
1988: IV
1989: IV

85.0
88.4
92.3
95.5
98.0
101.2
105.5
110.1

83.8
87.6
90.7
94.6
97.0
101.6
106.1
111.0

90.6
93.3
94.4
95.9
97.8
101.0
103.1
104.9

89.4
91.8
94.2
97.0
96.3
101.5
105.6
110.8

79.0
83.7
87.7
92.9
97.3
101.9
107.1
112.7

93.1
92.9
94.8
96.1
98.6
101.0
104.4
106.8

95.3
95.0
96.4
97.3
99.2
100.7
104.0
106.0

97.5
95.1
97.2
98.5
98.8
101.2
106.3
110.1

93.8
94.9
96.0
96.5
99.5
100.5
102.8
103.9

86.0
88.0
90.7
93.1
97.3
101.5
105.3
108.8

1990:1
I
I
III....
IV....

111.5
112.7
113.8
115.0

112.7
113.9
115.6
117.5

105.5
105.5
105.6
106.1

113.4
114.4
116.5
119.2

114.2
115.7
117.5
119.2

107.6
107.9
108.6
108.9

106.5
106.9
107.8
108.2

111.3
111.9
112.7
113.3

104.2
104.4
105.4
105.8

110.2
110.5
111.1
111.1

1991:1
I
I
Il
l
IV

116.4
117.3
118.2
118.9

118.5
119.4
120.3
121.3

106.8
107.1
107.5
107.8

119.5
119.8
120.1
120.7

120.8
122.0
123.5
124.9

109.3
109.2
109.0
108.5

108.7
108.3
107.8
107.3

113.8
114.0
114.4
113.8

106.3
105.7
104.9
104.6

111.3
111.7
112.5
111.8

1992:1
I
I
III....
IV....

120.0
120.9
121.2
122.2

122.5
123.6
124.1
125.3

108.4
109.0
109.1
109.1

121.5
122.1
122.8
123.1

126.6
128.1
128.5
130.7

108.5
108.6
108.6
108.9

107.1
107.1
106.6
106.6

113.8
114.2
114.8
115.7

104.3
104.2
103.5
103.2

112.2
112.8
113.8
114.9

1993:1
I
I
III....
IV..

123.3
124.0
124.5
124.9

126.2
127.0
127.4
128.1

109.2
109.8
109.9
110.2

124.1
124.2
123.7
124.4

131.8
133.1
134.0
135.0

108.5
108.9
108.6
108.6

105.7
106.0
105.1
104.7

116.3
117.5
118.5
119.4

102.0
101.9
100.5
99.8

115.8
117.3
118.5
119.3

See next page for continuation of table.




272

TABLE B-3.—Implicit price deflators for gross domestic product,

1959-93—Continued

[Index numbers, 1987=100, except as noted; quarterly data seasonally adjusted]
Government purchases
of goods
and services

Exports and
imports of goods
and services

Federal
Year or quarter
Exports

Imports

Total
Total

National
defense

Nondefense

State
and
local

Final
sales of
domestic
product

Gross
domestic
purchases '

Percent
change
from
precedperiod,
GDP
implicit
price
deflator 2

1959..

28.0

23.4

20.8

21.5

19.9

25.6

25.4

2.8

1960..
1961..
1962..
1963..
1964..

28.6
29.0
28.9
28.9
29.1

23.8
23.8
23.7
24.3
24.9

20.9
21.3
22.3
22.8
23.4

21.3
21.7
22.8
23.3
23.9

20.4
20.9
21.7
22.3
22.8

26.0
26.2
26.8
27.2
27.7

25.8
26.0
26.6
27.0
27.5

1.6
1.2
2.3
1.1
1.8

1965..
1966..
1967..
1968..
1969..

30.0
31.0
31.8
32.3
33.3

25.3
25.8
26.0
26.2
26.7

24.0
25.0
26.3
27.9
29.6

24.6
25.5
26.5
28.1
29.6

23.5
24.6
26.1
27.7
29.6

28.3
29.3
30.2
31.7
33.3

28.2
29.2
30.0
31.4
33.0

2.5
3.5
3.1
5.0
5.0

1970
1971
1972
1973
1974

35.3
36.6
38.1
43.6
53.0

28.4
30.0
32.2
37.3
53.5

31.9
34.4
37.0
40.0
44.0

31.8
34.4
37.6
40.9
44.8

36.9
40.5
44.5

39.3
41.9
45.5

32.1
34.4
36.5
39.4
43.5

35.2
37.1
38.8
41.2
44.9

34.7
36.7
38.4
40.8
44.9

5.4
5.4
4.6
6.4
8.7

1975
1976
1977
1978
1979

58.5
61.2
64.3
68.9
78.0

58.5
60.5
66.4
70.7
83.1

48.4
51.8
55.4
59.6
65.1

49.3
52.6
56.2
60.4
66.0

48.5
51.9
55.6
59.8
65.8

51.2
54.1
57.7
61.7
66.4

47.9
51.2
54.9
59.1
64.5

49.2
52.2
55.7
60.1
65.4

49.2
52.3
56.1
60.5
66.0

9.6
6.3
6.9
7.9
8.6

1980
1981
1982
1983
1984

87.1
92.9
95.2
96.8
98.9

101.4
104.5
99.7
95.9
94.7

72.0
78.7
84.0
87.7
91.4

73.4
81.4
87.1
91.0
93.9

73.5
81.1
87.6
91.6
94.8

73.3
82.1
85.9
89.5
91.3

71.1
76.7
81.7
85.2
89.4

71.8
78.7
83.8
87.4
90.8

72.7
79.7
84.1
87.2
90.9

9.5
10.0
6.2
4.1
4.4

1985....
1986....
1987....
1988....
1989....

97.7
96.9
100.0
105.3
107.7

91.9
93.2
100.0
105.1
107.8

95.0
97.4
100.0
103.6
107.8

96.9
98.6
100.0
102.6
106.8

97.3
98.6
100.0
103.0
106.6

95.7
98.6
100.0
101.4
107.3

93.4
96.4
100.0
104.3
108.6

94.3
96.9
100.0
103.9
108.5

93.9
96.5
100.0
103.9
108.5

3.7
2.6
3.2
3.9
4.4

1990
1991
1992
1993"

109.1
110.7
110.8
110.7

111.2
110.4
109.6
107.4

112.3
116.2
119.7
123.3

111.0
115.4
120.3
124.8

110.7
114.7
120.1
125.1

112.0
117.2
120.8
124.3

113.2
116.7
119.4
122.3

113.2
117.7
121.1
124.2

113.4
117.7
120.9
123.6

4.4
3.9
2.9
2.5

1982: IV..
1983: IV..
1984: IV..
1985: IV..
1986: IV..
1987: IV..
1988: IV..
1989: IV..

94.7
98.2
98.7
97.7
97.4
101.6
106.6
107.4

98.5
95.4
93.6
94.2
93.6
102.6
106.0
107.7

85.8
87.9
92.7
96.2
98.3
100.9
104.8
109.0

89.0
89.9
95.0
98.1
98.8
100.2
103.6
107.7

89.6
91.7
95.5
98.7
98.7
100.3
103.9
107.5

87.7
84.3
93.7
96.4
99.2
100.1
102.6
108.4

83.4
86.4
90.9
94.8
97.8
101.5
105.7
109.9

85.2
88.6
92.1
95.5
97.9
101.3
105.6
110.0

85.3
88.4
91.9
95.3
97.5
101.4
105.5
110.0

1990: I ..
..
II...

108.0
108.3
109.2
111.0

109.5
107.9
111.1
116.5

110.7
111.5
112.8
114.2

109.7
110.1
111.5
112.9

109.4
109.6
111.0
112.9

110.5
111.4
112.8
113.1

111.5
112.4
113.7
115.2

111.4
112.7
113.9
115.0

111.6
112.6
114.0
115.6

5.2
4.4
4.0
4.3

1991:1

111.0
110.6
110.2
110.9

112.9
110.1
108.9
110.0

115.2
115.5
116.5
117.5

114.3
114.2
115.6
117.5

113.5
113.0
114.9
117.5

116.7
117.3
117.2
117.8

115.8
116.4
117.2
117.5

116.4
117.3
118.2
118.9

116.6
117.3
118.0
118.8

5.0
3.1
3.1
2.4

1992: I .
.

111.0
110.9
110.7
110.7

109.3
109.6
109.3
110.0

118.6
119.7
119.9
120.8

119.7
120.4
120.1
121.1

119.6
120.3
119.8
120.8

120.0
120.6
121.0
121.6

117.9
119.2
119.7
120.6

120.0
120.9
121.3
122.2

119.8
120.6
121.0
122.1

3.8
3.0
1.0
3.3

1993: I .
.

110.8
111.3
110.4
110.3

108.0
108.5
106.9
106.4

122.4
123.1
123.7
123.9

123.8
124.5
125.4
125.7

123.9
124.8
125.7
126.0

123.6
123.9
124.6
125.1

121.5
122.3
122.7
122.9

123.3
124.1
124.5
125.0

122.8
123.5
123.8
124.1

3.6
2.3
1.5
1.4

IV

II
Ill
IV
1
2

P....

Gross domestic product (GDP) less exports of goods and services plus imports of goods and services.
Quarterly changes are at annual rates.

Note.—Separate deflators are not calculated for gross private domestic investment, change in business inventories, and net exports
of goods and services.
Source: Department of Commerce, Bureau of Economic Analysis.




273

T A B L E B-4.—Fixed-weighted price indexes for gross domestic product,

1987 weights,

1959-93

[Index numbers, 1987 = 100, except as noted; quarterly data seasonally adjusted]
Personal consumption
expenditures

Year or quarter

Gross
domestic
product

Gross private domestic investment:
Fixed investment
Nonresidential

Total

Durable
goods

Nondurable
goods

Services

Total
Total

Structures

Producers'
durable
equipment

Residential

1959

30.4

54.4

31.4

23.9

24.1

25.0

1960
1961
1962
1963
1964

30.8
31.1
31.3
31.6
31.9

54.1
53.8
53.4
53.1
53.1

31.8
32.0
32.1
32.5
32.8

24.5
25.0
25.3
25.7
26.1

24.1
24.0
24.2
24.5
24.9

25.1
25.1
25.0
24.7
24.9

1965
1966
1967
1968
1969

32.2
32.8
33.7
35.0
36.3

52.1
51.3
51.8
53.1
54.2

33.3
34.3
35.1
36.5
38.1

26.7
27.4
28.3
29.6
30.7

25.6
26.6
27.5
28.8
30.7

25.5
26.4
27.2
28.6
30.6

1970
1971
1972
1973
1974

37.9
39.5
40.8
42.7
46.7

55.1
56.7
57.1
57.8
61.0

39.9
41.1
42.4
45.3
51.3

32.4
34.3
35.9
37.4
40.3

32.8
35.2
37.9
40.8
46.3

31.7
33.5
35.5
38.6
42.7

1975
1976
1977
1978
1979

50.5
53.3
56.7
60.7
65.8

66.0
69.1
71.7
75.2
80.0

55.3
57.5
60.8
64.7
71.3

43.7
46.9
50.5
54.6
59.0

51.5
53.7
57.8
63.7
71.3

46.7
49.7
54.7
61.4
68.2

1980
1981
1982
1983
1984

84.8
88.1
91.1

72.6
78.9
83.2
86.7
89.9

84.7
89.5
92.4
93.7
94.9

79.6
86.0
88.8
91.1
93.7

65.3
71.9
77.4
82.4
86.4

95.6
94.8
94.7

100.3
98.3
96.8

78.5
87.3
92.9
92.5
94.1

104.2
101.3
98.3

75.3
81.3
85.3
87.3
89.8

1985
1986
1987
1988
1989

94.3
97.0
100.0
104.0
108.6

93.3
96.1
100.0
104.3
109.5

96.0
97.1
100.0
102.0
104.5

96.2
96.1
100.0
103.8
109.5

90.9
95.8
100.0
105.1
110.7

95.7
97.9
100.0
103.3
106.3

97.3
98.8
100.0
102.8
105.6

96.9
98.5
100.0
104.6
109.0

97.5
99.0
100.0
101.9
103.9

92.1
95.8
100.0
104.3
107.8

1990
1991
1992
1993"

113.6
118.2
122.1
125.9

115.2
120.5
124.9
128.7

106.3
109.1
111.5
113.8

116.2
120.5
123.0
124.9

116.8
123.3
129.5
134.6

109.1
110.8
112.0
114.7

108.4
110.2
111.4
113.3

112.4
113.9
114.6
117.8

106.2
108.3
109.7
110.9

110.7
111.9
113.4
117.7

86.3
89.3
92.3
95.5
98.0
101.3
105.6
110.2

84.7
88.2
91.0
94.8
97.1
101.6
106.2
111.2

92.6
94.5
95.2
96.3
97.9
101.0
103.3
105.2

89.7
92.0
94.4
97.2
96.3
101.5
105.7
111.0

79.6
84.2
87.9
92.9
97.3
101.9
107.2
112.8

95.4
94.6
95.1
96.4
98.8
101.0
104.5
107.3

99.6
97.6
97.0
97.9
99.5
100.7
104.0
106.6

93.5
92.4
95.3
97.8
99.0
101.2
106.2
110.3

102.8
100.3
97.9
97.9
99.8
100.5
102.9
104.7

86.2
88.0
90.8
93.1
97.3
101.5
105.4
108.8

111.7
112.9
114.3
115.3

113.0
114.2
115.9
117.9

105.9
106.0
106.3
106.9

113.8
114.6
116.8
119.7

114.3
115.9
117.8
119.5

108.3
108.7
109.5
110.0

107.4
107.9
108.7
109.4

111.4
112.0
112.8
113.3

105.3
105.7
106.6
107.4

110.2
110.5
111.1
111.1

116.8
117.8
118.7
119.5

119.0
119.9
121.0
122.0

108.1
108.7
109.6
110.0

119.9
120.3
120.5
121.2

121.2
122.5
124.0
125.5

110.5
110.6
111.0
110.9

110.1
110.1
110.3
110.4

113.7
114.0
114.4
113.7

108.1
108.0
108.2
108.7

111.4
111.8
112.6
112.0

IV..

120.8
121.8
122.5
123.5

123.4
124.5
125.5
126.5

110.7
111.5
111.8
112.1

122.0
122.7
123.4
123.8

127.3
128.8
130.1
131.6

111.2
111.7
112.4
112.8

110.7
111.2
111.7
112.0

113.8
114.2
114.8
115.6

109.1
109.6
110.1
110.1

112.3
112.8
113.8
114.8

1993:1
II
Ill
IV

124.8
125.6
126.3
127.0

127.5
128.4
128.9
129.7

112.6
113.5
114.1
114.9

124.9
125.0
124.5
125.2

132.8
134.2
135.2
136.2

113.5
114.4
115.2
115.7

112.4
113.1
113.6
114.0

116.3
117.4
118.4
119.3

110.4
110.9
111.2
111.2

115.8
117.2
118.5
119.3

1982:
1983:
1984:
1985:
1986:
1987:
1988:
1989:

IV..
IV..
IV..
IV..
IV..
IV..
IV..
IV..

1990: I....

I
V
1991:1..

IV...
1992:1

See next page for continuation of table.




274

TABLE B-4.—Fixed-weighted price indexes for gross domestic product, 1987 weights,

1959-93—Continued

[Index numbers, 1987=100, except as noted; quarterly data seasonally adjusted]
Government purchases
of goods
and services

Exports and
imports of goods
and services

Federal
Year or quarter
Exports

1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971 .
1972 ...
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987 . . .
1988
1989
1990
1991
1992
1993"..
1982: IV
1983- IV
1984- IV
1985- IV
1986: IV
1987- IV
1988: IV
1989- IV
1990:1

..

Ill
IV
1991-1
.
II
Ill
I
V
1992-1
II
Ill
I
V
1993-1
II
III

.

100.4
99.7
99.9
98.2
97.3
100.0
105.7
108.2
110.0
112.4
113.7
115.5
99.4
100.3
99.3
97.9
97.6
101.7
107.0
108.1
108.8
109.2
110.3
111.9
112.4
112.2
112.1
112.9
1131
113.7
113.9
114.3
114.7
115 5
115.7
116.0

Imports

101.2
97.7
96.8
94.6
93.8
100.0
105.4
108.5
112.4
113.8
115.1
114.9
99.4
97.3
96.0
96.0
93.7
102.8
106.5
108.6
110.3
108.8
1120
118.3
115.4
113.1
112.6
114.1
1139
114.5
116.3
115.9
114.5
1156
114.8
114.9

Total

246
251
25.5
263
26 8
27.3
27 9
290
30.2
31.8
33.7
362
38.6
41.1
43.7
46.9
51.4
54.4
57 7
61.7
66.8
73.3
79.6
85 0
88.5
92.2
95.4
97.6
100.0
103.7
107.9
112.6
116.7
120.6
124.2
86.7
89.3
93.9
96.9
98.3
101.0
104.8
109.1
111.0
111.8
1131
114.4
115.5
116.1
117.0
118.0
1193
120.3
121.0
121.7
123.2
1240
124.8
124.8

Total

286
290
293
300
306
31.3
320
328
33.9
35.6
37.4
402
42.9
46.0
48.4
50.2
54.6
57.3
604
64.1
68.9
75.2
82.3
885
92.2
95.6
97.9
99.0
100.0
102.8
107.0
111.8
116.5
121.8
126.1
90.4
92.7
97.7
99.4
99.0
100.2
103.7
108.2
110.3
111.0
112.4
113.5
115.2
115.6
116.7
118.6
1206
121.4
1222
122.8
125.1
1258
126.8
126.6

National
Nondedefense
fense

46.2
49.0
51.2
55.1
57.8
607
64.5
69.6
76.3
83.3
897
93.5
96.9
98.8
99.5
100.0
103.1
107.1
112.1
116.5
122.3
127.1
91.4
93.9
99.3
100.5
99.3
100.3
103.9
108.3
110.6
111.3
112.7
114.0
115.1
115.3
116.7
118.9
1210
121.8
122.8
123.5
125.9
1268
127.9
127.7

45.2
46.4
47.4
52.9
55.8
594
62.8
66.6
71.9
79.1
847
88.4
91.4
94.9
97.5
100.0
102.0
106.7
110.8
116.5
120.2
122.9
87.1
88.7
92.6
95.9
98.3
100.1
102.9
107.8
109.5
110.2
111.4
112.0
115.5
116.3
116.8
117.5
119.6
119.9
120.3
120.9
122.5
122.5
123.4
123.2

State
and
local

21 5
221
22.5
23 4
23 8
24 2
24 8
26 0
27 4
28.9
30.8
331
35.3
37.3
40.1
44.3
48.9
52.1
55 7
59.9
65.1
71.9
77.6
82 3
85.5
89.6
93.5
96.5
100.0
104.3
108.6
113.2
116.8
119.6
122.8
83.8
86.7
91.1
94.9
97.8
101.5
105.8
109.9
111.5
112.4
113.7
115.1
115.8
116.4
117.2
117.7
118.2
119.5
120.0
120.9
121.8
122.7
123.2
123.4

Final
sales
of
domestic
product

84 9
88.2
91.2
94.4
97.0
100.0
104.0
108.6
113.6
118.3
122.2
126.0
86.3
89.4
92.3
95.6
98.0
101.3
105.7
110.2
111.8
113.0
114.3
115.4
116.8
117.8
118.8
119.6
120.8
121.8
122.6
123.6
124.9
125.7
126.4
127.1

Gross
domestic
purchases J

85.4
88.3
91.0
94.0
96.6
100.0
104.0
108.6
113.7
118.2
122.0
125.5
86.7
89.3
92.1
95.4
97.6
101.4
105.6
110.2
111.8
112.8
114.3
115.9
117.0
117.7
118.6
119.5
120.6
121.6
122.5
123.4
124.4
125.3
125.9
126.5

Percent
change
from
preceding
period,
GDP
fixedweighted
price
index2

3.9
3.4
3.5
2.8
3.1
4.0
4.5
4.6
4.1
3.3
3.1

5.8
4.4
4.7
3.8
5.1
3.4
3.4
2.7
4.2
3.4
2.5
3.1
4.3
2.8
2.1
2.2

1
Gross domestic product (GDP) less exports of goods and services plus imports of goods and services.
* Quarterly changes are at annual rates.
Note.—Separate deflators are not calculated for gross private domestic investment, change in business inventories, and net exports
of goods and services.
Source.- Department of Commerce, Bureau of Economic Analysis.




275

TABLE B-5.—Changes in gross domestic product and personal consumption expenditures, and related
implicit price deflators and fixed-weighted

price indexes,

1960-93

[Percent change from preceding period; quarterly data at seasonally adjusted annual rates]
Personal consumption expenditures

Gross domestic product
Year or quarter

Current
dollars

Constant
(1987)
dollars

Implicit
price
deflator

Fixedweighted
price
index
(1987
weights)

Current
dollars

Constant
(1987)
dollars

Implicit
price
deflator

Fixedweighted
price
index
(1987
weights)

1960
1961
1962
1963
1964

3.9
3.6
7.5
5.5
7.4

2.2
2.7
5.2
4.1
5.6

1.6
1.2
2.3
1.1
1.8

4.5
3.3
6.1
5.4
7.4

2.7
2.3
4.4
3.8
5.6

1.9
.7
1.8
1.4
1.7

1.3
.8
.6
.9
1.1

1965. .
1966
1967
1968
1969

84
9.5
58
9.2
7.9

55
5.9
26
4.2
2.7

25
3.5
31
5.0
5.0

78
8.3
58
9.8
8.0

56
5.1
31
5.2
3.7

21
3.0
26
4.1
4.3

10
1.8
26
3.8
3.8

5.3
8.6
10.0
11.8
8.1

.0
2.9
5.1
5.2
-.6

5.4
5.4
4.6
6.4
8.7

7.1
8.3
9.6
10.5
9.4

2.4
3.3
5.6
4.5
-.6

4.4
5.1
3.7
5.7
10.2

4.4
4.4
3.3
4.6
9.3

8.7
11.5
11.6
13.1
11.5

-.8
4.9
4.5
4.8
2.5

9.6
6.3
6.9
7.9
8.6

10.5
11.5
11.2
11.8
11.4

2.1
5.2
4.0
4.1
2.4

8.2
5.9
6.9
7.2
8.9

8.1
5.6
6.4
7.0
8.5

8.8
119
3.9
8.1
10.9

-.5
18
-2.2
3.9
6.2

9.5
10 0
6.2
4.1
4.4

3.9
3.4

10.4
10 2
6.9
9.6
9.0

-.1
1.2
1.1
4.6
4.8

10.4
9.0
5.7
4.9
3.9

10.3
8.6
5.4
4.3
3.7

1985
1986
1987
1988
1989

6.9
5.7
6.4
7.9
7.2

3.2
2.9
3.1
3.9
2.5

3.7
2.6
3.2
3.9
4.4

3.5
2.8
3.1
4.0
4.5

8.4
6.9
7.1
8.0
6.9

4.4
3.6
2.8
3.6
1.9

3.9
3.1
4.2
4.2
4.9

3.8
3.0
4.1
4.3
5.0

1990 .
1991
1992
1993".

56
32
5.5
5.6

12
_ 7
2.6
2.9

44
39
2.9
2.6

46
41
3.3
3.1

68
39
6.0
6.1

1.5
-.4
2.6
3.3

5.1
4.4
3.3
2.7

5.3
4.5
3.7
3.0

1987-1
I
I
11
1
IV..

68
81
7.2
9.9

3.0
51
4.0
5.9

33
29
3.3
3.6

34
28
3.3
3.7

5.5
94
8.3
4.4

_.l
4.8
3.9

5.9
45
4.1
4.5

5.6
44
4.3
4.5

1988:1
II
Ill
I
V

6.1
9.1
7.6
8.1

2.6
4.3
2.5
3.9

3.6
4.4
5.1
3.9

3.7
4.5
5.4
3.7

9.9
7.9
8.4
8.9

7.1
2.5
2.9
4.1

2.8
5.2
5.1
4.7

2.7
5.2
5.3
4.6

1989:1
II .
Ill
I
V

8.6
63
3.8
51

3.2
18
0
1.5

5.4
46
3.8
37

5.0
48
3.8
37

5.1
70
6.3
5.3

.1
1.1
2.9
.8

5.0
57
3.3
4.4

5.2
5.9
3.5
4.4

1990:1 ..
II
III
I
V

9.1
59
3.1
1.0

3.5
15
9
-3.2

5.2
44
4.0
4.3

5.8
44
4.7
3.8

9.2
53
8.3
3.7

2.8
9
2.1
-2.7

6.3
43
6.1
6.7

6.6
42
6.3
7.0

1991:1
II
11
1
I
V

2.4
48
4.3
32

-2.4
1.5
1.4
.6

5.0
31
3.1
24

5.1
3.4
3.4
2.7

.7
4.7
4.4
3.5

-2.8
1.8
1.3
.0

3.4
3.1
3.0
3.4

3.9
3.2
3.4
3.5

7.4
57
4.6
9.2

3.5
28
3.4
5.7

3.8
30
1.0
3.3

4.2
34
2.5
3.1

8.6
54
5.7
9.9

4.3
1.8
4.2
5.6

4.0
3.6
1.6
3.9

4.5
3.6
3.4
3.1

4.4
43
4.4
7.4

.8
1.9
2.9
5.9

3.6
23
1.6
1.3

4.3
28
2.1
2.2

3.8
61
5.5
6.3

.8
34
4.4
4.0

2.9
26
1.3
2.2

3.4
29
1.4
2.7

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983.
1984

.

. .

..

1992:1
II
III
IV.
1993:1..
II
III..
IV

...

Source: Department of Commerce, Bureau of Economic Analysis.




276

TABLE B-6.—Selected per capita product and income series in current and 1987 dollars, 1959-93

[Quarterly data at seasonally adjusted annual rates, except as noted]
Constant (1987) dollars

Current dollars
Year or
quarter

Gross
Disposdomes- Person- able
tic
al
personprod- income
al
uct
income

Personal consumption
expenditures
Total

Gross Disposdomes- able
tic
personDura- Nonal
ble durable Serv- prod- income
uct
goods goods

Personal consumption
expenditures
Total

Dura- Non- Servble durable
goods goods

Population
(thousands) '

1959

2,791

2,209

1,958

1,796

242

716

10,892

7,256

6,658

646

2,928

3,083

177,073

1960
1961
1962
1963
1964

2,840
2,894
3,063
3,186
3,376

2,264
2,321
2,430
2,516
2,661

1,994
2,048
2,137
2,210
2,369

1,839
1,869
1,953
2,030
2,149

240
228
252
273
296

847
857
878
895
936

752
784
823
861
917

10,903
11,014
11,405
11,704
12,195

7,264
7,382
7,583
7,718
8,140

6,698
6,740
6,931
7,089
7,384

638
595
644
688
733

2,915
2,926
2,964
2,977
3,065

3,145
3,218
3,323
3,423
3,586

180,760
183,742
186,590
189,300
191,927

1965
1966
1967
1968
1969

3,616
3,915
4,097
4,430
4,733

2,845
3,061
3,253
3,536
3,816

2,527
2,699
2,861
3,077
3,274

2,287
2,450
2,562
2,785
2,978

327
348
355
404
425

987
1,060
1,091
1,171
1,244

974
1,041
1,116
1,211
1,308

12,712
13,307
13,510
13,932
14,171

8,508
8,822
9,114
9,399
9,606

7,703
8,005
8,163
8,506
8,737

803
844
841
919
941

3,173
3,294
3,316
3,417
3,469

3,726
3,867
4,006
4,169
4,327

194,347
196,599
198,752
200,745
202,736

1970
1971
1972
1973
1974

4,928
5,283
5,750
6,368
6,819

4,052
4,302
4,671
5,184
5,637

3,521
3,779
4,042
4,521
4,893

3,152
3,372
3,658
4,002
4,337

416
468
528
585
575

1,318
1,364
1,454
1,602
1,780

1,418
1,540
1,676
1,814
1,982

14,013
14,232
14,801
15,422
15,185

9,875
10,111
10,414
11,013
10,832

8,842 896
9,022 970
9,425 1,073
9,752 1,164
9,602 1,062

3,497
3,494
3,601
3,670
3,552

4,449
4,558
4,751
4,917
4,988

205,089
207,692
209,924
211,939
213,898

1975
1976
1977
1978
1979

7,343
8,109
8,961
10,029
11,055

6,053
6,632
7,269
8,121
9,032

5,329
5,796
6,316
7,042
7,787

4,745
5,241
5,772
6,384
7,035

622
734
829
909
952

1,926
2,072
2,226
2,432
2,725

2,197
2,436
2,717
3,043
3,359

14,917
15,502
16,039
16,635
16,867

10,906
11,192
11,406
11,851
12,039

9,711
10,121
10,425
10,744
10,876

1,050
1,176
1,271
1,316
1,284

3,552 5,110
3,674 5,271
3,722 5,433
3,795 5,633
3,833 5,760

215,981
218,086
220,289
222,629
225,106

1980
1981
1982
1983
1984

11,892
13,177
13,564
14,531
15,978

9,948
11,021
11,589
12,216
13,345

8,576 7,677 933
9,455 8,375 994
9,989 8,868 1,018
10,642 9,634 1,173
11,673 10,408 1,345

2,999
3,236
3,326
3,490
3,693

3,745
4,146
4,523
4,971
5,370

16,584
16,710
16,194
16,672
17,549

12,005
12,156
12,146
12,349
13,029

10,746
10,770
10,782
11,179
11,617

1,154
1,150
1,131
1,270
1,432

3,779
3,774
3,756
3,842
3,953

5,814
5,845
5,895
6,066
6,231

227,715
229,989
232,201
234,326
236,393

1985
1986
1987
1988
1989

16,933
17,735
18,694
19,994
21,224

14,170
14,917
15,655
16,630
17,706

12,339
13,010
13,545
14,477
15,307

11,184
11,843
12,568
13,448
14,241

1,480
1,619
1,662
1,783
1,857

3,855
3,956
4,163
4,381
4,647

5,849
6,269
6,742
7,284
7,737

17,944
18,299
18,694
19,252
19,556

13,258
13,552
13,545
13,890
14,005

12,015
12,336
12,568
12,903
13,029

1,552
1,670
1,662
1,749
1,781

4,019
4,118
4,163
4,223
4,251

6,444
6,548
6,742
6,930
6,997

238,510
240,691
242,860
245,093
247,397

1990
1991
1992
1993 "

22,189
22,647
23,637
24,681

18,699
19,196
20,139
20,861

16,205
16,741
17,615
18,222

15,048
15,459
16,205
17,001

1,873
1,812
1,947
2,082

4,918
4,978
5,092
5,228

8,257
8,669
9,166
9,691

19,593
19,238
19,518
19,874

14,101
13,965
14,219
14,329

13,093
12,895
13,081
13,369

1,773
1,688
1,787
1,896

4,244
4,148
4,161
4,213

7,077
7,059
7,133
7,259

249,951
252,699
255,472
258,256

1982: IV
1983: IV
1984: IV
1985: IV
1986: IV
1987: IV
1988.1V
1989: IV

13,709
15,085
16,310
17,296
17,953
19,213
20,506
21,519

11,786
12,613
13,668
14,440
15,102
16,076
17,053
17,995

10,189
11,033
11,925
12,565
13,121
13,907
14,850
15,558

9,134
9,980
10,649
11,445
12,101
12,819
13.814
14,491

1,059
1,266
1,383
1,480
1,684
1,677
1,841
1,845

3,378
3,572
3,742
3,924
3,990
4,223
4,495
4,725

4,696
5,143
5,524
6,040
6,428
6,919
7,477
7,921

16,132
17,062
17,680
18,102
18,328
18,977
19,429
19,554

12,154
12,591
13,145
13,278
13,522
13,685
13,996
14,015

10,895
11,390
11,739
12,095
12,472
12,615
13,020
13,053

1,169
1,357
1,466
1,544
1,721
1,660
1,785
1,759

3,779
3,892
3,975
4,046
4,144
4,162
4,255
4,263

5,948
6,141
6,298
6,505
6,607
6,792
6,979
7,031

233,060
235,146
237,231
239,387
241,550
243,745
246,004
248,372

1990:1
I
I

21,942
22,203
22,309
22,299

18,421
18,628
18,786
18,958

15,963
16,114
16,275
16,467

14,781
14,935
15,189
15,283

1,928
1,867
1,867
1,831

4,828
4,863
4,958
5,022

8,025
8,205
8,364
8,431

19,678
19,704
19,603
19,388

14,163
14,144
14,078
14,018

13,114
13,110
13,138
13,010

1,827
1,770
1,767
1,726

4,258
4,250
4,255
4,212

7,029
7,089
7,116
7,072

248,927
249,552
250,291
251,035

1991:1
I
I
Il
l
IV

22,378
22,582
22,757
22,869

19,010
19,156
19,201
19,417

16,560
16,712
16,752
16,939

15,273
15,409
15,530
15,621

1,784
1,792
1,838
1,833

4,976
4,991
4,979
4,965

8,513
8,626
8,713
8,823

19,224
19,245
19,256
19,228

13,971
14,000
13,927
13,963

12,885
12,908
12,911
12,876

1,670
1,672
1,709
1,700

4,165
4,166
4,147
4,114

7,050
7,070
7,055
7,061

251,659
252,312
253,048
253,776

1992:1
I
I
Il
l
IV

23,227
23,487
23,685
24,143

19,725
19,969
20,090
20,767

17,245
17,481
17,577
18,153

15,906
16,072
16,249
16,589

1,902
1,912
1,958
2,013

5,024
5,050
5,104
5,190

8,980
9,110
9,187
9,385

19,348
19,430
19,537
19,754

14,073
14,142
14,169
14,490

12,981
13,002
13,098
13,241

1,756
1,754
1,794
1,845

4,135
4,136
4,154
4,216

7,090
7,112
7,149
7,179

254,392
255,090
255,836
256,569

1993:1
I
I
Il
l
IV ".
..

24,346
24,538
24,732
25,105

20,430
20,837
20,930
21,245

17,876
18,196
18,265
18,549

16,704
16,907
17,088
17,303

2,004
2,062
2,095
2,166

5,192
5,215
5,229
5,276

9,508
9,631
9,763
9,860

19,744
19,786
19,869
20,097

14,163
14,326
14,341
14,484

13,234
13,312
13,416
13,511

1,835
1,878
1,907
1,966

4,184
4,200
4,226
4,242

7,216
7,234
7,283
7,303

257,197
257,872
258,612
259,343

1
Population of the United States including Armed Forces overseas-, includes Alaska and Hawaii beginning 1960. Annual data are
averages of quarterly data. Quarterly data are averages for the period.
Source-. Department of Commerce (Bureau of Economic Analysis and Bureau of the Census).




277

T A B L E B-7.—Cross domestic product by major type of product,

1959-93

[Billions of dollars; quarterly data at seasonally adjusted annual rates]

Goods 1

Year or
quarter

Change
Final
in
sales of
Gross
busidomesdomestic
ness
tic
product
product inventories

Durable goods

Total

Total

Final
sales

Change
in
business
inventories

Final
sales

Change
in
business
inventories

Nondurable goods

Final
sales

Change
in
business
inventories

Services 1

Structures

Auto
output

1959

494.2

490.0

4.2

250.8

246.6

4.2

91.1

3.1

155.5

1.1

181.7

61.7

19.4

1960
1961
1962
1963
1964

513.3
531.8
571.6
603.1
648.0

510.1
528.9
565.5
597.5
643.0

3.2
2.9
6.1
5.7
5.0

257.1
260.4
281.5
293.2
313.5

253.9
257.4
275.4
287.5
308.5

3.2
2.9
6.1
5.7
5.0

93.8
93.1
103.4
110.0
119.6

1.6
-.1
3.4
2.7
4.0

160.1
164.3
172.0
177.5
188.9

1.6
3.0
2.7
3.0
1.0

195.1
208.6
223.0
238.1
256.9

61.1
62.8
67.0
71.9
77.6

21.3
17.8
22.4
25.1
25.9

1965
1966
1967
1968
1969

702.7
769.8
814.3
889.3
959.5

693.0
756.0
803.8
880.2
949.8

9.7
13.8
10.5
9.1
9.7

342.9
380.1
395.1
427.4
456.6

333.2
366.3
384.6
418.3
446.8

9.7
13.8
10.5
9.1
9.7

132.4
147.9
154.5
169.1
180.1

6.7
10.2
5.5
4.7
6.4

200.8
218.5
230.2
249.1
266.8

3.0
3.6
5.0
4.4
3.3

276.0
302.8
330.7
363.0
395.8

83.8
86.9
88.5
98.9
107.1

31.1
30.2
27.8
35.0
34.7

1970
1971
1972
1973
1974

1,010.7
1,097.2
1,207.0
1,349.6
1,458.6

1,008.4
1,089.2
1,197.1
1,331.9
1,444.4

2.3
8.0
9.9
17.7
14.3

467.8
493.0
537.4
616.6
662.8

465.6
485.0
527.5
598.9
648.5

2.3
8.0
9.9
17.7
14.3

182.1
189.4
209.7
242.0
257.1

-.1
2.8
7.2
15.0
11.2

283.5
295.5
317.8
356.9
391.4

2.3
5.2
2.7
2.8
3.1

434.3
477.0
523.6
571.0
631.3

108.6
127.2
145.9
161.9
164.5

28.5
38.9
41.4
45.9
38.8

1975
1976
1977
1978
1979

1,585.9
1,768.4
1 974.1
2,232.7
2,488.6

1,591.5
1,751.7
1,949.4
2,204.8
2,475.9

-5.7
16.7
24.7
27.9
12.8

715.1 720.8
798.8 782.0
880.4 855.7
989.1 961.2
1,100.2 1,087.5

-5.7
16.7
24.7
27.9
12.8

288.8
323.6
368.3
416.9
474.5

-7.0
10.3
9.7
20.3
9.6

432.0
458.4
487.4
544.3
613.0

1.3
6.4
15.0
7.6
3.1

706.9
782.2
870.4
975.5
1,079.6

163.8
187.5
223.3
268.1
308.8

40.3
55.1
64.2
67.9
66.2

1980
1981
1982
1983
1984

2,708.0
3,030.6
3,149.6
3,405.0
3,777.2

2,717.5 - 9 . 5
25.4
3,005.2
3,165.5 -15.9
3,410.6 - 5 . 5
71.1
3,706.1

1,176.2
1,324.6
1,315.0
1,407.3
1,591.9

1,185.7 - 9 . 5
25.4
1,299.2
1,330.9 -15.9
1,412.8 - 5 . 5
71.1
1,520.8

-6.8
683.6
19.2
755.0
.1
789.3
833.4 - 1 1 . 0
26.2
873.8

1,215.4
1,357.4
1,494.2
1,636.3
1,770.7

316.4
348.6
340.4
361.5
414.7

59.2
68.3
65.3
88.3
104.2

1985
1986
1987
1988
1989

4,038.7
4,268.6
4,539.9
4,900.4
5,250.8

4,014.1
4,260.0
4,513.7
4,884.2
5,217.5

24.6
8.6
26.3
16.2
33.3

1,652.6
1,705.3
1,794.5
1,942.0
2,097.0

1,628.0
1,696.7
1,768.2
1,925.7
2,063.6

1990
1991
1992
1993"

5,546.1
5,722.9
6,038.5
6,374.0

5,539.3
5,731.6
6,031.2
6,357.2

6.9
-8.6
7.3
16.8

2,185.2
2,218.4
2,312.8
2,419.9

2,178.4
2,227.0
2,305.5
2,403.1

1982:
1983:
1984:
1985:
1986:
1987:
1988:
1989:

IV
IV
IV
IV
IV
IV
IV
IV

3,195.1
3,547.3
3,869.1
4,140.5
4,336.6
4,683.0
5,044.6
5,344.8

3,241.4 - 4 6 . 3
3,527.1
20.2
3,818.1
51.0
4,107.9
32.6
4,355.4 - 1 8 . 8
4,623.7
59.3
17.3
5,027.3
30.2
5,314.6

1,302.2
1,483.0
1,617.5
1,673.7
1,714.5
1,865.4
2,007.0
2,115.9

1,348.5 - 4 6 . 3
20.2
1,462.8
51.0
1,566.5
32.6
1,641.1
1 733 3 - 1 8 . 8
59.3
1,806.1
17.3
1,989.7
30.2
2,085.7

1990:1
II
Ill
IV

5,461.9
5,540.9
5,583.8
5,597.9

5,452.4
9.6
33.3
5,507.6
8.4
5,575.3
5,621.8 -23.9

2,164.3
2,193.4
2,194.2
2,189.0

2,154.7
2,160.1
2,185.8
2,212.9

1991:1
II
Ill
IV

5,631.7
5,697.7
5,758.6
5,803.7

5,651.6 - 1 9 . 9
5,720.8 - 2 3 . 0
-.5
5,759.1
8.9
5,794.8

1992:1
II
Ill
IV

5,908.7
5,991.4
6,059.5
6,194.4

5,913.9
5,978.6
6,049.9
6,182.5

1993:1
II
Ill
IV

6,261.6
6,327.6
6,395.9
6,510.8

6,227.1
6,314.5
6,388.2
6,499.0

502.1 - 2 . 6
6.2
544.2
541.6 - 1 6 . 0
5.5
579.4
44.9
647.0
8.6
1.6
21.6
24.3
25.2

923.2
966.5
1,014.7
1,090.1
1,172.5

16.0
7.1
4.7
-8.1
8.1

1,939.0
2,097.3
2,267.2
2,460.9
2,642.1

447.1
466.0
478.2
497.5
511.7

115.8
120.4
118.9
129.1
135.1

6.9 933.5 - 2 . 1
934.3 - 1 2 . 9
-8.6
2.0
7.3 975.8
13.0
16.8 1,034.6

1,244.8
1,292.7
1,329.6
1,368.5

9.0
4.3
5.3
3.8

2,849.4
3,032.7
3,221.1
3,409.5

511.5
471.9
504.6
544.6

129.2
121.1
133.2
142.1

550.6 - 4 1 . 1
25.5
620.5
38.5
676.3
10.9
705.7
751.5 - 1 1 . 9
37.1
769.3
35.3
861.0
33.0
893.9

798.0 - 5 . 2
842.3 - 5 . 3
12.5
890.2
21.7
935.4
981.8 - 7 . 0
22.2
1,036.9
1,128.7 - 1 8 . 0
1,191.8 - 2 . 8

1,553.3
1,686.1
1,824.7
2,008.9
2,154.1
2,327.6
2,528.5
2,715.2

339.5
378.2
426.9
457.9
468.1
490.1
509.1
513.7

63.2
101.9
110.4
115.1
122.5
120.9
136.1
131.0

9.6
33.3
8.4
-23.9

-4.1
944.6
10.0
926.3
9.8
932.3
931.0 - 2 4 . 1

1,210.1
1,233.8
1,253.5
1,281.9

13.7
23.3
-1.4
.3

2,767.7
2,829.0
2,880.6
2,920.5

530.0
518.5
509.0
488.4

128.4
132.1
137.6
118.8

2,197.8
2,208.9
2,229.3
2,237.6

2,217.7 -19.9
2,231.9 -23.0
2,229.8
-.5
2,228.7
8.9

921.9 - 3 2 . 1
940.8 - 2 1 . 0
938.8
3.0
935.7
-1.5

1,295.9
1,291.1
1,291.0
1,293.0

12.2
-2.0
-3.5
10.4

2,964.8
3,018.5
3,057.0
3,090.4

469.0
470.4
472.3
475.7

114.2
118.7
127.8
123.5

-5.1
12.9
9.7
12.0

2,264.1
2,291.2
2,318.3
2,377.6

2,269.3
2,278.4
2,308.6
2,365.6

953.4 -13.0
-5.1
12.9 963.2
16.7
9.7 978.4
5.7
12.0 1,008.3 - 1 . 2

1,315.9
1,315.1
1,330.2
1,357.3

7.9
-3.8
4.0
13.2

3,152.7
3,196.2
3,239.3
3,296.1

491.9
504.0
501.9
520.8

125.6
137.9
133.0
136.4

34.6
13.1
7.7
11.7

2,397.4
2,408.1
2,409.4
2,464.7

2,362.9
2,395.0
2,401.7
2,452.9

1,003.5
1,037.8
1,032.9
1,064.3

1,359.3
1,357.1
1,368.8
1,388.6

19.5
10.4
-7.2
-7.7

3,341.8
3,388.1
3,437.8
3,470.3

522.4
531.5
548.7
575.8

142.8
145.9
134.6
145.1

24.6
8.6
26.3
16.2
33.3

34.6
13.1
7.7
11.7

704.8
730.2
753.5
835.6
891.2

15.0
2.7
14.8
19.5

1
Exports and imports of certain goods, primarily military equipment purchased and sold by the Federal Government, are included in
services.
Source: Department of Commerce, Bureau of Economic Analysis.




278

TABLE B-8.—Cross domestic product by major type of product in 1987 dollars, 1959-93
[Billions of 1987 dollars; quarterly data at seasonally adjusted annual rates]
Goods l

Year or
quarter

Change
Final
in
sales of
Gross
busidomestic domesness
tic
product
product inventories

Total

Total

Final
sales

Durable goods
Change
in
business
inventories

Final
sales

Change
in
business
inventories

Nondurable goods

Final
sales

Change
in
business
inventories

59.5

877.3
916.7
956.8
999.9
1,052.6

258.2
266.1
281.7
300.8320.4

6.9
9.6
13.1
10.9
9.1

1,102.1
1,168.4
1,226.6
1,277.8
1,324.6

335.4
334.5
329.3
350.1
354.5

83.2
80.4
72.4
86.6
82.9

739.1
742.1
770.0
784.1
772.7

6.9
11.9
6.4
6.5
11.3

1,362.0
1,401.8
1,454.1
1,508.3
1,553.9

338.9
372.1
401.9
410.4
366.1

65.4
85.3
89.9
98.7
79.0

-11.5
17.0
15.6
28.7
11.7

784.1
806.6
819.0
846.4
869.3

-2.5
8.5
18.7
8.5
1.9

1,602.2
1,649.1
1,701.2
1,770.6
1,821.7

327.7
359.0
395.2
425.6
438.0

74.8
96.8
106.0
104.2
94.8

626.4
619.4
578.9
601.5
655.1

-4.3
6.3
-16.0
6.3
45.7

891.4
903.4
907.3
925.8
944.7

-4.0
18.3
-1.5
-1.8
22.3

1,864.3
1,895.7
1,922.8
1,976.8
2,033.1

402.5
400.0
368.8
398.1
447.7

79.1
86 8
79.2
101.7
115.8

22.1
8.5
26.3
19.9
29.8

703.4
731.5
753.5
833.1
868.1

9.3
1.9
21.6
23.3
23.8

969.5
1,000.1
1,014.7
1,039.5
1,063.9

12.9
6.7
4.7
-3.4
6.0

2,115.3
2,185.0
2,267.2
2,349.7
2,403.9

469.4
479.3
478.2
476.4
472.5

125.0
124.4
118.9
127.3
128.0

5.7
-8.4
6.5
15.4

893.1
878.9
911.7
968.1

-1.9
-12.0
2.4
12.3

1,074.5
1,076.0
1,087.6
1,097.8

7.5
3.6
4.1
3.1

2,464.5
2,495.9
2,534.7
2,586.2

459.6
419.0
445.8
465.1

121.4
109.5
117.4
120.3

-3.0
911.6
2.6
929.1
8.3
955.3
18.3
974.9
-8.2
1,011.4
23.0
1,021.5
1,052.2 - 1 2 . 5
-6.1
1,069.6

1,942.1
1,998.3
2,058.1
2,148.8
2,208.2
2,290.9
2,372.4
2,430.0

369.8
416.0
455.1
476.5
477.2
483.8
481.3
469.8

75.3
113.7
122.4
122.4
124.1
120.3
134.6
123.8

1,065.8
1,067.7
1,075.7
1,088.6

8.6
18.3
1.8
1.5

2,441.1
2,464.4
2,475.1
2,477.3

479.2
467.1
455.6
436.5

121.4
123.9
129.9
110.3

871.8 - 2 8 . 5
885.6 - 1 9 . 7
2.3
881.1
-2.0
877.1

1,084.6
1,074.2
1,073.1
1,072.1

11.1
-2.6
-3.2
9.0

2,481.2
2,500.9
2,502.0
2,499.4

417.6
417.2
417.3
423.9

104.5
109.0
115.1
109.5

891.3
897.6
915.2
942.6

-11.6
15.6
6.3
-.8

1,081.3
1,076.3
1,086.2
1,106.4

6.6
-2.9
3.3
9.6

2,515.1
2,522.3
2,544.8
2,556.5

439.3
447.7
442.3
454.2

110.9
121.8
116.8
120.1

29.3 938.2
13.0 964.9
6.5 968.7
12.7 1,000.7

13.0
3.9
13.9
18.3

1,092.7
1,091.1
1,099.8
1,107.6

16.3
9.1
-7.4
-5.6

2,565.3
2,577.5
2,596.7
2,605.5

452.7
455.5
466.6
485.6

122.5
123.4
113.5
123.7

1,970.8
2,023.8
2,128.1
2,215.6
2,340.6

1,962.7
2,016.6
2,112.5
2,199.6
2,324.9

8.1
7.2
15.6
16.0
15.7

835.3
840.9
889.6
914.9
967.6

827.1
833.7
874.0
898.9
952.0

8.1
7.2
15.6
16.0
15.7

277.8
273.5
296.5
310.4
334.3

4.6
-.3
8.6
7.5
11.3

549.3
560.2
577.5
588.5
617.6

3.5
7.5
7.0
8.6
4.4

1965
1966
1967
1968
1969

2,470.5
2,616.2
2,685.2
2,796.9
2,873.0

2,445.4
2,579.5
2,657.5
2,773.2
2,848.2

25.1
36.7
27.6
23.6
24.8

1,033.0
1,113.3
1,129.4
1,168.9
1,193.9

1,007.9
1,076.6
1,101.7
1,145.3
1,169.1

25.1
36.7
27.6
23.6
24.8

364.1
399.4
413.7
430.4
438.4

18.3
27.1
14.5
12.8
15.7

643.8
677.2
688.0
714.9
730.7

1970
1971
1972
1973
1974

2,873.9
2,955.9
3,107.1
3,268.6
3,248.1

2,868.0
2,935.2
3,084.5
3,230.9
3,217.2

5.9
20.8
22.5
37.7
30.9

1,173.0
1,182.0
1,251.0
1,349.8
1,328.2

1,167.1
1,161.3
1,228.4
1,312.1
1,297.3

5.9
20.8
22.5
37.7
30.9

428.0
419.2
458.4
528.0
524.6

-.9
8.9
16.2
31.2
19.6

1975
1976
1977
1978
1979

3,221.7
3,380.8
3,533.3
3,703.5
3,796.8

3,235.6 - 1 3 . 9
3,355.3
25.5
3,499.0
34.3
3,666.3
37.2
3,783.2
13.6

1,291.8
1,372.7
1,436.9
1,507.3
1,537.1

1,305.7 - 1 3 . 9
1,347.2
25.5
34.3
1,402.6
37.2
1,470.1
13.6
1,523.5

521.6
540.6
583.6
623.7
654.1

1980
1981
1982
1983
1984

3,776.3
3,843.1
3,760.3
3,906.6
4,148.5

3,784.6
3,818.6
3,777.8
3,902.2
4,080.6

-8.3
24.6
-17.5
4.4
67.9

1,509.5
1,547.4
1,468.7
1,531.7
1,667.7

1,517.7
-8.3
24.6
1,522.9
1,486.2 - 1 7 . 5
4.4
1,527.3
67.9
1,599.8

1985
1986
1987
1988
1989

4,279.8
4,404.5
4,539.9
4,718.6
4,838.0

4,257.6
4,395.9
4,513.7
4,698.6
4,808.3

22.1
8.5
26.3
19.9
29.8

1,695.0
1,740.1
1,794.5
1,892.5
1,961.7

1,672.9
1,731.6
1,768.2
1,872.6
1,932.0

1990
1991
1992
1993"

4,897.3
4,861.4
4,986.3
5,132.7

4,891.6
4,869.8
4,979.8
5,117.3

5.7
-8.4
6.5
15.4

1,973.2
1,946.5
2,005.7
2,081.3

1,967.5
1,954.9
1,999.2
2,065.9

1982: IV
1983: IV
1984:IV
1985: IV
1986: IV
1987: IV
1988: IV
1989: IV

3,759.6
4,012.1
4,194.2
4,333.5
4,427.1
4,625.5
4,779.7
4,856.7

3,804.5 - 4 4 . 9
3,982.8
29.3
4,146.2
47.9
4,303.3
30.2
4,447.2 - 2 0 . 1
4,565.6
59.9
4,758.7
20.9
4,831.8
24.9

1,447.7
1,597.8
1,680.9
1,708.1
1,741.8
1,850.8
1,926.0
1,956.9

1,492.6 - 4 4 . 9
29.3
1,568.5
47.9
1,633.0
30.2
1,677.9
1,761.8 - 2 0 . 1
59.9
1,790.9
20.9
1,905.0
24.9
1,932.0

580.9 - 4 1 . 9
26.7
639.4
39.7
677.6
11.9
703.1
750.4 - 1 1 . 9
36.9
769.4
33.5
852.9
31.0
862.3

1990:1
II
Ill
IV

4,898.3
4,917.1
4,906.5
4,867.2

4,893.6
4,889.0
4,895.6
4,888.0

4.7
28.1
10.9
-20.9

1,978.0
1,985.7
1,975.8
1,953.5

4.7
1,973.3
28.1
1,957.6
10.9
1,964.9
1,974.3 - 2 0 . 9

907.5
889.9
889.2
885.7

-3.9
9.8
9.1
-22.4

1991:1
II
Ill
IV

4,837.8
4,855.6
4,872.6
4,879.6

4,855.2 - 1 7 . 4
4,878.0 - 2 2 . 3
-.9
4,873.5
7.1
4,872.5

1,939.1
1,937.5
1,953.3
1,956.3

1,956.5 - 1 7 . 4
1,959.8 - 2 2 . 3
-.9
1,954.2
7.1
1,949.2

1992:1
II
Ill
IV

4,922.0
4,956.5
4,998.2
5,068.3

4,926.9
4,943.8
4,988.6
5,059.6

-5.0
12.6
9.6
8.7

1,967.6
1,986.6
2,011.0
2,057.7

1,972.6
1,973.9
2,001.4
2,049.0

1993:1
II
Ill
IV

5,078.2
5,102.1
5,138.3
5,212.1

5,048.9
5,089.1
5,131.8
5,199.4

29.3
13.0
6.5
12.7

2,060.2
2,069.1
2,074.9
2,121.0

2,030.9
2,056.1
2,068.5
2,108.3

825.2

811.6

Auto
output

63.8
53.1
63.3
68.9
69.5

1,915.2

13.6

Structures

259.9

1,928.8

1960
1961
1962
1963
1964

1959

Services 1

13.6

-5.0
12.6
9.6
8.7

273.8

8.6

537.8

5.0

843.7

1
Exports and imports of certain goods, primarily military equipment purchased and sold by the Federal Government, are included in
services.
Source: Department of Commerce, Bureau of Economic Analysis.




279

TABLE B-9.—Gross domestic product by sector, 1959-93
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Business1
Year or quarter

Gross
domestic
product

Nonfarm1

Total »

Farm

Statistical
discrepancy

Households
and
institutions

General government2

Total

Federal

State
and
local

1959

494.2

436.9

419.8

18.9

-1.8

12.4

44.9

21.7

23.1

1960
1961
1962
1963
1964

513.3
531.8
571.6
603.1
648.0

451.4
465.7
500.5
527.1
565.7

434.7
447.9
481.4
508.7
547.2

19.8
20.1
20.2
20.4
19.3

-3.1
-2.2
-1.0
-2.0
-.7

13.9
14.5
15.6
16.7
17.9

48.1
51.6
55.5
59.3
64.4

22.6
23.7
25.2
26.5
28.5

25.5
27.9
30.2
32.9
35.9

1965
1966
1967
1968
1969

702.7
769.8
814.3
889.3
959.5

614.1
670.1
703.5
765.4
822.5

592.9
644.4
680.5
742.8
799.9

21.9
22.9
22.2
22.7
25.2

-.7
2.8
.8
-.1
-2.6

19.3
21.3
23.4
26.1
29.5

69.3
78.4
87.4
97.8
107.5

30.0
34.3
37.9
41.9
44.9

39.3
44.1
49.5
55.9
62.6

1970
1971
1972
1973
1974

1,010.7
1,097.2
1,207.0
1,349.6
1,458.6

858.7
931.2
1,025.3
1,151.5
1,242.7

832.5
900.0
991.7
1,102.2
1,193.9

26.2
28.1
32.6
49.8
47.4

.0
3.1
1.1
-.5
1.4

32.4
35.6
39.0
43.0
47.2

119.5
130.4
142.6
155.1
168.8

48.5
51.1
54.9
57.2
61.1

71.1
79.3
87.7
97.9
107.6

1975
1976
1977
1978
1979

1,585.9
1,768.4
1,974.1
2,232.7
2,488.6

1,346.1
1,507.4
1,691.1
1,921.1
2,147.9

1,291.4
1,450.6
1,633.0
1,858.7
2,069.7

48.8
46.4
47.2
54.7
64.5

6.0
10.4
10.9
7.6
13.8

52.0
57.1
62.4
71.0
78.9

187.7
203.9
220.6
240.7
261.9

66.6
71.0
75.6
81.8
87.1

121.1
132.9
145.0
158.9
174.8

1980
1981
1982
1983
1984

2,708.0
3,030.6
3,149.6
3,405.0
3,777.2

2,328.9
2,611.7
2,692.1
2,914.8
3,251.1

2,259.2
2,530.9
2,634.4
2,855.5
3,191.6

56.1
69.9
65.1
49.2
68.5

13.6
10.9
-7.4
10.2
-9.0

89.3
100.5
111.6
121.3
132.0

289.8
318.4
345.8
368.9
394.1

96.3
107.7
117.3
125.0
132.2

193.5
210.7
228.5
243.9
261.9

1985.
1986
1987
1988
1989

4,038.7
4,268.6
4,539.9
4,900.4
5,250.8

3,473.5
3,665.7
3,890.8
4,201.0
4,495.9

3,420.3
3,601.5
3,849.5
4,161.8
4,413.7

67.1
62.9
66.0
67.6
81.1

-13.9
1.2
-24.8
-28.4
1.1

141.7
153.3
170.5
187.6
206.1

423.6
449.6
478.7
511.7
548.8

140.3
143.7
151.4
159.8
169.1

283.2
305.9
327.3
351.9
379.8

1990
1991
1992
1993".

5,546.1
5,722.9
6,038.5
6,374.0

4,725.9
4,848.5
5,114.4
5,400.6

4,633.0
4,760.1
5,006.4
5,301.0

85.1
78.8
84.4
81.3

7.8
9.6
23.6
18.2

227.5
245.3
267.0
286.3

592.8
629.1
657.1
687.1

180.1
192.7
199.8
207.0

412.7
436.5
457.3
480.1

1982: IV
1983: IV
1984: IV
1985-.IV
1986: IV
1987: IV
1988-.IV
1989: IV

3,195.1
3,547.3
3,869.1
4,140.5
4,336.6
4,683.0
5,044.6
5,344.8

2,724.0
3,046.6
3,330.3
3,561.2
3,718.3
4,016.6
4,327.3
4,569.8

2,674.1
2,986.9
3,283.2
3,501.5
3,656.0
3,970.9
4,291.9
4,476.6

60.0
45.8
67.5
65.7
64.3
70.6
60.8

-10.1
13.8
-20.5
-5.9
-2.0
-24.9
-25.4
12.8

115.5
125.1
135.6
145.6
157.8
177.6
194.3
213.3

355.6
375.6
403.2
433.6
460.5
488.8
523.0
561.7

121.1
126.2
134.1
142.4
144.9
153.2
161.3
170.6

234.5
249.4
269.2
291.2
315.6
335.6
361.7
391.2

1990:1
II
Ill
IV

5,461.9
5,540.9
5,583.8
5,597.9

4,664.8
4,726.2
4,756.1
4,756.5

4,564.7
4,641.0
4,656.4
4,670.1

86.9
87.1
84.8
81.5

13.1
-1.8
14.9
4.9

218.9
225.1
230.9
235.0

578.2
589.6
596.8
606.4

177.9
180.4
179.7
182.3

400.4
409.2
417.1
424.1

1991:1
II
Ill
IV

5,631.7
5,697.7
5,758.6
5,803.7

4,770.7
4,827.3
4,880.7
4,915.3

4,691.2
4,739.9
4,774.7
4,834.6

79.2
83.0
78.7
74.5

.2
4.5
27.3
6.2

238.0
242.7
247.6
252.7

623.0
627.7
630.2
635.6

193.2
192.7
192.1
192.7

429.8
435.1
438.1
442.9

1992:1
II
Ill
IV

5,908.7
5,991.4
6,059.5
6,194.4

5,001.9
5,071.2
5,130.2
5,254.4

4,894.0
4,964.2
5,028.8
5,138.7

84.8
83.4
85.8
83.6

23.1
23.6
15.7
32.1

258.7
264.0
269.6
275.7

648.0
656.3
659.8
664.3

200.0
200.6
200.0
198.7

448.0
455.7
459.7
465.6

1993:1
II
Ill
IV

6,261.6
6,327.6
6,395.9
6,510.8

5,303.0
5,359.0
5,416.6
5,523.7

5,184.7
5,263.7
5,330.1
5,425.4

83.8
83.3
73.2
85.0

34.4
12.0
13.3
13.3

280.3
284.7
288.1
292.3

678.4
683.9
691.2
694.7

206.2
206.2
208.3
207.1

472.1
477.7
483.0
487.6

1
2

Includes compensation of employees in government enterprises.
Compensation of government employees.

Source: Department of Commerce, Bureau of Economic Analysis.




280

TABLE B-10.—Gross domestic product by sector in 1987 dollars, 1959-93
[Billions of 1987 dollars; quarterly data at seasonally adjusted annual rates]
Business'
Year or quarter

Gross
domestic
product

Totall

Nonfarm'

Farm

Statistical
discrepancy

Households
and
institutions

General government2

Total

Federal

State
and
local

1959...

1,928.8

1,582.1

1,543.4

45.2

-6.5

266.5

130.5

136.0

1960...
1961...
1962...
1963...
1964...

1,970.8
2,023.8
2,128.1
2,215.6
2,340.6

1,609.5
1,650.7
1,740.8
1,818.8
1,930.4

1,574.3
1,611.6
1,698.0
1,778.6
1,886.8

46.4
46.9
46.3
47.1
46.0

-11.2
-7.8
-3.6
-6.8
-2.4

86.5
87.5
91.1
93.6
96.5

274.8
285.6
296.2
303.2
313.7

132.1
135.3
141.6
140.9
141.7

142.7
150.3
154.7
162.3
172.0

1965...
1966...
1967...
1968...
1969...

2,470.5
2,616.2
2,685.2
2,796.9
2,873.0

2,045.3
2,162.6
2,208.0
2,303.0
2,366.2

2,001.7
2,109.1
2,158.8
2,258.0
2,326.7

46.1
44.5
46.5
45.1
46.8

-2.5
9.0
2.6
-.1
-7.2

100.4
104.7
108.3
111.8
115.5

324.8
348.9
368.9
382.1
391.3

142.3
155.4
168.1
170.7
171.2

182.5
193.5
200.8
211.4
220.1

1970
1971
1972
1973
1974

2,873.9
2,955.9
3,107.1
3,268.6
3,248.1

2,368.4
2,447.4
2,594.8
2,749.7
2,719.6

2,318.9
2,388.6
2,541.3
2,702.0
2,666.0

49.5
50.5
50.7
48.6
50.7

.0
8.3
2.8
-1.0
3.0

114.1
116.7
120.0
123.2
124.3

391.4
391.8
392.2
395.7
404.1

161.6
152.4
143.7
138.0
137.9

229.8
239.5
248.6
257.7
266.2

1975
1976
1977
1978
1979

3,221.7
3,380.8
3,533.3
3,703.5
3,796.8

2,684.6
2,840.1
2,987.8
3,144.2
3,226.0

2,619.6
2,768.1
2,914.6
3,083.8
3,155.0

53.1
52.5
53.8
48.2
50.4

11.9
19.5
19.4
12.2
20.6

128.0
128.6
129.8
135.1
138.3

409.1
412.0
415.6
424.2
432.5

137.1
137.0
137.0
138.4
137.5

272.0
275.0
278.6
285.8
295.0

1980
1981
1982
1983
1984

3,776.3
3,843.1
3,760.3
3,906.6
4,148.5

3,193.4
3,253.6
3,167.3
3,308.2
3,541.7

3,123.4
3,179.2
3,115.8
3,243.1
3,496.4

51.0
60.8
60.2
53.7
55.1

19.0
13.6
-8.7
11.5
-9.8

142.6
145.6
148.9
151.0
154.9

440.3
443.9
444.2
447.4
451.9

139.2
140.9
142.4
144.8
146.4

301.1
303.0
301.8
302.6
305.4

1985
1986
1987
1988
1989

4,279.8
4,404.5
4,539.9
4,718.6
4,838.0

3,658.1
3,768.3
3,890.8
4,050.6
4,150.5

3,608.6
3,702.8
3,849.5
4,014.8
4,083.4

64.2
64.3
66.0
63.2
66.2

-14.7
1.3
-24.8
-27.4
.9

159.9
166.3
170.5
180.6
190.5

461.8
469.9
478.7
487.4
497.0

148.6
149.0
151.4
153.5
154.2

313.2
320.8
327.3
333.9
342.7

1990
1991
1992
1993".

4,897.3
4,861.4
4,986.3
5,132.7

4,190.8
4,144.8
4,267.6
4,404.3

4,112.4
4,066.2
4,168.4
4,315.5

71.6
70.4
79.6
73.9

6.9
8.1
19.7
14.9

196.9
202.4
209.1
217.0

509.5
514.3
509.5
511.3

156.2
157.3
150.5
147.4

353.3
357.0
359.0
363.9

1982: IV
1983:IV
1984: IV
1985: IV
1986: IV
1987: IV
1988: IV
1989: IV

3,759.6
4,012.1
4,194.2
4,333.5
4,427.1
4,625.5
4,779.7
4,856.7

3,166.3
3,411.5
3,583.0
3,706.1
3,786.7
3,969.9
4,104.2
4,161.9

3,116.9
3,349.0
3,548.9
3,646.8
3,724.4
3,925.5
4,074.5
4,085.0

61.1
47.0
56.1
65.5
64.4
69.0
53.8
65.2

-11.7
15.5
-22.0
-6.2
-2.1
-24.6
-24.1
11.7

149.6
151.7
156.8
162.3
166.9
173.2
184.7
193.2

443.8
448.9
454.4
465.1
473.5
482.3
490.7
501.7

143.2
145.2
147.1
148.7
149.8
152.8
154.0
154.8

300.6
303.7
307.3
316.5
323.7
329.5
336.7
346.9

4,898.3
4,917.1
4,906.5
4,867.2

4,199.4
4,211.9
4,197.7
4,154.3

4,118.7
4,141.7
4,112.5
4,076.5

69.0
71.8
72.1
73.5

11.8
-1.6
13.1
4.2

193.8
196.2
198.5
199.2

505.0
509.1
510.2
513.6

155.2
156.5
155.6
157.4

349.9
352.6
354.6
356.2

1991:1..
II
III....
IV....

4,837.8
4,855.6
4,872.6
4,879.6

4,119.4
4,137.0
4,157.6
4,165.0

4,047.7
4,062.2
4,065.0
4,090.0

71.6
71.0
69.2
69.7

.2
3.8
23.3
5.3

200.0
201.9
202.9
204.7

518.4
516.7
512.2
509.9

161.3
158.8
155.6
153.3

357.1
357.8
356.6
356.5

1992:

4,922.0
4,956.5
4,998.2
5,068.3

4,206.7
4,239.8
4,277.9
4,346.2

4,110.0
4,141.0
4,182.6
4,240.0

77.2
79.1
82.2
79.7

19.4
19.7
13.1
26.5

206.5
207.4
210.3
212.4

508.8
509.3
510.0
509.8

152.0
151.0
150.1
148.8

356.8
358.3
360.0
361.0

5,078.2
5,102.1
5,138.3
5,212.1

4,353.9
4,374.1
4,408.4
4,480.8

4,247.4
4,288.1
4,330.1
4,396.4

78.2
76.2
67.5
73.6

28.3
9.8
10.8
10.8

213.5
216.8
218.4
219.5

510.8
511.3
511.5
511.8

148.8
147.8
146.9
146.0

362.0
363.4
364.5
365.8

,

1990:1
IV

II
Ill
IV
1993: f....
IV..
1
2

Includes compensation of employees in government enterprises.
Compensation of government employees.

Source: Department of Commerce, Bureau of Economic Analysis.




281

TABLE B - l l . — G r o s s domestic product by industry,

1947-91

[Billions of dollars]
Agri-

Year

Gross culdomes- ture,
fortic
prod- estry,
and
uct
fisheries

Manufacturing
Mining

Construction

Total

Transportation WholeNonRetail
and
Durasale
durapublic trade trade
ble
ble
utiligoods
goods
ties

Finance,
insurance,
and
real
estate

Services

Government

Statistical
discrepancy l

Based on 1972 SIC:
1947
1948
1949

234.3
260.3
259.3

20.8
24.0
19.4

6.8
9.4
8.1

9.1
11.5
11.5

66.2
74.7
72.3

33.5
38.2
37.2

32.7
36.6
35.1

21.0
23.7
23.9

16.6
18.3
17.6

27.5
30.1
30.3

24.0
27.2
29.4

20.2
21.9
22.6

20.2
20.9
23.1

1.8
-1.2
1.0

1950
1951
1952
1953
1954

287.0
331.6
349.7
370.0
370.9

20.7
23.8
23.2
21.1
20.7

9.3
10.2
10.2
10.8
11.0

13.2
15.6
16.9
17.5
17.7

84.1
99.1
103.4
112.4
106.8

45.9
55.6
59.0
66.1
61.0

38.2
43.5
44.3
46.4
45.8

26.6
30.1
32.1
34.1
33.7

19.8
22.5
22.7
23.2
23.5

31.7
34.3
36.3
37.2
38.1

32.3
35.8
39.4
43.7
47.5

24.2
26.4
28.2
30.2
31.6

24.2
30.9
35.6
36.8
37.9

1.0
2.9
1.8
2.8
2.4

1955
1956
1957
1958
1959

404.3
426.2
448.6
454.7
494.2

19.8
19.7
19.6
21.9
20.3

12.5
13.6
13.7
12.7
12.5

19.0
21.2
22.1
21.8
23.7

121.4
127.4
132.0
124.6
142.2

70.8
74.0
78.0
70.1
81.7

50.5
53.5
54.0
54.5
60.5

36.7
39.5
41.5
41.7
44.9

26.6
29.0
30.5
31.1
34.2

40.5
42.4
44.6
45.3
49.1

51.4
55.0
59.2
63.9
68.9

35.2
38.7
41.8
44.1
48.4

40.0
42.5
45.4
48.9
51.7

1.2
-2.8
-1.9
-1.1
-1.8

1960
1961
1962
1963
1964

513.3
531.8
571.6
603.1
648.0

21.3
21.7
22.1
22.3
21.4

12.9
13.0
13.2
13.5
13.9

24.2
25.2
27.0
28.9
31.5

144.8 82.6
145.3 81.7
159.1 92.1
168.6 98.3
180.5 105.9

62.2
63.6
67.1
70.4
74.6

47.1
48.7
51.7
54.6
58.1

35.3
36.4
38.8
40.5
43.6

50.4
51.7
55.4
57.9
63.5

73.5
78.0
82.4
87.1
92.9

51.6
55.0
59.3
63.4
69.1

55.4
59.1
63.5
68.4
74.1

-3.1
-2.2
-1.0
-2.0
-.7

1965
1966
1967
1968
1969

702.7
769.8
814.3
889.3
959.5

24.2
25.4
24.9
25.7
28.5

14.0
14.7
15.2
16.3
17.1

34.6
37.7
39.5
43.3
48.4

199.1
218.2
223.7
244.3
257.8

118.8 80.3
131.1 87.1
134.1 89.6
146.4 97.9
154.4 103.4

62.2
67.1
70.3
76.1
82.5

47.2
51.5
54.8
60.2
65.1

68.0
72.7
78.2
86.6
94.2

99.9
108.0
117.3
126.8
136.4

74.7
82.6
90.8
99.4
110.7

79.5
89.1
98.8
110.7
121.4

-.7
2.8
.8
-.1
-2.6

1970
1971
1972
1973
1974

1,010.7
1,097.2
1,207.0
1,349.6
1,458.6

29.8
32.1
37.3
55.0
53.2

18.7
18.9
19.6
23.8
37.0

51.1
56.1
62.5
69.8
73.7

253.1
266.7
294.3
327.6
341.2

146.2
154.2
172.6
195.8
202.2

106.9
112.5
121.7
131.8
139.0

88.0
97.1
108.3
119.1
129.9

68.6
74.3
83.2
93.5
107.1

100.2
109.2
118.9
131.0
136.9

146.3
163.1
176.5
193.1
208.9

120.5
130.3
144.9
163.2
179.4

134.2
146.2
160.4
173.9
189.9

.0
3.1
1.1
-.5
1.4

1975
1976
1977
1978
1979

1,585.9
1,768.4
1,974.1
2,232.7
2,488.6

54.9
53.8
54.4
63.3
74.6

42.8 75.2
47.5 85.1
54.1 93.9
61.4 110.7
71.2 124.8

358.8
409.6
466.8
521.9
575.7

207.1
239.9
277.7
317.5
343.8

151.7
169.7
189.1
204.5
231.9

142.3
161.2
179.2
202.2
219.1

117.0
124.8
137.9
157.1
178.6

153.0
172.4
190.4
214.9
233.2

226.7
250.1
283.6
328.6
370.8

199.3
224.1
255.7
294.6
333.0

209.8
229.3
247.1
270.5
293.9

6.0
10.4
10.9
7.6
13.8

1980
1981
1982
1983
1984

2,708.0
3,030.6
3,149.6
3,405.0
3,777.2

66.7
81.1
77.0
62.7
83.7

112.6
148.1
146.1
127.9
137.1

128.7
129.4
129.4
137.9
161.2

588.3
653.0
647.5
693.3
773.9

348.9
385.3
372.9
396.0
461.2

239.4
267.7
274.6
297.3
312.7

242.2
273.3
292.1
326.7
358.8

191.6
212.7
216.5
223.6
258.4

244.7
269.3
286.6
321.1
361.3

418.4
469.6
503.9
565.3
619.0

377.0
425.1
469.8
521.3
586.9

324.2
358.1
388.0
415.0
445.9

13.6
10.9
-7.4
10.2
-9.0

1985
1986
1987

4,038.7
4,268.6
4,539.9

84.3
81.7
88.5

130.6 179.2
82.7 201.9
83.0 213.0

798.5 471.5 327.0 378.0
829.3 480.0 349.3 393.8
878.4 503.2 375.2 419.9

276.6 390.9
290.9 418.7
302.6 440.1

681.8
743.5
809.9

650.9
712.8
784.0

481.8 -13.9
1.2
512.1
545.3 -24.8

293.1 441.8
331.0 471.7
351.6 502.5

809.7
866.3
926.5

782.5
865.5
948.8

545.3
584.8
627.6

-24.8
-28.4
1.1

982.4 1,040.0
363.0 515.7
375.1 532.1 1,039.7 1,089.8

676.3
720.6

7.8
9.6

Based on 1987 SIC:
1987
1988
1989

4,539.9 88.5
4,900.4 90.8
5,250.8 104.8

877.8 501.9 375.9 419.8
83.0 213.0
87.9 227.6 961.0 541.1 419.9 442.1
84.2 235.9 1,004.6 562.6 442.0 463.3

1990
1991

5,546.1 112.0
5,722.9 108.6

103.1 240.1 1,024.7 563.7 461.0 481.2
91.8 223.4 1,026.2 551.4 474.8 506.0

1
Equals gross domestic product (GDP) measured as the sum of expenditures less gross domestic income—that is, GDP measured as
the costs incurred and profits earned in domestic production.

Source: Department of Commerce, Bureau of Economic Analysis.




282

TABLE B-12.—Gross domestic product by industry in 1987 dollars, fixed 1987 weights, 1977-91
[Billions of dollars]

Year

Based on
1972 SIC:
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
Based on
1987 SIC:
1987
1988
1989
1990
1991

AgriculGross ture,
domes- forestry,
tic
product and
fisheries

Manufacturing
Mining

ConstrucDura- Nontion Total ble durable
goods goods

FiTransStanance,
portatistion Whole- Retail insur- Serv- Govern- tical Residand
sale trade ance, ices
dis- ual 2
ment
and
public trade
crepreal
utiliancy x
estate
ties

475.7
488.3
498.6

19.4
12.2
20.6

20.8
33.4
39.6

508.9 19.0
511.6 13.6
507.1 - 8 . 7
512.5 11.5
516.9 - 9 . 8

45.7
45.3
15.6
20.8
21.0

3,533.3
3,703.5
3,796.8

63.7
59.2
62.4

83.5 190.8 741.6 440.9
85.0 198.8 773.1 460.9
71.9 200.3 777.1 458.0

3,776.3
3,843.1
3,760.3
3,906.6
4,148.5

63.2
72.7
73.3
68.4
71.5

79.9
74.2
73.1
71.3
82.0

4,279.8
4,404.5
4,539.9

81.9
84.5
88.5

83.3 209.0 810.5 468.1
83.0 209.1 819.1 471.5
83.0 213.0 878.4 503.2

342.4 381.8 273.0 421.4 776.4 722.0
347.7 386.9 307.1 453.2 776.6 751.7
375.2 419.9 302.6 440.1 809.9 784.0

7.7
527.5 -14.7
1.3 - 4 . 4
536.4
545.3 - 2 4 . 8
.0

4,539.9
4,718.6
4,838.0

88.5
85.1
88.0

83.0 213.0 877.8 501.9
94.2 211.7 923.5 536.4
83.3 213.1 932.2 543.2

375.9 419.8 303.1 441.8 809.7 782.5
387.2 437.1 311.3 469.7 846.5 812.8
389.1 449.4 324.5 483.9 865.5 845.7

.0
545.3 - 2 4 . 8
1.8
555.9 - 2 7 . 4
567.0
.9 - 1 5 . 5

4,897.3
4,861.4

95.8
97.4

91.8 210.2 928.5 537.0
91.5 194.5 908.0 525.5

391.5 462.6 319.5 478.1 868.3 869.4
382.5 478.1 326.4 474.1 878.4 866.7

581.5
586.5

185.4
174.7
164.9
170.0
190.9

725.4
746.7
711.1
733.8
791.4

424.3
429.7
392.4
402.5
458.4

300.7 314.3 170.1 318.0 596.5 538.9
312.2 325.1 185.8 338.1 631.0 573.5
319.2 335.5 195.8 334.8 667.4 592.8
301.1
317.1
318.7
331.3
333.0

1
2

336.3
337.1
331.3
351.7
377.6

190.5
207.5
218.2
224.2
259.5

320.1
330.6
336.8
365.1
397.7

692.8
704.7
708.4
727.9
762.1

609.0
624.4
629.2
649.5
687.8

6.9 - 1 5 . 3
8.1 - 4 8 . 4

Equals the current-dollar statistical discrepancy deflated by the implicit price deflator for gross domestic business product.
Equals cross domestic product (GDP) in constant dollars measured as the sum of expenditures less the statistical discrepancy in
constant dollars and GDP in constant dollars measured as the sum of gross product originating by industry.
Note.—Constant-dollar values are equal to fixed-weighted quantity indexes with 1987 weights divided by 100 and multiplied by the
1987 value of current-dollar GDP.
Source: Department of Commerce, Bureau of Economic Analysis.




283

TABLE B-13.—Gross domestic product of nonfinancial corporate business, 1959-93
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Net domestic product

Year or
quarter

1959
1960
1961
1962
1963
1964
1965 .
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983,
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993 "
1982: IV
1983: IV
1984: IV
1985: IV
1986: IV
1987: IV
1988: IV
1989: IV
1990: I
II
ill
IV
1991: I
II
Ill
IV
1992: I
II
Ill
IV
1993: I
II
Ill
IV P

Gross
domestic
product
of
nonfinancial
corporate
business

267.5
278.1
285.5
311.7
331.8
358.1
393.5
431.0
453.4
500 5
543.3
5614
606.4
673 3
754.5
814.6
881.2
994.6
1124.7
1,279.4
1,423.7
1,546.5
1,748.6
1802 8
1,936.1
2,166.5
2,293.6
2 386 3
2!547.3
2 764 8
2,913.5
3,045.5
3 082.1
3,243.4
1,806.3
2,037.2
2,228.2
2,338.8
2,422.8
2,627.6
2,843.2
2,951.5
3,007.7
3,064.1
3,057.8
3,052.5
3,048.b
3,063.4
3,086.8
3,129.5
3,159.8
3,218.1
3,264.2
3,331.6
3,331.7
3,395.9
3,432.2

Domestic income
Consumption
of
fixed
capital

24.2
25.2
26.0
26.9
28.1
29.5
315
34.3
37.5
414
45.3
49 7
54.6
610
66.2
77.5
93.3
103.8
116.2
132.3
153.0
174.8
207.0
229 4
242.1
248.1
258.0
2714
281.4
297 5
317.4
329.3
3415
352 7
362.3
238.8
261.5
258.9
263.4
275.8
286.1
304.5
326.5
322.6
326.6
332.0
336.1
339.4
340.4
342.3
343.9
345.1
347.8
366.1
351.7
356.8
359.0
367.0
366.3

Total

243.2
252.9
259.6
284.8
303.7
328.6
362 0
396.7
415.9
4591
498.0
5116
551.7
612 4
688.3
737.1
788.0
890.8
1,008.5
1,147.2
1,270.7
1,371.7
1,541.5
1573 4
1,694.0
1,918.3
2,035.5
2 114 9
2,265.9
2 467 3
2,596.2
2,716.2
2 740 6
2,890.7
1,567.5
1,775.7
1,969.4
2,075.4
2,147.1
2,341.4
2,538.8
2,625.0
2,685.1
2,737.5
2,725.8
2,716.4
2,709.2
2,722.9
2,744.5
2,785.6
2,814.6
2,870.3
2,898.2
2,979.9
2,975.0
3,036.8
3,065.1

Indirect
business
taxes*

26.0
28.3
29.5
32.0
34.0
36.6
39.2
40.5
43.1
49 7
54.7
58 8
64.5
69 2
76.3
81.4
87.4
95.1
104.1
114.6
123.3
139.4
167.9
169 4
185.8
206.9
220.3
2314
241.0
2571
274.2
290.4
3115
327 7
345.5
172.6
194.0
212.4
223 8
233.6
245.4
263.1
279.0
285.3
285.8
294.0
296.6
304.2
307.1
315.3
319.5
321.8
323.9
329.1
336.0
333.0
344.0
347.0
357.9

Corporate profits with inventory valuation and capital
consumption adjustments

Total

217.2
224.6
230.1
252.8
269.7
292.0
322.8
356.2
372.8
409 3
443.3
452 8
4873
543 2
612.0
655.7
700.6
795.7
904.4
1,032.6
1,147.4
1,232.4
1,373.6
1404 0
1,508.2
1,711.4
1,815.3
1883 6
2,024.9
2 210 2
2,322.0
2,425.8
2,429.0
2,563.1
1,394.9
1,581.7
1,756.9
1,851.6
1,913.5
2,096.0
2,275.7
2,346.0
2,399.8
2,451.7
2,431.8
2,419.8
2,405.0
2,415.8
2,429.2
2,466.1
2,492.9
2,546.4
2,569.0
2,643.9
2,642.0
2,692.8
2,718.1

Compensation of
employees

171.5
181.2
185.3
200.1
211.1
226.7
246.5
274.0
292.3
323 2
358.8
378 7
402.0
447 1
505.9
556.8
580.3
656.7
741.8
850.2
964.2
1,053.5
1,164.8
1209 9
1,271.6
1,409.2
1,503.2
1 581 5
l!675.0
1 814 2
l!920.2
2,020.9
2,053.8
2 149 5
2,255.4
1,213.9
1,327.6
1,449.7
1,540.1
1,611.4
1,730.1
1,868.8
1,954.6
1,987.4
2,019.4
2,037.5
2,039.3
2,028.3
2,040.1
2,061.6
2,085.3
2,103.8
2,135.4
2,162.7
2,195.9
2,215.0
2,244.7
2,267.1
2,294.9

Profits
Total

42.6
40.0
40.8
48.2
53.8
60.0
70.3
74.9
71.8
76 0
71.3
57 1
67.2
77 0
83.6
70.6
91.5
111.5
132.0
146.1
138.1
120.7
136.9
1115
159.9
214.3
221.4
203.8
244.2
274.4
255.2
256.4
233.9
278 3
314.8
101.5
175.2
211.4
221.4
198.6
256.8
278.5
240.7
263.9
282.9
246.5
232.4
232.8
235.5
227.0
240.4
252.3
273.9
272.7
314.1
292.1
315.0
318.2

Profits Profits
before
tax
tax liability Total

43.6
40.3
40.1
45.0
49.8
56.0
66.2
71.4
67.5
74 0
70.8

581
67.1
78 6
98.6
109.2
109.9
137.3
158.6
183.5
195.5
181.6
181.0
132 9
155.9
189.0
165.5
149.1
212.0
256.6
232.9
232.1
214.8
2551
286.8
116.5
168.1
169.0
168.4
168.5
224.8
271.4
215.9
223.3
233.8
244.6
226.7
207.8
209.9
218.2
223.3
235.1
260.2
251.8
273.2
268.4
291.2
281.8

20.7
19.2
19.5
20.6
22.8
24.0
27.2
29.5
27.8
33 6
33.3
27 2
29.9
33 8
40.2
42.2
41.5
53.0
59.9
67.1
69.6
67.0
63.9
46 3
59.4
73.7
69.9
75.6
93.5
101.7
99.5
93.9
82.7
98.2
114.9
40.6
64.4
62.6
71.1
86.5
99.6
107.9
91.1
89.6
95.0
98.8
92.0
79.7
81.1
84.3
85.9
90.8
100.8
95.3
105.8
106.4
117.6
112.5

22.9
21.1
20.7
24.3
27.0
32.1
39.0
41.9
39.7
40 4
37.5

310
37.1
44 8
58.4
67.0
68.4
84 4
98.7
116.4
125.9
114.6
117.1
86 7
96.4
115.4
95.6
73.5
118.5
154 9
133.3
138.3
132.1
156 9
171.8
75.9
103.7
106.4
97.2
82.0
125.1
163.5
124.8
133.7
138.8
145.8
134.8
128.2
128.8
133.9
137.4
144.3
159.4
156.5
167.4
162.0
173.6
169.3

1
Indirect business tax and nontax liability plus business transfer payments less subsidies.
Source: Department of Commerce, Bureau of Economic Analysis.




Inventory
valuation
UndisDivi- tributed adjustdends profits ment

Profits after tax

284

10.0
10.6
10.6
11.4
12.6
13.7
15 6
16.8
17.5

191
19.1
18 5
18.5

201

21.1
21.7
24.8
27.8
32 0
37.2
39.3
45.5
53.4
56 4
66.5
69.5
74.5
76.3
77.9
82 0
101.9
118.1
94.0
105 2
125.3
59.0
67.4
68.7
74.7
75.2
84.0
84.3
102.3
118.0
117.4
120.0
117.2
103.1
92.9
89.0
90.9
93.9
100.3
105.9
120.7
127.4
125.4
124.0

12.9
10.6
10.1
13.0
14.4
18.4
23 4
25.1
22.2
21 3
18.4
12 5
18.7
24 7
37.3
45.2
43.6
56.6
66 8
79.1
86.7
69.1
63.7
30 2
29.9
45.9
21.1
-2.8
40.6
72 9
31.5
20.1
38.1

517

46.5
16.9
36.3
37.7
22.5

6.8

41.2
79.2
22.5
15.8
21.4
25.8
17.5
25.1
35.9
44.9
46.5
50.5
59.1
50.5
46.7
34.6
48.2
45.3

Capital Net
interconsump- est
tion
adjustment

-0.3

-0.7

-.2
.3
.0
.1
-.5

-.2
.3
3.2
3.9
4.5
5.3
5.6
5.8
56
6.3
55
4.7
50
5.0
.9

-1.2
-2.1
-1.6

-37

-5.9

-66
-4.6

-66

-20.0
-39.5
-11.0
-14.9
-16.6
-25.0
-41.6
-43.0
-25.7

-7.4
-10.9
-10.0
-12.3
-15.9
-17.8
-18.4
-99 -115
12.5
-8.5
29.4
-4.1
.2 55.6
9.7 44.9
46.7
-14.5
- 2 7 3 45.0
39.9
-17.5
35.3
-11.0
4.9 14.2
-5.3
28.5
-7.8
35.9
-8.6 -6.4
14.7
-7.6
3.5 38.9
56.9
-3.8
-10.7
40.8
-17.8
49.8
-31.7
38.8
-13.5
38.3
42.6
-2.0
8.9 40.1
33.4
-31.5
25.2
-19.5
8.2 16.8
12.8
12.7
11.8
-3.0
1.9 15.2
-4.6
21.8
27.4
-13.7
28.8
-7.8
4.9 36.0
-12.7
36.4
36.0
-12.2
1.0 35.4
35.7
-7.2

3.1
3.5
4.0
4.5
4.8
5.3
6.1
7.4
8.8
101

13.2
17 1
18.1
19 2
22.5
28.3
28.7
27.5
30.6
36.3
45.1
58.2
71.9
82 5
76.7
87.9
90.7
98.3
105.8
121.6
146.6
148.5
141.3
135.3

79.6
78.9
95.8
90.0
103.5
109.2
128.4
150.7
148.5
149.5
147.9
148.2
143.9
140.2
140.6
140.5
136.8
137.1
133.6
133.9
134.9
133.1
132.8

T A B L E B-14.—Output, costs, and profits oj nonfinancial corporate business, 1959-93
[Quarterly data at seasonally adjusted annual rates]

Year or quarter

Gross domestic
product of
nonfinancial
corporate
business
(billions of
dollars)

Current-dollar cost and profit per unit of output (dollars)»

Total
cost
and
profit 2

Consumption
of
fixed
capital

Indirect
business
taxes 3

Compensation
of
smploy-

Corporate profits with
inventory valuation and
capital consumption
adjustments
Profits
tax
liability

Net
interest

Profits
after
tax 4

Output
per hour
of all
employees
(1987
dollars)

Compensation
per hour
of all
employees
(dollars)

Current
dollars

1959
1960
1961
1962
1963
1964.,
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1982: IV..
1983: IV..
1984: IV..
1985: IV..
1986: IV..
1987: IV...
1988: IV..
1989: IV..
1990:1
II
Ill
IV

1991:1
II
Ill
IV

1992:1
II
Ill
IV

1993:1
II

1987
dollars

267.5
278.1
285.5
311.7
331.8
358.1
393.5
431.0
453.4
500.5
543.3
561.4
606.4
673.3
754.5
814.6
881.2
994.6
1,124.7
1,279.4
1,423.7
1,546.5
1,748.6
1,802.8
1,936.1
2,166.5

928.7
955.6
978.2
1,047.5
1,104.8
1,179.3
1,262.2
1,336.0
1,367.4
1,444.3
1,492.5
1,473.4
1,525.9
1,629.5
1,706.9
1,669.7
1,625.6
1,748.5
1,866.7
1,967.1
1,995.7
1,980.9
2,035.1
2,001.3
2,112.3
2,284.1
2,364.3
2,439.3
2,547.3
2,684.8
2,718.9
2,747.4
2,710.0
2,822.3
1,999.6
2,204.2
2,328.4
2,396.9
2,463.3
2,604.0
2,719.0
2,722.7

0.288
.291
.292
.298
.300
.304
.312
.323
.332
.347
.364
.381
,397
.413
.442
.488
.542
.569
.603
.650
.713
.781
.859
.901
.917
.949
.970
.978
1.000
1.030
1.072
1.109
1.137
1.149
.903
.924
.957
.976
.984
1.009
1.046
1.084

0.026
.026
.027
.026
.025
.025
.025
.026
.027
.029
.030
.034
.036
.037
.039
.046
.057
.059
.062
.067
.077
.088
.102
.115
.115
.109
.109
.111
.110
.111
.117
.120
.126
.125
.119
.119
.111
.110
.112
.110
.112
.120

0.028
.030
.030
.031
.031
.031
.031
.030
.032
.034
.037
.040
.042
.042
.045
.049
.054
.054
.056
.058
.062
.070
.082
.085
.088
.091
.093
.095
.095
.096
.101
.106
.115
.116
.086
.088
.091
.093
.095
.094
.097
.102

0.185
.190
.189
.191
.191
.192
.195
.205
.214
.224
.240
.257
.263
.274
.296
.333
.357
.376
.397
.432
.483
.532
.572
.605
.602
.617
.636
.648
.658
.676
.706
.736
.758
.762
.607
.602
.623
.643
.654
.664
.687
.718

0.046
.042
.042
.046
.049
.051
.056
.056
.052
.053
.048
.039
.044
.047
.049
.042
.056
.064
.071
.074
.069
.061
.067
.056
.076
.094
.094
.084
.096
.102
.094
.093
.086
.099
.051
.079
.091
.092
.081
.099
.102

0.022
.020
.020
.020
.021
.020
.022
.022
.020
.023
.022
.018
.020
.021
.024
.025
.026
.030
.032
.034
.035
.034
.031
.023
.028
.032
.030
.031
.037
.038
.037
.034
.031
.035
.020
.029
.027
.030
.035
.038
.040
.033

0.024
.022
.022
.026
.028
.031
.034
.034
.032
.029
.025
.020
.024
.027
.025
.017
.031
.033
.039
.040
.034
.027
.036
.033
.048
.062
.064
.053
.059
.064
.057
.059
.056
.064
.030
.050
.064
.063
.045
.060
.063
.055

0.003
.004
.004
.004
.004
.005
.005
.006
.006
.007
.009
.012
.012
.012
.013
.017
.018
.016
.016
.018
.023
.029
.035
.041
.036
.038
.038
.040
.042
.045
.054
.054
.052
.048
.040
.036
.041
.038
.042
.042
.047
.055

15.443
15.661
16.182
16.675
17.204
17.855
18.074
18.143
18.362
18.858
18.750
18.776
19.487
19.793
19.762
19.230
19.763
20.365
20.766
20.711
20.222
20.265
20.538
20.803
21.596
21.926
22.150
22.735
23.129
23.572
23.189
23.446
23.865
24.836
21.070
21.893
22.054
22.347
22.892
23.358
23.524
23.147

2.851
2.969
3.066
3.186
3.287
3.432
3.529
3.720
3.925
4.220
4.508
4.825
5.134
5.430
5.858
6.413
7.056
7.648
8.252
8.951
9.770
10.777
11.755
12.577
13.002
13.527
14.083
14.741
15.208
15.833
16.377
17.246
18.087
18.915
12.791
13.187
13.732
14.359
14.975
15.518
16.071
16.618

3,007.7
3,064.1
3,057.8
3,052.5

2,742.9
2,771.4
2,750.5
2,725.0

1.097
.106
.112
.120

.118
.118
.121
.123

.104
.103
.107
.109

.725
.729
.741
.748

.096
.102
.090
.085

.033
.034
.036
.034

.064
.068
.054
.052

.054
.054
.054
.054

23.231
23.537
23.468
23.549

16.832
17.150
17.385
17.623

3,048.6
3,063.4
3,086.8
3,129.5

2,694.1
2,692.4
2,708.5
2,745.0

.132
.138
.140
1.140

.126
.126
.126
.125

.113
.114
.116
.116

.753
.758
.761
.760

.086
.087
.084
.088

.030
.030
.031
.031

.057
.057
.053
.056

.053
.052
.052
.051

23.634
23.738
23.889
24.246

17.794
17.988
18.183
18.419

3,159.8
3,218.1
3,264.2
3,331.6

2,759.5
2,802.6
2,839.8
2,887.4

1.145
1.148
1.149
1.154

.125
.124
.129
.122

.117
.116
.116
.116

.762
.762
.762
.761

.091
.098
.096
.109

.033
.036
.034
.037

.059
.062
.062
.072

.050
.049
.047
.046

24.394
24.678
25.031
25.310

18.597
18.803
19.062
19.249

3,331.7
3,395.9
3,432.2

2,867.5
2,916.6
2,948.9

1.162
1.164
1.164

.124
.123
.124

.116
.118
.118

.772
.770
.769

.102
.108
.108

.037
.040
.038

.065
.068
.070

.047
.046
.045

25.053
25.296
25.512

19.353
19.468
19.629

2,293.6

2,386.3
2,547.3
2,764.8
2,913.5
3,045.5
3,082.1
3,243.4
1,806.3
2,037.2
2,228.2
2,338.8
2,422.8
2,627.6
2,843.2
2,951.5

Total

1
Output is measured by gross domestic product of nonfinancial corporate business in 1987 dollars.
2
This is equal to the deflator for gross domestic product of nonfinancial corporate business with the decimal point shifted two
places to the left.
3
Indirect business tax and nontax liability plus business transfer payments less subsidies.
4
With inventory valuation and capital consumption adjustments.

Sources: Department of Commerce (Bureau of Economic Analysis) and Department of Labor (Bureau of Labor Statistics).

 1 5 1 - 4 4 4 0 - 9 4 - 1 0


285

TABLE B-15.—Personal consumption expenditures. 1959-93
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Durable goods

Year or
quarter

1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984

Personal
consumption
expendi- Total»
tures

Motor
vehicles
and
parts

Nondurable goods

Furniture
and
house- Total
hold
equipment

!

Food

Clothing
and
shoes

Gasoline
and
oil

Services

Fuel
oil
and
coal

Household
operation
Totall

HousTotal

Trans- MediEjec- porta- cal
tricity tion care
and
gas

318.1

42.8

18.9

18.1

148.5

80.7

26.4

11.3

4.0

126.8

45.0

18.7

7.6

10.5

16.3

332.4
343.5
364.4
384.2
412.5

43.5
41.9
47.0
51.8
56.8

19.7
17.8
21.5
24.4
26.0

18.0
18.3
19.3
20.7
23.2

153.1
157.4
163.8
169.4
179.7

82.6
84.8
87.1
89.5
94.6

27.0
27.6
29.0
29.8
32.4

12.0
12.0
12.6
13.0
13.6

3.8
3.8
3.8
4.0
4.1

135.9
144.1
153.6
163.1
175.9

48.2
51.2
54.7
58.0
61.4

20.3
21.2
22.4
23.6
25.0

8.3
8.8
9.4
9.9
10.4

11.2
11.7
12.2
12.7
13.4

17.4
18.6
20.7
22.4
25.7

444.6
481.6
509.3
559.1
603.7

63.5
68.5
70.6
81.0
86.2

29.9
30.3
30.0
36.1
38.4

25.1
28.2
30.0
32.9
34.7

191.9
208.5
216.9
235.0
252.2

101.0
109.0
112.3
121.6
130.5

34.1
37.4
39.2
43.2
46.5

14.8
16.0
17.1
18.6
20.5

4.4
4.7
4.8
4.7
4.6

189.2
204.6
221.7
243.1
265.3

65.4
69.5
74.1
79.7
86.8

26.5
28.2
30.2
32.3
35.1

10.9
11.5
12.2
13.0
14.0

14.5
15.9
17.3
18.9
20.9

27.7
30.5
33.7
39.0
44.4

646.5
700.3
767.8
848.1
927.7

85.3
97.2
110.7
124.1
123.0

35.5
44.5
51.1
56.1
49.5

35.7
37.8
42.4
47.9
51.5

270.4
283.3
305.2
339.6
380.8

142.1
147.5
158.5
176.1
198.1

47.8
51.7
56.4
62.5
66.0

21.9
23.2
24.4
28.1
36.1

4.4
4.6
5.1
6.3
7.8

290.8
319.8
351.9
384.5
423.9

94.0
102.7
112.1
122.7
134.1

37.8
41.0
45.3
49.8
55.5

15.2
16.6
18.4
20.0
23.5

23.7
27.1
29.8
31.2
33.3

50.1
56.5
63.5
71.2
80.1

1,024.9
1,143.1
1,271.5
1,421.2
1,583.7

134.3
160.0
182.6
202.3
214.2

54.8
71.3
83.5
92.2
91.5

54.5
60.2
67.1
74.0
82.3

416.0
451.8
490.4
541.5
613.3

218.5
236.0
255.9
280.6
313.0

70.8
76.6
84.1
94.3
101.2

39.7
43.0
46.9
50.1
66.2

8.4
10.1
11.1
11.5
14.4

474.5 147.0
531.2 161.5
598.4 179.5
677.4 201.7
756.2 226.6

63.7
72.4
81.9
91.2
100.0

28.5
32.5
37.6
42.1
46.8

35.7
41.3
49.2
53.6
59.4

93.0
106.2
122.4
139.7
157.8

1,748.1
1,926.2
2,059.2
2,257.5
2,460.3

212.5
228.5
236.5
275.0
317.9

84.0
91.6
97.7
120.6
144.6

86.0
91.3
92.5
104.4
115.3

682.9
744.2
772.3
817.8
873.0

341.8
367.3
386.0
406.2
430.2

107.3
117.2
120.5
130.8
142.5

86.7
97.9
94.1
93.3
94.5

15.4
852.7 255.2
15.8 953.5 287.1
14.5 1,050.4 311.1
13.8 1,164.7 334.6
14.2 1,269.4 362.3

113.0
126.0
141.4
153.6
165.5

56.3
63.4
72.6
80.7
84.6

65.1
69.4
71.6
78.9
89.1

181.3
213.6
240.5
265.7
290.6

1985
1986
1987
1988
1989
1990
1991
1992
1993 "....
1982: IV.
1983: IV.
1984:1V.
1985: IV.
1986: IV.
1987: IV.
1988:1V.
1989: IV.

2,667.4
2,850.6
3,052.2
3,296.1
3,523.1

352.9 167.4
389.6 184.9
403.7 183.5
437.1 197.8
459.4 205.4

123.4 919.4 451.1 152.2
135.5 952.2 476.8 163.2
144.0 1,011.1 500.7 174.5
156.7 1,073.8 533.6 186.4
167.9 1,149.5 565.1 200.4

96.9
79.7
84.7
86.9
96.2

14.1
12.0
12.0
12.1
12.0

1,395.1
1,508.8
1,637.4
1,785.2
1,914.2

392.5
421.8
452.5
484.2
514.4

176.2
181.1
187.8
199.5
209.8

88.7
87.1
88.4
93.4
98.0

99.0
105.8
116.6
128.5
135.6

319.3
346.4
384.7
427.7
471.9

3,761.2
3,906.4
4,139.9
4,390.6

468.2 202.9
457.8 185.5
497.3 204.3
537.7 222.4

174.2
180.6
194.5
211.7

207.3
213.0
228.2
237.1

108.4
102.9
103.4
103.6

13.2
13.0
13.8
15.1

2,063.8
2,190.7
2,341.6
2,502.7

547.5
574.4
600.0
627.7

215.6
227.1
234.4
251.0

97.4
104.3
105.8
113.2

142.5 526.2
146.2 577.1
155.4 628.4
170.2 680.6

2,128.7
2,346.8
2,526.4
2,739.8
2,923.1
3,124.6
3,398.2
3,599.1

246.9
297.7
328.2
354.4
406.8
408.8
452.9
458.3

105.1
134.8
149.3
162.9
188.2
186.3
203.4
198.1

95.6
787.3 394.9 122.7
109.7
839.8 413.9 136.7
118.7
887.8 436.8 145.7
128.1 939.5 460.7 156.2
140.6
963.7 486.7 165.8
145.9 1,029.4 507.4 177.6
162.5 1,105.8 549.5 194.4
170.8 1,173.5 575.3 205.4

93.0
94.9
94.9
97.6
73.0
87.8
88.5
95.9

14.0
14.1
13.8
14.3
11.3
12.2
11.7
13.2

1,094.6
1,209.3
1,310.4
1,446.0
1,552.6
1,686.4
1,839.5
1,967.3

320.2
344.6
373.8
404.6
432.7
466.6
496.0
526.6

145.8
159.3
168.8
180.7
182.5
189.7
203.8
217.7

74.9
84.8
85.9
90.1
86.8
88.6
95.3
103.7

73.6
82.9
92.5
101.5
109.0
121.3
132.7
137.6

1990:1...
IV

3,679.3
3,727.0
3,801.7
3,836.6

479.8
466.0
467.3
459.5

213.9
202.2
202.8
192.9

175.1
173.6
173.6
174.5

1,201.7
1,213.6
1,241.0
1,260.7

591.0 206.2
601.3 206.8
611.4 208.5
615.6 207.6

102.2
99.7
108.7
123.0

12.3
12.3
14.1
13.9

1,997.8
2,047.5
2,093.4
2,116.4

534.5
543.2
553.6
558.6

208.1
216.2
219.1
219.1

92.4
98.1
99.7
99.6

1991:1..
II
Ill
IV

3,843.6
3,887.8
3,929.8
3,964.1

448.9 182.0
452.0 180.0
465.1 190.0
465.2 190.2

176.1
181.2
182.9
182.4

1,252.3
1,259.2
1,260.0
1,260.0

617.1
623.1
622.1
623.2

208.9
214.3
215.5
213.4

107.4
102.7
101.1
100.3

13.5
12.4
13.3
12.7

2,142.4
2,176.6
2,204.8
2,239.0

564.5
571.4
577.5
584.2

220.8
229.7
230.3
227.8

100.5
107.1
105.9
103.7

144.0
145.0
147.0
148.8

558.3
569.9
582.4
597.6

1992:1
II
Ill

4,046.5
4,099.9
4,157.1
4,256.2

484.0 199.4
487.8 200.6
500.9 203.4
516.6 213.7

188.7
190.2
196.5
202.7

1,278.2
1,288.2
1,305.7
1,331.7

628.8
626.6
631.7
647.6

221.4
224.5
230.7
236.1

99.9
102.9
105.8
105.2

12.8
14.7
13.9
13.9

2,284.4
2,323.8
2,350.5
2,407.9

591.2
596.9
602.5
609.2

228.0
234.5
230.3
245.0

101.3
104.7
106.0
111.0

152.5
153.7
153.0
162.4

609.1
622.6
634.9
646.9

4,296.2
4,359.9
4,419.1
4,487.4

515.3
531.6
541.9
561.9

211.7
220.8
221.7
235.4

203.3
208.6
214.0
220.9

1,335.3
1,344.8
1,352.4
1,368.4

648.2
654.1
660.0
671.1

233.1
235.2
238.2
241.9

106.0
103.6
102.4
102.5

15.1
14.9
15.4
15.0

2,445.5
2,483.4
2,524.8
2,557.2

617.6
625.1
631.1
636.9

245.7 111.1
246.7 109.8
255.2 116.4
256.3 115.6

166.3
169.1
170.9
174.4

662.2
675.4
686.9
698.0

IV

1993:1
II
Ill
IV "....
1
2

1,229.2
1,257.9
1,300.9
1,350.2

604.8
621.4
633.7
658.3

Includes other items not shown separately.
Includes imputed rental value of owner-occupied housing.

Source: Department of Commerce, Bureau of Economic Analysis.




286

250.9
274.8
299.9
333.0
358.4
398.5
444.4
489.2

139.9 504.4
141.7 519.0
143.1 534.8
145.4 546.6

TABLE B-16.—Personal consumption expenditures in 1987 dollars, 1959-93
[Billions of 1987 dollars; quarterly data at seasonally adjusted annual rates]
Durable goods
Year or
quarter

Nondurable goods

Personal
FurniconMotor ture
sumption
vehi- and
expendi- Total» cles house- TotalJ
tures
and hold
parts equipment

Food

Cloth- Gasoing
line
and
and
shoes oil

Services
Fuel
oil
and
coal

Household
operation
Total» Housing2

1959

1178 9 114 4

59 7

38 2

518 5 3019

58 2

38 1

22 6

1960
1961
1962
1963
1964

1,210.8
1,238.4
1,293.3
1,341.9
1,417 2

115.4
109.4
120.2
130.3
140 7

61.3
54.9
62.2
68.4
712

37.7
38.1
40.4
43.1
48 3

526.9
537.7
553.0
563.6
588 2

305.8
312.1
316.3
319.2
3310

58.7
59.8
62.4
63.6
68 5

39.4
39.8
41.5
42.8
451

21.7
20.6
20.6
21.6
22 5

568.5
591.3
620.0
648.0
688 3

168.1
176.0
185.8
194.4
203 5

1965
1966
1967
1968
1969

1,497.0
1,573.8
1,622.4
1,707.5
1,771.2

156.2
166.0
167.2
184.5
190.8

81.2
81.8
80.3
91.8
95.1

52.1
57.6
59.5
62.9
64.3

616.7
647.6
659.0
686.0
703.2

346.5
359.1
364.5
380.7
389.7

71.5
76.3
76.9
80.2
81.9

47.3
50.2
51.8
55.5
59.2

23.5
24.2
24.2
23.0
21.8

724.1
760.2
796.2
837.0
877.2

1970
1971
1972
1973
1974

1,813.5
1,873.7
1,978.4
2,066.7
2,053.8

183.7
201.4
225.2
246.6
227.2

85.6
100.8
114.3
123.4
102.2

64.4
66.8
73.6
81.5
81.9

717.2
725.6
755.8
777.9
759.8

397.5
399.2
411.9
412.6
404.7

81.0
84.6
90.4
96.9
95.4

1975
1976
1977
1978
1979

2,097.5
2,207.3
2,296.6
2,391.8
2,448.4

226.8
256.4
280.0
292.9
289.0

102.9 79.1
124.6 84.2
137.3 91.4
141.5 96.6
130.5 1013

767.1
801.3
819.8
844.8
862 8

413.2
431.9
441.5
442.8
448.0

1970
1981
1982
1983
1984

2,447.1
2,476.9
2,503.7
2,619.4
2,746.1

262.7
264.6
262.5
297.7
338.5

111.4 98.5
113.5 97.7
115.6 94.2
138.1 104.3
160.3 115.3

860.5
867.9
872.2
900.3
934.6

448.8
446.6
451.4
463.4
472.3

1985
1986
1987
1988
1989

2,865.8
2,969.1
3,052.2
3,162.4
3,223.3

370.1
402.0
403.7
428.7
440.7

1990
1991
1992
1993 '.

3,272.6
3,258.6
3,341.8
3,452.5

1982:
1983:
1984:
1985:
1986:
1987:
1988:
1989:

ElecTotal tricity
and
gas
J

Transportation

Medical
care

34 5

45 4

95 0

78.5
81.2
85.2
88.4
92 6

36.3
38.3
40.9
42.8
451

46.7
47.0
48.7
50.5
53.0

98.4
102.0
110.2
117.1
129.8

214.6
224.4
234.5
246.0
259.1

96.8
101.4
106.2
110.1
115.3

47.2
49.7
52.4
55.0
58.0

55.4
58.6
62.0
65.4
68.9

135.8
142.3
148.1
159.5
171.3

62.9
65.9
68.6
72.1
68.6

20.2 912.5 269.3
19.5 946.7 280.9
21.5 997.4 295.9
23.3 1,042.2 310.8
18.4 1,066.8 326.9

118.9
120.8
126.8
132.0
132.5

60.4
61.8
64.9
66.5
66.9

71.0
73.6
77.8
79.6
79.9

180.7
193.7
207.0
222.4
231.1

98.5
103.2
108.7
119.0
1241

70.6
73.4
75.7
77.4
76.4

18.1
20.3
19.6
19.5
18.1

1,103.6
1,149.5
1,196.8
1,254.1
1 296.5

336.5
346.7
355.4
372.9
387 9

138.1
143.9
151.0
158.0
162 9

70.4
72.9
76.0
78.8
79.3

81.4
84.4
90.2
92.9
96.1

243.8
255.5
267.9
279.2
790 9

126.0
132.8
133.7
142.4
153.1

72.0
73.2
73.9
75.7
77.9

14.0
11.8
10.9
11.1
11.2

1,323.9
1,344.4
1,368.9
1,421.4
1,473.0

399.4
407.3
409.6
415.5
426.8

167.1
165.6
166.7
169.4
173.7

81.6
80.3
81.2
83.7
84.3

91.3
88.9
87.4
91.6
100.0

302.1
318.3
323.7
332.6
341.9

180.2
193.3
183.5
194.8
196.4

123.8 958.7 483.0 158.8
136.3 991.0 494.1 170.3
144.0 1,011.1 500.7 174.5
155.4 1,035.1 513.4 178.9
165.8 1,051.6 515.0 187.8

79.2
82.9
84.7
86.1
87.3

11.5
12.1
12.0
12.0
11.4

1,537.0
1,576.1
1,637.4
1,698.5
1,731.0

435.9
442.1
452.5
461.8
469.2

179.1
180.8
187.8
196.9
202.6

86.6
85.6
88.4
92.7
94.3

109.2
112.6
116.6
122.5
123.8

353.0
366.2
384.7
399.4
408 6

443.1
426.6
456.6
489.7

192.7
170.5
182.3
191.7

171.6
180.0
194.8
216.3

1,060.7
1,048.2
1,062.9
1,088.1

523.9
518.7
520.5
531.2

186.2
184.7
193.7
199.2

86.4
83.1
83.9
84.9

10.5
10.7
11.9
13.0

1,768.8
1,783.8
1,822.3
1,874.7

474.6
478.6
484.2
492.0

204.3
208.2
211.7
218.7

92.2
95.8
95.3
99.0

124.0
120.0
122.7
126.3

424.6
437.6
449.2
463.2

2,539.3
2,678.2
2,784.8
2,895.3
3,012.5
3,074.7
3,202.9
3,242.0

272.3
319.1
347.7
369.6
415.7
404.7
439.2
436.8

123.7
151.6
164.3
173.9
193.6
183.6
197.7
188.3

96.4
109.3
118.7
128.6
141.4
145.9
160.3
167.9

880.7
915.2
942.9
968.7
1,000.9
1,014.6
1,046.8
1,058.9

458.3
467.1
475.1
488.2
496.9
502.4
518.0
515.6

135.7
147.7
154.7
161.7
171.9
174.5
182.8
190.9

73.4
76.9
79.0
79.5
84.6
85.4
87.5
88.6

10.5
11.4
11.1
11.4
12.4
11.9
12.0
12.0

1,386.2
1,443.9
1,494.2
1,557.1
1,595.8
1,655.5
1,716.9
1,746.3

411.0
419.7
431.3
438.1
444.8
457.0
465.6
471.3

166.2
173.3
174.8
182.6
182.8
189.3
198.6
208.5

80.2
86.8
84.5
88.5
86.8
88.6
93.0
98.8

88.2
94.2
103.5
111.2
113.4
117.9
124.2
124.3

327.8
334.8
344.9
359.1
372.0
390.7
403.0
411.8

1990:1
I
I
Il .
l .
IV

3,264.4
3,271.6
3,288.4
3,265.9

454^8
441.8
442.4
433.2

203.0
192.8
193.0
182.1

172.0
171.0
171.0
172.3

1,059.8
1,060.6
1,065.0
1,057.5

519.0
524.1
526.5
525.8

188.5
185.4
186.4
184.5

87.9
86.7
86.5
84.6

10.0
11.0
11.6
9.5

1,749.8
1,769.2
1,781.1
1,775.2

473.3
474.3
475.0
475.9

197.9
205.1
208.0
206.0

877
93.2
94.4
93.8

124.9
124.4
124.0
122.7

418.0
423.2
427.7
429.4

1991:1
I
I
Il
l
IV

3,242.7
3,256.9
3,267.1
3,267.5

420.3
422.0
432.6
431.5

169.4
165.9
173.7
173.0

174.3
180.0
182.7
182.9

1,048.2
1,051.1
1,049.3
1,044.0

518.7
519.0
518.8
518.2

182.9
187.0
185.9
183.1

82.7
83.7
83.4
82.5

10.3
10.6
11.4
10.6

1,774.2
1,783.8
1,785.2
1,792.0

476.3
478.1
479.4
480.6

203.8
211.3
210.6
207.3

92.5
98.9
97.3
94.4

120.2
120.1
119.7
120.2

432.6
435.3
438.8
443.6

1992:1
II
Ill
IV

3,302.3
3,316.8
3,350.9
3,397.2

446.6
447.5
459.0
473.4

180.6
179.5
180.6
188.6

188.2
189.8
197.1
204.2

1,052.0
1,055.0
1,062.9
1,081.8

518.8
515.7
518.2
529.3

188.3
191.1
195.4
200.0

82.7
83.7
84.7
84.4

11.1
12.8
11.7
11.9

1,803.7
1,814.3
1,829.0
1,842.0

481.7
483.2
485.1
486.7

205.9
210.7
213.6
216.6

92.4
95.1
95.3
98.5

120.4
121.9
125.0
123.7

445.3
447.9
450.4
453.2

1993:1
II
Ill
IV....

3,403.8
3,432.7
3,469.6
3,503.9

471.9
484.2
493.1
509.9

185.7
191.3
189.9
199.9

206.5
212.4
219.4
227.0

1,076.0
1,083.1
1,093.0
1,100.1

526.7
528.6
532.6
536.9

194.8
197.8
200.6
203.7

83.9
84.1
86.2
85.3

12.9
12.6
13.2
13.2

1,855.9
1,865.4
1,883.5
1,893.9

488.8
490.7
493.3
495.0

217.9 99.1
215.6 96.2
220.8 100.6
220.8 100.1

124.5
126.1
126.5
128.3

458.0
461.1
465.1
468.6

IV
IV
IV
IV
IV
IV
IV
IV

1

Includes other items not shown separately.
Includes imputed rental value of owner-occupied housing.
Source: Department of Commerce, Bureau of Economic Analysis.
2




287

546 0 159 8

75 0

TABLE B-17.—Gross and net private domestic investment, 1959-93
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Equals: Net private domestic investment
Net fixed investment

Year or quarter

Gross
private
domestic
investment

Less:
Consumption of
fixed
capital

Nonresidential
Total
Total
Total

1959..

Structures

Producers'
durable
equipment

dential

Change in
business
inventories

78.8

44.6

34.2

30.1

12.3

6.6

5.7

17.8

4.2

1960
1961
1962
1963
1964

78.7
77.9
87.9
93.4
101.7

46.3
47.7
49.3
51.3
53.9

32.4
30.3
38.6
42.0
47.8

29.2
27.3
32.5
36.4
42.8

13.8
12.2
15.3
16.4
21.3

7.7
7.6
8.3
8.3
10.3

6.1
4.6
7.0
8.1
11.0

15.4
15.1
17.2
20.0
21.5

3.2
2.9
6.1
5.7
5.0

1965
1966
1967
1968
1969

118.0
130.4
128.0
139.9
155.2

57.3
62.1
67.4
73.9
81.5

60.7
68.3
60.6
66.0
73.7

51.0
54.5
50.1
56.9
64.0

30.3
36.7
33.2
35.0
40.5

14.1
16.0
15.1
15.8
17.9

16.2
20.7
18.1
19.2
22.6

20.7
17.8
16.9
21.9
23.5

9.7
13.8
10.5
9.1
9.7

1970
1971
1972
1973
1974

150.3
175.5
205.6
243.1
245.8

97.6
109.9
120.4
140.2

61.5
78.0
95.7
122.7
105.5

59.2
69.9
85.8
105.0
91.3

38.4
36.8
42.5
59.0
58.9

18.4
18.4
18.7
23.8
24.5

20.0
18.4
23.8
35.2
34.5

20.8
33.1
43.2
46.0
32.3

2.3
8.0
9.9
17.7
14.3

1975
1976
1977
1978
1979

226.0
286.4
358.3
434.0
480.2

165.2
182.8
205.2
234.8
272.4

60.9
103.6
153.1
199.3
207.8

66.5
86.8
128.3
171.3
195.1

41.5
45.6
64.9
94.1
117.3

18.8
19.9
23.4
35.5
49.9

22.7
25.6
41.5
58.6
67.4

25.1
41.2
63.4
77.3
77.8

-5.7
16.7
24.7
27.9
12.8

1980
1981
1982
1983
1984

467.6
558.0
503.4
546.7
718.9

311.9
362.4
399.1
418.4
433.2

155.7
195.6
104.3
128.2
285.6

165.2
170.2
120.3
133.8
214.6

113.8
127.1
99.1
69.1
126.6

59.1
75.5
72.4
46.2
65.1

54.7
51.6
26.7
22.9
61.5

51.4
43.1
21.2
64.6
87.9

-9.5
25.4
-15.9
-5.5
71.1

1985
1986
1987
1988
1989

714.5
717.6
749.3
793.6
832.3

454.5
478.6
502.2
534.0
580.4

260.0
239.1
247.1
259.6
251.9

235.4
230.4
220.9
243.4
218.6

146.1
114.4
103.0
125.8
117.1

75.2
51.8
46.7
47.9
48.6

70.9
62.6
56.3
77.9
68.5

89.3
116.0
117.9
117.6
101.5

24.6
8.6
26.3
16.2
33.3

1990
1991
1992
1993".

808.9
736.9
796.5
892.0

602.7
626.1
657.9
671.2

206.2
110.8
138.6
220.8

199.3
119.5
131.2
204.0

116.1
67.2
60.4

51.8
27.5
13.9

64.3
39.7
46.5

83.2
52.3
70.8

-8.6
7.3

1982:
1983:
1984:
1985:
1986:
1987:
1988:
1989:

IV
IV
IV
IV
IV
IV
IV
IV

464.2
614.8
722.8
737.0
697.1
800.2
814.8
825.2

412.5
439.7
448.0
465.6
488.2
512.1
547.2
600.8

51.7
175.1
274.8
271.4
208.9
288.1
267.6
224.4

98.0
154.9
223.8
238.8
227.8
228.8
250.3
194.2

-46.3
20.2
51.0
32.6
-18.8
59.3
17.3
30.2

1990:1
I
I
Ill
IV

828.9
837.8
812.5
756.4

590.2
597.9
607.8
614.8

238.7
239.9
204.7
141.5

229.1
206.6
196.3
165.4

9.6
33.3
8.4
-23.9

1991:1

729.1
721.5
744.5
752.4

619.9
622.3
626.7
635.4

109.3
99.2
117.9
117.0

129.2
122.3
118.4
108.1

-19.9
-23.0
-.5
8.9

1992:1
II
Ill
IV

750.8
799.7
802.2
833.3

631.7
637.2
714.6
648.0

119.1
162.5
87.6
185.2

124.2
149.6
77.9
173.3

-5.1
12.9
9.7
12.0

1993:1

874.1
874.1
884.0
935.8

663.2
663.3
679.7
678.7

210.8
210.8
204.3
257.1

176.3
197.7
196.6
245.4

34.6
13.1
7.7
11.7

IV....

Source: Department of Commerce, Bureau of Economic Analysis.




288

6.9
16.8

TABLE B-18.—Gross and net private domestic investment in 1987 dollars, 1959-93
[Billions of 1987 dollars; quarterly data at seasonally adjusted annual rates]
Equals.- Net private domestic investment
Net fixed investment

Year or quarter

Gross
private
domestic
investment

Less:
Consumption o f
fixed
capital

Nonresidential
Total
Total
Total

Structures

Producers'
durable
equipment

Residential

Change in
business
inventories

1959

296.4

168.8

127.5

114.0

39.2

25.4

13.8

74.8

13.6

1960
1961
1962
1963
1964

290.8
289.4
321.2
343.3
371.8

173.7
178.6
183.6
189.6
196.4

117.1
110.8
137.6
153.7
175.4

109.0
103.6
122.0
137.7
159.7

44.1
39.9
49.5
52.8
69.7

30.5
30.6
32.9
32.1
39.5

13.7
9.4
16.6
20.7
30.2

64.8
63.7
72.5
84.9
90.0

8.1
7.2
15.6
16.0
15.7

1965
1966
1967
1968
1969

413.0
438.0
418.6
440.1
461.3

205.0
214.9
225.2
235.3
246.7

208.1
223.0
193.4
204.7
214.6

182.9
186.3
165.8
181.1
189.8

99.9
118.1
103.9
105.1
112.2

53.0
58.3
53.0
52.2
56.0

46.9
59.8
50.9
52.9
56.2

83.0
68.2
61.9
76.0
77.6

25.1
36.7
27.6
23.6
24.8

1970
1971
1972
1973
1974

429.7
475.7
532.2
591.7
543.0

258.0
269.1
285.0
296.4
310.3

171.7
206.6
247.2
295.3
232.6

165.8
185.8
224.6
257.6
201.7

98.7
85.0
98.9
134.6
122.3

53.5
49.0
49.2
57.9
53.4

45.2
36.0
49.7
76.7
68.9

67.1
100.8
125.7
123.0
79.4

5.9
20.8
22.5
37.7
30.9

1975
1976
1977
1978
1979

437.6
520.6
600.4
664.6
669.7

322.8
334.6
348.4
364.5
384.5

114.8
186.1
252.1
300.0
285.2

128.7
160.6
217.8
262.8
271.6

72.0
74.5
99.0
134.4
154.1

36.7
36.8
39.8
55.2
70.1

35.3
37.7
59.2
79.2
84.0

56.8
86.1
118.8
128.4
117.5

-13.9
25.5
34.3
37.2
13.6

1980
1981
1982
1983
1984

594.4
631.1
540.5
599.5
757.5

400.7
417.8
429.5
447.4
455.5

193.7
213.2
111.0
152.1
302.0

201.9
188.7
128.5
147.7
234.0

129.5
131.6
101.0
71.6
134.3

73.3
82.0
75.3
50.3
69.3

56.1
49.6
25.7
21.4
65.0

72.5
57.1
27.5
76.0
99.8

-8.3
24.6
-17.5
4.4
67.9

1985
1986
1987
1988
1989

745.9
735.1
749.3
773.4
784.0

471.5
486.7
502.2
518.5
545.5

274.4
248.4
247.1
254.9
238.5

252.3
239.9
220.9
235.0
208.7

154.0
118.3
103.0
122.6
114.8

79.4
54.9
46.7
46.7
45.9

74.6
63.3
56.3
75.9
68.9

98.3
121.6
117.9
112.4
94.0

22.1
8.5
26.3
19.9
29.8

1990
1991
1992
1993".

746.8
675.7
732.9
820.9

554.8
569.2
595.0
598.6

192.0
106.4
137.8
222.3

186.3
114.8
131.3
206.9

111.1
68.2
69.0

47.3
25.9
13.4

63.8
42.3
55.5

75.2
46.6
62.4

5.7
-8.4
6.5
15.4

1982:
1983:
1984:
1985:
1986:

1987: IV
1988: IV
1989: IV

503.5
669.5
756.4
763.1
705.9
793.8
785.0
769.5

439.2
468.5
467.4
480.1
492.5
508.1
524.7
559.6

64.3
201.0
289.0
283.0
213.3
285.7
260.3
209.9

109.2
171.7
241.1
252.8
233.4
225.8
239.3
185.0

-44.9
29.3
47.9
30.2
-20.1
59.9
20.9
24.9

1990:1
II
Ill
IV

766.5
773.9
751.0
695.7

549.7
553.1
556.5
559.9

216.8
220.7
194.5
135.8

212.1
192.6
183.7
156.7

4.7
28.1
10.9
-20.9

1991:1

IV

667.8
659.8
682.8
692.3

563.3
566.5
569.5
577.6

104.5
93.2
113.4
114.6

121.9
115.6
114.3
107.6

-17.4
-22.3
-.9
7.1

1992:1
II
Ill
IV

691.7
737.0
739.6
763.0

574.8
577.6
643.7
584.0

116.9
159.5
95.9
179.0

121.9
146.8
86.3
170.3

-5.0
12.6
9.6
8.7

1993:1
II
Ill

803.0
803.6
813.4
863.6

595.0
592.5
604.4
602.6

208.1
211.1
208.9
261.0

178.8
198.1
202.5
248.3

29.3
13.0
6.5
12.7

IV
IV
IV
IV
IV

II
Ill

IV

Source: Department of Commerce, Bureau of Economic Analysis.




289

TABLE B-19.—Inventories and final sales of domestic business, 1959-93
[Billions of dollars, except as noted; seasonally adjusted]
Inventoriesl
Nonfarm
Quarter
Total 2

Farm
Total 2

Fourth quarter:
1959

Manufacturing

Wholesale
trade

Retail
trade

Other

Final
sales of
domestic
business 3

Ratio of inventories
to final sales of
domestic business

Total

Nonfarm

141.2

31.6

109.6

55.2

21.0

26.2

7.2

36.5

3.87

3.00

1960
1961
1962
1963
1964

145.2
147.0
153.4
158.7
164.2

33.0
33.7
34.8
34.9
33.3

112.2
113.4
118.6
123.8
130.9

56.2
57.2
60.3
62.2
65.9

21.3
21.8
22.4
23.9
25.2

27.5
27.0
28.3
29.6
31.0

7.2
7.4
7.5
8.0
8.8

37.7
39.6
41.9
44.6
47.5

3.85
3.71
3.66
3.56
3.46

2.97
2.86
2.83
2.78
2.76

1965
1966
1967
1968
1969

178.4
194.0
206.0
221.4
242.5

37.4
36.3
36.5
38.7
41.9

141.0
157.8
169.5
182.6
200.6

70.7
80.9
87.5
94.0
103.4

26.9
30.3
32.7
34.6
37.9

33.7
36.2
36.9
40.7
44.5

9.8
10.4
12.4
13.3
14.9

52.5
55.6
59.1
65.0
69.0

3.40
3.49
3.48
3.41
3.51

2.69
2.84
2.87
2.81
2.91

1970
1971
1972
1973
1974

249.4
267.4
296.6
365.1
435.2

40.1
45.0
55.3
78.0
74.3

209.2
222.4
241.3
287.1
360.9

105.8
107.3
113.6
136.1
177.0

41.7
45.2
50.0
59.4
75.6

45.8
52.3
57.7
66.4
74.6

16.0
17.6
19.9
25.2
33.7

72.7
79.2
88.3
97.2
105.2

3.43
3.38
3.36
3.76
4.14

2.88
2.81
2.73
2.95
3.43

1975
1976
1977
1978
1979

440.1
475.3
521.6
605.3
702.6

75.5
72.2
75.2
92.1
97.9

364.5
403.1
446.4
513.2
604.7

177.8
194.9
210.6
238.0
280.6

76.2
86.1
96.2
111.7
141.2

74.7
82.7
93.3
107.5
118.9

35.8
39.4
46.3
55.9
64.1

117.5
129.1
144.3
166.6
185.4

3.74
3.68
3.61
3.63
3.79

3.10
3.12
3.09
3.08
3.26

784.1
836.2
817.0
827.5
898.9

104.9
101.4
103.6
103.2
100.9

679.3
734.7
713.5
724.4
797.9

309.8
331.9
318.5
319.2
349.0

174.2
184.8
174.7
168.9
187.2

125.0
137.0
139.5
153.7
173.5

70.3
81.1
80.7
82.5
88.3

203.5
220.3
230.9
252.2
273.3

3.85
3.80
3.54
3.28
3.29

3.34
3.34
3.09
2.87
2.92

1985
1986
1987
1988
1989

904.3
887.9
950.6
1,025.1
1,081.6

96.6
90.5
90.9
95.4
96.3

807.7
797.3
859.7
929.6
985.3

339.9
328.1
349.3
383.2
409.7

184.9
183.4
196.3
215.3
224.8

188.6
193.4
216.1
229.9
250.2

94.3
92.4
98.0
101.2
100.6

294.1
311.4
329.8
359.2
378.3

3.08
2.85
2.88
2.85
2.86

2.75
2.56
2.61
2.59
2.60

1990
1991
1992
1993 P

1,110.4
1,083.4
1,099.0
1,133.4

94.7
90.7
95.1
91.9

1,015.7
992.7
1,003.9
1,041.5

423.7
407.3
400.9
405.3

236.9
239.7
247.9
255.3

257.2
257.4
269.5
286.9

98.0
88.3
85.6
94.0

398.4
408.9
436.9
459.3

2.79
2.65
2.52
2.47

2.55
2.43
2.30
2.27

1,081.8
1,090.9
1,115.6
1,110.4

96.5
98.2
97.5
94.7

985.4
992.7
1,018.2
1,015.7

411.5
412.9
424.7
423.7

226.3
229.5
236.0
236.9

246.1
250.0
258.4
257.2

101.5
100.3
99.0
98.0

387.9
391.1
395.6
398.4

2.79
2.79
2.82
2.79

2.54
2.54
2.57
2.55

1,096.5
1,089.6
1,085.0
1,083.4

98.1
101.5
96.6
90.7

998.4
988.1
988.4
992.7

419.1
412.1
409.1
407.3

236.9
233.7
235.3
239.7

248.6
249.8
254.3
257.4

93.8
92.4
89.7
88.3

399.2
404.2
406.8
408.9

2.75
2.70
2.67
2.65

2.50
2.44
2.43
2.43

1992:1
II
Ill
IV

1,087.5
1,093.9
1,098.7
1,099.0

94.8
94.3
94.9
95.1

992.7
999.6
1,003.8
1,003.9

404.6
404.6
406.8
400.9

239.5
243.4
244.9
247.9

259.8
264.2
266.4
269.5

87.5
85.7
85.6

417.3
421.5
426.7
436.9

2.61
2.60
2.57
2.52

2.38
2.37
2.35
2.30

1993:1
II
Ill
IV

1,119.5
1,119.6
1,119.2
1,133.4

99.1
95.4
95.1
91.9

1,020.4
1,024.2
1,024.1
1,041.5

402.0
402.4
407.0
405.3

249.6
251.3
242.9
255.3

280.1
281.2
282.7
286.9

88.7
89.3
91.5
94.0

439.0
445.5
450.7
459.3

2.55
2.51
2.48
2.47

2.32
2.30
2.27
2.27

1980
1981
1982
1983
1984

i
1
|

1990:1
Ill
IV
1991.1
II
Ill
IV

1
Inventories at end of quarter. Quarter-to-quarter change calculated from this table is not the current-dollar change in business
inventories (CBI) component of GOP. The former is the difference between two inventory stocks, each valued at their respective end-ofquarter prices. The latter is the change in the physical volume of inventories valued at average prices of the quarter. In addition,
changes calculated from this table are at quarterly rates, whereas CBI is stated at annual rates.
2
Inventories of construction establishments are included in "other" nonfarm inventories.
3
Quarterly totals at monthly rates. Final sales of domestic business equals final sales of domestic product less gross product of
households and institutions and general government and includes a small amount of final sales by farms.

Note.—The industry classification of inventories is on an establishment basis and is based on the 1987 Standard Industrial
Classification (SIC) beginning 1987 and on the 1972 SIC for earlier years shown.
Source: Department of Commerce, Bureau of Economic Analysis.




290

TABLE B-20.—Inventories and final sales of domestic business in 1987 dollars, 1959-93
[Billions of 1987 dollars, except as noted; seasonally adjusted]
Inventories l
Nonfarm
Quarter
Total 2

Farm
Total 2

Fourth quarter:
1959

Manufacturing

Wholesale
trade

Retail
trade

Other

Final
sales of
domestic
business 3

Ratio of inventories
to final sales of
domestic business

Total

Nonfarm

388.6

79.6

. 308.9

152.4

61.2

67.6

27.8

131.5

2.96

2.35

1960
1961
1962
1963
1964

396.7
403.9
419.5
435.6
451.2

80.5
82.1
83.9
85.4
83.4

316.2
321.8
335.7
350.2
367.8

153.9
157.9
166.1
171.6
179.6

62.4
63.7
65.9
69.6
73.4

71.4
70.2
73.8
76.9
80.3

28.5
30.0
29.9
32.0
34.5

134.3
139.9
145.3
153.5
161.1

2.95
2.89
2.89
2.84
2.80

2.35
2.30
2.31
2.28
2.28

1965
1966
1967
1968
1969

476.4
513.1
540.7
564.3
589.2

84.6
83.5
84.5
86.9
86.9

391.7
429.6
456.3
477.5
502.3

190.2
212.1
227.6
237.4
246.7

77.6
86.5
92.0
94.7
100.3

86.8
92.5
92.1
99.3
105.9

37.2
38.4
44.6
46.1
49.4

174.2
177.3
183.8
192.6
195.4

2.73
2.89
2.94
2.93
3.01

2.25
2.42
2.48
2.48
2.57

1970
1971
1972
1973
1974

595.1
615.8
638.4
676.1
707.0

86.3
89.2
90.6
92.9
92.5

508.8
526.7
547.7
583.3
614.5

246.1
243.9
249.6
264.9
283.7

106.9
112.3
116.3
121.1
130.8

105.8
117.8
125.3
134.5
133.6

50.0
52.6
56.5
62.7
66.4

197.6
205.1
220.4
225.9
220.9

3.01
3.00
2.90
2.99
3.20

2.57
2.57
2.49
2.58
2.78

1975
1976
1977
1978
1979

693.1
718.6
752.9
790.1
803.7

92.9
90.8
93.6
93.0
95.7

600.2
627.8
659.2
697.1
708.0

277.2
289.6
297.1
309.2
320.1

127.3
135.3
144.4
155.8
157.3

127.6
134.8
144.5
153.7
153.5

68.0
68.1
73.3
78.3
77.1

229.1
238.3
249.4
264.6
270.2

3.03
3.02
3.02
2.99
2.97

2.62
2.63
2.64
2.63
2.62

1980
1981
1982
1983
1984

795.4
820.0
802.5
806.9
874.8

92.3
98.3
101.4
93.1
94.8

703.1
721.7
701.0
713.8
780.0

319.9
324.0
311.3
311.9
339.4

161.9
164.8
159.9
159.3
174.7

146.7
152.9
151.7
162.8
181.4

74.6
80.0
78.1
79.8
84.5

268.5
266.5
267.6
281.8
294.6

2.96
3.08
3.00
2.86
2.97

2.62
2.71
2.62
2.53
2.65

1985
1986
1987
1988
1989

896.9
905.5
931.8
951.7
981.5

97.2
95.1
88.7
81.7
81.6

799.8
810.4
843.1
870.0
899.9

335.7
333.6
340.2
355.3
373.9

178.7
185.7
192.7
199.1
202.5

194.1
196.7
213.6
219.7
231.0

91.3
94.4
96.6
95.9
92.5

306.3
317.2
325.8
340.3
344.7

2.93
2.85
2.86
2.80
2.85

2.61
2.55
2.59
2.56
2.61

1990
1991
1992
1993 *

987.2

978.8
985.3
1,000.6

84.1
84.3
88.1
82.2

903.1
894.5
897.2
918.4

376.9
370.6
365.9
368.0

208.8
212.3
217.7
220.8

229.4
230.5
236.4
247.6

88.0
81.0
77.1
81.9

347.9
346.5
361.5
372.3

2.84
2.82
2.73
2.69

2.60
2.58
2.48
2.47

1990:1
II
Ill
IV

982.6
989.7
992.4
987.2

82.0
82.9
84.6
84.1

900.7
906.8
907.8
903.1

376.0
377.5
378.8
376.9

203.7
206.0
208.4
208.8

227.4
230.6
231.0
229.4

93.6
92.8
89.5
88.0

349.6
348.6
348.9
347.9

2.81
2.84
2.84
2.84

2.58
2.60
2.60
2.60

1991:1
II
Ill
IV

982.8
977.2
977.0
978.8

84.4
85.3
85.1
84.3

898.4
891.9
891.9
894.5

377.9
374.6
372.4
370.6

209.9
207.3
208.5
212.3

224.8
225.3
228.5
230.5

85.8
84.7
82.5
81.0

344.7
346.6
346.5
346.5

2.85
2.82
2.82
2.82

2.61
2.57
2.57
2.58

1992:1
II
Ill
IV

977.5
980.7
983.1
985.3

85.5
86.9
87.8
88.1

892.1
893.8
895.3
897.2

368.7
367.2
369.0
365.9

211.3
214.2
215.1
217.7

230.8
232.9
234.0
236.4

81.3
79.5
77.2
77.1

351.0
352.3
355.7
361.5

2.79
2.78
2.76
2.73

2.54
2.54
2.52
2.48

1993:1
II

992.6
995.9
997.5
1,000.6

88.1
87.1
83.9
82.2

904.5
908.8
913.6
918.4

365.7
366.9
367.7
368.0

217.9
219.6
221.2
220.8

242.4
243.2
244.4
247.6

78.5
79.1
80.3
81.9

360.4
363.4
366.8
372.3

2.75
2.74
2.72
2.69

2.51
2.50
2.49
2.47

1
Inventories at end of quarter. Quarter-to-quarter changes calculated from this table are at quarterly rates, whereas the constantdollar change in business inventories component of GDP is stated at annual rates.
2
Inventories of construction establishments are included in "other" nonfarm inventories.
3
Quarterly totals at monthly rates. Final sales of domestic business equals final sales of domestic product less gross product of
households and institutions and general government and includes a small amount of final sales by farms.

Note.—The industry classification of inventories is on an establishment basis and is based on the 1987 Standard Industrial
Classification (SIC) beginning 1987 and on the 1972 SIC for earlier years shown.
Source: Department of Commerce, Bureau of Economic Analysis.




291

TABLE B-21.—Foreign transactions in the national income and product accounts, 1959-93
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Receipts from rest of the world
Year or
quarter

Total»
Total

1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975 ...
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993"
1982: IV....
1983: IV....
1984: IV....
1985: IV....
1986: IV....
1987: IV....
1988: IV....
1989: IV....

Payments to rest of the world

25.0
30.2
31.4
33.5
36.1
41.0
43.5
47.2
50.2
55.6
612
70.8
74.2
83.4
115.6
152 6
164.4
181.6
196.5
233.3
299.7

20.6
25.3
26.0
27.4
29.4
33.6
35.4
38.9
41.4
45.3
49 3

Merchandise 2
16.5
20.5
20.9
21.7
23.3
26.7
27.8
30.7
32.2
35.3
38 3

Receipts
of factor
Serv- income3
ices2
4.2
4.8
5.1
5.7
6.1
6.9
7.6
8.2
9.2
10.0
110
12.4
13.8
14.4
17.8
23 3
26.7
31.1
35.1
40.7
44.7

4.3
5.0
5.4
6.1
6.6
7.4

Payments
of
Serv- factor
inices 2 come4

Transfer payments (net)

Imports of goods and
services

Exports of goods and
services

Total
Total
25.0
30.2
31.4
33.5
36.1
41.0
43.5
47.2
50.2
55.6
612

8.1
8.3
8.9
10.3
119
13.0
14.1
16.4
23.8
30 3
28.2
32.8
37.7
47.1
69.7

70.8
74.2
83.4
115.6
152 6
164.4
181.6
196.5
233.3
299.7

53.2
63.7
67.4
69.2
76.6
79.7
93.0
106.2
118.4
136.4
158.4
175.1
191.7
200 6
67.4
67.9
77.3
82.1
98.1
109.2
121.6
143.1

80.6
94.1
97.3
95.8
108.1
97.3
96.0
105.1
128.7
157.5
168.6
146.1
129.2

360.9
398.2
379.9
372.5
410.5
399.3
415.2
469.0
572.9
665.5
725.7
747.6
769.7

357.5
388.3
415.2
402.9
426.7
506.8
606.9
683.1

57.0 44.5
59.3 45.6
66.2 51.8
91.8 73.9
124 3 1010
136.3 109.6
148.9 117.8
158.8 123.7
186.1 145.4
228.9 184.2
279.2 226.0
303.0 239.3
282.6 215.2
276.7 207.5
302.4 225.8
302.1 222.4
319.2 226.2
364.0 257.7
444.2 325.8
508.0 371.6
557.1 398.7
601.5 426.4
640.5 448.7
6601 459 5
265.6 198.2
286.2 218.2
308.7 231.4
304.7 222.6
333.9 235.8
392.4 283.3
467.0 345.4
523.8 380.7

91.9
102.1
106.6
98.1
92.8
114.4
139.9
159.3

1990: I
II
III....
IV ..

705.9
718.9
720.5
757.4

542.0
553.5
555.3
577.6

391.7
399.0
395.1
409.0

150.2
154.6
160.1
168.6

1991:1
II ...
Ill .
IV...

738.9
747.9
742.1
761.4

576.5
600.7
603.0
625.7

414.3
426.7
424.6
440.0

1992: I
II ..
Ill .
IV...

768.0
765.3
768.4
777.0

633.7
632.4
641.1
654.7

442.6
442.8
447.5
462.0

chandise2

22.3
22.8
22.7
25.0
26.1
28.1

15.3
15.2
15.1
16.9
17.7
19.4

7.0
7.6
7.6
8.1
8.4
8.7

31.5
37.1
39.9
46.6
50 5

22.2
26.3
27.8
33.9
36 8

9.3
10.7
12.2
12.6
13 7

55.8 40.9
62.3 46.6
74.2 56.9
91.2 71.8
127 5 104 5

14.9
15.8
17.3
19.3
22 9

122.7
151.1
182.4
212.3
252.7

23.7
26.5
29.8
34.8
39.9

1.5
1.8
1.8
1.8
2.1
2.4
2.7
3.1
3.4
4.1
58
6.6
6.4
7.7
11.1
14 6
14.9
15.7
17.2
25.3
37.5

Total

From
From
From
persons govern- business
ment
(net)
(net)

2.4
2.4
2.7
2.8
2.8
3.0
3.0
3.2
3.4
3.2
32

0.4

3.6
4.1
4.3
4.6
54
5.4
6.0
6.0
6.4
7.5

Net
foreign
investment

0.1
.1
.1
.1
.1
.2

.8
.8
1.0
1.0
11

1.8
1.9
2.1
2.1
2.1
2.1
2.1
2.2
2.1
1.9
18

.2
.2
.2
.3
3

-1.2
3.2
4.3
3.9
5.0
7.5
6.2
3.9
3.5
1.7
18

1.2
1.3
1.3
1.4
12

2.0
2.4
2.5
2.5
32

1.2
1.2
1.2
1.3
1.4

3.5
3.7
3.4
3.8
4.1

.4
.4
.5
.7
10
.7
1.1
1.4
1.4
2.0

4.9
1.3
-2.9
8.7
51
21.4
8.8
-9.2
-10.7
2.0

5.0
1.6
5.0
1.8
6.4
2.1
7.3
1.8
9.4
2.3
11.4
2.7
12.3
2.5
10.4
3.0
10.4
2.7
11.3
8.9
13.2
10.1
10.5 -27.9
16.3
10.4
14.2
11.0
8.2
1.9
11.0
2.0
13.9
2.5
13.5
2.5
12.8
2.8
14.6
3.1
15.1
2.7
15.1
9.8

2.4
3.2
3.6
3.8
3.9
3.2
3.5
3.2
4.8
5.4
5.5
5.6
6.0
61
3.7
4.8
4.0
3.4
4.0
3.8
5.9
5.4

11.5
9.5
-2.5
-35.0
-94.0

9.9
10.1
10.3
10.2

11.6
15.3
13.4
12.4

5.0
5.4
5.8
5.6

-80.3
-73.8
-92.1
-67.7

10.4 -76.9
10.4 -32.0
10.3 - 5 . 1
10.8
2.2

5.4
5.8
5.4
5.9

51.4
17.2
-22.8
-20.2

.5
.5
.5
.6
.7

357.5
388.3
415.2
402.9
426.7
506.8
606.9
683.1

293.9
317.7
303.2
328.1
405.1
417.6
451.7
507.1
552.2
587.7
628.5
621.1
670.1
725 8
295.1
358.0
415.7
440.2
467.1
535.6
573.1
597.7

99.0
124.6
152.6
177.4
212.8
248.6
267.7
250.6
272.7
336.3
343.3
370.0
414.8
452.1
485.1
509.0
500.7
544.5
593 0
241.6
300.0
344.1
363.0
382.4
437.6
470.1
492.2

45.3
49.9
52.6
55.4
68.8
74.3
81.7
92.3
100.1
102.6
119.5
120.4
125.6
132 8
53.4
58.0
71.6
77.2
84.7
98.0
103.0
105.6

9.0
46.5
10.0
60.9
12.1
67.1
12.9
66.5
15.6
83.8
17.4
82.4
18.3
86.9
16.6
100.5
17.8
120.8
25.6
141.5
28.8
146.9
131.9 -11.9
32.7
121.9
31.4
64.4
13.8
71.0
17.8
85.5
20.4
82.4
19.4
19.6
88.9
21.4
106.9
23.8
130.2
30.3
139.1

164.0
165.4
165.2
179.7

705.9
718.9
720.5
757.4

615.9
614.8
634.0
649.2

501.6
498.1
512.3
523.9

114.3
116.7
121.7
125.4

143.8
147.0
149.0
147.7

162.3
174.0
178.3
185.8

162.4
147.2
139.1
135.7

738.9
747.9
742.1
761.4

610.6
612.2
622.8
638.8

489.8
492.3
504.3
516.3

120.8
119.9
118.5
122.5

138.0 -61.1
134.3 -15.8
10.6
131.5
18.9
123.9

191.0
189.6
193.6
192.8

134.4
132.9
127.3
122.3

768.0
765.3
768.4
777.0

640.7
666.3
679.9
693.5

515.4
540.6
557.3
564.7

125.3
125.7
122.6
128.7

115.6
127.9
119.5
124.8

29.6
31.6
28.5
41.2

11.1
10.5
9.7
10.5

12.6
15.0
12.8
24.6

5.9
6.1
5.9
6.1

-17.7
-60.6
-59.4
-82.4

774.1 651.3 453.2 198.0
1993: I
II .. 791.8 660.0 458.6 201.3
Ill . 788.3 653.2 452.2 200.9
IV.
675.8 473.7 202.1

122.8
131.9
135.1

774.1 699.6 569.6 130.0 122.4
791.8 725.0 592.6 132.4 132.3
788.3 725.1 591.9 133.3 128.7
753.5 618.1 135.3

29.7
29.9
30.9
35.1

11.0
11.0
10.8
11.4

13.1
12.9
13.7
17.2

5.6
6.0
6.3
6.5

-77.6
-95.4
-96.4

360.9
398.2
379.9
372.5
410.5
399.3
415.2
469.0
572.9
665.5
725.7
747.6
769.7

1
2

26.5
30.9
29.6
28.2

1181
-141.7
-155.1
-118.0
-89.3
-78.5
6.4
-55.1
-15.8
-58.5
-106.3
-139.1
-149.0
-157.1
-120.1
-84.0

Includes capital grants received by the United States (net), not shown separately. See Table B-29 for data.
Exports and imports of certain goods, primarily military equipment purchased and sold by the Federal Government, are included in
services.
3
Consists largely of receipts by U.S. residents of interest and dividends and reinvested earnings of foreign affiliates of U.S.
corporations.
4
Consists largely of payments to foreign residents of interest and dividends and reinvested earnings of U.S. affiliates of foreign
corporations.
Source: Department of Commerce, Bureau of Economic Analysis.




292

TABLE B-22.—Experts and imports of goods and services and receipts and payments oj factor income in
1987 dollars. 1959-93
[Billions of 19S7 dollars; quarterly data at seasonally adjusted annual rates]

Exports of goods and services

Imports of goods and services
Do

Merchandise
Year or quarter

Total
Total

Durable
goods

i

Services 1

Nondurable
goods

«eceipts
of
factor
income 2

Merchandise
Total
Total

Durable
goods

i

Nondura ble
goods

Services 1

Payments
of
factor
income 3

1959

73.8

58.0

31.5

26.5

15.8

17.0

95.6

60.2

26.0

34.2

35.4

6.2

1960
1961
1962
1963
1964

88.4
89.9
95.0
101.8
115.4

71.2
71.5
74.8
80.3
91.4

39.2
39.4
41.2
43.6
50.2

32.0
32.1
33.5
36.7
41.2

17.2
18.4
20.3
21.5
24.0

19.1
20.6
22.5
24.4
26.6

96.1
95.3
105.5
107.7
112.9

59.1
59.2
68.0
70.9
75.6

24.7
23.7
28.0
29.6
32.8

34.4
35.5
40.0
41.2
42.8

37.0
36.1
37.5
36.8
37.3

7.2
7.2
7.3
8.2
9.1

1965
1966
1967
1968
1969

118.1
125.7
130.0
140.2
147.8

92.1
98.4
100.1
108.8
114.4

52.2
56.1
63.8
70.0
75.2

39.9
42.3
36.3
38.7
39.2

25.9
27.3
29.9
31.5
33.3

28.3
28.0
29.2
32.3
35.7

124.5
143.7
153.7
177.7
189.2

86.5
100.2
105.2
128.1
137.0

40.5
50.6
53.1
68.7
74.1

46.0
49.6
52.1
59.4
62.8

37.9
43.5
48.6
49.6
52.3

9.9
11.0
11.8
13.5
17.8

1970
1971
1972
1973
1974

161.3
161.9
173.7
210.3
234.4

125.2
124.1
136.5
166.9
183.4

80.4
79.3
87.1
108.0
123.5

44.7
44.9
49.5
58.9
59.9

36.1
37.8
37.2
43.4
51.0

36.8
37.9
42.2
57.5
67.5

196.4
207.8
230.2
244.4
238.4

142.1
156.1
177.5
194.7
189.3

75.4
84.4
95.7
100.9
101.3

66.7
71.7
81.7
93.9
87.9

54.4
51.7
52.8
49.7
49.2

19.2
17.9
20.5
27.6
33.2

1975
1976
1977
1978
1979

232.9
243.4
246.9
270.2
293.5

178.5
183.9
183.9
203.0
225.7

121.3
121.8
119.5
132.1
148.1

57.2
62.1
64.4
70.9
77.6

54.4
59.5
63.0
67.2
67.8

57.4
63.0
67.9
78.7
107.1

209.8
249.7
274.7
300.1
304.1

163.3
200.4
223.2
245.2
248.7

82.1
100.9
112.9
130.0
132.1

81.2
99.5
110.3
115.3
116.7

46.5
49.3
51.5
54.8
55.3

31.6
31.5
32.2
43.2
58.6

1980
1981
1982
1983
1984

320.5
326.1
296.7
285.9
305.7

248.2
244.0
217.7
208.3
221.3

161.0
154.2
130.5
124.6
133.8

87.3
89.7
87.2
83.8
87.5

72.3
82.2
79.0
77.6
84.4

113.7
120.7
117.9
111.0
119.4

289.9
304.1
304.1
342.1
427.7

235.6
246.1
243.1
276.5
346.1

133.6
143.4
143.0
167.6
219.9

102.0
102.7
100.1
108.9
126.2

54.2
58.0
61.1
65.6
81.6

66.6
79.4
82.1
78.0
93.5

1985
1986
1987
1988
1989

309.2
329.6
364.0
421.6
471.8

224.8
234.3
257.7
307.4
343.8

139.3
144.8
163.0
202.8
230.9

85.6
89.6
94.7
104.6
112.9

84.4
95.3
106.2
114.2
128.0

103.4
99.2
105.1
123.8
144.7

454.6
484.7
507.1
525.7
545.4

366.5
398.0
414.8
'431.3
450.4

237.2
254.6
264.2
274.7
287.1

129.3
143.4
150.6
156.7
163.3

88.1
86.7
92.3
94.3
95.0

88.2
90.2
100.5
116.1
130.1

1990
1991
1992
1993 "

510.5
543.4
578.0
596.4

368.9
396.7
422.7
438.2

249.4
269.2
288.0
304.9

119.5
127.4
134.7
133.3

141.6
146.7
155.4
158.2

148.0
123.1
105.5

565.1
562.5
611.6
675.7

461.4
463.9
511.9
572.3

292.5
297.2
332.5
379.9

168.9
166.7
179.4
192.5

103.7
98.5
99.7
103.3

128.8
110.0
97.7

1982: IV
1983.1V
1984: IV
1985: IV
1986: IV
1987: IV
1988: IV
1989: IV

280.4
291.5
312.8
312.0
342.9
386.1
438.2
487.7

202.8
215.5
229.0
226.4
243.5
278.0
322.0
354.8

119.0
131.0
138.5
139.6
150.0
180.1
214.7
237.8

83.7
84.5
90.5
86.8
93.5
97.8
107.2
116.9

77.6
75.9
83.8
85.5
99.4
108.1
116.2
132.9

109.7
116.5
116.1
102.9
94.8
112.9
132.3
144.3

299.4
375.1
444.2
467.4
498.9
522.1
540.9
555.0

236.3
306.6
357.9
380.0
409.1
427.4
444.8
458.5

134.6
191.1
229.3
243.5
259.8
273.8
284.0
290.4

101.7
115.5
128.6
136.5
149.3
153.7
160.8
168.1

63.1
68.6
86.3
87.4
89.8
94.6
96.1
96.5

77.6
82.0
93.9
86.8
91.2
105.4
123.0
125.9

1990:1
II
Ill
IV

501.8
511.1
508.6
520.4

364.3
370.4
366.4
374.6

245.9
252.3
248.6
250.9

118.4
118.1
117.8
123.8

137.5
140.7
142.2
145.8

146.4
146.0
144.4
155.4

562.6
570.0
570.7
557.2

459.6
466.5
466.4
453.1

285.7
293.5
296.2
294.4

173.8
173.0
170.2
158.8

103.0
103.5
104.3
104.1

128.2
129.8
130.0
127.1

1991:1
II
Ill
IV

519.4
542.9
546.9
564.2

381.6
396.1
398.2
410.7

254.5
271.7
271.7
279.0

127.2
124.4
126.5
131.7

137.8
146.8
148.7
153.5

138.5
124.4
116.7
112.9

541.0
556.2
571.9
580.7

442.1
457.2
474.6
481.7

284.2
288.9
304.7
311.2

158.0
168.3
169.9
170.5

98.9
99.1
97.3
98.9

117.0
112.5
109.0
101.6

1992:1
II
Ill
IV

571.0
570.2
579.3
591.6

414.4
415.9
423.0
437.3

280.9
283.6
287.4
300.0

133.5
132.4
135.6
137.3

156.6
154.2
156.3
154.3

110.7
108.7
103.7
98.9

586.2
608.2
621.8
630.3

486.8
509.0
521.6
530.3

315.1
328.5
338.4
348.0

171.7
180.4
183.2
182.4

99.3
99.2
100.1
100.0

93.6
103.0
95.5
98.8

1993:1
II
Ill
IV

588.0
593.2
591.9
612.5

430.2
434.5
434.1
454.1

296.5
302.4
302.2
318.4

133.7
132.1
131.9
135.6

157.8
158.6
157.8
158.5

98.3
105.0
107.1

647.9
668.4
678.2
708.1

545.9
565.7
574.9
602.8

360.5
372.1
381.0
405.9

185.5
193.6
193.9
196.9

102.0
102.7
103.3
105.3

95.8
103.0
99.6

P.

1

Exports and imports of certain goods, primarily military equipment purchased and sold by the Federal Government, are included in
services.
2
Consists largely of receipts by U.S. residents of interest and dividends and reinvested earnings of foreign affiliates of U.S.
corporations.
3
Consists largely of payments to foreign residents of interest and dividends and reinvested earnings of U.S. affiliates of foreign
corporations.
Source: Department of Commerce, Bureau of Economic Analysis.




293

TABLE B-23.—Relation of gross domestic product, gross national product, net national product, and
nationaI income, 1959-93
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Less:

Year or
quarter

Gross
domestic
product

PIUS:
Less:
Receipts Payments
of factor of factor
income income to
from rest rest of
the
of the
world2
world '

Equals:
Gross
national
product

Less:
Consumption of
fixed
capital

Equals:
Net
national
product

Indirect
business
tax and
nontax
liability

Business
transfer
payments

Statistical
discrepancy

PIUS:
Subsidies
less
current
surplus
of
government
enterprises

Equals:
National
income

1959

494.2

4.3

1.5

497 0

44 6

452.5

419

1.4

-1.8

-0.9

410.1

1960
1961
1962
1963
1964

513.3
531.8
571.6
603.1
648 0

5.0
5.4
6.1
6.6
74

1.8
1.8
1.8
2.1
24

516.6
535.4
575.8
607.7
653 0

46.3
47.7
49.3
51.3
53 9

470.2
487.7
526.5
556.4
599 2

45.5
48.1
51.7
54.7
58 8

1.4
1.5
1.6
1.8
20

-3.1
-2.2
-1.0
-2.0
7

-.8
.2
.3
-.3
1

425.7
440.5
474.5
501.5
5391

1965
1966
1567
1968
1969 .

702.7
769.8
814.3
889.3
959 5

8.1
8.3
8.9
10.3
119

2.7
3.1
3.4
4.1
58

708.1
774.9
819.8
895.5
965 6

57.3
62.1
67.4
73.9
815

650.7
712.8
752.4
821.5
884 2

62.7
65.4
70.4
79.0
86 6

2.2
2.3
2.5
2.8
31

-.7
2.8
.8
-.1
26

.3
1.4
1.2
1.2
15

586.9
643.7
679.9
741.0
798.6

1970
1971
1972
1973
1974

1,010.7
1,097.2
1,207.0
1,349.6
1,458.6

13.0
14.1
16.4
23.8
30.3

6.6
6.4
7.7
11.1
14.6

1,017.1
1,104.9
1,215.7
1,362.3
1,474.3

88.8
97.6
109.9
120.4
140.2

928.3
1,007.3
1,105.7
1,241.9
1,334.1

94.3
103.6
111.4
121.0
129.3

3.2
3.4
3.9
4.5
5.0

.0
3.1
1.1
-.5
1.4

2.6
2.4
3.4
2.6
.4

833,5
899.5
992.9
1,119.5
1,198.8

1975
1976
1977
1978
1979

1,585.9
1,768.4
1,974.1
2,232.7
2 488 6

28.2
32.8
37.7
47.1
69 7

14.9
15.7
17.2
25.3
37 5

1,599.1
1,785.5
1,994.6
2,254.5
2 520 8

165.2
182.8
205.2
234.8
272 4

1,433.9
1,602.7
1,789.4
2,019.8
2 248 4

140.0
151.6
165.5
177.8
188 7

5.2
6.5
7.3
8.2
99

6.0
10.4
10.9
7.6
13 8

2.6
1.4
3.3
3.6
29

1,285.3
1,435.5
1,609.1
1,829.8
2,038 9

1980
1981
1982
1983
1984

2,708.0
3,030.6
3,149.6
3,405.0
3,777.2

80.6
94.1
97.3
95.8
108.1

46.5
60.9
67.1
66.5
83.8

2,742.1
3,063.8
3,179.8
3,434.4
3,801.5

311.9
362.4
399.1
418.4
433.2

2,430.2
2,701.4
2,780.8
3,016.0
3,368.3

212.0
249.3
256.4
280.1
309.5

11.2
13.4
15.4
16.6
19.0

13.6
10.9
-7.4
10.2
-9.0

4.8
4.7
6.2
11.7
9.5

2,198.2
2,432.5
2,522.5
2,720.8
3,058.3

1985
1986
1987
1988
1989

4,038.7
4,268.6
4,539.9
4,900.4
5 250 8

97.3
96.0
105.1
128.7
157 5

82.4
86.9
100.5
120.8
141 5

4,053.6
4,277.7
4,544.5
4,908.2
5 266 8

454.5
478.6
502.2
534.0
580 4

3,599.1
3,799.2
4,042.4
4,374.2
4 686 4

329.9
345.5
365.0
385.3
414 7

21.0
24.2
24.0
25.6
26 6

-13.9
1.2
-24.8
-28.4
11

6.4
9.7
14.1
10.9
54

3,268.4
3,437.9
3,692.3
4,002.6
4 249 5

1990
1991
1992 p
1993

5,546.1
5,722.9
6,038.5
6 374 0

168.6
146.1
129.2

146.9
131.9
121.9

5,567.8
5,737.1
6,045.8

602.7
626.1
657.9
6712

4,965.1
5,111.0
5,387.9

444.0
476.6
502.8
530 5

26.8
26.3
27.6
28 0

7.8
9.6
23.6

4.5

7.7

4,491.0
4,598.3
4,836.6

1982:
1983:
1984:
1985:
1986:
1987:
1988:
1989:

IV
IV
IV
IV
IV
IV
IV
IV

3,195.1
3,547.3
3,869.1
4,140.5
4,336.6
4,683.0
5,044.6
5,344.8

91.9
102.1
106.6
98.1
92.8
114.4
139.9
159.3

64.4
71.0
85.5
82.4
88.9
106.9
130 2
139.1

3,222.6
3,578.4
3,890.2
4,156.2
4,340.5
4,690.5
5,054 3
5,365.0

412.5
439.7
448.0
465.6
488.2
512.1
547 2
600.8

2,810.1
3,138.7
3,442.2
3,690.7
3,852.3
4,178.5
4,507.2
4,764.2

262.3
291.7
317.7
335.1
351.6
372.3
394.2
424.4

16.0
18.1
20.2
22.2
24.9
24.2
27.2
26.2

-10.1
13.8
-20.5
-5.9
-2.0
-24.9
-25.4
12.8

9.6
19.2
9.7
2.6
8.2
22.0
16.5

4.4

2,551.5
2,834.3
3,134.4
3,341.9
3,486.0
3,828.8
4,127.6
4,305.2

1990:1
II
Ill
IV

5,461.9
5,540.9
5,583.8
5,597.9

164.0
165.4
165.2
179.7

143.8
147.0
149.0
147.7

5,482.1
5,559.3
5,599.9
5,630.0

590.2
597.9
607.8
614.8

4,891.9
4,961.4
4,992.2
5,015.1

436.2
437.2
448.0
454.8

26.3
27.0
27.1
26.7

13.1
-1.8
14.9
4.9

9.9
3.0
-5.6
10.4

4,426.2
4,502.0
4,496.6
4,539.2

1991:1
II
Ill
IV

5,631.7
5,697.7
5,758.6
5,803.7

162.4
147.2
139.1
135.7

138.0
134.3
131.5
123.9

5,656.1
5,710.6
5,766.2
5,815.5

619.9
622.3
626.7
635.4

5,036.2
5,088.3
5,139.6
5,180.0

465.6
470.5
481.3
488.9

26.1
26.3
26.0
26.6

.2
4.5
27.3
6.2

1.8
.8
-8.0
4.3

4,546.0
4,587.8
4,596.9
4,662.6

1992:1
II
Ill
IV

5,908.7
5,991.4
6,059.5
6,194.4

134.4
132.9
127.3
122.3

115.6
127.9
119.5
124.8

5,927.6
5,996.3
6,067.3
6,191.9

631.7
637.2
714.6
648.0

5,295.9
5,359.1
5,352.8
5,543.9

493.4
497.3
504.8
515.7

27.0
27.6
27.8
28.1

23.1
23.6
15.7
32.1

3.0
3.9
-3.7
7.7

4,755.4
4,814.6
4,800.8
4,975.8

1993:1
II
Ill
IV..

6,261.6
6,327.6
6,395.9
6,510.8

122.8
131.9
135.1

122.4
132.3
128.7

6,262.1
6,327.1
6,402.3

663.2
663.3
679.7
678.7

5,598.8
5,663.9
5,722.6

515.6
526.2
532.4
547.9

27.0
27.8
28.4
28.8

34.4
12.0
13.3

17.1
6.1
-5.3
10.7

5,038.9
5,104.0
5,143.2

72

1
Consists largely of receipts by U.S. residents of interest and dividends and reinvested earnings of foreign affiliates of U.S.
corporations.
2
Consists largely of payments to foreign residents of interest and dividends and reinvested earnings of U.S. affiliates of foreign
corporations.
Source: Department of Commerce, Bureau of Economic Analysis.




294

TABLE B-24.—Relation of national income and personal income, 1959-93
[Billions of dollars; quarterly data at seasonally adjusted annual rates]

National
income

Year or quarter

Net
interest

Equals:

>IUS:

Less:
Corporate
profits
with
inventory
valuation
and
capital
consumption
adjustments

Wage
Contribu- accruals
tions for
less
social
disburseinsurance
ments

Personal
interest
income

Personal
dividend
income

Government
transfer
payments
to
persons

Business
transfer
payments
to
persons

Personal
income

1959

410.1

52.3

10.2

18.8

0.0

22.7

12.7

25.7

1.3

391.2

1960
1961
1962
1963
1964

425.7
440.5
474.5
501.5
539.1

50.7
51.6
59.6
65.1
72.1

11.2
13.1
14.6
16.1
18.2

21.9
22.9
25.4
28.5
30.1

.0
.0
.0
.0
.0

25.0
26.9
29.3
32.4
36.1

13.4
14.0
15.0
16.1
18.0

27.5
31.5
32.6
34.5
36.0

1.3
1.4
1.5
1.7
1.8

409.2
426.5
453.4
476.4
510.7

586.9
643.7
679.9
741.0
798.6

82.9
88.6
86.0
92.6
89.6

21.1
24.3
28.1
30.4
33.6

31.6
40.6
45.5
50.4
57.9

.0
.0
.0
.0
.0

40.3
44.9
49.5
54.6
60.8

20.2
20.9
22.1
24.5
25.1

39.1
43.6
52.3
60.6
67.5

2.0
2.1
2.3
2.5
2.8

552.9
601.7
646.5
709.9
773.7

1970
1971
1972
1973
1974

833.5
899.5
992.9
1,119.5
1,198.8

77.5
90.3
103.2
116.4
104.5

40.0
45.4
49.3
56.5
71.8

62.2
68.9
79.0
97.6
110.5

.0
.6
.0
-.1
-.5

69.2
75.7
81.8
94.1
112.4

23.5
23.5
25.5
27.7
29.6

81.8
97.0
108.4
124.1
147.4

2.8
3.0
3.4
3.8
4.0

831.0
893.5
980.5
1,098.7
1,205.7

1975
1976
1977
1978
1979

1,285.3
1,435.5
1,609.1
1,829.8
2,038.9

121.9
147.1
175.7
199.7
202.5

80.0
85.1
100.7
120.5
149.9

118.5
134.5
149.8
171.8
197.8

.1
.1
.1
.3
-.2

123.0
134.6
155.7
184.5
223.2

29.2
34.7
39.4
44.2
50.4

185.7
202.8
217.5
234.8
262.8

4.5
5.5
5.9
6.8
7.9

1,307.3
1,446.3
1,601.3
1,807.9
2,033.1

1980
1981
1982
1983
1984

2,198.2
2,432.5
2,522.5
2,720.8
3,058.3

177.7
182.0
151.5
212.7
264.2

191.2
233.4
262.4
270.0
307.9

216.6
251.3
269.6
290.2
325.0

.0
,1
.0

57.1
66.9
67.1
77.8
78.8

312.6
355.7
396.3
426.1
437.8

8.8

.2

274.0
336.1
376.8
397.5
461.9

10.2
11.8
12.8
15.1

2,265.4
2,534.7
2,690.9
2,862.5
3,154.6

1985
1986
1987
1988
1989

3,268.4
3,437.9
3,692.3
4,002.6
4,249.5

280.8
271.6
319.8
365.0
362.8

326.2
350.2
360.4
387.7
452.7

353.8
379.8
400.7
442.3
473.2

-.2
.0
.0
.0
.0

498.1
531.7
548.1
583.2
668.2

87.9
104.7
100.4
108.4
126.5

468.1
497.1
521.3
555.9
603.8

17.8
20.7
20.8
20.8
21.1

3,379.8
3,590.4
3,802.0
4,075.9
4,380.3

1990
1991
1992
1993"

4,491.0
4,598.3
4,836.6

380.6
369.5
407.2

463.7
462.8
442.0

503.1
528.4
555.6
585.3

-20.0
20.0

.1
-.1

698.2
715.6
694.3
695.8

144.4
127.9
140.4
158.3

666.3
749.2
836.8
889.7

21.3
20.7
21.6
21.9

4,673.8
4,850.9
5,144.9
5,387.6

IV
IV
IV
IV
IV
IV
IV
IV

2,551.5
2,834.3
3,134.4
3,341.9
3,486.0
3,828.8
4,127.6
4,305.2

150.3
229.1
261.3
284.9
264.6
343.3
378.3
354.5

256.8
281.8
321.1
331.9
349.7
368.6
408.1
459.8

272.8
298.3
332.2
362.3
388.7
409.6
453.5
480.4

.0
.0
.6
.0
.0
-.2
.0
.0

373.6
418.7
485.4
507.5
532.6
562.3
608.9
681.2

69.4
80.6
79.3
92.7
105.6
100.1
113.8
132.9

419.9
428.0
442.3
474.8
505.8
528.1
563.5
624.0

12.3
13.2
16.2
18.8
20.9
20.4
21.3
20.8

2,746.8
2,965.3
3,242.5
3,456.7
3,647.8
3,918.5
4,195.2
4,469.4

1990 1

4,426.2
4,502.0
4,496.6
4,539.2

382.6
409.3
367.5
362.8

460.5
459.5
460.6
474.4

495.9
500.7
506.4
509.5

.0
.0
.0
.2

686.9
692.8
702.8
710.3

141.2
145.6
146.6
144.4

649.0
656.1
669.2
690.9

21.3
21.5
21.3
21.1

4,585.6
4,648.6
4,701.9
4,759.1

4,546.0
4,587.8
4,596.9
4,662.6

369.3
370.8
359.0
378.8

468.8
466.3
464.2
451.9

520.7
525.7
531.5
535.7

.2
-.4
.0
.0

715.4
720.0
717.3
709.6

136.6
126.7
123.9
124.3

724.2
740.9
754.8
776.8

20.8
20.5
20.6
20.8

4,783.9
4,833.4
4,858.8
4,927.5

4,755.4
4,814.6
4,800.8
4,975.8

409.9
411.7
367.5
439.5

439.5
440.8
440.1
447.7

548.5
552.7
556.6
564.6

.0
.0
.0

694.4
696.0
692.2
694.5

128.2
136.0
144.9
152.3

816.6
830.9
844.3
855.4

21.1
21.5
21.8
22.0

5,017.8
5,093.8
5,139.8
5,328.3

5,038.9
5,104.0
5,143.2

432.1
458.1
468.5

450.1
443.2
444.6

568.9
585.9
590.5
596.0

80.0

695.4
693.1
695.7
699.2

157.0
157.8
159.0
159.4

873.0
883.7
896.4
905.6

21.4
21.8
22.1
22.3

5,254.7
5,373.2
5,412.7
5,509.8

1965
1966
1967
1968
1969

1982
1983
1984
1985
1986
1987
1988
1989

!

II
III
I
V
1991 1

II
III
I
V
1992 1

II
III
I
V
1993 1

II

III
IV

P

Source: Department of Commerce, Bureau of Economic Analysis.




295

- 4

-80.0

.0
.0
.0

TABLE B-25.—National income by type of income, 1959-93
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Compensation
of employees

Year or quarter

National
income 1
Total

Wages
and

Proprietors' income with inventory valuation and
capital consumption adjustments
Supplements
to
wages
and
salaries 2

Farm

Total
Total

Proprietors'
income*

410.1
425.7
440.5
474.5
501.5
539.1

281.2

259.8

21.4

51.7

10.7

11.6

1960...
1961...
1962...
1963...
1964...

296.7
305.6
327.4
345.5
371.0

272.8
280.5
299.3
314.8
337.7

23.8
25.1
28.1
30.7
33.2

51.9
54.3
56.4
57.7
60.5

11.2
11.9
11.9
11.8
10.6

12.1
12.7
12.7
12.5
11.3

1965...
1966...
1967...
1968...
1969...

586.9
643.7
679.9
741.0
798.6

399.8
443.0
475.5
524.7
578.4

363.7
400.3
428.9
471.9
518.3

36.1
42.7
46.6
52.8
60.1

65.0
69.4
70.9
75.1
78.9

12.9
14.0
12.7
12.7
14.4

13.7
14.8
13.5
13.6
15.6

1970...
1971...
1972...
1973...
1974...

833.5
899.5
992.9

1,119.5
1,198.8

618.3
659.4
726.2
812.8
891.3

551.5
584.5
638.7
708.6
772.2

66.8
74.9
87.6
104.2
119.1

79.9
86.2
97.4
116.5
115.3

14.6
15.2
19.1
32.2
25.5

1975
1976
1977
1978
1979

1,285.3
1,435.5
1,609.1
1,829.8
2,038.9

948.7
1.058.3
1.177.3
1.333.0
1,496.4

814.7
899.6
994.0
1,120.9
1,255.3

134.0
158.7
183.3
212.1
241.1

121.2
132.9
146.4
167.7
181.8

1980
1981
1982
1983
1984

2,198.2
2,432.5
2,522.5
2,720.8
3,058.3

1.644.4
1,815.5
1,916.0
2.029.4
2,226.9

1,376.6
1,515.6
1,593.3
1,684.2
1,850.0

267.8
299.8
322.7
345.2
376.9

1985
1986
1987
1988
1989

3,268.4
3,437.9
3,692.3
4,002.6
4,249.5

2,382.8
2,523.8
2,698.7
2,921.3
3,100.2

1,986.3
2,105.4
2,261.2
2,443.0
2,586.4

1990
1991
1992
1993 '

4,491.0
4,598.3
4,836.6

3,297.6
3,402.4
3,582.0
3,772.1

1982:
1983:
1984:
1985:
1986:
1987:
1988:
1989:

2,551.5
2,834.3
3,134.4
3,341.9
3,486.0
3,828.8
4,127.6
4,305.2

1990:1

1991: I

1959...

IV
IV
IV
IV
IV
IV
IV
IV

II
Ill

IV
1992:I..
II
Ill
IV
1993:1

Nonfarm
Capital
consumption
adjustment

Total

Proprietors'
income

valuation
adjustment

Capital
consumption
adjustment

"tor?"

-0.9

41.1

40.2

0.0

0.9

-.7
-.7

40.6
42.4
44.5
45.9
49.8

39.8
41.8
43.9
45.2
49.2

.0
.0
.0
.0
-.1

.8
.6
.6
.7
.7

-.9
-1.1

52.1
55.3
58.2
62.4
64.5

51.9
55.4
58.3
63.0
65.0

-.2
-.2
-.2
-.4
-.5

.4
.2
.1
-.2
.0

15.9
16.6
20.9
34.3
28.2

-1.3
-1.4
-1.8
-2.0
-2.8

65.3
70.9
78.3
84.3
89.8

66.0
72.0
79.3
86.5
94.2

-.5
-.6
-.7
-2.0
-3.8

-.1

23.7
18.3
17.1
21.5
24.7

27.5
22.5
21.8
27.0
31.2

-3.8
-4.2
-4.8
-5.5
-6.4

97.5
114.6
129.4
146.2
157.0

100.2
117.6
132.5
150.2
161.8

-1.2
-1.3
-1.3
-2.1
-2.9

171.8
180.8
170.7
186.7
236.0

11.5
21.2
13.5
2.4
21.3

19.4
30.2
23.1
12.1
30.8

-7.9
-9.0
-9.7
-9.7
-9.4

160.3
159.6
157.3
184.3
214.7

165.8
160.9
157.8
176.1
197.1

-3.0
-1.4
-.6
-.5

-2.5
.2
.0
8.7
18.1

396.5
418.4
437.4
478.3
513.8

259.9
283.7
310.2
324.3
347.3

21.5
22.3
31.3
30.9
40.2

30.5
31.0
39.6
38.8
48.3

-9.0
-8.7
-8.3
-8.0
-8.1

238.4
261.5
279.0
293.4
307.0

212.4
230.6
252.4
266.8
281.1

-.2
-.1
-.8
-1.5
-1.2

26.1
30.9
27.4
28.1
27.2

2,745.0
2,814.9
2,953.1
3,100.4

552.5
587.5
629.0
671.7

363.3
376.4
414.3
442.1

41.9
36.8
43.7
45.0

49.8
44.4
51.2
52.1

-7.8
-7.6
-7.5
-7.1

321.4
339.5
370.6
397.1

305.6
327.7
358.0
385.2

-.4
.0

-L0

16.2
11.8
13.1
13.0

1,940.4
2,101.2
2,288.1
2,442.5
2,582.5
2,785.1
3,004.9
3,162.8

1,611.8
1,747.3
1,903.9
2,039.1
2,153.9
2,336.7
2,510.6
2,637.9

328.6
353.9
384.2
403.3
428.6
448.4
494.3
524.9

179.9
200.1
239.6
268.7
284.4
325.0
333.4
349.7

10.2
6.3
21.9
17.8
23.6
42.4
30.9
38.4

20.0
15.8
31.2
26.7
32.1
50.6
38.8
46.4

-9.8
-9.5
-9.3
-8.9
-8.6
-8.2
-7.9
-8.0

169.6
193.8
217.7
250.9
260.9
282.6
302.5
311.4

168.0
182.5
196.6
223.2
230.0
254.2
274.9
288.7

.6
-1.6
.1
-1.4
.7
1.7
-1.4
-.7

1.1
12.9
21.0
29.1
30.1
26.7
29.0
23.4

4,426.2
4,502.0
4,496.6
4,539.2

3,231.5
3,288.2
3,326.3
3,344.2

2,689.2
2,739.1
2,770.6
2,781.3

542.3
549.2
555.7
562.9

367.5
361.4
355.5
368.9

49.9
42.5
31.6
43.8

57.5
50.2
39.6
51.7

-7.6
-7.8
-8.0
-7.9

317.6
318.9
323.9
325.1

290.4
284.0
329.5
318.4

6.4
17.6
-19.8
-5.6

20.8
17.4
14.3
12.4

4,546.0
4,587.8
4,596.9
4,662.6

3,355.7
3,382.8
3,415.8
3,455.4

2,782.2
2,800.6
2,823.4
2,853.6

573.4
582.3
592.4
601.8

363.8
379.7
374.2
387.7

37.2
42.6
29.8
37.6

45.1
50.2
37.4
45.0

-7.8
-7.6
-7.6
-7.4

326.6
337.1
344.4
350.1

312.8
320.6
340.1
337.5

2.3
4.9
-7.5
.3

11.5
11.6
11.7
12.3

4,755.4
4,814.6
4,800.8
4,975.8

3,507.8
3,558.1
3,603.6
3,658.6

2,892.2
2,933.6
2,970.7
3,015.8

615.7
624.5
632.9
642.8

406.8
411.1
408.1
431.2

45.6
44.9
36.8
47.6

52.9
52.2
44:9
54.8

-7.3
-7.2
-8.2
-7.2

361.2
366.2
371.3
383.6

350.4
360.0
359.4
362.2

-2.1
-7.0
-.8
7.8

12.9
13.2
12.7
13.7

5,038.9
5,104.0
5,143.2

3,705.1
3,750.6
3,793.9
3,839.0

3,054.3
3,082.7
3,115.4
3,149.2

650.7
668.0
678.5
689.8

444.1
439.4
422.5
462.4

55.7
47.0
24.8
52.4

62.8
54.1
32.1
59.4

-7.1
-7.1
-7.3
-7.0

388.4
392.4
397.6
410.1

376.4
380.3
385.4
398.7

-1.6
-1.2
-.4
-.9

13.7
13.3
12.7
12.3

-.7

-.2
-.6
-1.4
-1.7
-1.8
-2.0
-1.9

1
National income is the total net income earned in production. It differs from gross domestic product mainly in that it excludes
depreciation charges and other allowances for business and institutional consumption of durable capital goods and indirect business
taxes. See Table B-23.

See next page for continuation of table.




296

T A B L E B-25.—National income by type of income, 1959-93—Continued
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Rental income of persons
with capital consumption
adjustment

Year or quarter
Total

Capital
Rental
conincome
sumption
of
adjustpersons
ment

Corporate profits with inventory valuation and capital consumption adjustments
Profits with inventory valuation adjustment and without
capital consumption adjustment
Profits
Total

Profits after tax
Total

Profits
before
tax

Profits
tax
liability

Total

UndisDivitributed
dends
profits

Inventory
valuation
adjustment

Capital
Net
coninterest
sumption
adjustment

1959

14.7

18.0

-3.4

52.3

53.1

53.4

23.6

29.7

12.7

17.0

-0.3

-0.8

10.2

1960
1961
1962
1963
1964

15.3
15.8
16.5
17.1
17.3

18.7
19.2
19.8
20.3
20.5

-3.4
-3.3
-3.3
-3.2
-3.2

50.7
51.6
59.6
65.1
72.1

51.0
51.3
56.4
61.2
67.5

51.1
51.0
56.4
61.2
68.0

22.7
22.8
24.0
26.2
28.0

28.4
28.2
32.4
34.9
40.0

13.4
14.0
15.0
16.1
18.0

15.0
14.3
17.4
18.8
22.0

-.2
.3
.0
.1
_ 5

-.3
.3
3.2
3.9
4.6

11.2
13.1
14.6
16.1
18.2

1965
1966
1967
1968
1969

18.0
18.5
19.4
18.2
18.0

21.3
22.1
23.4
22.8
23.9

-3.3
-3.6
-3.9
-4.6
-5.9

82.9
88.6
86.0
92.6
89.6

77.6
83.0
80.3
86.9
83.2

78.8
85.1
81.8
90.6
89.0

30.9
33.7
32.7
39.4
39.7

47.9
51.4
49.2
51.2
49.4

20.2
20.9
22.1
24.6
25.2

27.8
30.5
27.1
26.6
24.1

-1.2
-2.1
-1.6
-3.7
-5.9

5.3
5.6
5.7
5.6
6.4

21.1
24.3
28.1
30.4
33.6

1970
1971
1972......
1973
1974

17.8
18.2
16.8
17.3
15.8

24.2
25.6
26.1
28.2
29.3

-6.4
-7.4
-9.3
-10.9
-13.5

77.5
90.3
103.2
116.4
104.5

71.8
85.5
97.9
110.9
103.4

78.4
90.1
104.5
130.9
142.8

34.4
37.7
41.9
49.3
51.8

44.0
52.4
62.6
81.6
91.0

23.7
23.7
25.8
28.1
30.4

20.3
28.6
36.9
53.5
60.6

-6.6
-4.6
-6.6
-20.0
-39.5

5.6
4.8
5.3
5.5
1.2

40.0
45.4
49.3
56.5
71.8

1975
1976
1977
1978
1979

13.5
12.1
9.0
8.9
8.4

29.5
29.9
30.0
34.4
39.1

-15.9
-17.8
-21.0
-25.5
-30.8

121.9
147.1
175.7
199.7
202.5

129.4
158.8
186.7
212.8
219.8

140.4
173.7
203.3
237.9
261.4

50.9
64.2
73.0
83.5
88.0

89.5
109.5
130.3
154.4
173.4

30.1
35.6
40.7
45.9
52.4

59.4
73.9
89.5
108.5
121.0

-11.0
-14.9
-16.6
-25.0
-41.6

-7.6
-11.7
-11.0
-13.1
-17.3

80.0
85.1
100.7
120.5
149.9

1980
1981
1982
1983
1984

13.2
20.8
21.9
22.1
23.3

49.0
61.1
64.4
64.8
66.5

-35.8
-40.2
-42.4
-42.8
-43.2

177.7
182.0
151.5
212.7
264.2

197.8
203.2
166.4
202.2
236.4

240.9
228.9
176.3
210.7
240.5

84.8
81.1
63.1
77.2
94.0

156.1
147.8
113.2
133.5
146.4

59.0
69.2
70.0
81.2
82.7

97.1
78.6
43.2
52.3
63.8

-43.0
-25.7
-9.9
-8.5
-4.1

-20.2
-21.2
-14.9
10.4
27.8

191.2
233.4
262.4
270.0
307.9

1985
1986
1987
1988
1989

18.7
8.7
3.2
4.3
-13.5

63.4
53.4
50.0
53.4
44.2

-44.6
-44.7
-46.8
-49.1
-57.7

280.8
271.6
319.8
365.0
362.8

225.3
227.6
273.4
320.3
325.4

225.0
217.8
287.9
347.5
342.9

96.5
106.5
127.1
137.0
141.3

128.5
111.3
160.8
210.5
201.6

92.4
109.8
106.2
115.3
134.6

36.1
1.6
54.6
95.2
67.1

.2
9.7
-14.5
-27.3
-17.5

55.5
44.1
46.4
44.7
37.4

326.2
350.2
360.4
387.7
452.7

1990
1991
1992
1993 "...

-14.2
-12.8
-8.9
13.0

42.7
45.2
57.4
75.4

-56.9
-57.9
-66.3
-62.5

380.6
369.5
407.2

354.7
367.3
390.1

365.7
362.3

138.7
129.8

227.1 153.5
232.5 137.4
249.1 150.5
169.0

73.6
95.2
98.6

-11.0
4.9
-5.3
-7.8

25.9
2.2
17.1
24.3

463.7
462.8
442.0

1982:
1983:
1984:
1985:
1986:
1987:
1988:
1989:

IV
IV
IV
IV
IV
IV
IV
IV

24.1
22.2
24.3
14.0
4.7
6.8
2.8
-21.6

66.5
64.5
67.6
60.0
50.2
54.2
52.6
39.8

-42.3
-42.4
-43.4
-46.0
-45.5
-47.4
-49.7
-61.3

150.3
229.1
261.3
284.9
264.6
343.3
378.3
354.5

160.0
216.2
223.6
228.0
225.0
293.4
340.5
320.6

168.6
223.8
220.1
231.8
235.7
311.2
372.2
334.1

58.7
82.2
83.8
97.6
116.6
135.2
146.2
134.2

109.9
141.6
136.3
134.2
119.2
176.0
226.0
200.0

72.5
84.2
83.4
97.4
111.0
106.3
121.0
141.3

37.5
57.4
52.9
36.9
8.2
69.7
105.0
58.7

-8.6
-7.6
3.5
-3.8
-10.7
-17.8
-31.7
-13.5

-9.6
12.9
37.7
56.9
39.6
49.9
37.9
33.9

256.8
281.8
321.1
331.9
349.7
368.6
408.1
459.8

1990:1..

-15.9
-16.4
-13.3
-11.1

40.1
40.2
44.1
46.4

-56.0
-56.6
-57.4
-57.4

382.6
409.3
367.5
362.8

346.8
377.9
344.7
349.3

348.8
369.0
376.2
368.9

132.0
139.8
145.7
137.0

216.8
229.2
230.5
231.8

149.9
154.6
155.7
153.7

67.0
74.6
74.8
78.1

-2.0
8.9
-31.5
-19.5

35.8
31.4
22.8
13.5

460.5
459.5
460.6
474.4

1991: I ...
II..

45.1
44.7
41.0
49.8

-56.8
-56.6
-57.2
-61.0

369.3
370.8
359.0
378.8

364.6
370.1
359.0
375.4

356.5
357.4
362.0
373.5

125.4
128.0
132.5
133.4

231.1
229.4
229.5
240.1

145.9
136.2
133.4
133.9

85.2
93.2
96.1
106.1

8.2
12.7
-3.0
1.9

4.7

I
V

-11.7
-11.9
-16.3
-11.2

3.5

468.8
466.3
464.2
451.9

1992: 1
II
Ill
IV

-8.7
-7.2
-18.5
-1.2

47.3
49.3
75.7
57.4

-56.0
-56.5
-94.2
-58.6

409.9
411.7
367.5
439.5

399.7
395.7
350.1
414.8

404.3
409.5
357.9
409.9

147.0
153.0
130.1
155.0

257.3
256.5
227.8
254.9

138.0
146.1
155.2
162.9

119.3
110.4
72.7
92.0

-4.6
-13.7
-7.8
4.9

10.2
16.0
17.4
24.7

439.5
440.8
440.1
447.7

7.5
12.7
13.7
17.9

71.3
73.2
77.2
80.0

-63.8
-60.4
-63.5
-62.1

432.1
458.1
468.5

407.0
433.4
444.8

419.8
445.6
443.8

160.9
173.3
169.5

258.9 167.5
272.3 168.5
274.3 169.7
170.4

91.4
103.9
104.6

-12.7
-12.2
1.0
-7.2

25.1
24.7
23.8
23.6

450.1
443.2
444.6

1993: 1
II

2
3

Consists mainly of employer contributions for social insurance and to private pension, health, and welfare funds.
With inventory valuation adjustment.

Source: Department of Commerce, Bureau of Economic Analysis.




297

TABLE B-26.—Sources of personal income,

1959-93

[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Wage and salary disbursements *

Year or quarter

Personal
income

Commodityproducing
industries
Total
Total

Manufacturing

Distributive
industries

Service
industries

Govern-

Other
labor
income J

Proprietor' ' income
with invcmuiy
valuation and
cap tal
consunlption
adjustr lents

ment
Farm

Nonfarm

1959

391.2

259.8

109.9

86.9

65.1

38.8

46.0

10.6

10.7

41.1

1960
1961
1962
1963
1964

409.2
426.5
453.4
476.4
510.7

272.8
280.5
299.3
314.8
337.7

113.4
114.0
122.2
127.4
136.0

89.8
89.9
96.8
100.7
107.3

68.6
69.6
73.3
76.8
82.0

41.7
44.4
47.6
50.7
54.9

49.2
52.4
56.3
60.0
64.9

11.2
11.8
13.0
14.0
15.7

11.2
11.9
11.9
11.8
10.6

40.6
42.4
44.5
45.9
49.8

1965
1966
1967
1968
1969

552.9
601.7
646.5
709.9
773.7

363.7
400.3
428.9
471.9
518.3

146.6
161.6
169.0
184.1
200.4

115.7
128.2
134.3
146.0
157.7

87.9
95.1
101.6
110.8
121.7

59.4
65.3
72.0
80.4
90.6

69.9
78.3
86.4
96.6
105.5

17.8
19.9
21.7
25.2
28.5

12.9
14.0
12.7
12.7
14.4

52.1
55.3
58.2
62.4
64.5

1970
1971
1972
1973
1974

831.0
893.5
980.5
1,098.7
1,205.7

551.5
583.9
638.7
708.7
772.6

203.7
209.1
228.2
255.9
276.5

158.4
160.5
175.6
196.6
211.8

131.2
140.4
153.3
170.3
186.8

99.4
107.9
119.7
133.9
148.6

117.1
126.5
137.4
148.7
160.9

32.5
36.7
43.0
49.2
56.5

14.6
15.2
19.1
32.2
25.5

65.3
70.9
78.3
84.3
89.8

1975
1976
1977
1978
1979

1,307.3
1,446.3
1,601.3
1,807.9
2,033.1

814.6
899.5
993.9
1,120.7
1,255.4

277.1
309.7
346.1
392.6
442.1

211.6
238.0
266.7
300.1
334.9

198.1
219.5
242.7
274.9
308.4

163.4
181.6
202.8
233.7
267.7

176.0
188.6
202.3
219.4
237.3

65.9
79.7
94.7
110.1
124.3

23.7
18.3
17.1
21.5
24.7

97.5
114.6
129.4
146.2
157.0

1980
1981
1982
1983
1984

2,265.4
2,534.7
2,690.9
2,862.5
3,154.6

1,376.6
1,515.6
1,593.3
1,684.7
1,849.8

471.9
513.7
513.5
525.1
580.8

355.7
386.9
384.3
397.7
439.8

336.4
368.1
385.8
406.2
445.4

306.9
348.1
386.5
427.4
475.8

261.4
285.7
307.5
325.9
347.8

139.8
153.0
165.4
174.6
184.7

11.5
21.2
13.5
2.4
21.3

160.3
159.6
157.3
184.3
214.7

1985
1986
1987
1988
1989

3,379.8
3,590.4
3,802.0
4,075.9
4,380.3

1,986.5
2,105.4
2,261.2
2,443.0
2,586.4

612.2
628.5
651.8
699.1
724.2

461.3
473.8
490.1
524.5
542.2

475.9
501.7
536.9
575.3
607.0

524.5
579.5
650.7
719.6
776.8

373.9
395.7
421.8
449.0
478.5

191.8
200.7
210.4
230.5
251.9

21.5
22.3
31.3
30.9
40.2

238.4
261.5
279.0
293.4
307.0

1990
1991
1992
1993 "

4,673.8
4,850.9
5,144.9
5,387.6

2,745.0
2,815.0
2,973.1
3,080.4

745.7
738.1
756.5
763.6

555.6
557.2
577.6
577.2

848.3
635.1
648.0
883.5
682.0
967.0
706.4 1,020.8

515.9
545.4
567.5
589.7

274.3
296.9
322.7
350.7

41.9
36.8
43.7
45.0

321.4
339.5
370.6
397.1

1982
1983
1984
1985
1986
1987
1988
1989

I
V
I
V
I
V
I
V
I
V
I
V
I
V
I
V

2,746 8
2,965.8
3,242.5
3,456.7
3P647.8
3,918.5
4,195.2
4,469.4

1,611.7
1,747.3
1,903.3
2,039.1
2,153.9
2,337.0
2,510.6
2,637.9

503.9
547.6
594.5
622.6
635.3
668.4
715.3
732.1

378.0
415.7
450.5
469.1
478.5
501.6
537.5
545.7

391.2
422.4
458.4
487.6
512.5
551.9
589.9
616.1

400.9
445.8
494.4
546.8
602.1
685.0
746.8
800.0

315.6
331.5
356.1
382.2
404.0
431.7
458.5
489.7

169.2
179.0
187.7
193.9
205.3
216.5
240.3
259.1

10.2
6.3
21.9
17.8
23.6
42.4
30.9
38.4

169.6
193.8
217.7
250.9
260.9
282.6
302.5
311.4

1990 1
II
III
IV

4,585.6
4,648.6
4,701.9
4,759.1

2,689.1
2,739.1
2,770.6
2,781.1

740.6
748.2
749.1
744.8

549.7
557.5
558.4
556.9

624.7
634.4
640.2
641.0

821.5
843.5
861.4
866.8

502.3
513.0
519.9
528.5

268.0
271.5
276.2
281.3

49.9
42.5
31.6
43.8

317.6
318.9
323.9
325.1

1991 1
II
III
IV

4,783.9
4,833.4
4,858.8
4,927.5

2,782.0
2,800.9
2,823.4
2,853.6

735.3
733.3
739.3
744.4

551.0
552.0
559.3
566.4

639.8
645.9
651.0
655.4

866.1
876.8
886.9
904.1

540.8
545.0
546.2
549.7

287.1
293.3
300.1
307.0

37.2
42.6
29.8
37.6

326.6
337.1
344.4
350.1

1992 1
II
III
IV

5,017.8
5,093.8
5,139.8
5,328.3

2,892.2
2,933.6
2,970.7
3,095.8

741.3
750.0
751.6
783.3

564.0
571.2
573.3
602.0

663.5
928.1
672.2
944.6
682.5
966.8
709.9 1,028.4

559.3
566.9
569.7
574.2

313.4
319.9
326.0
331.5

45.6
44.9
36.8
47.6

361.2
366.2
371.3
383.6

1993 1
II
III
IV

5,254.7
5,373.2
5,412.7
5,509.8

2,974.3
3,082.7
3,115.4
3,149.2

740.7
765.1
769.4
779.0

559.7
580.3
581.5
587.5

966.6
682.9
709.1 1,022.2
714.4 1,038.8
719.2 1,055.5

584.1
586.3
592.8
595.5

338.5
346.6
354.7
362.9

55.7
47.0
24.8
52.4

388.4
392.4
397.6
410.1

1
The total of wage and salary disbursements and other labor income differs from compensation of employees in Table B-25 in that it
excludes employer contributions for social insurance and the excess of wage accruals over wage disbursements.




298

TABLE B-26.—Sources of personal income, 1959-93—Continued
[Billions of dollars-, quarterly data at seasonally adjusted annual rates]

Year or quarter

1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993 »
1982: IV
1983: IV
1984: IV
1985: IV
1986: IV
1987: IV
1988: IV
1989: IV
1990:1
II
Ill
IV
1991: I
II
Ill
IV
1992:I
II
Ill
IV
1993:L
II
Ill
IV "...

Rental
income
of
persons
with
capital
consumption
adjustment

Transfer payments to persons

Personal Personal
dividend interest
income
income

14.7
15.3
15.8
16.5
17.1
17.3
18.0
18.5
19.4
18.2
18.0
17.8
18.2
16.8
17.3
15.8
13.5
12.1
9.0
8.9
8.4
13.2
20.8
21.9
22.1
23.3
18.7
8.7
3.2
4.3
-13.5
-14.2
-12.8
-8.9
13.0
24.1
22.2
24.3
14.0
4.7
6.8
2.8
-21.6
-15.9
-16.4
-13.3
-11.1
-11.7
-11.9
-16.3
-11.2
-8.7
-7.2
-18.5
-1.2
7.5
12.7
13.7
17.9

12.7
13.4
14.0
15.0
16.1
18.0
20.2
20.9
22.1
24.5
25.1
23.5
23.5
25.5
27.7
29.6
29.2
34.7
39.4
44.2
50.4
57.1
66.9
67.1
77.8
78.8
87.9
104.7
100.4
108.4
126.5
144.4
127.9
140.4
158.3
69.4
80.6
79.3
92.7
105.6
100.1
113.8
132.9
141.2
145.6
146.6
144.4
136.6
126.7
123.9
124.3
128.2
136.0
144.9
152.3
157.0
157.8
159.0
159.4

Total

Old-age,
Governsurvivors,
ment
disability,
unemand
Veterans
ployment
health
benefits
insurinsurance
ance
benefits
benefits

Government
employees
retirement
benefits

Aid to
families
with
dependent
children
(AFDC)

Other

Less:
Personal
contributions for
social
insurance

Nonfarm
personal
income2

22.7

27.0

10.2

2.8

4.6

2.8

0.9

5.7

7.9

376.7

25.0
26.9
29.3
32.4
36.1

28.8
32.8
34.1
36.2
37.9

11.1
12.6
14.3
15.2
16.0

3.0
4.3
3.1
3.0
2.7

4.6
5.0
4.7
4.8
4.7

3.1
3.4
3.7
4.2
4.7

1.0
1.1
1.3
1.4
1.5

6.1
6.5
7.0
7.6
8.2

9.3
9.7
10.3
11.8
12.6

393.7
410.4
437.0
460.0
495.3

40.3
44.9
49.5
54.6
60.8

41.1
45.7
54.6
63.2
70.3

18.1
20.8
25.5
30.2
32.9

2.3
1.9
2.2
2.1
2.2

4.9
4.9
5.6
5.9
6.7

5.2
6.1
6.9
7.6
8.7

1.7
1.9
2.3
2.8
3.5

9.0
10.3
12.2
14.5
16.2

13.3
17.8
20.6
22.9
26.2

534.9
582.4
628.3
691.4
753.1

69.2
75.7
81.8
94.1
112.4

84.6
100.1
111.8
127.9
151.3

38.5
44.5
49.6
60.4
70.1

4.0
5.8
5.7
4.4
6.8

7.7
8.8
9.7
10.4
11.8

10.2
11.8
13.8
16.0
19.0

4.8
6.2
6.9
7.2
7.9

19.4
23.0
26.1
29.5
35.7

27.9
30.7
34.5
42.6
47.9

809.8
871.5
954.2
1,058.1
1,170.2

123.0
134.6
155.7
184.5
223.2

190.2
208.3
223.3
241.6
270.7

81.4
92.9
104.9
116.2
131.8

17.6
15.8
12.7
9.7
9.8

14.5
14.4
13.8
13.9
14.4

22.7
26.1
29.0
32.7
36.9

9.2
10.1
10.6
10.7
11.0

44.7
49.1
52.4
58.4
66.8

50.4
55.5
61.2
69.8
81.0

1,272.5
1,415.1
1,569.9
1,770.3
1,989.3

274.0
336.1
376.8
397.5
461.9

321.5
365.9
408.1
438.9
452.9

154.2
182.0
204.5
221.7
235.7

16.1
15.9
25.2
26.3
15.8

15.0
16.1
16.4
16.6
16.4

43.0
49.4
54.6
58.0
60.9

12.4
13.0
13.3
14.2
14.8

89.7
94.1
102.1
109.2

88.6
104.5
112.3
119.7
132.8

2,231.6
2,488.5
2,649.8
2,832.6
3,106.1

498.1
531.7
548.1
583.2
668.2

485.9
517.8
542.2
576.7
625.0

253.4
269.2
282.9
300.4
325.1

15.7
16.3
14.5
13.4
14.4

16.7
16.7
16.6
16.9
17.3

66.6
70.7
76.0
82.2
87.5

15.4
16.4
16.7
17.3
18.0

118.1
128.5
135.5
146.5
162.6

149.1
162.1
173.6
194.5
211.4

3,333.2
3,545.6
3,749.4
4,023.9
4,318.0

698.2
715.6
694.3
695.8

687.6
769.9
858.4
911.6

352.0
382.3
413.9
438.2

19.0
26.7
39.2
34.0

17.8
18.3
19.3
20.0

94.5
102.0
108.3
115.4

19.8
22.0
23.3
23.9

184.5
218.5
254.4
280.0

224.9
237.8
249.3
264.3

4,608.6
4,792.0
5,080.1
5,320.3

373.6
418.7
485.4
507.5
532.6
562.3
608.9
681.2

432.2
441.3
458.5
493.6
526.6
548.5
584.8
644.8

216.4
226.7
241.3
256.7
273.3
285.8
303.8
334.4

31.8
19.9
15.6
15.3
16.7
13.4
13.0
15.6

16.6
16.5
16.4
16.5
16.4
16.5
16.8
17.3

56.1
59.5
58.0
68.0
72.4
77.7
83.0
89.3

13.6
14.5
14.8
15.7
16.7
16.7
17.5
18.4

97.6
104.2
112.5
121.3
131.1
138.3
150.6
169.9

113.3
123.4
135.6
152.8
165.4
177.7
199.5
214.7

2,708.5
2,932.0
3,193.8
3,414.9
3,602.3
3,854.9
4,142.9
4,408.5

686.9
692.8
702.8
710.3

670.4
677.7
690.4
712.0

348.1
348.7
352.7
358.6

17.1
17.7
19.2
22.0

18.0
17.8
17.7
17.8

92.8
93.7
94.9
96.5

19.1
19.6
20.0
20.5

175.2
180.2
185.9
196.6

221.6
223.1
227.0
227.9

4,512.7
4,582.7
4,647.0
4,692.2

715.4
720.0
717.3
709.6

745.0
761.4
775.4
797.6

374.5
379.1
384.3
391.3

24.1
27.1
26.4
29.3

18.1
18.6
18.3
18.3

101.6
101.2
102.1
103.1

21.1
21.8
22.2
22.7

205.6
213.6
222.0
232.9

234.4
236.7
239.2
240.8

4,724.0
4,768.4
4,807.2
4,868.5

694.4
696.0
692.2
694.5

837.7
852.4
866.1
877.4

406.3
412.0
416.6
420.8

39.1
40.4
39.7
37.8

20.5
18.9
18.8
19.0

106.7
107.7
108.4
110.2

22.9
23.2
23.5
23.5

242.2
250.1
259.2
266.2

246.2
248.1
249.8
253.3

4,950.8
5,027.7
5,082.0
5,259.8

695.4
693.1
695.7
699.2

894.4
905.5
918.5
927.9

433.1
435.0
439.4
445.4

34.5
34.4
35.1
32.0

20.0
20.2
20.1
19.7

112.8
114.6
116.4
117.9

23.6
24.1
24.0
24.0

270.4
277.2
283.5
289.0

256.6
264.5
266.8
269.2

5,177.2
5,303.8
5,365.4
5,434.7

2
Personal income exclusive of the farm component of wages and salaries, other labor income, proprietors' income with inventory
valuation and capital consumption adjustments, and net interest.

Note.—The industry classification of wage and salary disbursements and proprietors' income is on an establishment basis and is
based on the 1987 Standard Industrial Classification (SIC) beginning 1987 and on the 1972 SIC for earlier years shown.
Source: Department of Commerce, Bureau of Economic Analysis.




299

TABLE B-27.—Disposition of personal income, 1959-93
[Billions of dollars, except as noted; quarterly data at seasonally adjusted annual rates]
Percent of disposable
personal income l

Less: Personal outlays

Less:
Year or quarter

Personal
income

Personal

tax and
nontax
payments

Equals:
Disposable
personal
income

Total

Personal
transfer
Personal
payconInterest
sumption paid by ments
expendi- persons to rest
of the
tures
world
(net)

Personal outlays
Equals:
Personal
saving
Total

Personal
consumption
expenditures

Personal
saving

1959
1960
1961
1962
1963
1964

391.2
409.2
426.5
453.4
476.4
510.7

44.5
48.7
50.3
54.8
58.0
56.0

346.7
360.5
376.2
398.7
418.4
454.7

324.7
339.9
351.3
372.8
393.7
423.1

318.1
332.4
343.5
364.4
384.2
412.5

6.1
7.0
7.3
7.8
8.9
10.0

0.4
.5
.5
.5
.6
.7

22.0
20.6
24.9
25.9
24.6
31.6

93.7
94.3
93.4
93.5
94.1
93.1

91.8
92.2
91.3
91.4
91.8
90.7

6.3
5.7
6.6
6.5
5.9
6.9

1965
1966
1967
1968
1969

552.9
601.7
646.5
709.9
773.7

61.9
71.0
77.9
92.1
109.9

491.0
530.7
568.6
617.8
663.8

456.4
494.4
522.8
573.9
620.5

444.6
481.6
509.3
559.1
603.7

11.1
12.0
12.5
13.8
15.7

1.0
1.0
1.1

34.6
36.3
45.8
43.9
43.3

93.0
93.2
91.9
92.9
93.5

90.5
90.7
89.6
90.5
90.9

7.0
6.8
8.1
7.1
6.5

1970
1971
1972
1973
1974

831.0
893.5
980.5
1,098.7
1,205.7

109.0
108.7
132.0
140.6
159.1

722.0
784.9
848.5
958.1
1,046.5

664.5
719.4
788.7
872.0
953.1

646.5
700.3
767.8
848.1
927.7

16.8
17.8
19.6
22.4
24.2

1.2
1.3
1.3
1.4
1.2

57.5
65.4
59.7
86.1
93.4

92.0
91.7
93.0
91.0
91.1

89.5
89.2
90.5
88.5
88.6

8.0
8.3
7.0
9.0
8.9

1975
1976
1977
1978
1979

1,307.3
1,446.3
1,601.3
1,807.9
2,033.1

156.4
182.3
210.0
240.1
280.2

1,150.9
1,264.0
1,391.3
1,567.8
1,753.0

1,050.6
1,170.9
1,303.4
1,460.0
1,629.6

1,024.9
1,143.1
1,271.5
1,421.2
1,583.7

24.5
26.7
30.7
37.5
44.5

1.2
1.2
1.2
1.3
1.4

100.3
93.0
87.9
107.8
123.3

91.3
92.6
93.7
93.1
93.0

89.1
90.4
91.4
90.7
90.3

8.7
7.4
6.3
6.9
7.0

1980
1981
1982
1983
1984

2,265.4
2,534.7
2,690.9
2,862.5
3,154.6

312.4
360.2
371.4
368.8
395.1

1,952.9
2,174.5
2,319.6
2,493.7
2,759.5

1,799.1
1,982.6
2,120.1
2,325.1
2,537.5

1,748.1
1,926.2
2,059.2
2,257.5
2,460.3

49.4
54.6
58.8
65.7
75.0

1.6
1.8
2.1
1.8
2.3

153.8
191.8
199.5
168.7
222.0

92.1
91.2
91.4
93.2
92.0

89.5
88.6
88.8
90.5
89.2

7.9
8.8
8.6
6.8
8.0

1985
1986
1987
1988
1989

3,379.8
3,590.4
3,802.0
4,075.9
4,380.3

436.8
459.0
512.5
527.7
593.3

2,943.0
3,131.5
3,289.5
3,548.2
3,787.0

2,753.7
2,944.0
3,147.5
3,392.5
3,634.9

2,667.4
2,850.6
3,052.2
3,296.1
3,523.1

83.6
90.9
92.3
93.7
103.0

2.7
2.5
3.0
2.7
8.9

189.3
187.5
142.0
155.7
152.1

93.6
94.0
95.7
95.6
96.0

90.6
91.0
92.8
92.9
93.0

6.4
6.0
4.3
4.4
4.0

1990
1991
1992
1993 '

4,673.8
4,850.9
5,144.9
5,387.6

623.3
620.4
644.8
681.6

4,050.5
4,230.5
4,500.2
4,706.0

3,880.6
4,029.0
4,261.5
4,515.7

3,761.2
3,906.4
4,139.9
4,390.6

109.3
112.2
111.1
114.0

10.1
10.5
10.4
11.0

170.0
201.5
238.7
190.3

95.8
95.2
94.7
96.0

92.9
92.3
92.0
93.3

4.2
4.8
5.3
4.0

1982:
1983:
1984:
1985:
1986:
1987:
1988:
1989:

IV
IV
IV
IV
IV
IV
IV
IV

2,746.8
2,965.8
3,242.5
3,456.7
3,647.8
3,918.5
4,195.2
4,469.4

372.1
371.6
413.4
448.8
478.5
528.6
542.0
605.1

2,374.7
2,594.3
2,829.1
3,007.9
3,169.3
3,389.9
3,653.2
3,864.3

2,190.9
2,417.9
2,606.5
2,828.7
3,018.2
3,220.1
3,496.7
3,715.5

2,128.7
2,346.8
2,526.4
2,739.8
2,923.1
3,124.6
3,398.2
3,599.1

60.2
69.2
77.6
86.4
92.3
92.4
95.8
106.7

1.9
2.0
2.5
2.5
2.8
3.1
2.7
9.8

183.8
176.3
222.6
179.2
151.1
169.8
156.4
148.8

92.3
93.2
92.1
94.0
95.2
95.0
95.7
96.2

89.6
90.5
89.3
91.1
92.2
92.2
93.0
93.1

7.7
6.8
7.9
6.0
4.8
5.0
4.3
3.9

1990:1
II
Ill
IV

4,585.6
4,648.6
4,701.9
4,759.1

611.9
627.4
628.5
625.2

3,973.7
4,021.2
4,073.4
4,133.9

3,797.2
3,845.6
3,921.9
3,957.7

3,679.3
3,727.0
3,801.7
3,836.6

108.0
108.4
109.8
110.9

9.9
10.1
10.3
10.2

176.5
175.7
151.6
176.2

95.6
95.6
96.3
95.7

92.6
92.7
93.3
92.8

4.4
4.4
3.7
4.3

1991:1
II
Ill
IV

4,783.9
4,833.4
4,858.8
4,927.5

616.4
616.6
619.7
628.8

4,167.5
4,216.8
4,239.1
4,298.8

3,966.0
4,010.7
4,052.3
4,087.0

3,843.6
3,887.8
3,929.8
3,964.1

111.9
112.5
112.2
112.1

10.4
10.4
10.3
10.8

201.5
206.0
186.8
211.7

95.2
95.1
95.6
95.1

92.2
92.2
92.7
92.2

4.8
4.9
4.4
4.9

1992:1
II
Ill
IV

5,017.8
5,093,8
5,139.8
5,328.3

630.9
634.6
642.8
670.7

4,386.9
4,459.2
4,497.0
4,657.6

4,169.4
4,221.3
4,277.3
4,377.9

4,046.5
4,099.9
4,157.1
4,256.2

111.9
110.9
110.5
111.3

11.1
10.5
9.7
10.5

217.5
237.9
219.6
279.7

95.0
94.7
95.1
94.0

92.2
91.9
92.4
91.4

5.0
5.3
4.9
6.0

1993:1
II
Ill
IV ".

5,254.7
5,373.2
5,412.7
5,509.8

657.1
681.0
689.0
699.1

4,597.5
4,692.2
4,723.7
4,810.7

4,419.7
4,483.6
4,544.0
4,615.5

4,296.2
4,359.9
4,419.1
4,487.4

112.5
112.7
114.1
116.7

11.0
11.0
10.8
11.4

177.9
208.7
179.7
195.2

96.1
95.6
96.2
95.9

93.4
92.9
93.6
93.3

3.9
4.4
3.8
4.1

1

Percents based on data in millions of dollars.

Source: Department of Commerce, Bureau of Economic Analysis.




300

TABLE B-28.—Total and per capita disposable personal income and personal consumption expenditures in
current and 1987 dollars, 1959-93
[Quarterly data at seasonally adjusted annual rates, except as noted]
Personal consumption expenditures

Disposable personal income
Year or quarter

Total (billions of
dollars)

Per capita
(dollars)

Total (billions of
dollars)

Per capita
(dollars)

Current
dollars

1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993 »
1982: IV
1983: IV
1984: IV
1985: IV
1986: IV
1987: IV
1988: IV
1989: IV
1990:1..
II....
III..
IV...
1991:1
II
Ill
IV
1992:1

1993:1....
II...
IV "...

1987
dollars

Current
dollars

1987
dollars

Current
dollars

1987
dollars

Current
dollars

1987
dollars

346.7

1,284.9

1,958

7,256

318.1

1,178.9

1,796

6,658

360.5
376.2
398.7
418.4
454.7

1,313.0
1,356.4
1,414.8
1,461.1
1,562.2

1,994
2,048
2,137
2,210
2,369

7,264
7,382
7,583
7,718
8,140

332.4
343.5
364.4
384.2
412.5

1,210.8
1,238.4
1,293.3
1,341.9
1,417.2

1,839
1,869
1,953
2,030
2,149

6,698
6,740
6,931
7,089
7,384

491.0
530.7
568.6
617.8
663.8

1,653.5
1,734.3
1,811.4
1,886.8
1,947.4

2,527
2,699
2,861
3,077
3,274

8,508
8,822
9,114
9,399
9,606

444.6
481.6
509.3
559.1
603.7

1,497.0
1,573.8
1,622.4
1,707.5
1,771.2

2,287
2,450
2,562
2,785
2,978

7,703
8,005
8,163
8,506
8,737

722.0
784.9
848.5
958.1
1,046.5

2,025.3
2,099.9
2,186.2
2,334.1
2,317.0

3,521
3,779
4,042
4,521
4,893

9,875
10,111
10,414
11,013
10,832

646.5
700.3
767.8
848.1
927.7

1,813.5
1,873.7
1,978.4
2,066.7
2,053.8

3,152
3,372
3,658
4,002
4,337

8,842
9,022
9,425
9,752
9,602

1,150.9
1,264.0
1,391.3
1,567.8
1,753.0

2,355.4
2,440.9
2,512.6
2,638.4
2,710.1

5,329
5,796
6,316
7,042
7,787

10,906
11,192
11,406
11,851
12,039

1,024.9
1,143.1
1,271.5
1,421.2
1,583.7

2,097.5
2,207.3
2,296.6
2,391.8
2,448.4

4,745
5,241
5,772
6,384
7,035

9,711
10,121
10,425
10,744
10,876

1,952.9
2,174.5
2,319.6
2,493.7
2,759.5

2,733.6
2,795.8
2,820.4
2,893.6
3,080.1

8,576
9,455
9,989
10,642
11,673

12,005
12,156
12,146
12,349
13,029

1,748.1
1,926.2
2,059.2
2,257.5
2,460.3

2,447.1
2,476.9
2,503.7
2,619.4
2,746.1

7,677
8,375
8,868
9,634
10,408

10,746
10,770
10,782
11,179
11,617

2,943.0
3,131.5
3,289.5
3,548.2
3,787.0

3,162.1
3,261.9
3,289.5
3,404.3
3,464.9

12,339
13,010
13,545
14,477
15,307

13,258
13,552
13,545
13,890
14,005

2,667.4
2,850.6
3,052.2
3,296.1
3,523.1

2,865.8
2,969.1
3,052.2
3,162.4
3,223.3

11,184
11,843
12,568
13,448
14,241

12,015
12,336
12,568
12,903
13,029

4,050.5
4,230.5
4,500.2
4,706.0

3,524.5
3,529.0
3,632.5
3,700.5

16,205
16,741
17,615
18,222

14,101
13,965
14,219
14,329

3,761.2
3,906.4
4,139.9
4,390.6

3,272.6
3,258.6
3,341.8
3,452.5

15,048
15,459
16,205
17,001

13,093
12,895
13,081
13,369

2,374.7
2,594.3
2,829.1
3,007.9
3,169.3
3,389.9
3,653.2
3,864.3

2,832.6
2,960.6
3,118.5
3,178.7
3,266.2
3,335.8
3,443.1
3,480.9

10,189
11,033
11,925
12,565
13,121
13,907
14,850
15,558

12,154
12,591
13,145
13,278
13,522
13,685
13,996
14,015

2,128.7
2,346.8
2,526.4
2,739.8
2,923.1
3,124.6
3,398.2
3,599.1

2,539.3
2,678.2
2,784.8
2,895.3
3,012.5
3,074.7
3,202.9
3,242.0

9,134
9,980
10,649
11,445
12,101
12,819
13,814
14,491

10,895
11,390
11,739
12,095
12,472
12,615
13,020
13,053

3,973.7
4,021.2
4,073.4
4,133.9

3,525.6
3,529.8
3,523.5
3,519.0

15,963
16,114
16,275
16,467

14,163
14,144
14,078
14,018

3,679.3
3,727.0
3,801.7
3,836.6

3,264.4
3,271.6
3,288.4
3,265.9

14,781
14,935
15,189
15,283

13,114
13,110
13,138
13,010

4,167.5
4,216.8
4,239.1
4,298.8

3,515.9
3,532.5
3,524.2
3,543.4

16,560
16,712
16,752
16,939

13,971
14,000
13,927
13,963

3,843.6
3,887.8
3,929.8
3,964.1

3,242.7
3,256.9
3,267.1
3,267.5

15,273
15,409
15,530
15,621

12,885
12,908
12,911
12,876

4,386.9
4,459.2
4,497.0
4,657.6

3,580.1
3,607.5
3,624.8
3,717.6

17,245
17,481
17,577
18,153

14,073
14,142
14,169
14,490

4,046.5
4,099.9
4,157.1
4,256.2

3,302.3
3,316.8
3,350.9
3,397.2

15,906
16,072
16,249
16,589

12,981
13,002
13,098
13,241

4,597.5
4,692.2
4,723.7
4,810.7

3,642.6
3,694.4
3,708.7
3,756.4

17,876
18,196
18,265
18,549

14,163
14,326
14,341
14,484

4,296.2
4,359.9
4,419.1
4,487.4

3,403.8
3,432.7
3,469.6
3,503.9

16,704
16,907
17,088
17,303

13,234
13,312
13,416
13,511

1

Population
(thousands) l

177,073
180,760
183,742
186,590
189,300
191,927
194,347
196,599
198,752
200,745
202,736
205,089
207,692
209,924
211,939
213,898
215,981
218,086
220,289
222,629
225,106
227,715
229,989
232,201
234,326
236,393
238,510
240,691
242,860
245,093
247,397
249,951
252,699
255,472
258,256
233,060
235,146
237,231
239,387
241,550
243,745
246,004
248,372
248,927
249,552
250,291
251,035
251,659
252,312
253,048
253,776
254,392
255,090
255,836
256,569
257,197
257,872
258,612
259,343

Population of the United States including Armed Forces overseas; includes Alaska and Hawaii beginning 1960. Annual data are
averages of quarterly data. Quarterly data are averages for the period.
Source: Department of Commerce (Bureau of Economic Analysis and Bureau of the Census).




301

TABLE B-29.—Gross sating and investment, 1959-93
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Gross saving
Gross private saving
Year or
quarter

Total
Total

Personal
saving

Gross
business
saving1

Gross investment

Government surplus or deficit
( - ) , national income and
product accounts

Total

Federal

State
and
local

Capital
grants
received
by the
United
States
(net)2

Total

Gross
private
domestic
investment

Net
foreign
investment 3

Statistical
discrepancy

1959

79.4

82.5

22.0

60.5

-3.1

-2.6

-0.5

77.6

78.8

-1.2

-1.8

1960
1961
1962
1963
1964

85.1
84.4
92.8
100.4
110.0

81.5
87.4
95.8
98.8
111.5

20.6
24.9
25.9
24.6
31.6

60.9
62.5
69.9
74.1
80.0

3.6
-3.0
-2.9
1.6
-1.6

3.5
-2.6
-3.4
1.1
-2.6

.0
-.4
.5
.4
1.0

82.0
82.2
91.8
98.4
109.3

78.7
77.9
87.9
93.4
101.7

3.2
4.3
3.9
5.0
7.5

-3.1
-2.2
-1.0
-2.0
-.7

1965
1966
1967
1968
1969

125.0
131.5
130.8
141.7
159.5

123.7
132.5
144.5
146.4
149.5

34.6
36.3
45.8
43.8
43.3

89.2
96.1
98.7
102.5
106.2

1.2
-1.0
-13.7
-4.6
10.0

1.3
-1.4
-12.7
-4.7
8.5

.0
.5
-1.1
.1
1.5

124.2
134.3
131.6
141.7
157.0

118.0
130.4
128.0
139.9
155.2

6.2
3.9
3.5
1.7
1.8

-.7
2.8
.8
-.1
-2.6

1970
1971
1972
1973
1974

155.2
173.7
201.7
252.3
249.5

165.8
192.2
204.9
245.4
256.0

57.5
65.4
59.7
86.1
93.4

108.2
126.8
145.1
159.3
162.6

-11.5
-19.2
-3.9
6.9
-4.5

-13.3
-21.7
-17.3
-6.6
-11.6

1.8
2.5
13.4
13.4
7.1

155.2
176.8
202.7
251.8
250.9

150.3
175.5
205.6
243.1
245.8

4.9
1.3
-2.9
8.7
5.1

.0
3.1
1.1
-.5
1.4

1975
1976
1977
1978
1979

241.4
284.8
338.2
415.7
468.5

306.3
323.1
355.0
412.8
457.9

100.3
93.0
87.9
107.8
123.3

206.0
230.0
267.1
305.0
334.5

-64.8
-38.3
-16.8
2.9
9.4

-69.4
-52.9
-42.4
-28.1
-15.7

4.6
14.6
25.6
31.1
25.1

247.4
295.2
349.1
423.3
482.2

226.0
286.4
358.3
434.0
480.2

21.4
8.8
-9.2
-10.7
2.0

6.0
10.4
10.9
7.6
13.8

1980
1981
1982
1983
1984

465.4
556.6
508.4
501.6
633.9

499.6
585.9
616.9
641.3
742.7

153.8
191.8
199.5
168.7
222.0

345.7
394.1
417.5
472.7
520.7

-35.3
-30.3
-108.6
-139.8
-108.8

-60.1
-58.8
-135.5
-180.1
-166.9

24.8
28.5
26.9
40.3
58.1

479.1
567.5
500.9
511.7
624.9

467.6
558.0
503.4
546.7
718.9

11.5
9.5
-2.5
-35.0
-94.0

13.6
10.9
-7.4
10.2
-9.0

1985
1986
1987
1988
1989

610.4
574.6
619.0
704.0
741.8

735.7
721.4
730.7
802.3
819.4

189.3
187.5
142.0
155.7

546.4
533.9
588.7
646.6
667.3

-125.3
-146.8
-111.7
-98.3
-77.5

-181.4
-201.0
-151.8
-136.6
-122.3

56.1
54.3
40.1
38.4
44.8

596.5
575.9
594.2
675.6
742.9

714.5
717.6
749.3
793.6
832.3

-118.1
-141.7
-155.1
-118.0
-89.3

-13.9
1.2
-24.8
-28.4
1.1

1990
1991
1992
1993 "

722.7
733.7
717.8

861.1
929.9
986.9

170.0
201.5
238.7
190.3

691.2
728.4
748.3

-138.4
-196.2
-269.1
-223.7

-163.5
-203.4
-276.3
-225.8

25.1
7.3
7.2
2.1

730.4
743.3
741.4

808.9
736.9
796.5
892.0

-78.5
6.4
-55.1

7.8
9.6
23.6

1982:
1983:
1984:
1985:
1986:
1987:
1988:
1989:

458.5
542.4
637.0
603.8
550.1
667.9
720.1
728.4

615.4
678.7
764.7
734.7
676.3
783.7
814.8
828.6

183.8
176.3
222.6
179.2
151.1
169.8
156.4
148.8

431.6
502.4
542.1
555.5
525.3
613.9
658.3
679.8

-156.9
-136.3
-127.8
-130.9
-126.2
-115.8
-94.7
-100.2

-183.4
-184.6
-186.8
-187.2
-177.5
-152.7
-134.9
-141.5

26.5
48.3
59.0
56.3
51.2
37.0
40.2
41.3

448.4
556.3
616.5
597.8
548.1
643.0
694.7
741.3

464.2
614.8
722.8
737.0
697.1
800.2
814.8
825.2

-15.8
-58.5
-106.3
-139.1
-149.0
-157.1
-120.1
-84.0

-10.1
13.8
-20.5
-5.9
-2.0
-24.9
-25.4
12.8

1990:1

735.5
765.9
705.5
683.8

867.4
888.5
825.5
863.1

176.5
175.7
151.6
176.2

690.9
712.9
673.9
686.9

-131.9
-122.7
-119.9
-179.3

-166.4
-152.0
-144.6
-191.0

34.5
29.3
24.7
11.7

748.6
764.0
720.4
688.7

828.9
837.8
812.5
756.4

-80.3
-73.8
-92.1
-67.7

13.1
-1.8
14.9
4.9

1991:1.

780.3
734.3
694.4
726.0

919.4
935.0
906.6
958.7

201.5
206.0
186.8
211.7

717.9
728.9
719.8
746.9

-139.1
-200.7
-212.2
-232.6

-145.2
-206.2
-217.7
-244.7

6.1
5.5
5.5
12.1

780.5
738.7
721.8
732.3

729.1
721.5
744.5
752.4

51.4
17.2
-22.8
-20.2

.2
4.5
27.3
6.2

1992:1
II....
III...
IV...

709.9
715.5
727.0
718.8

974.1
987.7
1,016.5
969.4

217.5
237.9
219.6
279.7

756.6
749.8
796.9
689.7

-264.2
-272.2
-289.5
-250.6

-270.2
-279.9
-290.7
-264.2

6.1
7.8
1.2
13.5

733.0
739.1
742.7
750.9

750.8
799.7
802.2
833.3

-17.7
-60.6
-59.4
-82.4

23.1
23.6
15.7
32.1

1993:1

762.0
766.7
774.3

1,024.8
988.3
988.7

177.9
208.7
179.7
195.2

847.0
779.6
809.0

-262.8
-221.5
-214.4

-263.5
-222.6
-212.7

1.1
-1.7

796.5
778.7
787.6

874.1
874.1
884.0
935.8

-77.6
-95.4
-96.4

34.4
12.0
13.3

IV
IV
IV
IV
IV
IV
IV
IV

Ill
IV »

1
Undistributed corporate profits with inventory valuation and capital consumption adjustments, corporate and noncorporate
consumption of fixed capital, and private wage accruals less disbursements.
2
Consists mainly of allocations of special drawing rights (SDRs).
3
Net exports of goods and services plus net receipts of factor income from rest of the world less net transfers plus net capital
grants received by the United States. See also Table B-21.
4
Consists of a U.S. payment to India under the Agricultural Trade Development and Assistance Act. This payment is included in
capital grants received by the United States, net.

Source: Department of Commerce, Bureau of Economic Analysis.




302

TABLE B-30.—Personal saving, flow of funds accounts, 1946-93
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Increase in
financial assets
Year or
quarter

Personal
saving

Net investment in
tangible assets 7

Less-. Net increase in
debt

Non- MortSecurities
CheckInsurcor- gage
Other
Time
able
Owner- Conance
and Money Governfinan- occu- sumer porate debt Con- Other
deposand
Corpoon sumer
busiTotal its and savings market
cial
Other
pied dura- ness non- credit d e b t 8 9
fund
ment
rate
pension
ascurren- depos- shares securi- equi- securihomes bles
re6
4
farm
asits
cy
ties 3 ties serves 5 sets
8
ties 2
sets homes

56
.0
8.7 - 2 . 9
8.6 - 2 . 0
2.7
14.9
19.2
4.6
30.1
1.6
24.6
.9
20.8
2.1
28.1
1.2
32.0
1.9
_ ^

-15

63
3.5
2.3
2.6
2.4
4.8
7.4
8.2
9.1
8.5
9.3
11.8
13.8
10.5

1946
1947
1948
1949

17.2
19.0
24.9
21.2

1950
1951..
1952
1953
1954
1955
1956
1957
1958
1959

31.1
35.7
38.7
36.2
27.6
36.0
38.9
38.5
37.0
36.0

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

38.5
38.3
44.8
49.3
61.5
68.5
83 0
84.6
82.7
82.6

34.2
36.0
40.5
45.9
57.1
57.3
64 0
72.4
69.0
70.6

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

92.1
104.4
121.9
158.3
121.6
150.2
171.1
197.4
206.2
220.3

79.9
107.6
134.9
147.5
152.5
177.2
211.4
255.7
286.5
329.1

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989

217.6
248.0
257.1
314.8
363.5
390.3
463.7
363.8
361.3
449.6

328.6
324.8
379.9
496.9
532.8
625.1
586.1
502.4
489.9
556.2

28.6
97.5
-1.9
27.7
_ 5

1990
1991
1992

435.3
384.4
441.4

483.3
452.0
499.4

34.0
12.3
51.8 -103.9
140.2 - 1 2 3 . 5

1991:1
II....
III...
IV...

484.4
298.1
410.4
344.6

543.0
424.4
415.9
424.8

37.3
39.5
114.7
15.7

- 4 4 . 2 108.6 - 5 5 . 2
-61.6 -7.2
110.5
-170.3 -17.8 -62.9
14.6 -174.9
-139.4

1992:1
II....
III...
IV...

432.8
419.0
412.0
501.9

485.1
446.3
524.7
541.7

118.7
74.7
211.8
155.5

34.6
-72.6
18.6
-160.4
-142.8 - 2 8 . 4
-118.0 - 4 0 . 0

1993:1
II....
III...

276.3
544.3
390.7

249.1
562.8
563.4

19.4
12.3

29.6
32.5
34.8

37
1.1
.9
-10
-1.2

4.2
6.1
6.7
24

10.3

9.5

.5
1.0
.5
.9
-.7
7.4
3.7
.1
6.4
4.5
3.7

-2.7

8.2
2.0
8
1.0

12.0

181

25.8
25.9
25.9
27.5
18 8
34.9
30.3

-1.1

3.7
3.8

13 6
-2.6

1.2

12 - 0 8
1.2 -.8
.2
1.0
-.3
.8
.7
-.9
7
1.9
1.5 -.1
.3
1.1
.8 - 1 . 4
4
12
1.2
2.1
1.4
1.6
.9
1.9
.2
.7
3.4
.3
11
0
-1.4
.2
-1.1
1.2
1.2
.0
-1.5
-.1
49
0
6.4
-3.0
-6.0
7.2

-1.3

8.6

28.5 - 1 1 . 1

10.8

7.4

42.5
65 8
72.6
62.8
55.3
79.6
104.2
106.3
103.2
75.7

.2
-7.5
-12.7 - 1 1 2
-2.1 - 1 3 5
14.5 - 1 2 . 2
17.0
1.4
12.7
2.4

5.9
37

13.5
13.2
13.1

6.3
6.2

15.6
19.8
21.5
35.8

9.2 120.8

2.4

1.3
.0
-.4
5.7

30.0
23.7
87.0
31.8
-30.1
43.8

1.1
2.5
7.9 - 6 . 0

-2.8

7.4

17.8
-4.6

.5

16.5

6.0
1.8
.7 - 1 0 . 5

27.5
60.6
29.4
37.4
25.4
74.9
100.3
77.8
-55.2
112.2
157.7
101.2

-10.2
-20.3

135.1
-45.6

21.3
81.9

26.2

9.4 189.1

34.5

51
5.4
5.3
5.6
6.1
6.3
8.5
8.0
8.0
87
9.7
9.7
10.7
12.2
11.9
12 5
13.5
14.5
17.1
17.8
20 2
19.6
21.1
23.3
25.8
30 3
50.4
41.8
44.6
71.5
60.3
80.3
94.3
103.5

36
2.5
2.0
1.4
3.0
1.6
3.8
2.4
2.0
1.7
3.4
1.9
4.3
1.9
3.7
44
2.5
2.1
3.2
3.2
41
6.8
5.7

11.8

5.5
18.3
17.0
20.1

7.7
8.0

27.2
31.3
38.5
42.0

1.5
58
6.8 9.4
9.3 10.2
8.5 10.9
11.9
11.9
11.6
12.6
13.0
17 1
16.0
13.6
12.3
19.2

19.6
25 4
34.3
40.6
29.1
27.4
41.5
51.5
56.8
50.4

116.2
74.4
-88.1
-64.8

132.4 - 1 3 . 1
171.2
9.7
256.3
16.0
196.6 125.5

162.8
217.1
305.8
287.2

23.1
6.0 -214.0 - 4 9 . 7
60.7 - 7 0 . 5
119.8 - 3 6 . 4
47.1 -119.7
123.7 -132.6

172.0 -155.8
248.3 - 8 7 . 7
351.4 - 3 9 . 5

392.1
240.8
312.5

75.4 106.1
87.8 103.1
20.6 105.5

3.7

38.2
24.3
20.2
85.1
44.7
24.5
-3.8

4.5

-8.6
-7.9
21.7
-9.3
53.1
33.5
31.4

-44.7
-37.6
22.5
-27.5
-87.1
5.5
-94.5 -24.5

5.3

131.5

126.9
126.7
178.1
176.2
162.4
281.9
292.0
220.9
165.4
338.4

8.8
7.9
3.7
7.7
7.2
45
8.6

17.7
27 8
36.7
40.2
30.4
28.2
44.8
65.9
78.5
75.2

56.4
5.6 - 7 . 8
69.5 - 6 3 . 0
121.0
35.7

4.7

-38.9
-16.9

7.0

12.7

11.9
15.1
20.2
23 2
21.3
26.9
26.2

51.3
50.5
30.0
71.3
93.6
93.6
119.4
123.3
126.5
114.4
98 5
75.7
94.0
68.2
70.6
78.9
85.0
6.2 86.7
41.0 96.5
72.0
-6.0
_ 3 120.9

67.5
113.5
196.8
225.3
116.6
90.3
92.8
134.8
78.2

8.7

10.3

17.2
16 3
18.2
20.5
22.1
21.6
19 0
18.5
19.9
19.9

28.5
17.5
31.3
30.5
50.4
101.0
67.3
50.2
65.6
72.8
26.0
183.8
53.4
384.5
10.3
243.2
433.7 -125.2
195.5 149.9
75.6
470.0
438.8 113.3

36.2
24.6
22.5

14.9
11.4

0.1
1.5
7.0
2.2
7.4
4.6
2.8
2.3
1.8
2.2
.7
1.8
4.2
.9
2.2
29
4.3
4.7
4.4
8.4
79
7.3
10.2
11.7
10.1

151

18.1
23.2
11.6

6.1
4.0

16.3
23.1
32.0

26.3 14.2
27.3 27.5
22.4 10.1
50.6 - 1 1 . 8
81.8 24.3
95.8 26.8
111.4 16.0
102.9 12.3
112.6
7.4
109.0 18.4
4.6
90.0
53.1 - 2 3 . 5
67.7 - 2 1 . 1
48.2 - 1 8 . 0
49.8 - 1 7 . 1
60.0 - 2 4 . 8
54.5 - 3 4 . 2
60.3 - 1 3 . 6
59.5 - 8 . 7
61.6 - 4 1 . 6
89.2 - 2 0 . 2

4.1
4.9
4.8
4.2
7.0
6.4
6.4
7.4
9.0

12.2
10.8

8.6
9.5

12.9

11.0
12.2
13.8
16.2
16.8
16.8
12 7
13.1
16.7
17.4

2.9
3.5
3.1
3.1
6.0
1.4
5.2
4.1
1.3
7.0
3.6
2.6
.3
7.7
4.0
2.2
5.9
8.5
9.5

10.1

59
5.1
10.8

9.9

2.5
2.6
2.6
1.7
5.1
3.6
2.9
2.0
4.7
4.9
4.3
3.2
6.0
6.0
7.2
7.0
7.2
9.1

10.9
12.1
12 5
16.6
15.7
18.6

4.6 17.6
13.0
31.2
26.3 14.0
43.8
39.3 19.0
26.9
43.6 22.7
34.2
9.4 58.4
39.3
8.0 41.4
45.7
62.0 22.9
62.2
93.0 36.7
83.7
109.9 45.1
116.2 38.3 111.8
94.1
4.8 103.9
95.7
69.6 16.9
56.1 16.4 112.7
117.1 48.9 126.3
135.6 81.7 151.8
171.7 82.3 197.2
203.4 57.5 108.1
240.9 32.9 103.4
219.0 50.1 106.1
87.1
211.8 49.5
51.1
176.7 13.4
20.5
165.5 - 1 3 . 1
175.5
9.3 13.8
166.7 - 1 6 . 1
6.5
74.8
159.8 - 5 . 1
159.7 - 2 0 . 4 - 1 9 . 6
20.2
176.0 - 1 0 . 7
216.0 - 9 . 8 - 2 0 . 6
78.3
111.1 - 1 4 . 7
202.8 13.5 - 1 1 . 6
172.2 48.2
9.3

78.8 - 9 . 2 127.8
95.0 —7 7 175.6
94.1 - 1 7 . 1 229.1

19.2
22.9
60.8

1.5
10.3
65.2

1
2

Saving by households, nonprofit institutions, farms, and other noncorporate business.
Consists of U.S. savings bonds, other U.S. Treasury securities, U.S. Government agency securities and government sponsored
enterprise securities, federally-related mortgage pool securities, and State and local obligations.
3
Includes mutual fund shares.
5
6

Private life insurance reserves, private insured and noninsured pension reserves, and government insurance and pension reserves.
Consists of security credit, mortgages, accident and health insurance reserves, nonlife insurance claims, and investment in bank
personal trusts for households; and of consumer credit, equity in government-sponsored enterprises, and nonlife insurance claims for
noncorporate business.
7
Purchases of physical assets less depreciation.
8
Includes data for corporate farms.
9
Other debt consists of security credit, U.S. Government and policy loans, and noncorporate business debt.
Source: Board of Governors of the Federal Reserve System.




303

TABLE B-31.—Median money income (in 1992 dollars) and poverty status of families and persons, by race,
selected years, 1971-92
Families1

Persons
below
poverty level

Below poverty level

Year

Number
(millions)

Median
money
income
(in
1992
dollars) 2

Female
householder

Total
Number
(millions)

Percent

Number
(millions)

Percent

Median money income (in 1992 dollars)
of persons 15 years old and over with
income 2 3
Males

Number
(millions)

Percent

Females

All
persons

Yearround
full-time
workers

All
persons

Yearround
full-time
workers

ALL RACES

1971
1973
1975 4
1977
1978
1979 5
198C
1981
1982
1983 4
1984
1985
1986
1987 4
1988
1989
1990
1991
1992

53.3
55.1
56.2
57.2
57.8
59.6
60.3
61.0
61.4
62.0
62.7
63.6
64.5
65.2
65.8
66.1
66.3
67.2
68.1

$33,480
35,821
34,249
35,539
36,665
37,136
35,839
34,862
34,390
34,757
35,693
36,164
37,709
38,249
38,177
38,710
37,950
37,021
36,812

5.3
4.8
5.5
5.3
5.3
5.5
6.2
6.9
7.5
7.6
7.3
7.2
7.0
7.0
6.9
6.8
7.1
7.7
8.0

10.0
8.8
9.7
9.3
9.1
9.2
10.3
11.2
12.2
12.3
11.6
11.4
10.9
10.7
10.4
10.3
10.7
11.5
11.7

2.1
2.2
2.4
2.6
2.7
2.6
3.0
3.3
3.4
3.6
3.5
3.5
3.6
3.7
3.6
3.5
3.8
4.2
4.2

33.9
32.2
32.5
31.7
31.4
30.4
32.7
34.6
36.3
36.0
34.5
34.0
34.6
34.2
33.4
32.2
33.4
35.6
34.9

25.6
23.0
25.9
24.7
24.5
26.1
29.3
31.8
34.4
35.3
33.7
33.1
32.4
32.2
31.7
31.5
33.6
35.7
36.9

12.5
11.1
12.3
11.6
11.4
11.7
13.0
14.0
15.0
15.2
14.4
14.0
13.6
13.4
13.0
12.8
13.5
14.2
14.5

$22,471
23,946
22,101
22,472
22,729
22,332
21,360
20,980
20,473
20,652
21,065
21,268
21,908
21,966
22,424
22,508
21,784
21,085
20,654

$31,351
34,088
32,289
33,454
33,385
33,139
32,685
32,221
31,780
31,706
32,413
32,596
33,147
32,952
32,427
32,155
31,108
31,244
31,012

$7,839
8,311
8,450
8,749
8,455
8,251
8,387
8,499
8,640
9,022
9,274
9,410
9,742
10,245
10,536
10,889
10,810
10,791
10,774

$18,558
19,285
19,270
19,567
20,039
19,966
19,760
19,398
20,051
20,396
20,825
21,191
21,561
21,692
21,994
22,219
22,103
21,885
22,167

47.6
48.9
49.9
50.5
50.9
52.2
52.7
53.3
53.4
53.9
54.4
55.0
55.7
56.1
56.5
56.6
56.8
57.2
57.9

34,740
37,438
35,619
37,162
38,178
38,751
37,341
36,620
36,107
36,395
37,385
38,011
39,439
39,997
40,222
40,704
39,626
38,920
38,909

3.8
3.2
3.8
3.5
3.5
3.6
4.2
4.7
5.1
5.2
4.9
5.0
4.8
4.6
4.5
4.4
4.6
5.0
5.2

7.9
6.6
7.7
7.0
6.9
6.9
8.0
8.8
9.6
9.7
9.1
9.1
8.6
8.1
7.9
7.8
8.1
8.8
8.9

1.2
1.2
1.4
1.4
1.3
1.4
1.6
1.8
1.8
1.9
1.9
2.0
2.0
2.0
1.9
1.9
2.0
2.2
2.2

26.5
24.5
25.9
24.0
23.5
22.3
25.7
27.4
27.9
28.3
27.1
27.4
28.2
26.9
26.5
25.4
26.8
28.4
28.1

17.8
15.1
17.8
16.4
16.3
17.2
19.7
21.6
23.5
24.0
23.0
22.9
22.2
21.2
20.7
20.8
22.3
23.7
24.5

9.9
8.4
9.7
8.9
8.7
9.0
10.2
11.1
12.0
12.1
11.5
11.4
11.0
10.4
10.1
10.0
10.7
11.3
11.6

23,558
25,126
23,217
23,538
23,805
23,330
22,721
22,261
21,644
21,727
22,236
22,311
23,119
23,348
23,671
23,605
22,725
22,039
21,645

32,233
35,075
33,035
34,138
34,005
34,097
33,617
32,978
32,627
32,559
33,523
33,501
34,073
33,720
33,518
33,572
32,290
31,885
31,737

7,969
8,391
8,538
8,882
8,557
8,329
8,433
8,594
8,757
9,180
9,383
9,593
9,934
10,506
10,796
11,102
11,075
11,044
11,036

18,773
19,612
19,315
19,691
20,228
20,141
19,951
19,721
20,321
20,675
21,031
21,491
21,891
22,094
22,323
22,483
22,370
22,204
22,423

5.2
5.4
5.6
5.8
5.9
6.2
6.3
6.4
6.5
6.7
6.8
6.9
7.1
7.2
7.4
7.5
7.5
7.7
7.9

-20,964
21,607
21,916
21,229
22,612
21,944
21,606
20,657
19,956
20,511
20,837
21,887
22,535
22,732
22,924
22,866
22,997
22,197
21,161

28.8
28.1
27.1
28.2
27.5
27.8
28.9
30.8
33.0
32.3
30.9
28.7
28.0
29.4
28.2
27.8
29.3
30.4
30.9

.9
1.0
1.0
1.2
1.2
1.2
1.3
1.4
1.5
1.5
1.5
1.5
1.5
1.6
1.6
1.5
1.6
1.8
1.8

53.5
52.7
50.1
51.0
50.6
49.4
49.4
52.9
56.2
53.7
51.7
50.5
50.1
51.1
49.0
46.5
48.1
51.2
49.8

7.4
7.4
7.5
7.7
7.6
8.1
8.6
9.2
9.7
9.9
9.5
8.9
9.0
9.5
9.4
9.3
9.8
10.2
10.6

32.5
31.4
31.3
31.3
30.6
31.0
32.5
34.2
35.6
35.7
33.8
31.3
31.1
32.4
31.3
30.7
31.9
32.7
33.3

14,050
15,198
13,880
13,968
14,261
14,441
13,653
13,237
12,970
12,706
12,758
14,040
13,853
13,851
14,284
14,266
13,813
13,352
12,754

22,041
23,640
24,585
23,536
26,044
24,573
23,653
23,332
23,173
23,116
22,879
23,432
24,023
24,110
24,569
23,426
23,059
23,309
22,942

6,982
7,574
7,756
7,670
7,705
7,580
7,808
7,635
7,724
7,845
8,323
8,185
8,405
8,582
8,716
8,910
8,940
9,081
8,857

16,576
16,631
18,454
18,403
18,748
18,455
18,607
17,811
18,163
18,312
18,953
19,024
19,156
19,733
20,004
20,220
19,906
19,710
20,299

WHITE

1971
1973
1975 4
1977
1978
1979 5
1980
1981
1982
1983 4
1984
1985
1986
1987 4
1988
1989
1990
1991
1992
BLACK
1971
1973
1975 4
1977
1978
1979 5
1980
1981
1982
1983 4
1984
1985
1986
1987 4
1988
1989
1990
1991
1992

!
The term "family" refers to a group of two or more persons related by birth, marriage, or adoption and residing together; all such
persons are considered members of the same family. Beginning 1979, based on householder concept and restricted to primary families.
2
Current dollar median money income deflated by CPI-U-X1.
3
Prior to 1979, data are for persons 14 years and over.
4
Based on revised methodology; comparable with succeeding years.
5
Based on 1980 census population controls; comparable with succeeding years.

Note.—Poverty rates (percent of persons below poverty level) for all races for years not shown above are: 1959, 22.4; 1960, 22.2;
1961, 21.9; 1962, 21.0; 1963, 19.5; 1964, 19.0; 1965, 17.3; 1966, 14.7; 1967, 14.2; 1968, 12.8; 1969, 12.1; 1970, 12.6; 1972, 11.9;
1974, 11.2; and 1976, 11.8.
Poverty thresholds are updated each year to reflect changes in the consumer price index (CPI-U).
For details see "Current Population Reports," Series P-60, Nos. 184 and 185.
Source: Department of Commerce, Bureau of the Census.




304

POPULATION, EMPLOYMENT, WAGES, A N D PRODUCTIVITY
T A B L E B-32.—Population by age group, 7929-93
(Thousands of persons]
Age (years)
July 1

Total
Under 5

5-15

16-19

20-24

25-44

45-64

65 and
over
6,474

1929

121,767

11,734

26,800

9,127

10,694

35,862

21,076

1933

125,579

10.612

26,897

9,302

11,152

37,319

22,933

7,363

1939

130,880

10,418

25,179

9.822

11,519

39,354

25,823

8,764

1940
1941
1942
1943
1944

132,122
133,402
134,860
136,739
138,397

10,579
10,850
11,301
12,016
12,524

24,811
24,516
24,231
24,093
23,949

9,895
9,840
9,730
9,607
9,561

11,690
11,807
11,955
12.064
12,062

39,868
40,383
40,861
41,420
42,016

26,249
26,718
27,196
27,671
28,138

9,031
9,288
9,584
9,867
10,147

1945
1946
1947
1948
1949

139,928
141,389
144,126
146,631
149,188

12,979
13,244
14,406
14,919
15,607

23,907
24,103
24,468
25,209
25,852

9,361
9,119
9,097
8,952
8,788

12,036
12,004
11,814
11,794
11,700

42,521
43,027
43,657
44,288
44,916

28,630
29,064
29,498
29,931
30,405

10,494
10,828
11,185
11,538
11,921

1950
1951
1952
1953
1954

152,271
154,878
157,553
160,184
163,026

16,410
17,333
17,312
17,638
18,057

26,721
27,279
28,894
30,227
31,480

8,542
8,446
8,414
8,460
8,637

11,680
11,552
11,350
11,062
10,832

45,672
46,103
46,495
46,786
47,001

30,849
31,362
31,884
32,394
32,942

12,397
12,803
13,203
13,617
14,076

1955
1956
1957
1958.,
1959

165,931
168,903
171,984
174,882
177,830

18,566
19,003
19,494
19,887
20,175

32,682
33,994
35,272
36,445
37,368

8,744
8,916
9,195
9,543
10,215

10,714
10,616
10,603
10,756
10,969

47,194
47,379
47,440
47,337
47,192

33,506
34,057
34,591
35,109
35,663

14,525
14,938
15,388
15,806
16,248

1960
1961
1962
1963
1964

180,671
183,691
186,538
189,242
191,889

20,341
20,522
20,469
20,342
20,165

38,494
39,765
41,205
41,626
42,297

10,683
11,025
11,180
12,007
12,736

11,134
11,483
11,959
12,714
13,269

47,140
47,084
47,013
46,994
46,958

36,203
36,722
37,255
37,782
38,338

16,675
17,089
17,457
17,778
18,127

1965
1966
1967
1968
1969

194,303
196,560
198,712
200,706
202,677

19,824
19,208
18,563
17,913
17,376

42,938
43,702
44,244
44,622
44,840

13,516
14,311
14,200
14,452
14,800

13,746
14,050
15,248
15,786
16,480

46,912
47,001
47,194
47,721
48,064

38,916
39,534
40,193
40,846
41,437

18,451
18,755
19,071
19,365
19,680

1970
1971
1972
1973
1974

205,052
207,661
209,896
211,909
213,854

17,166
17,244
17,101
16,851
16,487

44,816
44,591
44,203
43,582
42,989

15,289
15,688
16,039
16,446
16,769

17,202
18,159
18,153
18,521
18,975

48,473
48,936
50,482
51,749
53,051

41,999
42,482
42,898
43,235
43,522

20,107
20,561
21,020
21,525
22,061

1975
1976
1977
1978
1979

215,973
218,035
220,239
222,585
225,055

16,121
15,617
15,564
15,735
16,063

42,508
42,099
41,298
40,428
39,552

17,017
17,194
17,276
17,288
17,242

19,527
19,986
20,499
20,946
21,297

54,302
55,852
57,561
59,400
61,379

43,801
44,008
44,150
44,286
44,390

22,696
23,278
23,892
24,502
25,134

1980
1981
1982
1983
1984

227,726
229,966
232,188
234,307
236,348

16,451
16,893
17,228
17,547
17,695

38,838
38,144
37,784
37,526
37,461

17,167
16,812
16,332
15,823
15,295

21,590
21,869
21,902
21,844
21,737

63,470
65,528
67,692
69,733
71,735

44,504
44,500
44,462
44,474
44,547

25,707
26,221
26,787
27,361
27,878

1985
1986
1987
1988
1989

238,466
240,651
242,804
245,021
247,342

17,842
17,963
18,052
18,195
18,508

37,450
37,404
37,333
37,593
37,972

15,005
15,024
15,215
15,198
14,913

21,478
20,942
20,385
19,846
19,442

73,673
75,651
77,338
78,595
79,943

44,602
44,660
44,854
45,471
45,882

28,416
29,008
29,626
30,124
30,682

249,900
252,671
255,462
258,233

18,850
19,204
19,512

38,590
39,201
39,898

14,444
13,903
13,644

19,302
19,352
19,176

81,200
82,488
82,594

46,287
46,759
48,352

31,228
31,764
32,285

,

1990
1991
1992
1993

Note.—Includes Armed Forces overseas beginning 1940. Includes Alaska and Hawaii beginning 1950.
All estimates are consistent with decennial census enumerations.
Source: Department of Commerce, Bureau of the Census.




305

TABLE B-33.—Population and the labor force, 1929-93
[Monthly data seasonally adjusted, except as noted]
Civilian labor force

Year or month

Civilian
noninstitutional
population 1

Labor
force
including

Resident
Armedl
Forces resident
Armed
Forces

Employment
including
resident
Armed
Forces

Unemployment rate

Employment

Total
Total

cultural

Nonagricultural

Unemployment

All
workers 2

Percent

Thousands of persons 14 years of age and over

1929
1933
1939
1940
1941
1942
1943
1944
1945
1946
1947

49,180
51,590
55,230
55,640
55,910
56,410
55,540
54,630
53,860
57,520
60,168

99,840
99,900
98,640
94,640
93,220
94,090

103,070
106,018

47,630 10,450
38,760 10,090
45,750 9,610
47,520 9,540
50,350 9,100
53,750 9,250
54,470 9,080
53,960 8,950
52,820 8,580
55,250 8,320
57,812 8,256

Civilian
workers 3

CivilCivilian
ian
emlabor
ployforce
ment/
parpopticiulapation
tion
rate 4
ratio 5

37,180 1,550
28,670 12,830
36,140 9,480
37,980 8,120
41,250 5,560
44,500 2,660
45,390 1,070
45,010
670
44,240 1,040
46,930 2,270
49,557 2,356

32
.
24.9
17.2
14.6
99
.
47
.
19
.
12
.
19
.
39
.
39
.

55.7
56.0
57.2
58.7
58.6
57.2
55.8
56.8

47.6
50.4
54.5
57.6
57.9

49,148 2,311
50J14 2,276
49,993 3,637
51,758 3,288
53,235 2,055
53,749 1,883
54,919 1,834
53,904 3,532
55,722 2,852
57,514 2,750
58,123 2,859
57,450 4,602
59,065 3,740
60,318 3,852
60,546 4,714
61,759 3,911
63,076 4,070
64,782 3,786
66,726 3,366
68,915 2,875
70,527 2,975
72,103 2,817
74,296 2,832
75,215 4,093
75,972 5,016
78,669 4,882
81,594 4,365
83,279 5,156
82,438 7,929
85,421 7,406
88,734 6,991
92,661 6,202
95,477 6,137
95,938 7,637
97,030 8,273
96,125 10,678
97,450 10,717
101,685 8,539
103,971 8,312
106,434 8,237
109,232 7,425
111,800 6,701
114,142 6,528
114,728 6,874
113,644 8,426
114,391 9,384
116,232 8,734

39
.
38
.
59
.
53
.
33
.
30
.
29
.
55
.
44
.
41
.
43
.
68
.
55
.
55
.
67
.
55
.
57
.
52
.
45
.
38
.
38
.
36
.
35
.
49
.
59
.
56
.
49
.
56
.
85
.
77
.
71
.
61
.
58
.
71
.
76
.
97
.
96
.
75
.
72
.
70
.
62
.
55
.
53
.
55
.
67
.
74
.
68
.

58.3
58.8
58.9
59.2
59.2
59.0
58.9
58.8
59.3
60.0
59.6
59.5
59.3
59.4
59.3
58.8
58.7
58.7
58.9
59.2
59.6
59.6
60.1
60.4
60.2
60.4
60.8
61.3
61.2
61.6
62.3
63.2
63.7
63.8
63.9
64.0
64.0
64.4
64.8
65.3
65.6
65.9
66.5
66.4
66.0
66.3
66.2

56.0
56.6
55.4

56.1
53.6
54.5

Thousands of persons 16 years of age and over
1947
1948
1949
1950
1951
1952
1953 6
1954
1955
1956
1957
1958
1959
I960 6
1961 6
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971 6
1972
1973 6
1974
1975
1976
1977
1978 6
1979
1980
1981
1982
1983
1984
1985
1986 6
1987
1988
1989
1990
1991
1992
1993

101,827
103,068
103,994
104,995
104,621
105,231
107,056
108,321
109,683
110,954
112,265
113,727
115,329
117,245
118,771
120,153
122,416
124,485
126,513
128,058
129,874
132,028
134,335
137,085
140,216
144,126
147,096
150,120
153,153
156,150
159,033
161,910
164,863
167,745
170,130
172,271
174,215
176,383
178,206
180,587
182,753
184,613
186,393
188,049
189,765
191,576
193,550

1,169
2,143
2,386
2,231
2,142
2,064
1,965
1,948
1,847
1,788
1,861
1,900
2,061
2,006
2,018
1,946
2,122
2,218
2,253
2,238
2,118
1,973
1,813
1,774
1,721
1,678
1,668
1,656
1,631
1,597
1,604
1,645
1,668
1,676
1,697
1,706
1,706
1,737
1,709
1,688
1,637
1,564
1,566
1,485

63,377
64,160
64,524
65,246
65,785
67,087
68,517
68,877
69,486
70,157
71,489
72,359
72,675
73,839
75,109
76,401
77,892
79,565
80,990
82,972
84,889
86,355
88,847
91,203
93,670
95,453
97,826
100,665
103,882
106,559
108,544
110,315
111,872
113,226
115,241
117,167
119,540
121,602
123,378
125,557
126,424
126,867
128,548
129,525

60,087
62,104
62,636
63,410
62,251
64,234
65,764
66,019
64,883
66,418
67,639
67,646
68,763
69,768
71,323
73,034
75,017
76,590
78,173
80,140
80,796
81,340
83,966
86,838
88,515
87,524
90,420
93,673
97,679
100,421
100,907
102,042
101,194
102,510
106,702
108,856
111,303
114,177
116,677
119,030
119,550
118,440
119,164
120,791

59,350
60,621
61,286
62,208
62,017
62,138
63,015
63,643
65,023
66,552
66,929
67,639
68,369
69,628
70,459
70,614
71,833
73,091
74,455
75,770
77,347
78,737
80,734
82,771
84,382
87,034
89,429
91,949
93,775
96,158
99,009
102,251
104,962
106,940
108,670
110,204
111,550
113,544
115,461
117,834
119,865
121,669
123,869
124,787
125,303
126,982
128,040

57,038
58,343
57,651
58,918
59,961
60,250
61,179
60,109
62,170
63,799
64,071
63,036
64,630
65,778
65,746
66,702
67,762
69,305
71,088
72,895
74,372
75,920
77,902
78,678
79,367
82,153
85,064
86,794
85,846
88,752
92,017
96,048
98,824
99,303
100,397
99,526
100,834
105,005
107,150
109,597
112,440
114,968
117,342
117,914
116,877
117,598
119,306

1

Not seasonally adjusted.
Unemployed as percent of labor force including resident Armed Forces.
Unemployed as percent of civilian labor force.
4
Civilian labor force as percent of civilian noninstitutional population.
5
Civilian employment as percent of civilian noninstitutional population.
See next page for continuation of table.
2
3




306

7,890
7,629
7,658
7,160
6,726
6,500
6,260
6,205
6,450
6,283
5,947
5,586
5,565
5,458
5,200
4,944
4,687
4,523
4,361
3,979
3,844
3,817
3,606
3,463
3,394
3,484
3,470
3,515
3,408
3,331
3,283
3,387
3,347
3,364
3,368
3,401
3,383
3,321
3,179
3,163
3,208
3,169
3,199
3,186
3,233
3,207
3,074

52
.
32
.
29
.
28
.
54
.
43
.
40
.
42
.
66
.
53
.

54
.
65
.
54
.
55
.
50
.
44
.
37
.
37
.
35
.
34
.
48
.
58
.
55
.
48
.
55
.
83
.
76
.
69
.
60
.
58
.
70
.
75
.
95
.
95
.
74
.
71
.
69
.
61
.
54
.
52
.
54
.
66
.
73
.
67
.

56.1
57.3
57.3
57.1
55.5
56.7
57.5
57.1
55.4
56.0
56.1
55.4
55.5
55.4
55.7
56.2
56.9
57.3
57.5
58.0
57.4
56.6
57.0
57.8
57.8
56.1
56.8
57.9
59.3
59.9
59.2
59.0
57.8
57.9
59.5
60.1
60.7
61.5
62.3
63.0
62.7
61.6
61.4
61.6

TABLE B-33.—Population and the labor force, 1929-93—Continued

[Monthly data seasonally adjusted, except as noted]
Unemployment rate

Civilian labor force

Year or month

Civilian
noninstitutional
population 1

Resident
Armed
Forcesl

Labor
force
including
Armed
Forces

Employment
including
resident
Armed
Forces

Employment

Total
Total

Agricultural

Nonagricultural

Unemployment

All
workers 2

Thousands of persons 16 years of age and over
187,293
187,412
187,529
187,669
187,828
187,977

1,697
1,678
1,669
1,657
1,639
1,630

126,298
126,299
126,432
126,470
126,554
126,282\

119,687
119,714
119,942
119,762
119.955
119,868

124,601
124,621
124,763
124,813
124,915
124,652

117,990
118,036
118,273
118,105
118,316
118,238

3,156
3,123
3,223
3,167
3,289
3,257

114,834
114,913
115,050
114,938
115,027
114,981

6,611
6,585
6,490
6,708
6,599
6,414

5.2
5.2
5.1
5.3
5.2
5.1

July..
Aug..
Sept.
Oct...
Nov..

188,136
188,261
188,401
188,525
188,697
188,866

1,627
1,640
1,601
1,570
1,615
1,617

126,284
126,457
126,504
126,480
126,477
126,766

119,576
119,446
119,389
119,288
118,974
119,033

124,657
124,817
124,903
124,910
124,862
125,149

117,949
117,806
117,788
117,718
117,359
117,416

3,108
3,149
3,170
3,201
3,149
3,252

114,841
114,657
114,618
114,517
114,210
114,164

6,708
7,011
7,115
7,192
7,503
7,733

5.3
5.5
5.6
5.7
5.9
6.1

1991: Jan...
Feb...
Mar..
Apr...
May..
June.

188,977
189,115
189,243
189,380
189,522
189,668

1,615
1,602
1,460
1,456
1,458
1,505

126,402
126,629
126,716
127,177
126,643
126,872

118,582
118.471
118,251
118,867
118,104
118,383

124,787
125,027
125,256
125,721
125,185
125,367

116,967
116,869
116,791
117,411
116,646
116,878

3,173
3,228
3,131
3,189
3,269
3,281

113,794
113,641
113,660
114.222
113,377
113,597

7,820
8,158
8,465
8,310
8,539
8,489

6.2
6.4
6.7
6.5
6.7
6.7

July..
Aug..
Sept.
Oct...
Nov..

189,839
189,973
190,122
190,289
190,452
190,605

1,604
1,616
1,624
1,614
1,605
1,604

126,706
126,565
127,231
127,192
127,124
127,245

118,342
118,121
118,766
118,611
118,453
118,240

125,102
124,949
125,607
125,578
125,519
125.641

116,738
116,505
117,142
116,997
116,848
116,636

3,258
3,273
3.275
3,231
3,255
3,141

113,480
113,232
113,867
113,766
113,593
113.495

8,364
8,444
8,465
8,581
8,671
9,005

6.6
6.7
6.7
6.7
6.8
7.1

1,599
1,585
1,585
1,577
1,574
1,570

127,748
127,794
128,130
128,494
128,610
128,839

118,729
118,504
118,840
119,247
119,108
119,068

126,149
126,209
126,545
126,917
127,036
127,269

117,130
116,919
117,255
117,670
117,534
117,498

3,136
3,218
3,208
3,220
3,192
3,248

113,994
113,701
114,047
114,450
114,342
114,250

9,019
9,290
9,290
9,247
9,502
9,771

7.1
7.3
7.3
7.2
7.4
7.6

1,568
1,566
1,566
1,552
1,531
1,517

127,358
127.339
127,306
126,933
127,287
127,469
127,224
127,400
127,440
127,539
128,075
128.056

117,763
117,749
117,772
117,723
117,974
118,155
118,178
118,442
118,562
118,585
119,180
119,187

1,471
1,482
1,482
1,475
1,470
1,461

129,573
129,816
129,590
130,055
130,132
130,359

128,102
128,334
128,108
128,580
128.662
128,898

119,370
119,692
119,568
119,941
120.332
120,661

3,043
3,005
3.093
3,021
3,114
3.0%

9,046
8,958
8,878
8,954
8,895
8,869
8,732
8,642
8,540
8,639
8,330
8.237

7.0
6.9
6.9
6.9
6.9
6.8

193,633
193,793
193,971
194,151
194,321
194,472

114,546
114,512
114,561
114,535
114,804
114,933
114,996
115,326
115,463
115,514
116,106
116,156
116,327
116,687
116,475
116,920
117,218
117,565

7.4
7.4
7.4
7.2
7.2
7.2

July.
Aug.
Sept
Oct..
Nov.
Dec

119,331
119,315
119,338
119,275
119,505
119.672
119,693
119,954
120,059
120,077
120,664
120.664
120,841
121.174
121,050
121.416
121,802
122,122

9,595
9,590
9,534
9.210
9,313
9,314

1,515
1,512
1,497
1,492
1,484
1,477

128,926
128,905
128,872
128,485
128,818
128,986
128,739
128,912
128,937
129,031
129,559
129,533

3,217
3,237
3,211
3,188
3,170
3.222

1993: Jan...
Feb...
Mar..
Apr...
May..
June

190,759
190,884
191,022
191,168
191,307
191,455
191,622
191,790
191,947
192,131
192,316
192,509
192,644
192,786
192,959
193,126
193,283
193,456

Dec.

1992: Jan...
Feb...
Mar..
Apr...
May..
June.
July..
Aug..
Sept.
Oct...
Nov..
Dec.

3,182
3,116
3,099
3,071
3,074
3,031

85:

Percent

1990: Jan...
Feb...
Mar..
Apr...
May..
June.

Dec.

Civilian
workers 3

Civilian
employment/
populapation tion 5
rate4 ratio
Civilian
labor
force

6.7
6.7
6.6
6.6
6.4
6.3

5.3
5.3
5.2
5.4
5.3
5.1
5.4
5.6
5.7
5.8
6.0
6.2
6.3
6.5
6.8
6.6
6.8
6.8
6.7
6.8
6.7
6.8
6.9
7.2
7.1
7.4
7.3
7.3
7.5
7.7
7.5
7.5
7.5
7.3
7.3
7.3
7.1
7.0
7.0
7.0
6.9
6.9
6.8
6.7
6.7
6.7
6.5
6.4

66.5
66.5
66.5
66.5
66.5
66.3

63.0
63.0
63.1
62.9
63.0
62.9

66.3
66.3
66.3
66.3
66.2
66.3

62.7
62.6
62.5
62.4
62.2
62.2

66.0
66.1
66.2
66.4
66.1
66.1

61.9
61.8
61.7
62.0
61.5
61.6

65.9
65.8
66.1
66.0
65.9
65.9

61.5
61.3
61.6
61.5
61.4
61.2

66.1
66.1
66.2
66.4
66.4
66.5

61.4
61.3
61.4
61.6
61.4
61.4

66.5
66.4
66.3
66.1
66.2
66.2

61.5
61.4
61.4
61.3
61.3
61.4

66.0
66.1
66.0
66.0
66.3
66.2

61.3
61.4
61.4
61.4
61.7
61.6

66.2
66.2
66.0
66.2
66.2
66.3

61.6
61.8
61.6
61.8
61.9
62.0

6
Not strictly comparable with earlier data due to population adjustments as follows: Beginning 1953, introduction of 1950 census
data added about 600,000 to population and 350,000 to labor force, total employment, and agricultural employment. Beginning 1960,
inclusion of Alaska and Hawaii added about 500,000 to population, 300,000 to labor force, and 240.000 to nonagricultural employment.
Beginning 1962, introduction of 1960 census data reduced population by about 50.000 and labor force and employment by 200,000.
Beginning 1972, introduction of 1970 census data added about 800,000 to civilian noninstitutional population and 333,000 to labor
force and employment. A subsequent adjustment based on 1970 census in March 1973 added 60,000 to labor force and to employment.
Beginning 1978, changes in sampling and estimation procedures introduced into the household survey added about 250,000 to labor
force and to employment. Unemployment levels and rates were not significantly affected. Beginning 1986, the introduction of revised
population controls added about 400,000 to the civilian population and labor force and 350,000 to civilian employment. Unemployment
levels and rates were not significantly affected.

Note.—Labor force data in Tables B-33 through B-42 are based on household interviews and relate to the calendar week including
the 12th of the month. For definitions of terms, area samples used, historical comparability of the data, comparability with other series,
etc., see "Employment and Earnings."
Source: Department of Labor, Bureau of Labor Statistics.




307

TABLE B-34.—Civilian employment and unemployment by sex and age. 1947-93
[Thousands ot persons 16 years of age and over; monthly data seasonally adjusted]

Unemployment

Civilian employment
Males

Females

Year or month
Total
Total

1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1992. Jan..
Feb...
Mar..
Apr...
May..
June.
July..
Aug..
Sept.
Oct...
Nov..
Dec.
1993: Jan..
Feb...
Mar.
Apr..
May.
June
July.
Aug.
Sept
Oct..
Nov.
Dec.

57,038
58,343
57,651
58,918
59,961
60,250
61,179
60,109
62,170
63,799
64,071
63,036
64,630
65,778
65,746
66,702
67,762
69,305
71,088
72,895
74,372
75,920
77,902
78,678
79,367
82,153
85,064
86,794
85,846
88,752
92,017
96,048
98,824
99,303
100,397
99,526
100,834
105,005
107,150
109,597
112,440
114,968
117,342
117,914
116,877
117,598
119,306
117,130
116,919
117,255
117,670
117,534
117,498
117,763
117,749
117,772
117,723
117,974
118,155
118,178
118,442
118,562
118,585
119,180
119,187
119,370
119,692
119,568
119,941
120,332
120,661

40,995
41,725
40,925
41,578
41,780
41,682
42,430
41,619
42,621
43,379
43,357
42,423
43,466
43,904
43,656
44,177
44,657
45,474
46,340
46,919
47,479
48,114
48,818
48,990
49,390
50,896
52,349
53,024
51,857
53,138
54,728
56,479
57,607
57,186
57,397
56,271
56,787
59,091
59,891
60,892
62,107
63,273
64,315
64,435
63,593
63,805
64,700
63,499
63,319
63,553
63,853
63,821
63,732
63,830
63,869
63,980
63,920
64,028
64,178
64,237
64,329
64,355
64,416
64,687
64,642
64,728
64,904
64,756
64,971
65,144
65,259

20
years
and
over

Total

38,776
39,382
38,803
39,394
39,626
39,578
40,296
39,634
40,526
41,216
41,239
40,411
41,267
41,543
41,342
41,815
42,251
42,886
43,422
43,668
44,294
44,859
45,388
45,581
45,912
47,130
48,310
48,922
48,018
49,190
50,555
52,143
53,308
53,101
53,582
52,891
53,487
55,769
56,562
57,569
58,726
59,781
60,837
61,198
60,714
61,019
61,865
60,649
60,579
60,860
61,090
61,075
61,009
61,083
61,104
61,141
61,071
61,200
61,314
61,418
61,477
61,498
61,614
61,849
61,805
61,869
62,006
61,901
62,172
62,315
62,444

16,045
16,617
16,723
17,340
18,181
18,568
18,749
18,490
19,551
20,419
20,714
20,613
21,164
21,874
22,090
22,525
23,105
23,831
24,748
25,976
26,893
27,807
29,084
29,688
29,976
31,257
32,715
33,769
33,989
35,615
37,289
39,569
41,217
42,117
43,000
43,256
44,047
45,915
47,259
48,706
50,334
51,696
53,027
53,479
53,284
53,793
54,606
53,631
53,600
53,702
53,817
53,713
53,766
53,933
53,880
53,792
53,803
53,946
53,977
53,941
54,113
54,207
54,169
54,493
54,545
54,642
54,788
54,812
54,970
55,188
55,402

16-19
years

2,218
2,344
2,124
2,186
2,156
2,107
2,136
1,985
2,095
2,164
2,115
2,012
2,198
2,361
2,315
2,362
2,406
2,587
2,918
3,253
3,186
3,255
3,430
3,409
3,478
3,765
4,039
4,103
3,839
3,947
4,174
4,336
4,300
4,085
3,815
3,379
3,300
3,322
3,328
3,323
3,381
3,492
3,477
3,237
2,879
2,786
2,836
2,850
2,740
2,693
2,763
2,746
2,723
2,747
2,765
2,839
2,849
2,828
2,864
2,819
2,852
2,857
2,802
2,838
2,837
2,859
2,898
2,855
2,799
2,829
2,815

16-19
years

1,691
1,682
1,588
1,517
1,611
1,612
1,584
1,490
1,547
1,654
1,663
1,570
1,640
1,768
1,793
1,833
1,849
1,929
2,118
2,468
2,496
2,526
2,687
2,735
2,730
2,980
3,231
3,345
3,263
3,389
3,514
3,734
3,783
3,625
3,411
3,170
3,043
3,122
3,105
3,149
3,260
3,313
3,282
3,024
2,749
2,613
2,694
2,677
2,676
2,624
2,615
2,624
2,553
2,565
2,642
2,601
2,583
2,579
2,619
2,633
2,634
2,591
2,636
2,716
2,670
2,741
2,704
2,740
2,727
2,765
2,771

Note.—See footnote 6 and Note, Table B-33.
Source: Department of Labor, Bureau of Labor Statistics.




308

Males

Females

20
years
and
over

Total

20
20
16-19 years
Total 16-19 years Total years and
years and
over
over

14,354
14,936
15,137
15,824
16,570
16,958
17,164
17,000
18,002
18,767
19,052
19,043
19,524
20,105
20,296
20,693
21,257
21,903
22,630
23,510
24,397
25,281
26,397
26,952
27,246
28,276
29,484
30,424
30,726
32,226
33,775
35,836
37,434
38,492
39,590
40,086
41,004
42,793
44,154
45,556
47,074
48,383
49,745
50,455
50,535
51,181
51,912
50,954
50,924
51,078
51,202
51,089
51,213
51,368
51,238
51,191
51,220
51,367
51,358
51,308
51,479
51,616
51,533
51,777
51,875
51,901
52,084
52,072
52,243
52,423
52,631

2,311
2,276
3,637
3,288
2,055
1,883
1,834
3,532
2,852
2,750
2,859
4,602
3,740
3,852
4,714
3,911
4,070
3,786
3,366
2,875
2,975
2,817
2,832
4,093
5,016
4,882
4,365
5,156
7,929
7,406
6,991
6,202
6,137
7,637
8,273
10,678
10,717
8,539
8,312
8,237
7,425
6,701
6,528
6,874
8,426
9,384
8,734
9,019
9,290
9,290
9,247
9,502
9,771
9,595
9,590
9,534
9,210
9,313
9,314

1,692 270 1,422 619
1,559 256 1,305 717
2,572 353 2,219 1,065
2,239 318 1,922 1,049
1,221
191 1,029 834
698
1,185 205 980
1,202
184 1,019 632
2,344 310 2,035 1,188
1,854 274 1,580 998
1,711 269 1,442 1,039
1,841 300 1,541 1,018
3,098 416 2,681 1,504
2,420 398 2,022 1,320
2,486 426 2,060 1,366
2,997 479 2,518 1,717
2,423 408 2,016 1,488
2,472 501 1,971 1,598
2,205 487 1,718 1,581
1,914 479 1,435 1,452
1,551 432 1,120 1,324
1,508 448 1,060 1,468
993 1,397
1,419 426
1,403 440 963 1,429
2,238 599 1,638 1,855
2,789 693 2,097 2,227
2,659 711 1,948 2,222
2,275 653 1,624 2,089
2,714 757 1,957 2,441
4,442 966 3,476 3,486
4,036 939 3,098 3,369
3,667 874 2,794 3,324
3,142 813 2,328 3,061
3,120 811 2,308 3,018
4,267 913 3,353 3,370
4,577 962 3,615 3,696
6,179 1,090 5,089 4,499
6,260 1,003 5,257 4,457
4,744 812 3,932 3,794
4,521
806 3,715 3,791
4,530 779 3,751 3,707
4,101
732 3,369 3,324
3,655 667 2,987 3,046
3,525 658 2,867 3,003
3,799 629 3,170 3,075
4,817 709 4,109 3,609
5,380 761 4,619 4,005
4,932 728 4,204 3,801
5,211 724 4,487 3,808
5,379 771 4,608 3,911
5,346 772 4,574 3,944
5,279 703 4,576 3,968
5,526 742 4,784 3,976
5,650 865 4,785 4,121
5,442 768 4,674
5,476 776 4,700 4,153
5,443 820 4,623 4,114
5,344 683 4,661 4,091
5,330 764 4,566 3,866
5,201 753 4,448 3,983
4,977 737 4,240 4,113
5,067 742 4,325 4,069
5,147 729 4,418 3,891
5,098 810 4,288 3,731
5,016 731 4,285 3,856
5,041 759 4,282 3,879
5,002 731 4,271 3,828
4,943 728 4,215 3,730
4,824 687 4,137 3,699
4,849 715 4,134 3,716
4,586 703 3,883 3,790
4,554 677 3,877 3,744
3,683

9,046
8,958
8,878
8,954
8,895
8,869
8,732
8,642
8,540
8,639
8,330
8,237

144
153
223
195
145
140
123
191
176
209
197
262
256
286
349
313
383
385
395
405
391
412
413
506
568
598
583
665
802
780
789
769
743
755
800
886
825
687
661
675
616
558
536
519
581
591
568
561
579
575
559
594
682
630
577
614
535
615
576
594
596
588
575
640
571
531
534
537
571
546
531

475
564
841
854
689
559
510
997
823
832
821
1,242
1,063
1,080
1,368
1,175
1,216
1,195
1,056
921
1,078
985
1,015
1,349
1,658
1,625
1,507
1,777
2,684
2,588
2,535
2,292
2,276
2,615
2,895
3,613
3,632
3,107
3,129
3,032
2,709
2,487
2,467
2,555
3,028
3,413
3,234
3,247
3,332
3,369
3,409
3,382
3,439
3,523
3,537
3,477
3,331
3,368
3,537
3,475
3,295
3,143
3,281
3,239
3,257
3,199
3,165
3,179
3,219
3,198
3,152

T A B L E B-35.—Civilian employment by demographic characteristic, 1954-93
[Thousands of persons 16 years of age and over; monthly data seasonally adjusted]
White
Year or
month

All
civilian
workers

Black

Black and other

Total

Males

Females

Both
sexes
16-19

Total

Males

Females

Both
sexes
16-19

Total

Males

Females

Both
sexes
16-19

1954
1955
1956
1957
1958
1959

60,109
62,170
63,799
64,071
63,036
64,630

53,957
55,833
57,269
57,465
56,613
58,006

37,846
38,719
39,368
39,349
38,591
39,494

16,111
17,114
17,901
18,116
18,022
18,512

3,078
3,225
3,389
3,374
3,216
3,475

6,152
6,341
6,534
6,604
6,423
6,623

3,773
3,904
4,013
4,006
3,833
3,971

2,379
2,437
2,521
2,598
2,590
2,652

396
418
430
407
365
362

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

65,778
65,746
66,702
67,762
69,305
71,088
72,895
74,372
75,920
77,902

58,850
58,913
59,698
60,622
61,922
63,446
65,021
66,361
67,750
69,518

39,755
39,588
40,016
40,428
41,115
41,844
42,331
42,833
43,411
44,048

19,095
19,325
19,682
20,194
20,807
21,602
22,690
23,528
24,339
25,470

3,700
3,693
3,774
3,851
4,076
4,562
5,176
5,114
5,195
5,508

6,928
6,833
7,003
7,140
7,383
7,643
7,877
8,011
8,169
8,384

4,149
4,068
4,160
4,229
4,359
4,496
4,588
4,646
4,702
4,770

2,779
2,765
2,843
2,911
3,024
3,147
3,289
3,365
3,467
3,614

430
414
420
404
440
474
545
568
584
609

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

78,678
79,367
82,153
85,064
86,794
85,846
88,752
92,017
96,048
98,824

70,217
70,878
73,370
75,708
77,184
76,411
78,853
81,700
84,936
87,259

44,178
44,595
45,944
47,085
47,674
46,697
47,775
49,150
50,544
51,452

26,039
26,283
27,426
28,623
29,511
29,714
31,078
32,550
34,392
35,807

5,571
5,670
6,173
6,623
6,796
6,487
6,724
7,068
7,367
7,356

8,464 4,813
8,488 4,796
8,783 4,952
9,356 5,265
9,610 5,352
9,435 5,161
9,899 5,363
10,317 5,579
11,112 5,936
11,565 6,156

3,650
3,692
3,832
4,092
4,258
4,275
4,536
4,739
5,177
5,409

574
538
573
647
652
615
611
619
703
727

7,802
8,128
8,203
7,894
8,227
8,540
9,102
9,359

4,368
4,527
4,527
4,275
4,404
4,565
4,796
4,923

3,433
3,601
3,677
3,618
3,823
3,975
4,307
4,436

509
570
554
507
508
508
571
579

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989

99,303
100,397
99,526
100,834
105,005
107,150
109,597
112,440
114,968
117,342

87,715
88,709
87,903
92,120
93,736
95,660
97,789
99,812
101,584

51,127
51,315
50,287
50,621
52,462
53,046
53,785
54,647
55,550
56,352

36,587
37,394
37,615
38,272
39,659
40,690
41,876
43,142
44,262
45,232

7,021
6,588
5,984
5,799
5,836
5,768
5,792
5,898
6,030
5,946

11,588 6,059
11,688 6,083
11,624 5,983
11,941 6,166
12,885 6,629
13,414 6,845
13,937 7,107
14,652 7,459
15,156 7,722
15,757 7,963

5,529
5,606
5,641
5,775
6,256
6,569
6,830
7,192
7,434
7,795

689
637
565
543
607
666
681
742
774
813

9,313
9,355
9,189
9,375
10,119
10,501
10,814
11,309
11,658
11,953

4,798
4,794
4,637
4,753
5,124
5,270
5,428
5,661
5,824
5,928

4,515
4,561
4,552
4,622
4,995
5,231
5,386
5,648
5,834
6,025

547
505
428
416
474
532
536
587
601
625

1990
1991
1992
1993

117,914
116,877
117,598
119,306

102,087
101,039
101,479
102,812

56,432
55,557
55,709
56,397

45,654
45,482
45,770
46,415

5,518
4,989
4,761
4,887

15,827
15,838
16,119
16,494

8,003
8,036
8,096
8,303

7,825
7,802
8,023
8,191

743
639
637
642

11,966
11,863
11,933
12,146

5,915
5,880
5,846
5,957

6,051
5,983
6,087
6,189

573
474
474
474

1992: Jan
Feb....
Mar....
Apr....
May...
June...

117,130
116,919
117,255
117,670
117,534
117,498

101,195
101,051
101,308
101,599
101,473
101,277

55,485
55,357
55,507
55,745
55,709
55,596

45,710
45,694
45,801
45,854
45,764
45,681

4,877
4,782
4,688
4,768
4,763
4,601

15,928
15,943
15,945
16,029
16,002
16,179

8,040
8,036
8,041
8,076
8,038
8,105

7,888
7,907
7,904
7,953
7,964
8,074

665
649
609
618
597
636

11,866
11,799
11,836
11,856
11,845
11,982

5,876
5,812
5,814
5,823
5,809
5,862

5,990
5,987
6,022
6,033
6,036
6,120

519
492
477
461
445
470

July....
Aug....
Sept...
Oct....
Nov....
Dec...

117,763
117,749
117,772
117,723
117,974
118,155

101,568
101,479
101,497
101,547
101,793
101,944

55,768
55,749
55,829
55,823
55,846
56,052

45,800
45,730
45,668
45,724
45,947
45,892

4,700
4,756
4,795
4,797
4,764
4,827

16,168
16,315
16,305
16,210
16,189
16,206

8,076
8,136
8,157
8,129
8,189
8,118

8,092
8,179
8,148
8,081
8,000
8,088

626
685
639
640
640
648

11,974
12,079
12,049
11,976
11,958
11,954

5,826
5,855
5,870
5,850
5,897
5,849

6,148
6,224
6,179
6,126
6,061
6,105

462
496
467
451
465
485

1993:Jan
Feb....
Mar....
Apr...
May..
JuneJuly...
Aug...
Sept..
Oct...
Nov...
Dec...

118,178
118,442
118,562
118,585
119,180
119,187

102,029
102,076
102,251
102,190
102,612
102,721

56,086
56,100
56,175
56,166
56,304
56,362

45,943
45,976
46,076
46,024
46,308
46,359

4,808
4,824
4,829
4,826
4,878
4,835

16,126
16,439
16,306
16,354
16,507
16,408

8,157
8,284
8,162
8,210
8,307
8,249

7,969
8,155
8,144
8,144
8,200
8,159

635
653
593
618
675
640

11,864
12,157
11,991
11,965
12,140
12,076

5,895
6,009
5,884
5,846
5,961
5,931

5,969
6,148
6,107
6,119
6,179
6,145

485
487
443
436
494
451

119,370
119,692
119,568
119,941
120,332
120,661

102,835
103,179
103,094
103,273
103,662
103,807

56,336
56,523
56,467
56,627
56,799
56,794

46,499
46,656
46,627
46,646
46,863
47,013

4,902
4,930
4,939
4,906
4,991
4,970

16,459
16,522
16,512
16,697
16,705
16,876

8,367
8,366
8,302
8,380
8,363
8,476

8,092
8,156
8,210
8,317
8,342
8,400

681
652
630
616
628

12,134
12,225
12,202
12,292
12,297
12,397

6,008
6,031
5,960
5,991
5,951
6,013

6,126
6,194
6,242
6,301
6,346
6,384

513
514
484
463
461
467

Note.—See footnote 6 and Note, Table B-33.
Source: Department of Labor, Bureau of Labor Statistics.




309

TABLE B-36.—Unemployment by demographic characteristic, 1954-93
[Thousands of persons 16 years of age and over; monthly data seasonally adjusted]
White
Year or
month

All
civilian
workers

Total

Males

Black

Black and other

Females

Both
sexes
16-19

Total

Males

Females

Both
sexes
16-19

Total

Males

Females

Both
sexes
16-19

448
395
494
741
698
698
641
636

458
451
470
629
637
695
690
683

279
262
297
330
330
354
360
333

738
840
975
1,059
911
913
894
858
776
772

343
357
396
392
353
357
347
312
288
300

734
805
912
842

258
270
313
302

854
877
875
908
959
948

291
313
268
288
322
328

1954
1955
1956
1957
1958
1959

3,532
2,852
2,750
2,859
4,602
3,740

2,859
2,252
2,159
2,289
3,680
2,946

1,913
1,478
1,366
1,477
2,489
1,903

946
774
793
812
1,191
1,043

423
373
382
401
541
525

673
601
591
570
923
793

431
376
345
364
610
517

242
225
246
206
313
276

79
77
95
96
138
128

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

3,852
4,714
3,911
4,070
3,786
3,366
2,875
2,975
2,817
2,832

3,065
3,743
3,052
3,208
2,999
2,691
2,255
2,338
2,226
2,260

1,988
2,398
1,915
1,976
1,779
1,556
1,241
1,208
1,142
1,137

1,077
1,345
1,137
1,232
1,220
1,135
1,014
1,130
1,084
1,123

575
669
580
708
708
705
651
635
644
660

788
971
861
863
787
678
622
638
590
571

498
599
509
496
426
360
310
300
277
267

290
372
352
367
361
318
312
338
313
304

138
159
142
176
165
171
186
203
194
193

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

4,093
5,016
4,882
4,365
5,156
7,929
7,406
6,991
6,202
6,137

3,339
4,085
3,906
3,442
4,097
6,421
5,914
5,441
4,698
4,664

1,857
2,309
2,173
1,836
2,169
3,627
3,258
2,883
2,411
2,405

1,482
1,777
1,733
1,606
1,927
2,794
2,656
2,558
2,287
2,260

871
1,011
1,021
955
1,104
1,413
1,364
1,284
1,189
1,193

754
930
977
924
1,058
1,507
1,492
1,550
1,505
1,473

380
481
486
440
544
815
779
784
731
714

374
450
491
484
514
692
713
766
774
759

235
249
288
280
318
355
355
379
394
362

906
846
965
1,369
1,334
1,393
1,330
1,319

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989

7,637
8,273
10,678
10,717
8,539
8,312
8,237
7,425
6,701
6,528

5,884
6,343
8,241
8,128
6,372
6,191
6,140
5,501
4,944
4,770

3,345
3,580
4,846
4,859
3,600
3,426
3,433
3,132
2,766
2,636

2,540
2,762
3,395
3,270
2,772
2,765
2,708
2,369
2,177
2,135

1,752
1,930
2,437
2,588
2,167
2,121
2,097
1,924
1,757
1,757

5,091
6,447
7,047
6,547

2,866
3,775
4,121
3,753

2,225
2,672
2,926
2,793

1992: Jan...
Feb..
Mar..
Apr..
May.
June.

9,019
9,290
9,290
9,247.
9,502
9,771

6,826
6,996
7,071
6,980
7,040
7,327

4,053
4,132
4,136
4,083
4,239
4,337

2,773
2,864
2,935
2,897
2,801
2,990

939
999
1,044
919
957
1,138

830
933
1,104
1,187
1,022
1,026
999
955
869
868
850
936
1,079
1,008
1,005
1,031
1,018
1,054
1,124
1,158

1,553
1,731
2,142
2,272
1,914
1,864
1,840
1,684
1,547
1,544

6,874
8,426
9,384
8,734

922
997
1,334
1,401
1,144
1,095
1,097
969
888
889
933
1,783
1,979 1,043
2,337 1,259
2,187 1,179
2,257 1,252
2,261 1,230
2,242 1,224
2,245 1,191
2,388 1,264
2,456 1,298

377
388
443
441
384
394
383
353
316
331

1990
1991
1992
1993

1,291
1,374
1,534
1,387
1,116
1,074
1,070
995
910
863
856
977
983
943

292
313
369
353
337
352
314
339
372
398

815
891
1,167
1,213
1,003
951
946
826
771
773
1,527
793
1,679
874
1,958 1,046
1,796
954
1,871 1,017
1,924 1,047
1,915 1,040
1,894
986
2,022 1,063
2,021 1,073

July..
Aug..
Sept.
Oct..
Nov..
Dec.

9,595
9,590
9,534
9,210
9,313
9,314

7,193
7,166
7,214
6,966
6,899
6,917

4,134
4,159
4,203
4,055
4,029
3,933

3,059
3,007
3,011
2,911
2,870
2,984

1,006
969
1,032
864
992
948

2,401
2,400
2,326
2,365
2,342
2,377

1,293
1,296
1,256
1,308
1,243
1,267

1,108
1,104
1,070
1,057
1,099
1,110

386
375
400
383
393
384

2,010
2,011
1,927
1,982
1,944
1,979

1,065
1,076
1,046
1,082
1,018
1,047

945
935
881
900
926
932

321
316
346
329
321
316

1993: Jan...
Feb..
Mar..
Apr..
May.
June.

9,046
8,958
8,878
8,954
8,895
8,869

6,750
6,670
6,671
6,601
6,622
6,652

3,847
3,849
3,909
3,825
3,781
3,818

2,903
2,821
2,762
2,776
2,841
2,834

951
963
945
962
983
945

2,355
2,266
2,222
2,318
2,204
2,231

1,227
1,207
1,248
1,253
1,213
1,209

1,128
1,059
974
1,065
991
1,022

371
375
380
416
379
380

1,953
1,857
1,871
1,903
1,804
1,846

1,006
968
1,034
1,034
970
976

947
889
837
869
834
870

312
311
325
361
323
321

July..
Aug..
Sept.
Oct..
Nov..
Dec.

8,732
8,642
8,540
8,639
8,330
8,237

6,558
6,467
6,398
6,736
6,142
6,209

3,833
3,756
3,657
3,788
3,386
3,509

2,725
2,711
2,741
2,948
2,756
2,700

909
934
912
1,003
922
894

2,169
2,156
2,132
2,040
2,133
2,013

1,158
1,171
1,169
1,088
1,151
1,046

1,011
985
963
952
982
967

344
319
306
314
337
317

1,786
1,744
1,750
1,653
1,760
1,614

929
931
950
863
950
825

857
813
800
790
810
789

293
259
275
269
301
274

Note.—See footnote 6 and Note, Table B-33.
Source: Department of Labor, Bureau of Labor Statistics.




310

TABLE B-37.—Civilian labor force participation rate and employment/population ratio, 1948-93
[Percent;1 monthly data seasonally adjusted]
Employment/population ratio

Labor force participation rate
Year or month

1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1992: Jan..
Feb..
Mar.
Apr..
May.
June
July..
Aug.
Sept
Oct..
Nov..
Dec.
1993: Jan..
Feb..
Mar.
Apr..
May.
June
July..
Aug.
Sept
Oct..
Nov..
Dec.
1

civilian
work-

Males

Females

58.8
58.9
59.2
59.2
59.0
58.9
58.8
59.3
60.0
59.6
59.5
59.3
59.4
59.3
58.8
58.7
58.7
58.9
59.2
59.6
59.6
60.1
60.4
60.2
60.4
60.8
61.3
61.2
61.6
62.3
63.2
63.7
63.8
63.9
64.0
64.0
64.4
64.8
65.3
65.6
65.9
66.5
66.4
66.0
66.3
66.2
66.1
66.1
66.2
66.4
66.4
66.5
66.5
66.4
66.3
66.1
66.2
66.2
66.0
66.1
66.0
66.0
66.3
66.2
66.2
66.2
66.0
66.2
66.2
66.3

86.6
86.4
86.4
86.3
86.3
86.0
85.5
85.4
85.5
84.8
84.2
83.7
83.3
82.9
82.0
81.4
81.0
80.7
80.4
80.4
80.1
79.8
79.7
79.1
78.9
78.8
78.7
77.9
77.5
77.7
77.9
77.8
77.4
77.0
76.6
76.4
76.4
76.3
76.3
76.2
76.2
76.4

32.7
33.1
33.9
34.6
34.7
34.4
34.6
35.7
36.9
36.9
37.1
37.1
37.7
38.1
37.9
38.3
38.7
39.3
40.3
41.1
41.6
42.7
43.3
43.4
43.9
44.7
45.7
46.3
47.3
48.4
50.0
50.9
51.5
52.1
52.6
52.9
53.6
54.5
55.3
56.0
56.6
57.4

76.1
75.5
75.6
75.2
75.4
75.4
75.5
75.7
75.9
75.8
75.7
75.7
75.7
75.4
75.4
75.4
75.1
75.3
75.3
75.2
75.4
75.3
75.2
75.3
74.9
75.1
75.0
75.0

57.5
57.3
57.8
57.9
57.6
57.7
57.8
57.9
57.7
57.9
58.1
57.9
57.8
57.5
57.7
57.8
57.7
57.7
57.6
57.6
57.9
57.9
57.8
57.9
57.9
58.1
58.2
58.3

Both
sexes
16-19
years
52.5
52.2
51.8
52.2
51.3
50.2
48.3
48.9
50.9
49.6
47.4
46.7
47.5
46.9
46.1
45.2
44.5
45.7
48.2
48.4
48.3
49.4
49.9
49.7
51.9
53.7
54.8
54.0
54.5
56.0
57.8
57.9
56.7
55.4
54.1
53.5
53.9
54.5
54.7
54.7
55.3
55.9
53.7
51.7
51.3
51.5
51.7
51.5
50.6
50.4
51.1
51.9
51.2
51.4
52.2
50.4
51.4
51.7
51.4
51.9
51.5
51.8
52.5
51.5
51.8
51.6
51.2
51.1
51.2
50.9

White

58.2
58.7
59.4
59.1
58.9
58.7
58.8
58.8
58.3
58.2
58.2
58.4
58.7
59.2
59.3
59.9
60.2
60.1
60.4
60.8
61.4
61.5
61.8
62.5
63.3
63.9
64.1
64.3
64.3
64.3
64.6
65.0
65.5
65.8
66.2
66.7
66.8
66.6
66.7
66.7
66.6
66.6
66.8
66.9
66.8
66.8
66.9
66.7
66.7
66.6
66.6
66.7
66.6
66.5
66.6
66.5
66.7
66.7
66.7
66.8
66.7
67.0
66.8
66.9

Black
and
other

64.0
64.2
64.9
64.4
64.8
64.3
64.5
64.1
63.2
63.0
63.1
62.9
63.0
62.8
62.2
62.1
61.8
60.9
60.2
60.5
60.3
59.6
59.8
60.4
62.2
62.2
61.7
61.3
61.6
62.1
62.6
63.3
63.7
64.3
64.0
64.7
63.7
63.1
63.8
63.1
63.6
63.5
63.3
63.5
63.8
64.5
64.2
64.5
64.1
63.8
63.5
63.5
63.1
63.7
63.0
63.3
63.4
63.0
62.8
62.8
62.6
62.8
63.0
63.1

Black

59.9
60.2
59.8
58.8
59.0
59.8
61.5
61.4
61.0
60.8
61.0
61.5
62.2
62.9
63.3
63.8
63.8
64.2
63.3
62.6
63.3
62.4
63.0
62.9
62.9
62.8
63.3
63.8
63.7
64.1
63.4
63.3
62.9
63.0
62.4
63.2
62.4
62.3
62.6
62.4
62.3
62.4
62.3
62.1
62.5
62.3

All
civilian
workers
56.6
55.4
56.1
57.3
57.3
57.1
55.5
56.7
57.5
57.1
55.4
56.0
56.1
55.4
55.5
55.4
55.7
56.2
56.9
57.3
57.5
58.0
57.4
56.6
57.0
57.8
57.8
56.1
56.8
57.9
59.3
59.9
59.2
59.0
57.8
57.9
59.5
60.1
60.7
61.5
62.3
63.0
62.7
61.6
61.4
61.6
61.4
61.3
61.4
61.6
61.4
61.4
61.5
61.4
61.4
61.3
61.3
61.4
61.3
61.4
61.4
61.4
61.7
61.6
61.6
61.8
61.6
61.8
61.9
62.0

Males

83.5
81.3
82.0
84.0
83.9
83.6
81.0
81.8
82.3
81.3
78.5
79.3
78.9
77.6
77.7
77.1
77.3
77.5
77.9
78.0
77.8
77.6
76.2
74.9
75.0
75.5
74.9
71.7
72.0
72.8
73.8
73.8
72.0
71.3
69.0
68.8
70.7
70.9
71.0
71.5
72.0
72.5
71.9
70.2
69.7
69.9
69.7
69.5
69.7
69.9
69.8
69.7
69.7
69.7
69.7
69.6
69.6
69.7
69.7
69.8
69.7
69.7
69.9
69.8
69.8
70.0
69.7
69.9
70.0
70.1

Females

31.3
31.2
32.0
33.1
33.4
33.3
32.5
34.0
35.1
35.1
34.5
35.0
35.5
35.4
35.6
35.8
36.3
37.1
38.3
39.0
39.6
40.7
40.8
40.4
41.0
42.0
42.6
42.0
43.2
44.5
46.4
47.5
47.7
48.0
47.7
48.0
49.5
50.4
51.4
52.5
53.4
54.3
54.3
53.7
53.8
54.1
53.8
53.8
53.8
53.9
53.8
53.8
53.9
53.8
53.7
53.6
53.7
53.7
53.7
53.8
53.9
53.8
54.1
54.1
54.1
54.2
54.2
54.3
54.5
54.7

Both
sexes
16-19
years
47.7
45.2
45.5
47.9
46.9
46.4
42.3
43.5
45.3
43.9
39.9
39.9
40.5
39.1
39.4
37.4
37.3
38.9
42.1
42.2
42.2
43.4
42.3
41.3
43.5
45.9
46.0
43.3
44.2
46.1
48.3
48.5
46.6
44.6
41.5
41.5
43.7
44.4
44.6
45.5
46.8
47.5
45.4
42.1
41.0
41.7
42.0
41.3
40.4
40.8
40.9
40.2
40.5
41.1
41.3
41.2
40.9
41.6
41.3
41.7
41.4
41.3
42.1
41.5
42.2
42.1
42.0
41.4
41.8
41.9

Civilian labor force or civilian employment as percent of civilian noninstitutional population in group specified.

Note.—Data relate to persons 16 years of age and over.
See footnote 6 and Note, Table B-33.
Source: Department of Labor, Bureau of Labor Statistics.




311

White

55.2
56.5
57.3
56.8
55.3
55.9
55.9
55.3
55.4
55.3
55.5
56.0
56.8
57.2
57.4
58.0
57.5
56.8
57.4
58.2
58.3
56.7
57.5
58.6
60.0
60.6
60.0
60.0
58.8
58.9
60.5
61.0
61.5
62.3
63.1
63.8
63.6
62.6
62.4
62.7
62.4
62.3
62.4
62.6
62.5
62.3
62.4
62.3
62.3
62.3
62.4
62.4
62.5
62.5
62.5
62.4
62.7
62.7
62.7
62.9
62.8
62.9
63.0
63.1

Black
and
other

58.0
58.7
59.5
59.3
56.7
57.5
57.9
56.2
56.3
56.2
57.0
57.8
58.4
58.2
58.0
58.1
56.8
54.9
54.1
55.0
54.3
51.4
52.0
52.5
54.7
55.2
53.6
52.6
50.9
51.0
53.6
54.7
55.4
56.8
57.4
58.2
57.3
56.1
55.7
55.7
55.7
55.6
55.5
55.7
55.5
56.0
55.9
56.3
56.1
55.7
55.5
55.4
55.0
56.0
55.4
55.5
55.9
55.4
55.5
55.6
55.4
56.0
55.9
56.3

Black

53.7
54.5
53.5
50.1
50.8
51.4
53.6
53.8
52.3
51.3
49.4
49.5
52.3
53.4
54.1
55.6
56.3
56.9
56.2
54.9
54.3
54.4
54.4
54.1
54.2
54.2
54.1
54.6
54.5
54.9
54.7
54.3
54.1
54.0
53.5
54.8
54.0
53.8
54.5
54.1
54.3
54.6
54.5
54.8
54.7
55.1

TABLE B-38.—Civilian labor force participation rate by demographic characteristic, 1954-93
[Percent; 1 monthly data seasonally adjusted]
White

Year or month

All
civilian
workers

Black and other or black

Males
Total
Total

16-19
years

Males

Females
20
years
and
over

Total

16-19
years

20
years
and
over

Total
Total

16-19
years

Females
20
years
and
over

Total

16-19
years

20
years
and
over

Black and other
1954
1955
1956
1957
1958
1959

58.8
59 3
60.0
59 6
59.5
59.3

58.2
58 7
59.4
591
58.9
58.7

85.6
85 4
85.6
84 8
84.3
83.8

57.6
58 6
60.4
59 2
56.5
55.9

87.8
87 5
87.6
86 9
86.6
86.3

33.3
34 5
35.7
35 7
35.8
36.0

40.6
40 7
43.1
42 2
40.1
39.6

32.7
34 0
35.1
35 2
35.5
35.6

64.0
64 2
64.9
64 4
64.8
64.3

85.2
85 1
85.1
84 2
84.1
83.4

61.2
60 8
61.5
58 8
57.3
55.5

87.1
87 8
87.8
87 0
87.1
86.7

46.1
461
47.3
47 1
48.0
47.7

31.0
32 7
36.3
33 2
31.9
28.2

47.7
47 5
48.4
48 6
49.8
49.8

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

59.4
59.3
58.8
58.7
58.7
58 9
59.2
59 6
59.6
60.1

58.8
58.8
58.3
58.2
58.2
58 4
58.7
59 2
59.3
59.9

83.4
83.0
82.1
81.5
81.1
80 8
80.6
80 6
80.4
80.2

55.9
54.5
53.8
53.1
52.7
54 1
55.9
56 3
55.9
56.8

86.0
85.7
84.9
84.4
84.2
83 9
83.6
83 5
83.2
83.0

36.5
36.9
36.7
37.2
37.5
38 1
39.2
40 1
40.7
41.8

40.3
40.6
39.8
38.7
37.8
39 2
42.6
42 5
43.0
44.6

36.2
36.6
36.5
37.0
37.5
38 0
38.8
39 8
40.4
41.5

64.5
64.1
63.2
63.0
63.1
62 9
63.0
62 8
62.2
62.1

83.0
82.2
80.8
80.2
80.1
79 6
79.0
78 5
77.7
76.9

57.6
55.8
53.5
51.5
49.9
513
51.4
51 1
49.7
49.6

86.2
85.5
84.2
83.9
84.1
83 7
83.3
82 9
82.2
81.4

48.2
48.3
48.0
48.1
48.6
48 6
49.4
49 5
49.3
49.8

32.9
32.8
33.1
32.6
31.7
29 5
33.5
35 2
34.8
34.6

49.9
50.1
49.6
49.9
50.7
511
51.6
516
51.4
52.0

1970
1971.
1972

60.4
60.2
60.4

60.2
60.1
60.4

80.0
79.6
79.6

57.5
57.9
60.1

82.8
82.3
82.0

42.6
42.6
43.2

45.6
45.4
48.1

42.2
42.3
42.7

61.8
60.9
60.2

76.5
74.9
73.9

47.4
44.7
46.0

81.4
80.0
78.6

49.5
49.2
48.8

34.1
31.2
32.3

51.8
51.8
51.2

1972....
1973
1974
1975
1976
1977
1978
1979

60.4
60.8
61.3
61.2
616
62.3
63.2
63.7

60.4
60.8
61.4
61.5
61.8
62.5
63.3
63.9

79.6
79.4
79.4
78.7
78 4
78.5
78.6
78.6

60.1
62.0
62.9
61.9
62 3
64.0
65.0
64.8

82.0
81.6
81.4
80.7
80 3
80.2
80.1
80.1

43.2
44.1
45.2
45.9
46 9
48.0
49.4
50.5

48.1
50.1
51.7
51.5
52 8
54.5
56.7
57.4

42.7
43.5
44.4
45.3
46 2
47.3
48.7
49.8

59.9
60.2
59.8
58.8
59 0
59.8
61.5
61.4

73.6
73.4
72.9
70.9
70 0
70.6
71.5
71.3

46.3
45.7
46.7
42.6
413
43.2
44.9
43.6

78.5
78.4
77.6
76.0
75 4
75.6
76.2
76.3

48.7
49.3
49.0
48.8
49 8
50.8
53.1
53.1

32.2
34.2
33.4
34.2
32 9
32.9
37.3
36.8

51.2
51.6
51.4
51.1
52 5
53.6
55.5
55.4

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989

63 8
63.9
64 0
64.0
64.4
64.8
65 3
65.6
65.9
66.5

641
64.3
64 3
64.3
64.6
65.0
65.5
65.8
66.2
66.7

78 2
77.9
77.4
77.1
77.1
77.0
76.9
76.8
76.9
77.1

63 7
62.4
60 0
59.4
59.0
59.7
59 3
59.0
60.0
61.0

79 8
79.5
79 2
78.9
78.7
78.5
78 5
78.4
78.3
78.5

512
51.9
52 4
52.7
53.3
54.1
55 0
55.7
56.4
57.2

56 2
55.4
55 0
54.5
55.4
55.2
56 3
56.5
57.2
57.1

50 6
51.5
52 2
52.5
53.1
54.0
54 9
55.6
56.3
57.2

610
60.8
61 0
61.5
62.2
62.9
63 3
63.8
63.8
64.2

70 3
70.0
70 1
70.6
70.8
70.8
71 2
71.1
71.0
71.0

43 2
41.6
39.8
39.9
41.7
44.6
43 7
43.6
43.8
44.6

75.1
74.5
74 7
75.2
74.8
74.4
74.8
74.7
74.6
74.4

53 1
53.5
53.7
54.2
55.2
56.5
56 9
58.0
58.0
58.7

55 6
56.0
56.2
56.8
57.6
58.6
58.9
60.0
60.1
60.6

1990
1991
1992
1993

66.4
66.0
66.3
66.2

66.8
66.6
66.7
66.7

76.9
76.4
76.4
76.1

59.4
57.2
56.7
56.5

78.3
77.8
77.8
77.5

57.5
57.4
57.8
58.0

55.4
54.3
52.6
53.7

57.6
57.7
58.1
58.3

63.3
62.6
63.3
62.4

70.1
69.5
69.7
68.6

73.8
73.4
73.1
72.0

57.8
57.0
58.0
57.4

1992: Jan
Feb
Mar
May"!!!!!!!!!!
June

66.1
66.1
66.2
66.4
66.4
66.5

66.6
66.6
66.8
66.9
66.8
66.8

76.3
76.2
76.3
76.5
76.6
76.5

57.2
56.5
55.9
56.3
56.4
57.0

77.7
77.6
77.8
78.0
78.1
78.0

57.7
57.7
57.9
57.9
57.7
57.8

52.9
53.1
52.9
51.9
52.6
52.5

58.0
58.0
58.2
58.3
58.0
58.1

63.0
62.9
62.9
62.8
63.3
63.8

70.3
69.8
69.7
69.1
69.7
70.2

40.6
37.4
40.7
39.5
44.4
42.9
39.2
37.2
37.3
41.4

34.9
34.0
33.5
33.0
35.0
37.9
39.1
39.6
37.9
40.4
36.7
33.5
35.2
34.5

73.3
73.0
73.2
72.8
73.4
73.6

57.1
57.2
57.4
57.7
58.1
58.6

33.6
34.8
32.6
35.0
36.8
35.8

59.3
59.3
59.8
59.8
60.1
60.8

July
Aug
Sept
Oct
Nov
Dec

66.5
66.4
66.3
66.1
66.2
66.2

66.9
66.7
66.7
66.6
66.6
66.7

76.4
76.4
76.5
76.2
76.1
76.2

56.5
56.5
58.6
56.0
56.9
57.1

77.9
77.8
77.8
77.7
77.5
77.6

57.9
57.8
57.7
57.6
57.8
57.8

52.6
52.6
52.4
51.8
52.6
52.7

58.3
58.1
58.0
58.0
58.1
58.1

63.7
64.1
63.4
63.3
62.9
63.0

69.7
70.0
69.7
69.7
69.4
69.1

40.3
40.6
41.1
41.7
40.9
42.1

73.1
73.4
73.0
73.0
72.7
72.2

58.7
59.2
58.3
58.0
57.6
57.9

35.5
37.8
37.3
33.5
34.7
34.9

60.9
61.2
60.3
60.3
59.7
60.1

1993:Jan
Feb
Mar

June

66.0
66.1
66.0
66.0
66.3
66.2

66.6
66.5
66.6
66.5
66.7
66.7

76.1
76.1
76.2
76.0
76.1
76.1

56.4
56.7
57.0
56.6
56.1
56.8

77.5
77.5
77.6
77.4
77.5
77.5

57.7
57.7
57.7
57.6
58.0
58.0

53.0
53.2
52.5
53.1
55.0
52.6

58.1
58.0
58.0
57.9
58.2
58.4

62.4
63.2
62.4
62.3
62.6
62.4

69.1
69.7
69.0
68.6
68.9
68.6

41.1
41.7
41.3
44.6
42.7
39.8

72.3
73.0
72.2
71.3
72.0
71.9

56.8
57.8
56.9
57.2
57.4
57.3

35.5
34.9
32.4
31.8
35.5
34.0

58.9
59.9
59.2
59.6
59.4
59.5

July
Aug
Sept
Oct
Nov
Dec

66.2
66.2
66.0
66.2
66.2
66.3

66.7
66.8
66.7
67.0
66.8
66.9

76.1
76.1
75.9
76.2
75.8
75.9

56.5
57.3
56.1
56.1
56.7
56.0

77.5
77.5
77.3
77.7
77.2
77.4

58.0
58.1
58.1
58.3
58.3
58.4

53.3
53.3
54.1
55.2
54.4
54.2

58.3
58.5
58.4
58.5
58.6
58.7

62.3
62.4
62.3
62.1
62.5
62.3

68.8
68.9
68.3
67.6
68.0
67.3

41.0
39.2
38.0
34.9
34.9
35.2

72.0
72.4
71.8
71.5
71.8
70.9

57.0
57.1
57.3
57.6
58.1
58.1

36.0
34.5
33.8
34.1
36.9
35.1

59.8
59.2
59.5
59.8
60.1
60.3

.

Black

Jay!!!!!!!!!!

1

Civilian labor force as percent of civilian noninstitutional population in group specified.

Note.—Data relate to persons 16 years of age and over.
See

footnote 6 and Note, Table B-33.

Source: Department of Labor, Bureau of Labor Statistics.




312

60.0
59.3
60.1
59.5

TABLE B-39.—Civilian employment/population ratio by demographic characteristic, 1954-93
[Percent;1 monthly data seasonally adjusted]
White
Year or month

All
civilian
work- Total
ers
Total

Black and other or black

Males
16-19
years

Females
20
years Total
and
over

16-19
years

Females

Males
20
years Total Total
and

16-19
years

20
years Total
and

16-19
years

over

over

20
years
and

over

Black and other

815

1954
1955
1956
1957
1958
1959
1960
1961 ...
1962
1963 ..
1964
1965
1966
1967
1968
1969
1970
1971
1972

55 5
56 7
57 5
57.1
55.4
56.0
56.1
55 4
55.5
55.4
55.7
56.2
56.9
57 3
57.5
58.0
57 4
56.6
57.0

55 2
56.5
57 3
55.3
55.9
55 9
55 3
55 4
55 3
55.5
56 0
56.8
57 2
57.4
58.0
57 5
56 8
57.4

79.2
79.9
79 4
78 2
78.4
77 7
77.8
77.9
78.3
78.4
78.3
78.2
76 8

1972
1973 .
1974
1975
1976
1977
1978
1979
1980
1981 ..
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1992:Jan
Feb
Mar
Apr

57.0
57.8
57.8
56.1
56 8
57.9
59 3
59.9
59.2
59.0
57.8
57.9
59 5
60.1
60 7
61.5
62.3
63.0
62.7
61.6
61.4
61.6
61.4
61.3
61.4
61.6

57.4
58 2
58.3
56.7
57 5
58.6
60 0
60.6
60.0
60.0
58.8
58.9
60 5
61.0

76.0
76 5
75.9
73.0
73 4
74.1
75 0
75.1
73.4
72.8
70.6
70.4

May

614

Aug

614

568

82.2
82 7

818

757

76.0

49 9
52.0

840
847

31.4
33^0
34 2

36.4
37!(3
38 9

33.6
34.0
34.6
34 5
35 0

35.0
34.8
35.1
34 6
34^8
32 9

81.6
81.4
80.1

36 2
37 5
38 3
38.9
40.1
40 3

33 7
37 5
37 7
37 8
39.5
39 5

79.0

40.7

79.0
79 2
78.6
75.7
76 0
76.5
77 2
77.3
75.6

40.7

541
524

85.0

47 6
48.1

81.8
82.8
82.4

481
45 9
46 4

447

45.0

471
50.1
50 2
50.3
51.1
49 6
49*2
51.5

841

814
8L5
811

813
815
817
817

790

342

347

35I5

399

311

58 0

76 5
77^6
78 4

52 4

327

587

33 8

59 5

772

480

33.5
34.0
34.5
34 5

72.5
73.8
74.1

42.0
41.4
43.8

40.1
40.4

56.7
57.5
57.9
56 2
56 3
56 2
57.0
57 8
58.4
58 2
58.0
58.1
56 8

41.3

40.6

54.1

67.3

41.3
43 6
44 3
42.5
44 2
45.9
48 5

40.6

53 7
416 54 5
42 2 53 5
41.9 50.1
43 1 50 8
44.4 51.4
46 1 53 6
47^3 53.8
47.8 52.3
48 5 51.3
48.4 49.4
48.9 49.5
50 0 52 3
51.0 53.4
52 0 54 1
53.1 55.6
54.0 56.3
54.9 56.9
55 2 56 2
54.8 54.9
54.9 54.3
55.3 54.4
55.0 54.4
54.9 54.1
55.1 54.2
55.1 54.2
55 0 54 1
55.0 54.6
55.0 54.5
54 8 54.9
54.8 54.7
54.8 54.3
55.1 54.1
54.9 54.0
54.9 53.5
54.9 54.8
55.1 54.0
54.9 53.8
55.2 54.5
55.3 54.1
55.4 54.3
55.5 54.6
55.4 54.5
55.4 54.8
55.6 54.7
55.8 55.1

66 8
67 5
65.8
60.6
60 6
61.4
63 3
63.4
60.4

382

322

386

339

347

35 2
35 8
36 5
37 5
38 3

391

401

593

549

717

72 0

718

72 9
73 7
74 0
73 8
73 3
72.8
70 9

681

527

52.2

410
417

37 4
37^8
39 4
40 5
38 8
38 7
39.0
35 5
31*8
32.4

79.2

804
813
805
76.0
77.6
77.9
75 5
75.7
76 2

777

78 7
79 2
79 4
78.9
78.4
76 8
74 2
73.2

419

24 7

42^2
43 0

264

28 0

42 8
43.2
43 6
42 6
42 7
42 7
43 4

22 8
20.3
24 8
23 2
23.1

437

441
451
450
45.2
45.9

449
43 9
43.3

265

213

21.8
20 2
23.1
24 8
24.7
25.1
22 4
20 2
19.9

43 7
43^9
44 7

455

45.0
45.7
45.8
44 8
44.9
45 2
46.1
47.3
48.2
47.9
48.2
48.9
48 2
47 3
46.7

Black

June
July
Sept
Oct
Nov
Dec
1993: Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
1

61.4
61.5
61.4
61.3
61.3
61.4
61.3
61.4
61.4
61.4
61.7
61.6
61.6
61.8
61.6
61.8
61.9
62.0

615

62.3
63.1
63.8
63.6
62.6
62.4
62.7
62.4
62.3
62.4
62.6
62 5
62.3
62.4
62 3
62.3
62.3
62.4
62.4
62.5
62.5
62.5
62.4
62.7
62.7
62.7
62.9
62.8
62.9
63.0
63.1

721

72.3
72 3
72.7
73.2
73.7
73 2
71.5
71.1
71.3
71.1
70.9
71.0
71.3

712

71.0
71.2
71 1
71.1
71.1
71.0
71.2
71.2
71.2
71.2
71.2
71.3
71.3
71.2
71.4
71.3
71.4
71.6
71.5

51.5

543
54.4
50.6

515

54.4
56 3
55.7
53.4

513

47.0
47.4
49 1
49.9
49 6
49.9
51.7
52.6

510
47.2
46.3
46.6
47.4
45.7
44.4
46.6
45 9
45.1
46.0

461

47.2
47.2
46.9
47.1
46.3
46.6
47.3
46.1
46.4
46.3
46.5
47.2
46.7
46.0
46.7
46.5

751
73.0
72.6
74 3
74.3
74 3
74.7
75.1
75.4
75 0
73.3
72.9
73.1
72.8
72.7
73.0
73.1
73 0
72.9
73.0
72 9
72.9
72.8
72.8
73.0
73.0
73.0
73.0
73.0
73.1
73.1
73.0
73.2
73.1
73.3
73.4
73.3

418
42 4
42.0
43 2
44.5
46 3
47.5
47.8
48 3
48.1
48.5
49 8
50.7

517

52.8
53.8
54.6
54 8
54.3
54.3
54.7
54.4
54.3
54.4
54.5
54 3
54.2
54.3
54 2
54.1
54.1
54.4
54.3
54.3
54.3
54.4
54.3
54.6
54.7
54.8
54.9
54.9
54.9
55.1
55.2

494

47.9
46 2
44.6
44.5
47 0
47.1
47 9
49.0
50.2
50.5
48 5
46.1
44.3
45.8
44.9
44.9
44.6
44.1
44 8
42.7
43.9
44 7
44.2
44.1
43.7
44.7
45.0
45.0
44.3
45.4
46.0
45.2
46.2
45.9
46.3
46.3
47.2
46.9

591

56.0
56.3
59 2
60.0
60 6
62.0
62.7
62.8

618
60.5
59.1
59.1
59.9
59.2
59.1
59.1
58 9
59.3
58.9

591

59.2
58.9
59.2
58.6
59.0
60.1
58.7
58.3
59.3
58.9
59.6
59.7
58.9
59.1
58.6
59.1

Civilian employment as percent of civilian noninstitutional population in group specified.

Note.—Data relate to persons 16 years of age and over.
See footnote 6 and Note, Table B-33.
Source: Department of Labor, Bureau of Labor Statistics.




313

31.6
32 8

314

26.3
25 8
26.4
28 5

287

27.0
24 6
20.3
20.4
23 9
26.3
26 5
28.5
29.4
30.4
27 6
23.8
23.6
23.6
28.1
25.6
24.7
21.5

212

22.1
23.0
22 7
23.2
23.7
23.1
24.6
24.8
25.2
23.1
23.7
25.6
24.4
25.5
25.5
22.9
20.8
21.2
21.5

19.2
22 0
20.9
20.2
19 2
18.5

66.4
67.1
67.0

43.0
43 8
43.5
41.6
42 8
43.3
45 8
46.0
45.7
45.1
44.2
44.1
46 7
48.1
48 8
50.3
51.2
52.0

661

516

64.9
63.3
63.2
63.6
63.1
63.1
63.5
63 3
63.7
63.0
63 3
63.3
62.9
63.4
62.6
63.0
64.1
62.8
62.2
63.2
62.9
63.5
63.7
63.1
63.6
63.0
63.5

50.3
50.4
50.5
50.0
49.9
50.1
50.1

23.1
23 8
25.8
25.8
27.1
25.7
21.4
22.1
21.6
21.9
21.9
21.3
23.0

501

218

73.0
73 7
71.9
66.5
66 8
67.5
69 1
69.1
65.8
64.5
61.4
61.6

641
64.6

651

50.7
50.9

515

51.0
50.5
49.9
50.2
49.1
50.5
50.1
50.1
50.5
50.2
50.0
50.5
50.8
51.2
51.5
51.7

221

22.4
21.0
19 7
17.7
17.0

201

23.3
21.7
25.1
21.9
19.7
21.6
22.0
21.8
21.5
19.4
18.0
21.7
18.8
23.5
23.5
22.9
22.9
22.2
22.8

46.5
47 2
46.9
44.9
46 4
47.0
49 3
49.3
49.1
48 5
47.5
47.4
49 8
50.9

516

53.0
53.9
54.6
54 2
53.1
53.1
53.2
52.6
52.6
52.9
52.7
52 8
53.3
53.7
54.0
53.8
53.4
52.6
52.9
51.6
53.2
53.0
53.1
53.2
53.1
52.5
53.0
53.4
53.9
54.2
54.5

TABLE B-40.—Civilian unemployment rate, 1948-93
[Percent;1 monthly data seasonally adjusted]
Males
Year or month

1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960.
1961
1962.
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1992: Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
1993: Jan
Feb
Mar
May!"'.!"!!'
June
July
Aug
Sept
Oct
Nov
Dec

All
civilian
workers Total

3.8
5.9
5.3
3.3
3.0
29
5.5
44
4.1
43
6.8
5.5
5.5
6.7
5.5
57
5.2
45
3.8
3.8
36
3.5
49
5.9
5.6
4.9
5.6
85
7.7
71
6.1
5.8
7.1
76
9.7
9.6
7.5
7.2
7.0
6.2
5.5
5.3
.5.5

67
7.4
6.8
7.1
7.4
7.3
7.3
7.5
7.7
7.5
7.5
7.5
7.3
7.3
7.3
7.1
7.0
7.0
7.0
6.9
6.9
6.8
6.7
6.7
6.7
6.5
6.4

3.6
5.9
5.1
2.8
2.8
28
5.3
42
3.8
4 1

6.8
5.2
5.4
6.4
5.2
52
4.6
40
32
3.1
29
2.8
44
5.3
50
4.2
4.9
79
7.1
63
5.3
5.1
6.9
74
9.9
99
7.4
7.0
6.9
6.2
5.5
5.2
5.6
70
7.8
7.1
7.6
7.8
7.8
7.6
8.0
8.1
7.9
7.9
7.8

7.7
7.7
7.5
7.2
7.3
7.4
7.3
7.2
7.2
7.2
7.1
6.9
6.9
6.6
6.5

Females

20
16- years
19
and Total
years over

9.8
14.3
12.7

8.1
8.9
79

13.5

116

11.1
12 4
17.1
15.3
15.3
17.1
14.7
17 2
15.8
14 1

117

12.3

116

11.4
15 0
16.6
15 9
13.9
15.6
20 1
19.2
17 3
15.8
15.9
18.3

201

24.4
23 3
19.6
19.5
19.0
17.8
16.0
15.9
16.3
19.8
21.5
20.4
20.3
22.0
22.3
20.3
21.3
24.1
21.8
21.9
22.4
19.3
21.3
20.8
20.7
20.6
20.3
22.4
20.5
21.1
20.4
20.1
19.4
20.3
19.9
19.4

32
5.4
4.7
2.5
2.4
25
4.9
38
3.4
36
6!2
4.7
47
5.7
4.6
45
3.9
32
25
2.3
22
2.1
35
4.4
40
3.3
3.8
68
5.9
52
4.3
4.2
5.9
63
8.8
89
6.6
6.2
6.1
5.4
4.8
4.5
4.9
63
7.0
6.4
6.9
7.1
7.0
7.0
7.3
7.3
7.1
7.1
7.0
7.1
6.9
6.8
6.5
6.6
6.7
6.5
6.5
6.5
6.5
6.4
6.3
6.2
5.9
5.8

41
6.0
5.7
4.4
3.6
33
6.0
49

4.8
47
6!8
5.9
59
7.2
6.2
65
6.2
55
48
5.2
48
4.7
59
6.9
66
6.0
6.7
93
8.6
82
7.2
6.8
7.4
79
9.4
92
7.6
7.4
7.1
6.2
5.6
5.4
5.4
6.3
6.9
6.5
6.6
6.8
6.8
6.9
6.9
7.1
7.1
7.1
7.1
6.7
6.9
7.1
7.0
6.7
6.4
6.6
6.6
6.6
6.4
6.3
6.3
6.4
6.4
6.2

1619
years

8.3
12.3
11.4

8.3
8.0
72

11.4
10 2
11.2
10 6

R3
13.5
13 9
16.3
14.6
17 2
16.6
15 7
14 1
13.5
14 0
13.3
15 6
17.2
16 7
15.3
16.6
19 7
18.7
18 3
17.1
16.4
17.2
19 0
21.9

213

18.0
17.6
17.6
15.9
14.4
14.0
14.7
17 4
18.5
17.4
17.3
17.8
18.0
17.6
18.5
21.1
19.7
17.9
19.1
17.2
19.3
18.0
18.4
18.5
18.5
17.9
19.1
17.6
16.2
16.5
16.4
17.3
16.5
16.1

20
years
and
over

36
5.3
5.1
40
3.2
29
5.5
4.4
42
41

6!l
5.2

51

63
5.4
54
5.2
45
38
4.2
38
3.7
48
5.7
54
49
5.5
80
7.4
70
6.0
5.7
6.4
68
8.3
81
6.8
6.6
6.2
5.4
4.9
4.7
4.8
5.7
6.3
5.9
6.0
6.1
6.2
6.2
6.2
6.3
6.4
6.5
6.4
6.1
6.2
6.4
6.3
6.0
5.7
6.0
5.9
5.9
5.8
5.7
5.8
5.8
5.7
5.7

1

Unemployed as percent of civilian labor force in group specified.
2
Data for 1949 and 1951-54 are for April; 1950, for March.
Note.—Data relate to persons 16 years of age and over.
See footnote 6 and Note, Table B-33.
Source: Department of Labor, Bureau of Labor Statistics.




314

Both
sexes
16-19
years

9.2
13.4
12.2

82
8.5
76

12!6
11.0

n!i

11 6
15!9
14.6
14 7
16 8
14.7
17 2
16.2
14 8
12 8
12.9
12 7
12.2
15 3
16.9
16 2
14 5
16.0
19 9
19.0
17 8
16.4
16.1
17.8
19 6
23.2
22 4
18.9
18.6
18.3
16.9
15.3
15.0
15.5
18.6
20.0
19.0
18.9
20.0
20.2
19.0
19.9
22.7
20.8
20.0
20.9
18.3
20.3
19.5
19.6
19.6
19.5
20.3
19.8
19.5
18.4
18.4
17.9
18.9
18.3
17.8

White

3.5
5.6
4.9
3.1
2.8
27
5.0
39
3.6
38
6.1
4.8
50
6.0
4.9
50
4.6
41
3.4
3.4
32
3.1
45
5.4
5.1
4.3
5.0
78
7.0
62
5.2
5.1
6.3
67
8.6
84
6.5
6.2
6.0
5.3
4.7
4.5
4.7
6.0
6.5
6.0
6.3
6.5
6.5
6.4
6.5
6.7
6.6
6.6
6.6
6.4
6.3
6.4
6.2
6.1
6.1
6.1
6.1
6.1
6.0
5.9
5.8
6.1
5.6
5.6

Black
and
other

Black

5.9
8.9
9.0
5.3
5.4
45
9.9
87
8.3
79
12.6
10.7
10 2
12.4
10.9
10 8

9.6
81
7.3
7.4
67
6.4
82
9.9

10.0

9.0
9.9

13 8
13.1
13 1
11.9
11.3
13.1
14.2
17.3
17.8
14.4
13.7
13.1
11.6
10.4
10.0
10.1
11.1
12.7
11.7
12.4
12.4
12.3
12.3
13.0
13.2
12.9
12.8
12.5
12.7
12.6
12.8
12.7
12.1
12.0
12.4
11.8
12.0
11.6
11.5
11.4
10.9
11.3
10.7

..„„..„.

9.4
10.5
14 8
14.0
14 0
12.8
12.3
14.3
15 6
18.9
19 5
15.9
15.1
14.5
13.0
11.7
11.4
11.3
12.4
14.1
12.9
13.6
14.0
13.9
13.8
14.6
14.4
14.4
14.3
13.8
14.2
14.0
14.2
14.1
13.3
13.5
13.7
12.9
13.3
12.8
12.5
12.5
11.9
12.5
11.5

Experienced
wage
and
salary
workers

4.3
6.8
6.0
3.7
3.4
32
6.2
48
4.4
46
7.3
5.7
57
6.8
5.6
56
5.0
43
3.5
3.6
34
3.3
48
5.7
5.3
4.5
5.3
82
7.3
66
5.6
5.5
6.9
73
9.3
9.2
7.1
6.8
6.6
5.8
5.2
5.0
5.3
6.5
7.1
6.5
6.9
7.1
7.1
7.0
7.2
7.2
7.2
7.2
7.2
7.0
7.0
7.0
6.8
6.7
6.7
6.7
6.6
6.6
6.5
6.4
6.3
6.4
6.2
6.2

Married
men,
spouse
present 2

3.5
4.6
1.5
1.4
17
4.0
26
23
28
5.1
3.6
37
4.6
3.6
34
2.8
24
19
1.8
16
1.5
26
3.2
28
2.3
2.7
51
4.2
36
2.8
2.8
4.2
43
6.5
6.5
4.6
4.3
4.4
3.9
3.3
3.0
3.4
4.4
5.0
4.4
4.8
5.1
4.8
4.9
5.1
5.2
5.2
5.2
5.2
5.1
4.9
4.8
4.5
4.6
4.7
4.5
4.5
4.4
4.5
4.4
4.2
4.4
4.0
3.9

Women
who
maintain
families

4.9

4.4
4.4
5.4
7.3
7.2
7.1
7.0
10 0
10.1

94
8.5
8.3
9.2
10.4
11.7
12.2
10.3
10.4

9.8
9.2
8.1
8.1
8.2
9.1
9.9
9.5
9.0
9.4
9.9

10.0

9.9

10.0
10.2
10.7

9.4
9.3

10.5
10.2
10.4
10.1

9.0
9.6
9.8
9.7
9.6
9.0
9.0
9.3
9.0

10.2

TABLE B-41.—Civilian unemployment rate by demographic characteristic, 1950-93
[Percent;l monthly data seasonally adjusted]
White

Year or month

All
civilian
workers

Black and other or black

Males
Total
Total

16-19
years

Females
20
years
and
over

Total

16-19
years

Females

Males
20
years
and
over

Total
Total

16-19
years

20
years
and
over

Total

16-19
years

20
years
and
over

Black and other

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972

10.4
9.1
9.7
9.5
12.7
12.0
12.7
14.8
12.8
15.1
14.9
14.0
12.1
11.5
12.1
11.5
13.4
15.1
14.2

13.4
11.3
10.5
11.5
15.7
14.0
14.0
15.7
13.7
15.9
14.7
12.9
10.5
10.7
10.1
10.0
13.7
15.1
14.2

10.3
8.8
7.9
8.3
13.7
11.5
10.7
12.8
10.9
10.5
8.9
7.4
6.3
6.0
5.6
5.3
7.3
9.1
8.9

14.4
13.4
15.0
18.4
26.8
25.2
24.0
26.8
22.0
27.3
24.3
23.3
21.3
23.9
22.1
21.4
25.0
28.8
29.7

9.3
8.0
9.8

31.7
27.8
33.1
38.1
37.5
39.2
36.7
34.2
37.5
40.7
48.9
48.8
42.7
41.0
39.3
34.4
32.7
31.9
32.1
36.5
42.0
40.1
36.7
40.4
37.1
42.3
43.1
46.6
42.9
44.0
43.6
43.0
43.5
41.5
39.7
39.5
44.1
46.8
40.2
38.8
37.9
34.9
39.7
40.6
39.2
38.8

8.4
6.1
5.7
4.1
9.2
8.5
8.9
7.3
10.8
9.4
9.4
11.9
11.0
11.2
10.7
9.2
8.7
9.1
8.3
7.8
9.3
10.9
11.4

20.6
19.2
22.8
20.2
28.4
27.7
24.8
29.2
30.2
34.7
31.6
31.7
31.3
29.6
28.7
27.6
34.5
35.4
38.4

8.4
7.7
7.8
6.4
9.5
8.3
8.3
10.6
9.6
9.4
9.0
7.5
6.6
7.1
6.3
5.8
6.9
8.7

11.8
11.1
11.3
12.5 14.8
11.4 14.3
10.7 14.9
9.3 13.8
9.3 13.3
12.4 14.0
13.5 15.6
17.8 17.6
18.1 18.6
14.3 15.4
13.2 14.9
12.9 14.2
11.1 13.2
10.1 11.7
10.0 11.4
10.4 10.8
11.5 11.9
13.4 13.0
12.1 12.0
13.2 12.5
13.5 12.8
13.8 12.7
12.8 13.1
13.8 13.7
13.4 13.4
13.7 13.3
13.7 13.1
13.3 12.5
13.8 12.8
12.8 13.3
13.4 13.2
12.9 13.7
12.2 12.6
13.0 12.1
12.7 12.4
12.2 11.9
12.6 12.4
11.8 12.3
12.0 11.6
12.1 11.4
11.0 11.1
12.3 11.3
10.5 11.0

40.5
36.1
37.4
41.0
41.6
43.4
40.8
39.1
39.8
42.2
47.1
48.2
42.6
39.2
39.2
34.9
32.0
33.0
30.0
36.1
37.2
37.5
34.9
37.1
34.6
34.4
40.9
34.9
38.9
33.5
41.4
41.1
37.7
37.0
38.5
38.4
40.1
43.2
38.7
44.8
34.7
32.0
32.3
32.8
39.7
35.2

9.0
8.6
8.8
12.2
11.7
12.3
11.2
10.9
11.9
13.4
15.4
16.5
13.5
13.1
12.4
11.6
10.4
9.8
9.6
10.5
11.7
10.6
11.3
11.4
11.5
11.9
12.1
12.2
11.9
11.9
10.8
11.3
11.9
11.9
12.3
11.2
10.6
10.9
10.4
10.7
11.0
10.5
10.2
10.0
9.7
9.7

9.9
8.4
7.4
7.6
12.7
10.5
9.6
11.7
10.0
9.2
7.7
6.0
4.9
4.3
3.9
3.7
5.6
7.3
6.9
Black

1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985....:
1986
1987
1988
1989
1990
1991
1992
1993
1992: Jan...
Feb...
Mar..
Apr...
May..
June.
July..
Aug..
Sept.
Oct..
Nov..
Dec.
1993: Jan..
Feb..
Mar.

fe

1

5.6
4.9
5.6
8.5
7.7
7.1
6.1
5.8
7.1
7.6
9.7
9.6
7.5
7.2
7.0
6.2
5.5
5.3
5.5
6.7
7.4
6.8
7.1
7.4
7.3
7.3
7.5
7.7
7.5
7.5
7.5
7.3
7.3
7.3
7.1
7.0
7.0
7.0
6.9
6.9
6.8
6.7
6.7
6.7
6.5
6.4

5.1
4.3
5.0
7.8
7.0
6.2
5.2
5.1
6.3
6.7
8.6
8.4
6.5
6.2
6.0
5.3
4.7
4.5
4.7
6.0
6.5
6.0
6.3
6.5
6.5
6.4
6.5
6.7
6.6
6.6
6.6
6.4
6.3
6.4
6.2
6.1
6.1
6.1
6.1
6.1
6.0
5.9
5.8
6.1
5.6
5.6

4.5
3.8
4.4
7.2
6.4
5.5
4.6
4.5
6.1
6.5
8.8
8.8
6.4
6.1
6.0
5.4
4.7
4.5
4.8
6.4
6.9
6.2
6.8
6.9
6.9
6.8
7.1
7.2
6.9
6.9
7.0
6.8
6.7
6.6
6.4
6.4
6.5
6.4
6.3
6.3
6.4
6.2
6.1
6.3
5.6
5.8

14.2
12.3
13.5
18.3
17.3
15.0
13.5
13.9
16.2
17.9
21.7
20.2
16.8
16.5
16.3
15.5
13.9
13.7
14.2
17.5
18.4
17.6
17.2
19.0
20.6
17.2
18.6
20.8
18.6
18.5
19.5
15.7
17.6
17.5
17.9
17.8
17.1
18.5
17.2
18.4
17.7
17.7
16.8
17.9
17.7
16.9

3.6
3.0
3.5
6.2
5.4
4.7
3.7
3.6
5.3
5.6
7.8
7.9
5.7
5.4
5.3
4.8
4.1
3.9
4.3
5.7
6.3
5.6
6.2
6.3
6.2
6.3
6.5
6.5
6.3
6.3
6.3
6.3
6.1
6.0
5.8
5.8
5.9
5.7
5.7
5.7
5.8
5.6
5.5
5.7
5.0
5.2

June
July.
Aug.
Sept
Oct..
Nov.
Dec.
Unemployed as percent of civilian labor force in group specified.
Note.-See Note, Table B-40.
Source: Department of Labor, Bureau of Labor Statistics.




315

14.2
13.0
14.5
17.4
16.4
15.9
14.4
14.0
14.8
16.6
19.0
18.3
15.2
14.8
14.9
13.4
12.3
11.5
12.6
15.2
15.7
14.6
15.0
15.4
15.7
15.0
14.7
18.7
16.5
15.1
15.7
14.8
16.8
15.2
15.0
15.3
15.5
14.5
16.3
14.0
13.4
14.0
14.3
16.0
13.3
13.4

4.9
4.3
5.1
7.5
6.8
6.2
5.2
5.0
5.6
5.9
7.3
6.9
5.8
5.7
5.4
4.6
4.1
4.0
4.1
4.9
5.4
5.1
5.2
5.3
5.4
5.4
5.2
5.4
5.7
5.6
5.6
5.5
5.2
5.6
5.4
5.2
5.1
5.2
5.1
5.3
5.1
5.0
5.0
5.3
5.1
4.9

10.4

9.4

10.5
14.8 14.8
14.0 13.7
14.0 13.3
12.8 11.8
12.3 11.4
14.3 14.5
15.6 15.7
18.9 20.1
19.5 20.3
15.9 16.4
15.1 15.3
14.5 14.8
13.0 12.7
11.7 11.7
11.4 11.5
11.3 11.8
12.4 12.9
14.1 15.2
12.9 13.8
13.6 14.8
14.0 15.3
13.9 15.2
13.8 14.5
14.6 15.5
14.4 15.5
14.4 15.5
14.3 15.5
13.8 15.1
14.2 15.6
14.0 14.7
14.2 15.2
14.1 14.6
13.3 13.9
13.5 14.9
13.7 15.0
12.9 14.0
13.3 14.1
12.8 13.4
12.5 13.4
12.5 13.7
11.9 12.6
12.5 13.8
11.5 12.1

7.0
6.0
7.4

T A B L E B-42.—Unemployment by duration and reason, 1950-93
[Thousands of persons, except as noted; monthly data seasonally adjusted 1 ]
Reason for unemployment

Duration of unemployment

Year or month

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966.
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981...
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1992: Jan...
Feb
Mar....
Apr
May....
June...
July ..
..
Aug
Sept
Oct
Nov
Dec
1993:Jan
Feb
Mar
May"!
June
July
Aug
Sept
Oct
Nov
Dec

Unemployment

3,288
2,055
1,883
1,834
3,532
2,852
2,750
2,859
4,602
3,740
3,852
4,714
3,911
4,070
3,786
3,366
2,875
2,975
2,817
2,832
4,093
5,016
4,882
4,365
5,156
7,929
7,406
6,991
6,202
6,137
7,637
8,273
10,678
10,717
8,539
8,312
8,237
7,425
6,701
6,528
6,874
8,426
9,384
8,734
9,019
9,290
9,290
9,247
9,502
9,771
9,595
9,590
9,534
9,210
9,313
9,314
9,046
8,958
8,878
8,954
8,895
8,869
8,732
8,642
8,540
8,639
8,330
8,237

Less
than
5
weeks

1,450
1,177
1,135
1,142
1,605
1,335
1,412
1,408
1,753
1,585
1,719
1,806
1,663
1,751
1,697
1,628
1,573
1,634
1,594
1,629
2,139
2,245
2,242
2,224
2,604
2,940
2,844
2,919
2,865
2,950
3,295
3,449
3,883
3,570
3,350
3,498
3,448
3,246
3,084
3,174
3,169
3,380
3,270
3,160
3,326
3,101
3,328
3,232
3,297
3,475
3,345
3,341
3,325
3,194
3,182
3,040
3,262
3,232
3,148
3,309
3,242
3,232
3,223
3,046
3,052
3,156
2,946
3,063

5-14
weeks

1,055
574
516
482
1,116
815
805
891
1,396
1,114
1,176
1,376
1,134
1,231
1,117
983
779
893
810
827
1,290
1,585
1,472
1,314
1,597
2,484
2,196
2,132
1,923
1,946
2,470
2,539
3,311
2,937
2,451
2,509
2,557
2,196
2,007
1,978
2,201
2,724
2,760
2,522
2,752
2,939
2,707
2,741
2,705
2,760
2,762
2,774
2,825
2,605
2,799
2,674
2,543
2,549
2,583
2,537
2,526
2,758
2,543
2,608
2,457
2,491
2,401
2,247

15-26
weeks

425
166
148
132
495
366
301
321
785
469
503
728
534
535
491
404
287
271
256
242
428
668
601
483
574
1,303
1,018
913
766
706
1,052
1,122
1,708
1,652
1,104
1,025
1,045
943
801
730
809
1,225
1,424
1,274
1,424
1,489
1,424
1,322
1,407
1,512
1,446
1,472
1,353
1,384
1,399
1,538
1,372
1,284
1,275
1,311
1,270
1,257
1,258
1,259
1,297
1,284
1,216
1,150

27
weeks
and
over

357
137
84
78
317
336
232
239
667
571
454
804
585
553
482
351
239
177
156
133
235
519
566
343
381
1,203
1,348
1,028
648
535
820
1,162
1,776
2,559
1,634
1,280
1,187
1,040
809
646
695
1,098
1,930
1,778
1,600
1,705
1,784
1,784
1,979
2,142
2,104
2,043
2,083
2,063
1,925
2,004
1,921
1,890
1,835
1,675
1,776
1,768
1,749
1,741
1,750
1,746
1,755
1,714

Average
(mean)
duration
(weeks)

12.1
9.7
8.4
8.0
11.8
13.0
11.3
10.5
13.9
14.4
12.8
15.6
14.7
14.0
13.3
11.8
10.4
8.7
8.4
7.8
8.6
11.3
12.0
10.0
9.8
14.2
15.8
14.3
11.9
10.8
11.9
13.7
15.6
20.0
18.2
15.6
15.0
14.5
13.5
11.9
12.1
13.8
17.9
18.1
16.2
16.8
17.2
17.5
18.1
18.4
18.3
18.2
18.3
19.1
18.1
19.0
18.5
18.2
17.7
17.7
17.8
17.8
17.9
18.3
18.4
18.4
18.9
18.2

1

Median
duration
(weeks)

2.3
4.5
4.4
4.9
6.3
6.2
5.2
5.2
8.4
8.2
7.0
5.9
5.4
6.5
6.9
8.7
10.1
7.9
6.8
6.9
6.5
5.9
4.8
5.4
6.9
8.8
8.4
8.2
8.3
8.2
8.6
9.0
8.8
8.7
8.9
9.1
9.2
9.0
9.3
8.6
8.4
8.4
8.5
8.3
8.3
8.3
8.4
8.9
8.3
8.5
8.2

Job losers
Job
leavers

Total

On
layoff

Other

1,229
1,070
1,017
1,811
2,323
2,108
1,694
2,242
4,386
3,679
3,166
2,585
2,635
3,947
4,267
6,268
6,258
4,421
4,139
4,033
3,566
3,092
2,983
3,322
4,608
5,291
4,769
4,948
5,357
5,304
5,254
5,494
5,528
5,375
5,316
5,359
5,374
5,183
5,076
4,934
4,799
4,856
4,862
4,752
4,845
4,872
4,864
4,699
4,779
4,444
4,442

394
334
339
675
735
582
472
746
1,671
1,050
865
712
851
1,488
1,430
2,127
1,780
1,171
1,157
1,090
943
851
850
1,018
1,279
1,246
1,104
1,257
1,295
1,249
1,256
1,201
1,302
1,262
1,204
1,339
1,218
1,171
1,180
1,072
1,081
1,096
1,068
1,144
1,131
1,183
1,190
1,112
1,216
963
1,060

836
438
736
431
678
436
1,137
550
1,588
590
1,526
641
1,221
683
1,495
768
2,714
827
2,628
903
2,300
909
1,873
874
1,784
880
2,459
891
2,837
923
4,141
840
4,478
830
3,250
823
2,982
877
2,943 1,015
2,623
965
2,241
983
2,133 1,024
2,305 1,014
3,329
979
4,045
975
3,664
946
3,691
985
4,062
908
4,055
914
3,998
998
4,293
987
4,226 1,011
4,113 1,015
4,112 1,070
4,020
972
4,156
894
4,012
970
3,896
978
3,862
834
3,718 1,020
3,760 1,061
3,794
990
3,608
960
3,714
940
3,689
915
3,674
882
3,587
926
3,563
957
3,481
960
3,382
932

Reentrants

945
909
965
1,228
1,472
1,456
1,340
1,463
1,892
1,928
1,963
1,857
1,806
1,927
2,102
2,384
2,412
2,184
2,256
2,160
1,974
1,809
1,843
1,883
2,087
2,228
2,145
2,273
2,158
2,212
2,148
2,146
2,251
2,288
2,267
2,297
2,220
2,205
2,270
2,295
2,281
2,059
2,187
2,237
2,201
2,117
2,081
2,075
2,084
2,084
2,018

New
entrants

396
407
413
504
630
677
649
681
823
895
953
885
817
872
981
1,185
1,216
1,110
1,039
1,029
920
816
677
654
753
890
874
799
849
824
836
848
1,028
972
947
943
765
933
939
950
899
922
920
890
894
870
834
843
839
833
797

Because of independent seasonal adjustment of the various series, detail will not add to totals.
Data for 1967 by reason for unemployment are not strictly comparable with those for later years and the total by reason is not
equal to total unemployment.
2

Note.—Data relate to persons 16 years of age and over.
See footnote 6 and Note, Table B-33.
Source: Department of Labor, Bureau of Labor Statistics.




316

TABLE B-43.—Unemployment insurance programs, selected data,

State programs

All programs

Year or month

Covered
employment 1

Insured
unemployment
(weekly
average) ^ 3

Total
benefits
paid
(millions
of
dollars) 2 4

1992-. Jan
Feb
Mar....
Apr
May....
June...
July....
Aug....
Sept..
Oct
Nov
Dec
1993: Jan
Feb....
Mar...
Apr....
May...
June..
July ..
.
Aug...
Sept..
Oct....
Nov....
Dec ".

47,776
48,434
49,637
51,580
54,739
56,342
57,977
59,999
59,526
59,375
66,458
69,897
72,451
71,037
73,459
76,419
88,804
92,062
92,659
93,300
91,628
91,898
96,474
99,186
101,099
103,933
107,157
109,926
111,498
109,613
1
110,167

Insured
unemployment

Initial
claims

Exhaustions 5

Insured
unemployment as
percent
of
covered
employment

Benefits paid

of
dollars)4

Average
weekly
check
(dollars)6

Total
(millions

Weekly average; thousands

Thousands
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993 " .
..

1962-93

1,946
7
1,973
1,753
1,450
1,129
1,270
1,187
1,177
2,070
2,608
2,192
1,793
2,558
4,937
3,846
3,308
2,645
2,592
3,837
3,410
4,592
3,774
2,560
2,699
2,739
2,369
2,135
2,205
2,575
3,406
3,348
2,845
4,211
4,214
4,116
3,639
3,202
3,148
3,124
3,120
2,820
2,542
2,676
3,071
3,400
3,355
3,405
2,939
2,604
2,812
2,660
2,725
2,426
2,330
2,569
2,798

9
9

3,145.1
3,025.9
2,749.2
2,360.4
1,890.9
2,221.5
2,191.0
2,298.6
4,209.3
6,154.0
5,491.1
4,517.3
6,933.9
16,802.4
12,344.8
10,998.9
9,006.9
9,401.3
16,175.4
15,287.1
23,774.8
20,206.2
13,109.6
15,056.3
16,292.5
14,501.0
13,694.4
14,957.0
18,744.6
26,716.7
26,487.5
22,548.3

1,783
7
1,806
1,605
1,328
1,061
1,205
1,111
1,101
1,805
2,150
1,848
1,632
2,262
3,986
2,991
2,655
2,359
2,434
3,350
3,047
4,059
3,395
2,475
2,617
2,643
2,300
2,081
2,158
2,522
3,342
3,245
2,751

2,807.8
2,555.7
2,750.1
2,477.1
2,086.0
2,058.4
2,129.5
1,978.0
1,861.0
1,682.6
1,681.0
2,131.2
2,162.7
2,109.8
2,456.4
2,034.9
1,696.8
1,882.9
1,750.1
1,814.3
1,616.9
1,472.6
1,709.7
2,014.5

3,350
3,326
3,337
3,340
3,314
3,279
3,304
3,178
3,168
3,035
2,93?
2,783
2,715
2,640
2,701
2,764
2,770
2,813
2,832
2,796
2,810
2,806
2,780
2,710

7

302
298
268
232
203
226
21
0
200
296
295
21
6
247
363
478
386
375
346
388
488
460
53
8
438
377
397
378
328
310
330
388
447
408
340

4.4
4.3
3.8
3.0
2.3
2.5
2.2
2.1
3.4
4.1
3.5
2.7
3.5
6.0
4.6
3.9
3.3
2.9
3.9
3.5
4.6
3.9
2.8
2.9
2.8
2.4
2.0
2.1
2.4
3.2
3.1
2.6

2,675.4
2,774.7
2,522.1
2,166.0
1,771.3
2,092.3
2,031.6
2,127.9
3,848.5
4,957.0
4,471.0
4,007.6
5,974.9
11,754.7
8,974.5
8,357.2
7,717.2
8,612.9
13,761.1
13,262.1
20,649.5
17,762.8
12,594.7
14,130.8
15,329.3
13,606.8
12,564.7
13,760.3
17,356.0
24,525.7
23,893.5
20,186.1

34.56
35.27
35.92
37.19
39.75
41.25
43.43
46.17
50.34
54.02
56.76
59.00
64.25
70.23
75.16
78.79
83.67
89.67
98.95
106.70
119.34
123.59
123.47
128.14
135.65
140.55
144.97
151.73
161.56
169.88
173.64
179.61

448
452
440
413
408
414
433
387
402
35
6
359
31
4
33
5
33
4
362
347
31
4
33
4
352
327
328
344
39
3
328

3.2
3.1
3.2
3.2
3.2
3.1
3.2
3.0
3.0
2.9
2.8
2.7
2.6
2.5
2.6
2.6
2.6
2.7
2.7
2.7
2.7
2.7
2.6
2.6

2,723.8
2,476.2
2,664.1
2,397.9
1,946.0
1,983.2
2,049.0
1,899.5
1,778.1
1,601.0
1,598.7
2,035.3
2,075.5
2,024.3
2,361.5
1,958.0
1,631.5
1,811.0
1,684.3
1,746.3
1,552.2
1,402.3
1,609.1
1,904.6

171.65
173.39
173.87
173.88
173.70
173.22
171.51
173.95
174.09
174.86
175.55
175.49
177.36
179.47
180.70
180.50
180.52
179.88
178.29
179.71
179.61
180.45
180.07
179.17

**Monthly data are seasonally adjusted.
1
Includes persons under the State, UCFE (Federal employee, effective January 1955), and RRB (Railroad Retirement Board) programs.
Beginning October 1958, also includes the UCX program (unemployment compensation for ex-servicemembers).
2
Includes State, UCFE, RR, UCX, UCV (unemployment compensation for veterans, October 1952-January 1960), and SRA
(Servicemen's Readjustment Act, September 1944-September 1951) programs. Also includes Federal and State extended benefit
programs. Does not include FSB (Federal supplemental benefits), SUA (special unemployment assistance), Federal Supplemental
Compensation, and Emergency Unemployment Compensation programs, except as noted in footnote 9.
3
Covered workers who have completed at least 1 week of unemployment.
4
Annual data are net amounts and monthly data are gross amounts.
5
Individuals receiving final payments in benefit year.
6
For total unemployment only.
7
Programs include Puerto Rican sugarcane workers for initial claims and insured unemployment beginning July 1963.
8
Latest data available for all programs combined. Workers covered by State programs account for about 97 percent of wage and
salary earners.
9
Including Emergency Unemployment Compensation and Federal Supplemental Compensation, total benefits paid for 1992 and 1993
would be (in millions of dollars): for 1992, 40,275.2 and, for 1993, p34,484.8.
Source: Department of Labor, Employment and Training Administration.


151-444


317
0 - 9 4 - 1 1

TABLE B-44.—Employees on nonagricultural payrolls, by major industry, 1946-93
[Thousands of persons; monthly data seasonally adjusted]
Soods-producing industries
Year or month

Manufacturing

Total
Total

1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993"
1992 Jan
Fb
e

Mr
a
Ar
p
My
a

June
July

Ag
u
Sept
Ot
c
Nv
o
Dc
e
1993 Jan

Fb
e
Mr
a
Ar
p
My
a

June
July

Ag
u

Sept
Oct .
Nov p
Dec"

41652
43^857
44,866
43,754
45,197
47,819
48,793
50,202
48,990
50,641
52,369
52,853
51,324
53,268
54,189
53,999
55,549
56,653
58,283
60,765
63,901
65,803
67,897
70,384
70,880
71,214
73,675
76,790
78,265
76,945
79,382
82,471
86,697
89,823
90,406
91,152
89,544
90,152
94,408
97,387
99,344
101,958
105,210
107,895
109,419
108,256
108,519
110,171
108,051
108,045
108,164
108,347
108,470
108,454
108,605
108,615
108,674
108,789
108,921
109,079
109,235
109,539
109,565
109,820
110,058
110,101
110,338
110,305
110,502
110,664
110,866
111,049

17 248
18]509
18,774
17,565
18,506
19,959
20,198
21,074
19,751
20,513
21,104
20,964
19,513
20,411
20,434
19,857
20,451
20,640
21,005
21,926
23,158
23,308
23,737
24,361
23,578
22,935
23,668
24,893
24,794
22,600
23,352
24,346
25,585
26,461
25,658
25,497
23,812
23,330
24,718
24,842
24,533
24,674
25,125
25,254
24,905
23,745
23,142
22,974
23,310
23,266
23,267
23,251
23,237
23,172
23,160
23,073
23,012
22,995
22,995
22,985
23,001
23,069
23,016
22,980
23,006
22,941
22,948
22,903
22,886
22,934
22,992
23,002

Mining

862
955
994
930
901
929
898
866
791
792
822
828
751
732
712
672
650
635
634
632
627
613
606
619
623
609
628
642
697
752
779
813
851
958
1,027
1,139
1,128
952
966
927
111
111
713
692
709
689
631
599
653
649
645
642
637
630
628
623
616
618
616
613
611
600
600
600
602
596
595
592
596
596
594
603

Construction
1 683
2^009
2,198
2,194
2,364
2,637
2,668
2,659
2,646
2,839
3,039
2,962
2,817
3,004
2,926
2,859
2,948
3,010
3,097
3,232
3,317
3,248
3,350
3,575
3,588
3,704
3,889
4,097
4,020
3,525
3,576
3,851
4,229
4,463
4,346
4,188
3,904
3,946
4,380
4,668
4,810
4,958
5,098
5,171
5,120
4,650
4,471
4,573
4,506
4,468
4,485
4,485
4,491
4,469
4,459
4,459
4,447
4,466
4,462
4,459
4,454
4,515
4,481
4,517
4,577
4,574
4,593
4,593
4,592
4,629
4,663
4,662

Total
14 703
15^545
15,582
14,441
15,241
16,393
16,632
17,549
16,314
16,882
17,243
17,174
15,945
16,675
16,796
16,326
16,853
16,995
17,274
18,062
19,214
19,447
19,781
20,167
19,367
18,623
19,151
20,154
20,077
18,323
18,997
19,682
20,505
21,040
20,285
20,170
18,780
18,432
19,372
19,248
18,947
18,999
19,314
19,391
19,076
18,406
18,040
17,802
18,151
18,149
18,137
18,124
18,109
18,073
18,073
17,991
17,949
17,911
17,917
17,913
17,936
17,954
17,935
17,863
17,827
17,771
17,760
17,718
17,698
17,709
17,735
17,737

Durable
goods
7 785
8,'358
8,298
7,462
8,066
9,059
9,320
10,080
9,101
9,511
9,802
9,825
8,801
9,342
9,429
9,041
9,450
9,586
9,785
10,374
11,250
11,408
11,594
11,862
11,176
10,604
11,022
11,863
11,897
10,662
11,051
11,570
12,245
12,730
12,159
12,082
11,014
10,707
11,476
11,458
11,195
11,154
11,363
11,394
11,109
10,569
10,237
10,047
10,328
10,336
10,324
10,304
10,286
10,260
10,236
10,192
10,164
10,135
10,142
10,136
10,152
10,163
10,144
10,090
10,047
10,011
9,996
9,974
9,974
9,988
10,013
10,027

Nondurable goods
6 918
7,187
7,285
6,979
7,175
7,334
7,313
7,468
7,213
7,370
7,442
7,351
7,144
7,333
7,367
7,285
7,403
7,410
7,489
7,688
7,963
8,039
8,187
8,304
8,190
8,019
8,129
8,291
8,181
7,661
7,946
8,112
8,259
8,310
8,127
8,089
7,766
7,725
7,896
7,790
7,752
7,845
7,951
7,997
7,968
7,837
7,804
7,755
7,823
7,813
7,813
7,820
7,823
7,813
7,837
7,799
7,785
7,776
7,775
7,777
7,784
7,791
7,791
7,773
7,780
7,760
7,764
7,744
7,724
7,721
7,722
7,710

Note.—Data in Tables B-44 and B-45 are based on reports from employing establishments and relate to full- and part-time wage and
salary workers in nonagricultural establishments who received pay for any part of the pay period which includes the 12th of the month.
Not comparable with labor force data (Tables B-33 through B-42), which include proprietors, self-employed persons, domestic servants,
See next page for continuation of table.




318

TABLE B-44.—Employees on nonagricultural payrolls, by major industry, 1946-93—Continued
[Thousands of persons; monthly data seasonally adjusted]
Service-producing industries
Year or month

1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993 P.
1992: Jan
Feb
Mar..
Apr
May..
June.
July..
Aug..
Sept.
Oct
Nov..
Dec..
1993:Jan
Feb
Mar..
Apr
May.
June
July.
Aug.
Sept
Oct..
Nov
Dec

Total

24,404
25,348
26,092
26,189
26,691
27,860
28,595
29,128
29,239
30,128
31,266
31,889
31,811
32,857
33,755
34,142
35,098
36,013
37,278
38,839
40,743
42,495
44,160
46,023
47,302
48,278
50,007
51,897
53,471
54,345
56,030
58,125
61,113
63,363
64,748
65,655
65,732
66,821
69,690
72,544
74,811
77,284
80,086
82,642
84,514
84,511
85,377
87,197
84,741
84,779
84,897
85,096
85,233
85,282
85,445
85,542
85,662
85,794
85,926
86,094
86,234
86,470
86,549
86,840
87,052
87,160
87,390
87,402
87,616
87,730
87,874
88,047

Transportation and
public
utilities
4,061
4,166
4,189
4,001
4,034
4,226
4,248
4,290
4,084
4,141
4,244
4,241
3,976
4,011
4,004
3,903
3,906
3,903
3,951
4,036
4,158
4,268
4,318
4,442
4,515
4,476
4,541
4,656
4,725
4,542
4,582
4,713
4,923
5,136
5,146
5,165
5,081
4,952
5,156
5,233
5,247
5,362
5,514
5,625
5,793
5,762
5,709
5,710
5,717
5,719
5,716
5,713
5,711
5,711
5,707
5,701
5,704
5,699
5,699
5,707
5,719
5,725
5,724
5,720
5,719
5,711
5,709
5,690
5,692
5,693
5,703
5,716

Wholesale
trade
2,298
2,478
2,612
2,610
2,643
2,735
2,821
2,862
2,875
2,934
3,027
3,037
2,989
3,092
3,153
3,142
3,207
3,258
3,347
3,477
3,608
3,700
3,791
3,919
4,006
4,014
4,127
4,291
4,447
4,430
4,562
4,723
4,985
5,221
5,292
5,375
5,295
5,283
5,568
5,727
5,761
5,848
6,030
6,187
6,173
6,081
6,045
6,114
6,044
6,040
6,042
6,041
6,045
6,042
6,037
6,037
6,037
6,052
6,061
6,062
6,086
6,097
6,103
6,110
6,125
6,110
6,126
6,107
6,117
6,122
6,128
6,138

Retail
trade
6,077
6,477
6,659
6,654
6,743
7,007
7,184
7,385
7,360
7,601
7,831
7,848
7,761
8,035
8,238
8,195
8,359
8,520
8,812
9,239
9,637
9,906
10,308
10,785
11,034
11,338
11,822
12,315
12,539
12,630
13,193
13,792
14,556
14,972
15,018
15,171
15,158
15,587
16,512
17,315
17,880
18,422
19,023
19,475
19,601
19,284
19,346
19,734
19,229
19,258
19,268
19,325
19,357
19,344
19,360
19,359
19,380
19,402
19,405
19,460
19,523
19,629
19,604
19,648
19,702
19,751
19,790
19,795
19,836
19,846
19,833
19,865

Finance,
insurance,
and real
estate
1,675
1,728
1,800
1,828
1,888
1,956
2,035
2,111
2,200
2,298
2,389
2,438
2,481
2,549
2,628
2,688
2,754
2,830
2,911
2,977
3,058
3,185
3,337
3,512
3,645
3,772
3,908
4,046
4,148
4,165
4,271
4,467
4,724
4,975
5,160
5,298
5,340
5,466
5,684
5,948
6,273
6,533
6,630
6,668
6,709
6,646
6,571
6,605
6,580
6,581
6,576
6,577
6,577
6,569
6,559
6,558
6,565
6,570
6,569
6,575
6,578
6,577
6,574
6,585
6,588
6,590
6,604
6,602
6,616
6,632
6,654
6,668

Government
Services
Total
4,697
5,025
5,181
5,239
5,356
5,547
5,699
5,835
5,969
6,240
6,497
6,708
6,765
7,087
7,378
7,619
7,982
8,277
8,660
9,036
9,498
10,045
10,567
11,169
11,548
11,797
12,276
12,857
13,441
13,892
14,551
15,302
16,252
17,112
17,890
18,615
19,021
19,664
20,746
21,927
22,957
24,110
25,504
26,907
27,934
28,336
29,053
30,193
28,645
28,643
28,715
28,833
28,925
28,996
29,111
29,178
29,247
29,361
29,430
29,524
29,573
29,665
29,756
29,977
30,099
30,175
30,320
30,381
30,433
30,534
30,651
30,719

5,595
5,474
5,650
5,856
6,026
6,389
6,609
6,645
6,751
6,914
7,278
7,616
7,839
8,083
8,353
8,594
8,890
9,225
9,596
10,074
10,784
11,391
11,839
12,195
12,554
12,881
13,334
13,732
14,170
14,686
14,871
15,127
15,672
15,947
16,241
16,031
15,837
15,869
16,024
16,394
16,693
17,010
17,386
17,779
18,304
18,402
18,653
18,841
18,526
18,538
18,580
18,607
18,618
18,620
18,671
18,709
18,729
18,710
18,762
18,766
18,755
18,777
18,788
18,800
18,819
18,823
18,841
18,827
18,922
18,903
18,905
18,941

Federal
2,254
1,892
1,863
1,908
1,928
2,302
2,420
2,305
2,188
2,187
2,209
2,217
2,191
2,233
2,270
2,279
2,340
2,358
2,348
2,378
2,564
2,719
2,737
2,758
2,731
2,696
2,684
2,663
2,724
2,748
2,733
2,727
2,753
2,773
2,866
2,772
2,739
2,774
2,807
2,875
2,899
2,943
2,971
2,988
3,085
2,966
2,969
2,914
2,982
2,982
2,986
2,982
2,980
2,973
2,962
2,961
2,966
2,945
2,943
2,968
2,945
2,944
2,938
2,923
2,912
2,901
2,896
2,906
2,901
2,901
2,893
2,902

State and
local
3,341
3,582
3,787
3,948
4,098
4,087
4,188
4,340
4,563
4,727
5,069
5,399
5,648
5,850
6,083
6,315
6,550
6,868
7,248
7,696
8,220
8,672
9,102
9,437
9,823
10,185
10,649
11,068
11,446
11,937
12,138
12,399
12,919
13,174
13,375
13,259
13,098
13,096
13,216
13,519
13,794
14,067
14,415
14,791
15,219
15,436
15,683
15,927
15,544
15,556
15,594
15,625
15,638
15,647
15,709
15,748
15,763
15,765
15,819
15,798
15,810
15,833
15,850
15,877
15,907
15,922
15,945
15,921
16,021
16,002
16,012
16,039

Note (cont'd).—which count persons as employed when they are not at work because of industrial disputes, bad weather, etc., even
if they are not paid for the time off; and which are based on a sample of the working-age population. For description and details of the
various establishment data, see "Employment and Earnings."
Source-. Department of Labor, Bureau of Labor Statistics.




319

TABLE B-45.—Hours and earnings in private nonagricultural industries, 1959-931
[Monthly data seasonally adjusted, except as noted]
Average weekly hours
Manufacturing
Year or month

1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993 "
1992:Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct

Nov
Dec
1993:Jan
Feb
Mar
Apr
May....
June
July
Aug
Sept....
Oct
Nov "..
Dec "..
1
2
3

Total
private

39.0
38.6
38.6
38.7
38.8
38.7
38.8
38.6
38.0
37.8
37.7
37.1
36.9
37.0
36.9
36.5
36.1
36.1
36.0
35.8
35.7
35.3
35.2
34.8
35.0
35.2
34.9
34.8
34.8
34.7
34.6
34.5
34.3
34.4
34.5
34.2
34.5
34.5
34.3
34.5
34.3
34.3
34.6
34.2
34.4
34.6
34.3
34.5
34.4
34.2
34.4
34.7
34.4
34.5
34.7
34.3
34.5
34.6
34.6

Tntal
1OI3I

Overtime

40.3
39.7
39.8
40.4
40.5
40.7
41.2
41.4
40.6
40.7
40.6
39.8
39.9
40.5
40.7
40.0
39.5
40.1
40.3
40.4
40.2
39.7
39.8
38.9
40.1
40.7
40.5
40.7
41.0
41.1
41.0
40.8
40.7
41.0
41.4
40.8
41.0
41.1
41.1
41.2
41.1
41.1
41.1
41.0
41.1
41.2
41.2
41.4
41.4
41.2
41.5
41.4
41.2
41.4
41.4
41.5
41.6
41.7
41.7

2.7
2.5
2.4
2.8
2.8
3.1
3.6
3.9
3.4
3.6
3.6
3.0
2.9
3.5
3.8
3.3
2.6
3.1
3.5
3.6
3.3
2.8
2.8
2.3
3.0
3.4
3.3
3.4
3.7
3.9
3.8
3.6
3.6
3.8
4.1
3.6
3.7
3.8
3.8
4.0
3.8
3.8
3.8
3.6
3.8
3.9
3.9
4.0
4.2
4.0
4.2
4.1
4.0
4.0
4.1
4.1
4.3
4.4
4.4

Average hourly earnings

Average weekly earnings, total private

Total private

Current
dollars

1QOO
IDOL.
ftf.1

QOI-

lars 2

$2.02 $6.69
2.09
6.79
2.14
6.88
2.22
7.07
2.28
7.17
2.36
7.33
2.46
7.52
2.56
7.62
2.68
7.72
2.85
7.89
3.04
7.98
3.23
8.03
3.45
8.21
3.70
8.53
3.94
8.55
4.24
8.28
4.53
8.12
4.86
8.24
5.25
8.36
5.69
8.40
6.16
8.17
6.66
7.78
7.25
7.69
7.68
7.68
8.02
7.79
8.32
7.80
8.57
7.77
8.76
7.81
8.98
7.73
9.28
7.69
9.66
7.64
10.01
7.52
10.32
7.45
10.58
7.42
10.83
7.39
10.45
7.43
10.49
7.44
10.52
7.43
10.51
7.41
10.54
7.42
10.56
7.42
10.57
7.40
10.63
7.43
10.62
7.41
10.65
7.40
10.69
7.41
10.68
7.40
10.73
7.40
10.74
7.38
10.78
7.39
10.77
7.36
10.82
7.39
10.81
7.38
7.37
10.81
10.86
7.39
10.86
7.39
10.92
7.40
10.93
7.40
10.95
7.40

Percent change

Level
Manufacturing
(current
dollars)

$2.19
2.26
2.32
2.39
2.45
2.53
2.61
2.71
2.82
3.01
3.19
3.35
3.57
3.82
4.09
4.42
4.83
5.22
5.68
6.17
6.70
7.27
7.99
8.49
8.83
9.19
9.54
9.73
9.91
10.19
10.48
10.83
11.18
11.46
11.76
11.29
11.35
11.39
11.42
11.44
11.45
11.46
11.50
11.51
11.52
11.55
11.58
11.61
11.64
11.66
11.71
11.71
11.72
11.72
11.77
11.84
11.83
11.88
11.94

frnm ycai
irom
3

earlier

Current
dollars

$78.78
80.67
82.60
85.91
88.46
91.33
95.45
98.82
101.84
107.73
114.61
119.83
127.31
136.90
145.39
154.76
163.53
175.45
189.00
203.70
219.91
235.10
255.20
267.26
280.70
292.86
299.09
304.85
312.50
322.02
334.24
345.35
353.98
363.95
373.64
357.39
361.91
362.94
360.49
363.63
362.21
362.55
367.80
363.20
366.36
369.87
366.32
370.19
369.46
368.68
370.49
375.45
371.86
372.95
376.84
372.50
376.74
378.18
378.87

1982
dollars2

$260.86
261.92
265.59
273.60
278.18
283.63
291.90
294.11
293.49
298.42
300.81
298.08
303.12
315.44
315.38
302.27
293.06
297.37
300.96
300.89
291.66
274.65
270.63
267.26
272.52
274.73
271.16
271.94
269.16
266.79
264.22
259.47
255.40
255.22
254.87
254.01
256.67
256.49
254.05
255.90
254.36
253.89
257.02
253.45
254.59
256.50
253.68
255.30
253.92
252.87
253.24
256.28
253.83
254.40
256.53
253.57
255.24
255.87
255.99

Current
dollars
4.9
2.4
2.4
4.0
3.0
3.2
4.5
3.5
3.1
5.8
6.4
4.6
6.2
7.5
6.2
6.4
5.7
7.3
7.7
7.8
8.0
6.9
8.5
4.7
5.0
4.3
2.1
1.9
2.5
3.0
3.8
3.3
2.5
2.8
2.7
2.8
3.8
3.7
2.7
3.2
1.6
2.5
3.1
1.1
2.5
3.3
1.9
3.4
2.2
2.0
2.8
3.4
2.6
2.9
2.8
3.0
3.0
2.2
3.1

1QQO

L)ioc

dollars 2
4.2
.4
1.4
3.0
1.7
2.0
2.9
.8
-.2
1.7
.8
-.9
1.7
4.1
-.0
-4.2
-3.0
1.5
1.2
-.0
-3.1
-5.8
-1.5
-1.2
2.0
.8
-1.3
.3
-1.0
-.9
-1.0
-1.8
-1.6
.1
-.1
.4
1.0
.7
-.2
.4
-1.3
-.5
.0
-1.8
-.6
.3
-1.0
.2
-.9
-1.0
-.3
.2
-.2
.2
.1
.5
.4
-.3
.6

For production or nonsupervisory workers; total includes private industry groups shown in Table B-44.
Current dollars divided by the consumer price index for urban wage earners and clerical workers on a 1982 = 100 base.
Percent changes are based on data that are not seasonally adjusted.

Note.—See Note, Table B-44.
Source: Department of Labor, Bureau of Labor Statistics.




320

TABLE B-46.—Employment cost index, private industry,
Total private
Year and month

Total
compensation

Wages
and
salaries

Goods-producing

Benefits1

Total
compensation

Wages
and
sala-

Service-producing
Total
compensation

Benefits1

Wages
and
salaries

1979-93
Nonmanufacturing

Manufacturing

fits"61"

Total
compensation

Wages
and
salaries

Benefits1

Total
compensation

Wages
and
sala-

fits1

Index, June 1 9 8 9 = 1 0 0 ; not seasonally adjusted
December:
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993

59.1
64.8
71.2
75.8
80.1
84.0
87.3
90.1
93.1
97.6
102.3
107.0
111.7
115.6
119.8

61.5
67.1
73.0
77.6
81.4
84.8
88.3
91.1
94.1
98.0
102.0
106.1
110.0
112.9
116.4

53.2
59.4
66.6
71.4
76.7
81.7
84.6
87.5
90.5
96.7
102.6
109.4
116.2
122.2
128.3

60.7
66.7
73.3
77.8
81.6
85.4
88.2
91.0
93.8
97.9
102.1
107.0
111.9
116.1
120.6

63.7
69.7
75.7
80.0
83.2
86.4
89.4
92.3
95.2
98.2
102.0
105.8
109.7
112.8
116.1

54.6
60.5
68.2
73.2
78.3
83.2
85.7
88.3
90.9
97.3
102.6
109.9
116.7
123.4
130.3

57.7
63.3
69.5
74.1
78.9
82.9
86.6
89.3
92.6
97.3
102.3
107.0
111.6
115.2
119.3

60.0
65.3
71.1
75.9
80.2
83.7
87.7
90.3
93.4
97.8
102.2
106.3
110.2
113.0
116.6

51.9
58.4
65.1
69.6
75.2
80.4
83.6
86.8
90.2
96.1
102.6
109.0
115.7
121.2
126.7

60.1
66.0
72.5
76.9
80.8
85.0
87.8
90.7
93.4
97.6
102.0
107.2
112.2
116.5
121.3

63.0
68.9
74.9
79.1
82.5
86.1
89.2
92.1
95.2
98.1
101.9
106.2
110.3
113.7
117.3

54.2
59.9
67.5
72.4
77.5
82.7
85.0
87.5
89.8
96.6
102.3
109.5
116.1
122.6
130.0

58.5
64.2
70.4
75.1
79.6
83.4
87.0
89.7
92.9
97.5
102.3
106.9
111.5
115.1
119.0

60.8
66.2
72.1
76.8
81.0
84.2
88.0
90.6
93.7
97.8
102.2
106.1
109.8
112.6
116.0

52.5
59.1
66.1
70.6
76.2
81.1
84.4
87.5
91.0
96.8
102.8
109.3
116.2
122.0
127.4

1992: Mar
June
Sept
Dec
1993: Mar
June
Sept
Dec

113.1
113.9
114.8
115.6
117.1
118.0
119.1
119.8

110.9
111.6
112.2
112.9
113.9
114.6
115.7
116.4

118.6
119.7
121.2
122.2
125.2
126.7
127.7
128.3

113.5
114.3
115.3
116.1
118.0
119.1
119.9
120.6

110.7
111.4
112.1
112.8
113.8
114.5
115.3
116.1

119.7
120.6
122.3
123.4
127.3
129.0
130.0
130.3

112.8
113.6
114.4
115.2
116.4
117.3
118.5
119.3

111.1
111.7
112.3
113.0
113.9
114.7
115.9
116.6

117.7
118.8
120.4
121.2
123.4
124.6
125.7
126.7

114.0
114.7
115.7
116.5
118.6
119.7
120.6
121.3

111.5
112.2
112.9
113.7
114.7
115.5
116.3
117.3

119.3
120.1
121.5
122.6
126.8
128.6
129.7
130.0

112.7
113.5
114.4
115.1
116.3
117.2
118.4
119.0

110.7
111.3
111.9
112.6
113.4
114.2
115.4
116.0

118.2
119.4
121.0
122.0
124.2
125.5
126.5
127.4

1992: Mar
June
Sept
Dec
1993: Mar
June
sept
Dec

112.9
113.8
114.7
115.7
116.8
117.9
::::: 118.9
119.9

110.9
111.6
112.1
113.0
113.9
114.6
115.6
116.5

118.2
119.5
121.3
122.9
124.7
126.4
127.7
129.1

113.3
114.1
115.2
116.3
117.7
118.8
119.8
120.7

110.7
111.4
112.1
112.8
113.8
114.5
115.3
116.1

118.6
119.8
121.5
123.7
126.0
128.3
129.7
131.1

112.6
113.5
114.3
115.3
116.2
117.2
118.3
119.2

110.7
111.3
111.8
112.7
113.4
114.2
115.3
116.1

117.9
119.2
121.0
122.5
123.9
125.3
126.5
127.9

Index, June 1989=100; seasonally adjusted
112.7
113.5
114.3
115.3
116.2
117.2
118.3
119.4

119.1
120.4
122.3
124.3
126.7
128.7
130.0
131.3

111.1
111.7
112.1
113.1
113.9
114.7
115.8
116.7

117.4
118.7
120.4
121.7
123.1
124.5
125.7
127.2

113.7
114.7
115.7
116.9
118.3
119.6
120.6
121.7

111.5
112.2
112.9
113.7
114.7
115.5
116.3
117.3

Percent change from 12 months earlier, not seasonally adjusted
December:
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993

9.6
9.9
6.5
5.7
4.9
3.9
3.2
3.3
4.8
4.8
4.6
4.4
3.5
3.6

1992: Mar
June
Sept
Dec
1993: Mar
June
Sept
Dec

4.2
3.7
3.4
3.5
3.5
3.6
3.7
3.6

1992: Mar
June
Sept
Dec
1993: Mar
June
Sept
Dec

0.9

9.1
8.8
6.3
4.9
4.2
4.1
3.2
3.3
4.1
4.1
4.0
3.7
2.6
3.1
3.4
3.0
2.7
2.6
2.7
2.7
3.1
3.1

7.2
7.4
6.5
3.5
3.4
3.4
6.9
6.1
6.6
6.2
5.2
5.0
6.3
5.5
5.2
5.2
5.6
5.8
5.4
5.0

9.9
9.9
6.1
4.9
4.7
3.3
3.2
3.1
4.4
4.3
4.8
4.6
3.8
3.9
4.6
4.1
3.9
3.8
4.0
4.2
4.0
3.9

1.2
1.1
1.5
1.3
1.5
1.4
1.0
1.1

1.1
.7
1.0
1.0
1.2
.9
.8
.8

11.7
12.1

9.4
8.6
5.7
4.0
3.8
3.5
3.2
3.1
3.2
3.9
3.7
3.7
2.8
2.9
3.5
3.1
3.1
2.8
2.8
2.8
2.9
2.9

10.8
12.7

7.3
7.0
6.3
3.0
3.0
2.9
7.0
5.4
7.1
6.2
5.7
5.6
7.0
5.9
5.6
5.7
6.3
7.0
6.3
5.6

9.7
9.8
6.6
6.5
5.1
4.5
3.1
3.7
5.1
5.1
4.6
4.3
3.2
3.6
4.0
3.5
3.1
3.2
3.2
3.3
3.6
3.6

8.8
8.9
6.8
5.7
4.4
4.8
3.0
3.4
4.7
4.5
4.0
3.7
2.5
3.2
3.3
2.8
2.4
2.5
2.5
2.7
3.2
3.2

12.5
11.5

6.9
8.0
6.9
4.0
3.8
3.9
6.5
6.8
6.2
6.1
4.8
4.5
5.7
5.1
5.1
4.8
4.8
4.9
4.4
4.5

9.8
9.8
6.1
5.1
5.2
3.3
3.3
3.0
4.5
4.5
5.1
4.7
3.8
4.1
5.0
4.3
4.0
3.8
4.0
4.4
4.2
4.1

9.4
8.7
5.6
4.3
4.4
3.6
3.3
3.4
3.0
3.9
4.2
3.9
3.1
3.2
3.8
3.5
3.3
3.1
2.9
2.9
3.0
3.2

7.3
7.0
6.7
2.8
2.9
2.6
7.6
5.9
7.0
6.0
5.6
6.0
7.3
6.0
5.4
5.6
6.3
7.1
6.7
6.0

9.7
9.7
6.7
6.0
4.8
4.3
3.1
3.6
5.0
4.9
4.5
4.3
3.2
3.4
3.9
3.5
3.2
3.2
3.2
3.3
3.5
3.4

8.9
8.9
6.5
5.5
4.0
4.5
3.0
3.4
4.4
4.5
3.8
3.5
2.6
3.0
3.2
2.7
2.4
2.6
2.4
2.6
3.1
3.0

12.6
11.8
6.8
7.9
6.4
4.1
3.7
4.0
6.4
6.2
6.3
6.3
5.0
4.4

1.3
1.0
1.4
1.8
1.9
1.8
1.1
1.1

0.8
.8
.7
.9
.8
.9
.9
.8

0.7
.5
.4
.8
.6
.7
1.0
.7

1.0
1.1
1.5
1.2
1.1
1.1
1.0
1.1

10.5
12.7

5.6
5.2
5.1
5.0
5.1
5.1
4.5
4.4

Percent change from 3 months earlier, seasonally adjusted

1

0.7
.6
.4
.8
.8
.6
.9
.8

0.9
.6
.6
.6
.9
.6
.7
.7

1.4
1.1
1.6
1.6
1.9
1.6
1.0
1.0

0.8
.7
.7
.9
.8
.9
.9
.9

0.7
.5
.4
.9
.7
.7
1.0
.8

1.1
1.1
1.4
1.1
1.2
1.1
1.0
1.2

1.1
.9
.9
1.0
1.2
1.1
.8
.9

1.1
.6
.6
.7
.9
.7
.7
.9

Employer costs for employee benefits.

Note.—The employment cost index is a measure of the change in the cost of labor, free from the influence of employment shifts
among occupations and industries.
Data exclude farm and household workers.
Through December 1981, percent changes are based on unrounded data; thereafter changes are based on indexes as published.
Source: Department of Labor, Bureau of Labor Statistics.




321

TABLE B-47.—Productivity and related data, business sector, 1947-93
[1982=100; quarterly data seasonally adjusted]

Year nr
Tear Of

Output per hour
of all persons

Output1

Hours of all
persons2

Compensation
pert our3

Real compensation
per hour4

Unit labor costs

Implicit price
deflator«

Business
sector

Nonfarm
business
sector

Business
sector

Nonfarm
business
sector

Business
sector

Nonfarm
business
sector

Business
sector

Nonfarm
business
sector

Business
sector

Nonfarm
business
sector

Business
sector

Nonfarm
business
sector

Business
sector

Nonfarm
business
sector

1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992

43 4
45.3
46.0
49.9
517
53.6
55.3
56.7
58.6
59.3
61.0
63.0
64.6
65.6
68.1
70.5
73 3
76.5
78 6
80.7
82.8
85.3
85.8
87.0
89.8
92.7
95.0
93.2
95.5
98 3
99.9
100.5
99.4
98.6
99.9
100.0
102.3
104.8
106.3
108.5
109.6
110.7
109.9
110.7
111.8
115.5

50 6
52.3
53.4
56.8
58 2
59.8
60.7
62.2
64.3
64.5
65.8
67.6
69.2
69.9
72.2
74.5
771
80.0
818
83.4
85.2
87.7
87.7
88.5
91.3
94.2
96.4
94.5
96.7
99.2
100.7
101.4
99.9
99.9
99.9
100 0
102.5
104.7
105.6
107.7
108.6
109.6
108.6
109.1
110.3
113.7

341
35.9
35.3
38.6
411
42.6
44.4
44.0
47.1
48.4
49.0
48.2
51.4
52.2
53.3
56.1
58 7
62.2
65 9
69.3
70.8
74.0
76.2
75.8
78.0
83.0
88.2
86.6
85.0
89.9
94.9
100.1
102.1
100.5
102.4
100.0
104.1
112.6
116.7
119.9
124.8
130.1
132.3
133.3
131.6
135.4

33 5
35.2
34.6
37.9
40 5
42.1
43.8
43.3
46.5
47.9
48.6
47.8
51.0
51.8
52.9
55.7
58 3
61.9
65 7
69.3
70.8
74.0
76.2
75.7
77.9
83.0
88.4
86.7
84.9
90 0
95.0
100.5
102.5
100.8
102.4
100.0
104.4
113.0
116.8
120.1
125.0
130.6
132.7
133.5
131.8
135.4

78 7
79.3
76.6
77.4
79 6
79.6
80 3
77.6
80.4
816
80.3
76.6
79.6
79.7
78.3
79.6
80 0
81.3
83 9
85.8
85.5
86.7
88.8
87.2
86.8
89.5
92.8
92.9
89.0
915
95.0
99.6
102.8
101.9
102.5
100.0
101.8
107.4
109.8
110.5
113.8
117.5
120.4
120.5
117.7
117.3

66 3
67.4
64.7
66.7
69 7
70.4
72 1
69.6
72.4
74 2
73.8
70.7
73.7
74.2
73.3
74.8
75 7
77.4
80 3
83.1
83.0
84.4
86.9
85.6
85.3
88.1
91.6
91.8
87.9
90 7
94.4
99.2
102.6
101.8
102.5
100.0
101.9
107.9
110.7
111.5
115.1
119.1
122.2
122.4
119.5
119.1

10 4
11.3
11.5
12.3
13 5
14.4
15 4
15.9
16.3
17 4
18.5
19.4
20.2
21.1
21.9
23.0
23 8
25.1
26 0
27.8
29.4
31.8
34.1
36.7
39.1
41.6
45.1
49.6
54.5
59 5
64.3
70.0
76.8
85.0
93.0
100 0
103.8
108.3
113.2
118.9
123.1
128.5
133.0
140.6
147.4
154.9

113
12.3
12.7
13.5
14 6
15.5
16 3
16.9
17.5
18 6
19.6
20.4
21.3
22.2
23.0
23.9
24 7
25.9
26 7
28.3
30.0
32.3
34.5
37.0
39.4
41.9
45.4
49.9
54.9
59 6
64.4
70.1
76.7
84.9
93.0
100 0
104.0
108.3
112.8
118.4
122.5
127.7
131.9
139.2
146.2
153.7

44 9
45.2
46.5
49.4
50 2
52.4
55 6
57.0
58.7
617
63.6
64.7
67.0
68.8
70 8
73.3
75 1
78.0
79 7
82.9
85.0
88.3
89.8
91.3
93.1
95.9
98.1
97.0
97.8
100 9
102.4
103.6
102.1
99.5
98.7
100 0
100.6
100.6
101.5
104.7
104.6
104.8
103.5
103.8
104.5
106.5

49 1
49.3
51.5
54.0
54 4
56.3
59.1
60.6
63.1
65 9
67.5
68.2
70.5
72.4
741
76.3
78 0
80.5
81 9
84.3
86.6
89.6
90.8
92.0
93.9
96.8
98.7
97.6
98.4
101 1
102.5
103.7
102.0
99.4
98.8
100 0
100.8
100.6
101.2
104.3
104.1
104.2
102.7
102.8
103.6
105.7

24 0
24.9
24.9
24.7
26 2
26.9
27.8
28.0
27.8
29.3
30.4
30.8
31.3
32.2
32.2
32.6
32 5
32.8
33 1
34.5
35.5
37.3
39.8
42.2
43.5
44.8
47.5
53.1
57.1
60 5
64.3
69.6
77.3
86.2
93.1
100.0
101.5
103.4
106.5
109.5
112.3
116.0
121.0
127.1
131.9
134.1

22 4
23.6
23.8
23.7
25 2
25.9
26.9
27.1
27.3
28.8
29.8
30.2
30.8
31.8
31.8
32.1
32 1
32.3
32 7
33.9
35.2
36.8
39.4
41.8
43.1
44.5
47.1
52.8
56.8
60.1
63.9
69.1
76.8
85.7
93.1
100.0
101.5
103.4
106.8
110.0
112.8
116.5
121.5
127.6
132.6
135.1

23 8
25.7
25.4
25.8
27 5
27.8
28.1
28.2
28.9
29.9
30.9
31.3
32.1
32.6
32.8
33.5
33 7
34.1
35 0
36.1
37.2
38.8
40.6
42.4
44.5
46.2
49.0
53.7
59.0
62.4
66.5
71.8
78.3
85.9
94.5
100.0
103.4
107.7
111.2
113.6
116.6
120.8
126.1
131.2
136.1
139.2

22 5
24.2
24.4
24.8
26 4
26.8
27.5
27.6
28.5
29.5
30.5
30.8
31.8
32.3
32.5
33.1
33 4
33.9
34 6
35.8
36.9
38.6
40.4
42.2
44.3
45.8
47.9
52.8
58.3
61.9
66.1
71.2
77.5
85.6
94.2
100.0
104.0
107.6
111.6
114.2
117.2
121.4
126.5
131.8
137.0
140.3

1982: IV
1983: IV
1984: IV
1985: IV
1986: IV
1987: IV
1988: IV
1989: IV
1990: IV

101.1
103.1
105.4
107.0
108.3
110.6
110.9
109.7
110.5

101.1
103.3
105.3
106.0
107.4
109.5
110.0
108.5
108.9

100.0
107.5
114.4
118.0
120.6
127.4
131.7
132.3
132.1

100.0
108.1
114.8
118.2
120.8
127.6
132.5
132.7
132.2

98.9
104.3
108.5
110.2
111.3
115.1
118.8
120.6
119.6

99.0
104.7
109.0
111.4
112.5
116.5
120.5
122.3
121.4

102.1
105.3
109.9
115.6
120.9
125.8
130.6
134.9
143.5

102.1
105.2
109.9
115.0
120.4
125.1
129.8
133.9
142.1

100.6
100.5
100.7
102.4
105.6
105.1
104.7
103.4
103.5

100.6
100.4
100.7
101.8
105.2
104.6
104.1
102.6
102.5

101.0
102.1
104.3
108.0
111.6
113.7
117.9
123.0
129.8

101.0
101.9
104.4
108.5
112.2
114.3
118.0
123.4
130.5

101.1
104.8
109.0
112.4
114.6
117.9
122.8
127.8
133.2

101.4
105.2
109.0
112.9
115.2
118.5
123.4
128.2
134.0

1991:1
II
Ill
IV

110.9
111.6
111.8
112.8

109.4
110.2
110.4
111.3

131.0
131.5
131.5
132.4

131.2
131.7
131.8
132.6

118.1
117.8
117.6
117.3

119.9
119.5
119.4
119.2

144.9
146.6
148.2
150.1

143.7
145.4
147.1
148.8

103.6
104.2
104.7
105.2

102.7
103.4
103.9
104.3

130.6
131.4
132.6
133.1

131.3
132.0
133.2
133.7

134.8
135.8
136.6
137.2

135.7
136.6
137.5
138.2

1992:1
II
Ill
IV

114.1
114.8
116.0
117.1

112.4
113.1
114.1
115.3

133.3
134.5
136.0
137.9

133.3
134.4
135.9
137.9

116.8
117.1
117.2
117.7

118.7
118.8
119.0
119.6

152.2
153.7
156.1
157.8

150.9
152.6
154.8
156.6

105.8
106.0
106.9
107.3

104.8
105.2
106.0
106.4

133.4
133.9
134.5
134.8

134.3
134.9
135.6
135.8

138.3
139.1
138.7
140.6

139.3
140.2
139.8
141.8

1993:1
II
Ill

116.6
116.6
117.6

114.8
114.7
115.9

138.0
139.3
140.5

138.1
139.5
141.0

118.3
119.5
119.4

120.3
121.6
121.7

159.1
160.1
161.6

157.7
158.4
159.9

107.1
107.0
107.7

106.2
105.9
106.6

136.4
137.3
137.4

137.4
138.2
138.0

141.6
142.5
142.9

142.7
143.5
144.0

quarter

1

Output refers to gross domestic product originating in the sector in 1987 dollars.
Hours at work of all persons engaged in the sector, including hours of proprietors and unpaid family workers. Estimates based
primarily on establishment data.
3
Wages and salaries of employees plus employers' contributions for social insurance and private benefit plans. Also includes an
estimate of wages, salaries, and supplemental payments for the self-employed.
4
Hourly compensation divided by the consumer price index for all urban consumers.
5
Current dollar gross domestic product divided by constant dollar gross domestic product.
2

Source: Department of Labor, Bureau of Labor Statistics.




322

TABLE B-48.—Changes in productivity and related data, business sector, 1948-93
[Percent change from preceding period; quarterly data at seasonally adjusted annual rates]
Output per hour
of all persons

Output1

Tear or

quarter

Business
sector

Nonfarm
business
sector

Business
sector

-1.8

1948
1949

4.5
1.6

3.3
2.2

1950
1951
1952
1953
1954

8.5
3.6
3.7
3.2
2.5

6.5
2.3
2.8
1.6
2.5

1955
1956
1957
1958
1959

3.4
1.3
2.8
3.2
2.5

3.2
.4
2.0
2.7
2.3

1960
1961
1962
1963
1964

1.6
3.8
3.5
4.1
4.3

1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

5.2
9.5
6.6
3.7
4.1
-.9
7.1

2.8
1.3
-1.6

Compensation per
hour3

Hours of all
persons2

Voar nr

Nonfarm
business
sector

5.0
-1.8

9.6
7.0
3.8
4.0
-1.0

7.3
3.0
1.5
-1.7

Business
sector

Real compensation
per hour4

Business
sector

Nonfarm
business
sector

4.0
.1

5.2
.8

7.9
-1.2

7.8
.8

4.8
.7
3.6
4.9
2.5

-.9
6.0
2.6
3.5
.7

-.3
6.2
2.8
4.1
.8

1.6
6.7
1.0
1.3
.4

1.8
6.1
1.6
2.5
.7

3.0
5.1
3.1
1.7
3.6

4.1
4.5
2.3
1.2
3.4

-.7
5.3
3.6
1.4
1.7

.5
5.6
3.7
1.3
1.7

2.5
3.3
3.2
1.4
2.7

3.2
3.5
3.3
.9
3.4

4.4
3.4
4.1
3.5
4.6

2.6
2.9
3.6
2.4
3.9

2.6

2.3
3.0
2.2
3.3

2.7
.1
1.2
-.3
.9

3.3
0
1.0
-.1
.8

1.5
.5
2.0
.8
1.1

1.5
.6
2.1
.9
1.4

Business
sector

Nonfarm
business
sector

0.7

1.7

-3.3

-3.9

8.6
1.7

8.6
3.0

0.5
3.0

0.5
4.3

3.0
4.6
1.0
2.4
-3.4

7.4
9.8
6.3
6.8

3.3

6.2
8.7
5.6
5.7
3.3

6.1
1.8
4.3
6.0
2.5

3.9
2.5
-.5

2.6
6.7
6.6
4.6
4.3

3.7
6.1
5.7
4.0
4.1

-3.3

3.6
1.5
-1.5
-4.6

3.8

-4.2

Business
sector

Ncnfarm
business
sector

Business
sector

6.5

6.7

1.1
3.3
3.1
3.6
3.8

1.7
2.1
5.1
4.6
6.0

1.7
2.1
5.3
4.7
6.2

1.6
.5
1.6

2.1
1.1
2.3

4.3
4.0
4.7
38
5.2

2.7
2.8
2.6
3.0
.6

2.2
1.9
2.2
2.9
-.0

6.0
5.2
2.2
4.5
2.9

6.1
5.4
2.2
4.6
2.9

3.2
2.3
-.3
1.4
2.4

3.8
3.4
-.1
1.7
2.9

3.8
7.0
5.7
8.1
7.3

3.3
5.9
5.9
7.9
6.8

2.2
4.0
2.6
3.8
1.7

1.7
2.9
2.7
3.5
1.3

1.1
4.1
3.1
5.0
6.7

1.0
3.9
3.5
4.8
6.9

2.5
3.3
2.9
4.4
4.7

2.2
3.3
3.3
4.5
4.6

1.4
3.3
3.2
2.5

1.0
3.1
3.1
2.4

-.5
2.9
6.4
6.2

-.6
2.9

-1.5

7.5
6.4
6.4
8.6

1.7
1.9
3.1
2.3

1.4
2.0

6.1
3.0
3.1
5.9

6.2
3.2
3.2
5.7

4.3
4.9
3.8
6.1

-2.0

-1.8

11.9

12.1

9.5

4.5
5.0
3.5
4.5

-1.9

7.2
6.4
6.5
8.2
9.8

10.2

2.3
2.6
1.5
.7
-1.4

-1.9

7.5
6.0
6.3
8.2

7.5

10.0

10.4

5.9
6.4
8.1
11.0

5.8
6.5
8.0
9.1

6.3
6.8
7.6
8.9

9.7
10.1
5.8
3.4
4.1

10.4
10.1
6.1
4.0
3.5

2.4
3.0
1.7
.6
-1.1

5.8
5.6
5.5
2.0

-.4
3.2
3.6
.1

-2.0
5.9
5.6
5.8
2.0

-42
2.8
3.8
4.9
3.2

-42
3.2
4.1
5.0

-1.7
1.6
-2.4
4.4 v
8.2

-.9
.6

-.8
1.3
.1
2.3

-.9
.9
.1

-1.6

2.5

4.1

2.4

2.2

8.2

1985
1986
1987
1988
1989

1.4
2.1
1.0
1.0
_ 7

.8
2.0
.8
9
-.9

3.6
2.8
4.1
43
1.7

1990
1991
1992

.7
1.0
3.3

.4
1.1
3.1

.7
-1.3
2.9

1991:1
II
Ill
IV

1.5
2.5
.6
3.7

1.9
2.7
.8
3.4

-3.3
1.4
.1
2.7

-3.1

1992:1
II
ill
IV

4.7
2.5
4.2

3.8
2.8
3.6
4.2

1993:1
II
Ill

-1.6

3.8
-.0
3.6

-1.8

-.4
4.3

-1.8

.6
-1.2

6.5
6.4
-1.9

1980
1981
1982
1983
1984

1.9

.1
-1.6

4.3

Implicit price
deflator5

Nonfarm
business
sector

Nonfarm
business
sector

.9
2.8
.0
.9

Unit labor costs

-.3
3.3
4.0
.2

9.8

-1.1

.8
3.2
1.4
1.2

3.5

10 0
9.1
8.0
8.9
9.7

10.0

8.7
8.0
8.9
9.5

-1.5

-.8
.7
-2.4

10.7
9.4
7.6

10.7

-2.5

3.2
1.9
-1.1
8
2.7
1.4
1.2
-1.7

11.0

-2.5
-.7
1.2
.8
-.2

11.5

1.9

11.7
8.6
7.4
1.5
1.9

3.0
2.8
2.5
34
4.3

3.3
2.9
2.6
32
4.3

3.3
2.2
2.6
36
4.4

3.7
2.4
2.6
36
4.2

8.0
7.4
1.5

1.8

1.9

3.8

9.6
7.5
4.0

5.6

5.9

4.3

4.1

.0

3.4
2.8
4.1
44
1.7

2.1
.6
3.0
33
2.5

2.5
.8
3.2
35
2.6

4.5
5.0
3.6
44
3.5

4.1
5.0
3.5
42
3.3

.9
3.1
-.1
2

-1.3

.6
3.1
-.2
1
-1.4

.6

.1
-2.3
_ 4

.2
-2.4
_ 4

5.7
4.9
5.0

5.5
5.0
5.1

.3
.6
2.0

.1
.8
2.0

5.0
3.8
1.7

5.1
3.9
2.0

4.1
3.7
2.3

4.2
3.9
2.4

1.5
.3
2.7

-4.7
-1.1
-.5
-1.0

-4.9
-1.1
-.6
-.7

4.1
4.8
4.5
5.2

4.4
4.9
4.6
4.9

.4
2.5
1.8
1.9

.6
2.7
1.9
1.6

2.5
2.2
3.8
1.4

2.5
2.2
3.7
1.5

4.8
3.1
2.4
1.7

4.9
2.7
2.6
2.2

2.9
3.4
4.6
5.6

2.1
3.3
4.4
6.0

-1.8
1.0
.4
1.8

-1.6

5.7
4.1

3.3
2.4
-1.2
5.6

3.2
2.7
-1.1
5.6

2.1
3.8
_ i

2.2
1.5
3.1
1.4
-.9

1.7
1.8
2.2
.4

.6
4.0
4.4

2.3
.9
3.4
1.4
-.5

.9
1.6
1.9
.7

.5
3.8
3.5

5.6
4.7
5.9
4.6
2.9
1.9
3.7

5.0

4.8
2.3
-.6

2.7
2.6
1.2

2.5
2.4
1.2

-2.3

-1.3
2.7

-2.5

.5
.8
1.8
2.5
4.4
.1

6.2
4.6
3.3
2.5
3.9

-.8
1.3
.6

-.4
2.7

-1.0

2.5

2.5
.3

1
Output refers to gross domestic product originating in the sector in 1987 dollars.
2
Hours at work of all persons engaged in the sector, including hours of proprietors and unpaid family workers. Estimates based
primarily on establishment data.
3
Wages and salaries of employees plus employers' contributions for social insurance and private benefit plans. Also includes an
estimate of wages, salaries, and supplemental payments for the self-employed.
4
Hourly compensation divided by the consumer price index for all urban consumers.
5
Current dollar gross domestic product divided by constant dollar gross domestic product.

Note.—Percent changes are based on original data and therefore may differ slightly from percent changes based on indexes in Table
B-47.
Source: Department of Labor, Bureau of Labor Statistics.




323

PRODUCTION AND BUSINESS ACTIVITY
TABLE B-49.—Industrial production indexes, major industry divisions, 1947-93
[1987 = 100; monthly data seasonally adjusted]

Total
industrial
production

Year or month
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976 .
1977
1978
1979
1980 .
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993".
1992: Jan
Feb
Mar
Ar
p
May
June
July
Aug
Sept
Oct
Nov
Dec
1993:Jan
Fb
e
Mar
Apr
June
July
Aug
Sept
Oct"
Nov
Dec p

1

111
23.6
22.3
25.8
28.0
29.1
31.6
29.9
33.7
35.1
35.6
33.3
37.3
381
38.4
416
44.0
47 0
51.7
56 3
57.5
60 7
63.5
614
62.2
68.3
73.8
72.7
66.3
72.4
78.2
82.6
85.7
84.1
85.7
81.9
84.9
92.8
94 4
95.3
100.0
104.4
106.0
106.0
104.1
106.5
111.0
104.5
105.3
105.6
106.3
106.7
106.0
106.8
106 6
106.2
107 5
108.4
108.9
109.3
109 9
110.1
1104
110.2
110 5
110.8
111.0
111.4
112 1
113.2
114.0 j

Manufacturing
Mining
Total

Durable
19 9
20.8
18.9
23.0
25.9
27.5
31.1
27.4
31.3
32.4
32.6
28.5
32.8
33 3
32.7
36 3
38.7
414
47.1
52 3
52.9
55 5
57.7
53 3
53.1
59.3
66.2
64.8
56.7
62.6
68.7
73.9
78.3
75.7
77.4
72.7
76.8
88.4
918
93.9
100.0
106.6
108.6
107.4
103.8
108.1
115.9
104.6
106.2
106.7
107.2
108.4
107.6
108.2
108 5
108.1
109 8
110.9
111.8
112.9
1138
114.1
1150
114.9
114 6
115.4
115.7
117.0
118.3
120.1
121.7

212
22.0
20.8
24.2
26.1
27.2
29.6
27.7
31.3
32.5
32.9
30.6
34.5
35 2
35.3
38 4
40.7
43 5
48.2
52 6
53.6
56 6
59.1
56 4
57.3
63.3
68.9
67.9
61.1
67.4
73.3
77.8
80.9
78.8
80.3
76.6
80.9
89.3
916
94.3
100.0
104.7
106.4
106.1
103.7
106.9
111.9
104.5
105.4
106.1
106.5
107.1
106.5
107.1
107 0
106.8
108 0
108.9
109.2
109.9
110 5
110.8
1114
111.3
1113
111.6
111.9
112.3
113 2
114.5
115.3
i

Source: Board of Governors of the Federal Reserve System.




324

Utilities

Nondurable
22 6
23.4
23.0
25.6
26.4
26.9
28.0
28.2
31.3
32.9
33.5
33.7
37.1
38 0
39.1
415
43.8
46 6
49.8
52 9
54.6
581
61.1
611
63.6
69.3
111
72.3
67.7
74.6
80.1
83.5
84.6
83.1
84.5
82.5
87.0
90.8
915
94.9
100.0
102.3
103.7
104.4
103.5
105.4
106.8
104.4
104.6
105.3
105.5
105.4
105.2
105.7
105 2
105.2
105 8
106.4
106.0
106.4
106 4
106.6
106 9
106.9
107.2
107.0
107.3
106.5
107 0
107.6
107.4

55 5
58.3
51.7
57.7
63.4
62.8
64.5
63.2
70.5
74.2
74.3
68.1
71.3
72.7
73.1
75.2
78.2
81.4
84.4
88.9
90.6
94.1
97.8
100 4
97.8
99.9
100.8
100.3
98.0
98.9
101.5
104.6
106.6
110.0
114.3
109.3
104.8
111.9
109.0
101.0
100.0
101.3
100.0
102.0
100.4
97.6
97.0
97.5
96.7
97.2
97.4
98.8
97.1
98.5
97 0
97.1
97.6
97.8
98.2
98.3
95.9
95.3
96.4
97.3
98.0
96.4
95.5
97.7
98 2
97.4
97.9

11.7
13.0
13.9
15.8
18.1
19.6
21.3
22.9
25.6
28.1
30.0
31.4
34.5
36.9
39.0
41.9
44.8
48.7
51.7
55.6
58.4
63.1
68.7
72 9
76.4
81.3
84.5
83.5
84.3
87.6
89.9
92.7
95.3
95.9
94.3
91.8
93.6
97.0
99.5
96.3
100.0
105.0
108.7
109.9
112.2
112.0
116.0
110.2
111.0
111.4
112.0
111.2
110.0
111.2
110 4
111.2
112.7
114.7
116.8
112.8
1175
117.8
1144
112.1
114 9
116.9
117.7
115.3
114 6
115.4
116.6

TABLE B-50.—Industrial production indexes, market groupings, 1947-93
[1987 = 100; monthly data seasonally adjusted]
Materials

Final products

Year or month

Total
industrial
production

Consumer goods
Total
Total

1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985

22.7
23.6
22.3
25.8
28.0
29.1
31.6
29.9
33.7
35.1
35.6
33.3
37.3
38.1
38.4
41.6
44.0
47.0
51.7
56.3
57.5
60.7
63.5
61.4
62.2
68.3
73.8
72.7
66.3
72.4
78.2
82.6
85.7

1986
1987

1988
1989
1990
1991
1992
1993 ".
1992:Jan
Feb
Mar....
Apr
May....
June..
July...
Aug...
Sept..
Oct
Nov...
Dec...
1993:

Jan....
Feb....
Mar...
Apr....
May...
June..
July...
Aug...
Sept..
Oct".

Nov.
Dec".
1

20.8
21.5
20.9
23.5
25.4
27.3
29.1
27.6
29.8
31.6
32.5
31.0
34.0

84.1
85.7
81.9
84.9
92.8
94.4
95.3
100.0
104.4
106.0
106.0
104.1
106.5
111.0
104.5
105.3
105.6
106.3
106.7
106.0
106.8
106.6
106.2
107.5
108.4
108.9
109.3
109.9
110.1
110.4
110.2
110.5
110.8
111.0
111.4
112.1
113.2
114.0

Automotive
products

Equipment

Other
Nonduradurable Total
ble
goods
goods

35.1
35.4
38.4
40.6
42.9
47.1
51.6
53.7
56.3
58.1
56.0
56.5
61.3
65.9
65.7
61.8
66.2
71.6
76.1
79.0

25.4
26.2
26.1
29.7
29.4
30.1
31.9
31.7
35.4
36.7
37.6
37.2
40.9
42.4
43.3
46.2
48.8
51.5
55.5
58.4
59.8
63.4
65.8
65.0
68.8
74.3
77.6
75.2
72.3
79.4
85.1
88.4
87.3

21.7
22.6
22.5
28.3
25.0
22.5
28.4
26.5
35.2
28.9
30.3
24.1
30.2
34.6
31.6
38.3
41.9
43.9
54.1
53.9
47.4
56.4
56.7
47.7
60.8
65.6
72.4
62.6
59.0
73.2
84.0
86.3
78.5

30.4
26.2
26.2
29.6
27.3
32.2
33.9
33.2
31.3
36.0
36.2
37.3
40.5
43.7
47.7
54.1
59.6
60.4
64.7
69.0
66.9
70.8
81.0
85.7
79.3
69.8
78.2
87.4
91.2
89.8

80.0
82.1
80.8
83.0
91.0
94.2
95.7
100.0
104.8
106.8
107.0
105.3
108.2
113.5
105.3
106.5
106.9
107.7
108.3
107.1
108.1
108.9
108.1
110.1
111.0
111.5
111.9
112.4
112.7
112.8
112.5
112.7
113.2
113.5
113.8
114.8
115.9
116.6

85.3
85.8
84.5
88.8
92.8
93.7
96.8
100.0
102.9
104.0
103.4
102.8
105.2
108.1
103.2
104.0
104.7
105.4
105.8
104.0
104.9
105.1
104.4
106.4
107.1
107.5
107.6
108.5
108.6
108.1
107.3
107.3
107.7
107.8
107.4
108.6
109.6
109.8

59.5
59.2
57.5
71.9
86.6
92.7
95.3
100.0
106.4
108.2
100.7
89.8
99.4
110.6
90.5
95.2
96.5
99.0
102.9
99.0
98.8
99.5
97.3
103.1
104.1
108.7
112.7
111.9
111.2
112.1
109.7
105.3
103.3
103.0
105.6
112.9
119.5
123.4

85.1
86.3
78.1
86.2
94.6
90.6
93.9
100.0
103.0
105.2
103.6
99.9
105.2
111.9
102.5
103.6
104.7
105.8
107.9
104.6
106.3
104.0
104.1
104.9
107.1
107.2
109.3
110.7
111.7
112.3
111.8
110.2
113.2
112.2
112.5
113.8
114.9
114.4

22.8
23.8
22.0

Defense
and
space

Total

Durable

22.4
23.6
22.4
26.1
27.4
27.2
29.1
29.0
32.9
34.4
34.4
33.6
37.1

25.1
26.2
23.9
28.6
31.6
32.1
35.6
32.9
38.9
39.9
39.9
35.9
41.4

58.7
52.8
51.3
50.1
49.4
48.5
49.2
49.2
49.5
51.5

37.4
38.1
40.4
42.7
45.5
48.4
51.4
53.5
56.6
59.6
58.7
60.5
67.6
71.9
69.4
62.6
69.0
74.9
79.1
81.2

42.0
42.0
45.8
48.7
52.6
58.7
63.9
63.3
67.5
71.5
69.0
70.0
77.2
84.5
82.8
72.6
81.2
87.3
91.8
95.4

21.5
22.1
19.8
24.9
28.3
28.9
33.8
29.2
35.7
35.8
35.8
30.1
35.9
36.3
35.5
39.4
42.1
45.9
52.6
57.9
55.9
59.2
62.3
56.5
56.8
64.2
73.3
71.2
59.3
68.4
75.3
81.4
85.3

57.4
58.5
65.7
71.8
78.9
89.4
96.0
100.0
99.7
100.1
98.8
91.7
85.9
78.7
89.5
89.0
88.9
87.7
87.2
86.5
85.1
84.5
84.4
83.5
83.2
82.5
82.0
81.5
80.7
80.5
79.5
78.6
78.6
78.0
77.5
76.9
76.6
76.1

77.0
77.0
75.1
80.3
86.2
88.3
91.9
100.0
101.8
102.0
101.2
96.5
97.6
100.1
97.0
97.2
97.2
97.9
97.9
97.7
98.6
97.0
96.9
97.8
98.1
98.3
98.2
99.3
99.6
100.0
99.7
99.4
100.4
100.6
100.4
101.0
101.8
101.9

91.3
92.8
85.1
88.3
96.6
96.6
95.9
100.0
105.0
106.7
106.8
105.5
107.9
112.2
106.2
106.8
107.3
107.9
108.0
107.8
108.5
107.6
107.4
108.1
109.3
110.0
110.4
110.9
110.9
111.5
111.6
112.1
112.0
112.2
112.7
113.2
114.3
115.5

79.3
82.1
73.4
79.2
92.1
92.9
93.7
100.0
106.8
108.4
107.6
105.2
108.9
116.0
106.8
107.8
108.1
108.8
109.0
108.7
109.3
108.9
107.6
109.7
111.1
111.9
113.3
114.2
114.1
114.9
114.8
114.9
115.4
115.8
117.
118.2
119.7
121.7

15.0
15.8
14.1
15.3
21.2
25.5
27.6
24.2
24.7
27.1
28.2
25.2
27.7

14.7
15.3
13.4
14.3
17.5
19.8
20.6
18.1
19.6
22.7
23.6
19.9
22.4
23.0
22.3
24.3
25.5
28.5
32.6
37.8
38.6
40.3
42.9
41.3
39.3
44.8
52.4
54.7
48.8
50.6
56.7
63.1
71.5

39.9
40.6
46.9
50.6
49.0
54.3
63.7
72.7
72.9
69.4

67.8
69.7
74.2
76.5
76.5
74.9
80.4
84.4
87.8
87.7

28.5
28.1
31.3
33.1
35.0
39.6
46.1
49.0
50.4
51.8
48.1
45.0
49.3
55.0
56.8
52.0
53.8
58.8
64.2
71.0

89.1
89.6
89.7
91.9
93.4
94.4
97.6
100.0
102.4
103.2
103.8
105.0
105.9
107.2
105.0
105.2
105.7
106.1
105.9
104.6
105.5
106.0
105.3
107.1
107.5
107.4
106.7
107.7
107.7
106.9
106.3
107.2
107.4
107.8
106.9
107.3
107.4
107.2

74.6
78.2
77.0
76.8
89.2
94.8
94.5
100.0
107.6
110.9
112.1
108.9
112.7
121.2
108.3
110.1
110.2
111.1
112.0
111.6
112.7
114.3
113.5
115.4
116.7
117.2
118.1
118.0
118.7
119.7
119.9
120.4
121.2
121.6
122.9
123.8
125.:
126.6

73.5
76.1
72.9
71.9
85.4
91.1
93.1
100.0
110.7
115.5
116.9
115.7
123.2
137.0
116.3
118.8
119.0
120.6
122.1
121.9
123.7
126.1
125.0
127.5
129.0
129.6
131.2
131.7
133.4
134.8
135.4
136.1
137.1
137.6
139.4
140.8
142.9
144.9

27.0
27.7
27.9
30.3
31.3
32.6
33.5
33.9
36.5
38.8
40.1
41.3
44.1
45.5
47.0
49.2
51.4
54.0
56.3
59.0
62.0
64.5
66.7

Intermediate
products

7.5
8.8
9.2

10.8
26.5
37.2
44.6
39.3
35.9
35.1
36.7
36.8
38.8

Nondurable

25.2
28.9
30.2
30.1
29.9
34.2

Ener-

52.7
59.3
62.7
63.4
58.8
62.3
63.1
63.6
65.8
69.7
72.5
75.8
80.6
83.4
87.2
91.7

34.8
36.2
39.2
41.6
45.2
49.6
53.6
54.5
59.9
64.9
65.2
68.0
74.9
80.4
80.8
71.9
81.4
86.7
89.7
92.9

96.2
97.1
100.8
101.5
98.8
96.7
99.0
101.1
102.2
105.0

88.7
90.5
82.1
89.2
93.0
91.7
94.4
100.0
104.4
107.1
108.0
107.1
110.9
114.0
108.8
109.9
110.9
111.2
111.5
111.5
111.5
110.7
111.7
110.7
112.0
111.5
112.4
112.1
112.8
113.8
114.1
114.8
114.2
115.2
113.8
114.4
115.5
115.3

106.2
104.3
100.7
98.9
103.8
103.4
99.5
100.0
102.2
103.1
104.2
104.6
103.4
103.5
103.1
102.5
102.7
103.5
103.3
103.1
104.4
102.5
103.6
103.0
103.9
105.1
103.4
103.8
103.5
103.4
103.4
104.6
103.7
102.8
103.3
102.9
103.0
103.9

Two components—oil and gas well drilling and manufactured homes—are included in total equipment, but not in detail shown.

Source: Board of Governors of the Federal Reserve System.




325

TABLE B-51.—Industrial production indexes, selected manufactures, 1947-93
[1987 = 100; monthly data seasonally adjusted]
Nondurable manufactures

Durable manufactures
Primary
metals
Year or month
Total

1947
1948
1949
1950
1951
1952.
1953
1954
1955
1956
1957
1958
1959
1960
1961 . .
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993 "
1992:Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
1993:Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct"
Nov "
Dec "

70 2
73.0
61.4
77.3
84.1
76 8
87.0
70 4
91.5
90 9
87.1
69 0
80.7
80.4
78.9
84.6
91.2
102 9
113.2
120.2
111.1
115.1
123.8
115.2
109.2
122.4
138.9
134 5
107.2
119 9
121.5
130 7
133.0
110 8
117.5
83.2
91.0
102 4
101.8
93.7
100.0
108.7
107.2
106.5
98 4
101.1
105.5
101.7
102.4
102.6
101.8
101.1
101.2
100.6
100.5
98.0
100.5
101.6
102.4
102.8
108.0
104.2
104.4
104.2
105.7
105.3
106.2
106.0
105.0
107.1
109.1

Iron
and
steel

102 1
106.8
91.2
112.4
125.7
110 6
127.5

991

131.8
129 3
124.6
93 9
108.1
109.9
104 9
109.3
119.1
135 5
148.7
153.1
141.5
146.1
159.2
148.2
135.5
150.6
171.5
1661
133.5
147 1
145.1
155 3
156.5
126 0
135.1
86.2
96.1
105.9
104.5
90.8
100 0
112.7
111.2
111.5
100.6
104.7
110.5
105.5
106.4
106.5
105.6
104.8
103.8
104.7
103.8
102.0
104.1
103.6
107.4
107.0
112.9
107.6
108.4
108.1
110.9
111.9
112.1
111.1
112.4
111.1
114.6

Transportation
equipment

Industrial

and
Fabricated
metal
products

37 5
38.2
34.4
42.2
45.1
44 0
49.6
44 7
51.0

518

53.1
47 6
53.4
53.4
52 1
56.7
58.5

621

68.3
73.1
76.5
80.6
81.9
75.9
75.6
82.9
92.1
88 4
76.7
84 9
92.7
96 2
99.5
92 5
91.1
83.2
85.5
93 3
94.5
93.8
100 0
104.2
102.8
99.5
94 9
96.7
100.9
94.9
95.9
96.6
96.8
97.2
97.1
97.0
97.0
96.5
97.5
97.6
97.8
99.8
99.7
100.3
101.4
100.6
100.1
101.2
101.0
100.9
101.6
102.7
103.3

commercial
machinery and
computer
equipment
12 0
12.1
10.3
11.6
14.7
16 0
16.7
14 2
15.6
17 9
17.9
15 0
17.5
17.6
17 1
19.2
20.5
23 3
26.2
30.5
31.1
31.3
33.9
32.8
30.5
35.4
41.4
44 1
38.1
40 0
45.1
50 2
56.9
60 6
65.9
63.9
64.3
80 8
86.8
90.3
100.0
113.0
117.3
117.6
113.7
124.8
146.8
114.7
118.1
120.0
120.9
123.2
123.8
125.7
126.9
127.9
130.6
132.8
133.8
135.0
136.7
139.6
142.8
144.2
145.4
148.5
149.9
152.1
153.7
156.2
158.8

Electricai
machinery

85
8.8
8.3
11.3

114

13 0
14.9
13 3
15.3
16 5
16.4
15 0
18.2
19.8

210

24.1
24.8
26 2
31.3
37.5
37.7
39.8
42.3
40.5
40.7
46.5
53.0
52 4
45.1
50 7
58.4
64 0
71.3
73 3
75.4
75.9
80.3
94 1
93.1
94.3
100 0
108.5
111.0
111.4
112 8
119.8
131.7
114.9
116.3
117.2
118.2
119.5
119.3
120.7
120.6
121.5
122.6
124.4
124.8
125.8
127.1
128.5
129.0
129.7
130.1
132.3
133.5
135.2
136.0
137.2
138.7

Total

19 6
21.4
21.5
25.7
28.7
33 3
41.8
36 4
41.9
40 6
43.5
34 3
38.9
40.3
37.8
43.7
48.0
49 2
58.5
62.7
61.3
66.6
66.1
55.5
60.1
64.1
73.0
66 4
59.7
68 0
73.7
79 5
81.0
72.3
68.7
64.8
72.7
83.1
91.8
96.9
100 0
105.2
109.6
107.0
101.8
102.6
105.6
100.6
102.2
102.3
103.2
104.5
102.7
101.4
102.4
100.5
103.0
103.6
106.3
108.4
107.8
106.9
106.9
105.5
102.6
100.8
100.4
102.4
106.3
110.0
112.7

Source: Board of Governors of the Federal Reserve System.




326

Motor
vehicles
and
parts

27 3
29.6
30.4
39.0
35.8
30 7
38.7
33 3
44.6
36 2
38.0
28 0
36.4
41.1
36 0
43.9
48.6
49 9
63.7
62.6
55.1
66.0
66.3
53.3
66.9
73.0
85.0
73 4
62.2

819

94.7
99.2
91.0
67 0
64.4
58.8
74.5
90.6
99.0
98.5
100.0
105.7
106.9
101.0
94.3
104.8
120.1
96.1
100.3
101.2
104.5
107.9
104.8
103.1
105.0
102.6
108.0
109.9
116.2
120.9
120.7
120.1
120.4
118.1
114.3
110.1
110.0
115.0
124.1
132.3
138.8

Lumber
Apparel
and
prodproducts
ucts

38 8
40.4
35.7
43.4
43.2
42 7
45.1
44 8
50.1
49 5
45.4

461

52.3
49.3
51.6
54.4
56.9
61 1
63.5
65.9
65.3
67.2
67.1
66.7
68.5
78.4
78.7

714

66.5
75 6
82.3
83.6
82.4
76 9
74.7
67.3
79.9
86 0
88.0
95.1
100.0
100.1
99.4
97.1
90.5
96.4
100.0
95.1
96.3
96.5
95.3
96.1
93.8
96.6
96.6
94.7
97.8
99.8
98.0
99.3
101.8
98.0
98.1
97.4
96.5
99.1
99.9
100.7
104.0
104.2
104.6

431
45.0
44.5
47.9
47.0
49.5
50.1
49.5
54.7
56.0
55.8
54 3
59.7
60.9

613

63.8
66.4
68 7
72.6
74.5
74.1
76.0
78.4
75.3
76.2
80.9
81.5
77 9
71.1
83 9
91.6
93.9
89.0
89 2
91.0
90.1
93.8
95 7
92.6
96.3
100 0
98.1
95.0
92.2
91.9
92.3
90.8
93.4
93.3
93.6
93.4
93.5
91.7
92.7
91.3
91.5
91.7
92.9
92.7
93.1
92.5
92.1
92.0
91.2
91.1
90.7
90.6
89.6
89.4
90.0
89.7

Textile Printing
mill
and
prod- publishucts
ing

35 2
37.7
34.8
39.6
39.2
38 9
39.9
37 3
42.5
43 7
41.6
41 1
46.4
45.6
46 9
50.1
51.9
56 0
61.0
64.7
64.8
72.3
76.0
74.4
78.5
86.0
89.6

815

77.7
86 3
91.6
92.0
95.0
92 1
89.4
83.0
93.2
93 7
89.7
93.9
100.0
98.6
100.3
97.1
96.8
104.7
106.3
102.9
104.3
104.3
105.0
105.0
103.8
107.0
103.5
105.1
103.5
106.0
106.0
106.9
106.2
105.4
104.2
106.9
107.1
107.7
107.4
105.4
106.6
106.3
106.8

22 1
23.2
23.8
24.9
25.4
25 3
26.5
27 6
30.3
32 3
33.4
32 6
34.8
36.2
36.4
37.7
39.7
42 1
44.8
48.3
50.9
51.7
54.2
52.7
53.2
56.7
58.3
57.4
53.7
58.7
64.3
68.1
69.9
70.3
72.1
75.2
79.0
84 5
87.6
90.6
100.0
100.9
101.1
100.8
96.8
95.0
94.1
96.4
95.6
95.1
95.8
94.5
95.6
95.7
93.5
94.1
94.5
94.2
94.7
94.7
94.0
94.7
95.6
94.7
94.5
93.8
93.4
93.8
94.3
94.4
93.3

Chemicals
and
products

87
9.4
9.3
11.6
13.1
13.7
14.8
15.0
17.6
18 9
19.9
20 6
24.0
24.9
26.1
29.0
31.7
34 8
38.7
42.2
44.2
49.6
53.7
55.9
59.5
66.9
73.1
75.8
69.1
77.3
83.3
88.0
91.3
87.8
89.2
81.8
87.5
91.4
91.4
94.6
100.0
106.0
109.2
111.8
111.3
115.0
118.3
112.8
113.6
114.2
114.6
114.8
114.9
114.6
114.4
115.2
116.2
117.7
116.7
116.8
116.2
117.6
117.8
118.1
119.1
118.7
119.1
118.5
118.1
119.6
120.0

Foods

331
32.8
33.1
34.3
35.0
35.7
36.4
37.2
39.3
41.5
42.2
43.2
45.4
46.6
47.9
49.5
51.2
53 6
54.8
56.9
59.4
61.0
63.0
64.0
66.0
69.5
70.9
71.9
71.4
75.5
79.0
81.8
82.6
84.6
86.5
87.7
90.1
92.1
94.9
97.4
100.0
101.5
102.5
103.7
105.3
106.0
106.9
104.6
105.8
106.4
106.0
106.1
105.4
105.9
106.3
105.6
106.8
106.4
106.2
105.9
106.9
106.7
106.7
106.7
107.1
107.2
107.8
107.3
107.8
107.2
107.0

TABLE B-52.—Capacity utilization rates, 1948-93
[Percent;1 monthly data seasonally adjusted]
Manufacturing
Year or month

1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993"
1992:Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
1993:Jan
Feb
Mar..
MPay"
June
July
Aug
Septp
Oct
Nov P.
Dec "

Total
industry

Total

Durable
goods

Primary
processing

Advanced
processing

82.5
74.2

87.3
76.2

82.8
85.8
85.4
89.3
80.1

88.5
90.2
84.9
89.4
80.6
92.0
89.4
84.7
75.4
83.0
79.8
77.9
81.5
83.8
87.8
91.0
91.4
85.4
86.3
86.9

88.8
91.1
88.0
87.4
86.5

80.4
79.3
86.4
91.5
86.0
72.9
80.1
84.0
86.3
86.4

79.1
77.4
82.5
86.5
82.8
73.5
77.8
81.9
84.3
84.8

78.0
78.0
69.0
74.8
80.4
79.8
80.9
84.9
86.9
86.2
84.2
80.1
82.4
84.6
82.3
82.6
83.0
82.3
82.6
82.2

81.3
79.1
74.6
74.9
80.3
79.4
78.3
80.1
82.1
81.8
79.8
76.8
77.9
79.6
78.7
79.1
79.2
77.3
77.5
77.0

82.6
81.9
81.7
82.3
83.0
82.9

77.3
77.3
77.0
77.9
78.4
78.6

83.5
84.3
83.8
84.3
84.2
84.5

78.9
79.0
79.3
79.5
79.3
78.9
79.2
79.2
79.6
80.1
80.9
81.4

74.6
79.3
83.3
85.5
86.2
82.1
80.9
75.0
75.8
81.1

80.2
78.8
72.8
74.9
80.4

80.3
79.2
81.5
83.7
83.6
82.1
79.2
79.8
81.9
78.8
79.3
79.5
79.9
80.1
79.5
80.0
79.7
79.3
80.2
80.8
81.0
81.2
81.5
81.6
81.7
81.5
81.5
81.7
81.7
81.9
82.3
83.0
83.5

79.5
79.1
81.6
83.6
83.1
81.1
77.8
78.8
81.1
77.6
78.2
78.6
78.8
79.1
78.6
78.9
78.7
78.4
79.2
79.7
79.8
80.3
80.5
80.6
80.9
80.7
80.6
80.7
80.8
81.0
81.5
82.3
82.7

80.8
79.2
84.3
88.4
84.2

Utilities

79.8
83.4
85.9
89.3
80.0
84.2
84.4
83.1
74.9
81.1
80.5
77.2
81.6
83.4
84.6

87.0
86.1
83.6
75.0
81.6
80.1
77.3
81.4
83.5
85.6
89.5
91.1
87.2
87.2
86.8
79.7
78.2
83.7
88.1
83.8
73.2
78.5
82.8
85.1
85.4

86.4
86.8
86.9

Mining

80.0
73.2

87.1
86.8
86.3
76.7
74.3
80.9
87.5
82.7
70.2
75.4
80.3
83.5
84.9
78.6
76.6
69.0
70.5
78.3
77.8
76.2
78.6
81.8
81.5
79.0
74.9
76.4
80.4
74.6
75.6
75.8
76.1
76.8
76.1
76.4
76.5
76.1
77.1
77.8
78.2
78.9
79.4
79.5
79.9
79.7
79.4
79.8
79.9
80.6
81.4
82.5
83.4

1

Output as percent of capacity.
Source: Board of Governors of the Federal Reserve System.




Nondurable
goods

327

86.3
86.6
86.6
82.9
82.8
86.6
87.5
84.0
76.4
81.8
85.2
86.2
85.1
81.4
81.0
78.0
81.1
83.1
81.9
83.0
85.6
85.9
85.3
84.0
81.7
82.0
82.0
81.7
81.8
82.3
82.4
82.2
81.9
82.2
81.7
81.7
82.0
82.4
82.0
82.2
82.1
82.2
82.3
82.2
82.3
82.0
82.1
81.5
81.7
82.0
81.8

84.5
84.8
84.4
84.8
85.7
86.0

81.2
83.5
86.6
88.9
87.4
90.4
92.5
92.5
89.9
90.0
90.9
91.3
91.9
94.0
94.6
86.5
79.9
84.4
82.9
78.2
79.9
84.4
85.9
89.1
88.6
86.8
87.1
86.4
85.7
86.2
86.5
87.8
86.3
87.6
86.4
86.5
87.1
87.4
87.8
87.9
85.8
85.3
86.4
87.2
87.9
86.5
85.8
87.8
88.4
87.7
88.2

93.4
94.1
95.8
95.4
93.9
94.6
92.9
86.8
84.0
84.8
84.6
84.8
85.9
85.5
82.8
79.5
80.3
82.5
83.5
80.2
82.0
84.1
86.0
86.0
86.3
85.3
87.0
84.6
85.1
85.3
85.7
84.9
83.9
84.8
84.1
84.5
85.6
87.1
88.5
85.4
88.9
89.0
86.4
84.6
86.6
88.1
88.6
86.7
86.1
86.6
87.5

T A B L E B-53.—New construction activity, 1929-93
[Value put in place, billions of dollars; monthly data at seasonally adjusted annual rates]

Private construction

Year or month

Total
new
construction

Nonresidential buildings and other
construction»

Residential
buildings 1
Total
Total 2

Public construction

New
housing
units

Total

Commercial 3

Total

Federal

State and
local5

Industrial

Other4

0.9
.2
.3

2.6
.5
1.2

2.5
1.6
3.8

0.2
.5

2.3
1.1
3.1

2^3

4.7
.8
1.7

3.0
3.5
1.7
.9

2.6
3.0
1.4
.7
.6

2.1
2.7
1.7
1.1
1.4

1.3
1.5
1.2
.9
1.1

3.6
5.8
10.7
6.3
3.1

1.2
3.8
9.3
5.6
2.5

2.4
2.0
1.3
.7
.6

3.4
12.1

1.3
6.2

.7
4.8

2.1
5.8

1.3
3.0

2.4
2.2

1.7
.9

.7
1.4

20.0
26.1
26.7

16.7
21.4
20.5

9.9
13.1
12.4

7.8
10.5
10.0

6.9
8.2
8.0

1.7
1.4
1.0

4.2
5.5
5.9

3.3
4.7
6.3

1.2
1.5

1950
1951
1952
1953
1954

33.6
35.4
36.8
39.1
41.4

26.7
26.2
26.0
27.9
29.7

18.1
15.9
15.8
16.6
18.2

15.6
13.2
12.9
13.4
14.9

8.6
10.3
10.2
11.3
11.5

1.1
2.1
2.3
2.2
2.0

6.1
6.7
6.8
7.3
7.2

6.9
9.3
10.8
11.2
11.7

1.6
3.0
4.2
4.1
3.4

5.2
6.3
6.6
7.1
8.3

1955
1956
1957
1958
1959

46.5
47.6
49.1
50.0
55.4

34.8
34.9
35.1
34.6
39.3

21.9
20.2
19.0
19.8
24.3

18.2
16.1
14.7
15.4
19.2

12.9
14.7
16.1
14.8
15.1

2.4
3.1
3.6
2.4
2.1

7.3
8.0
9.0
8.8
9.0

11.7
12.7
14.1
15.5
16.1

2.8
2.7
3.0
3.4
3.7

8.9
10.0
11.1
12.1
12.3

1960
1961
1962
1963

54.7
56.4
60.2
64.8

38.9
39.3
42.3
45.5

23.0
23.1
25.2
27.9

17.3
17.1
19.4
21.7

15.9
16.2
17.2
17.6

2.9
2.8
2.8
2.9

8.9
8.7
9.2
9.7

15.9
17.1
17.9
19.4

3.6
3.9
3.9
4.0

12.2
13.3
14.0
15.4

1964

72.1

51.9

30.5

24.1

21.4

6.8

3.6

11.0

20.2

3.7

16.5

1965
1966
1967
1968
1969

78.0
81.2
83.0
92.4
99.8

56.1
57.4
57.6
65.0
72.0

30.2
28.6
28.7
34.2
37.2

23.8
21.8
21.5
26.7
29.2

25.8
28.8
28.8
30.8
34.8

8.1
8.1
8.0
9.0
10.8

5.1
6.6
6.0
6.0
6.8

12.6
14.1
14.9
15.8
17.2

21.9
23.8
25.4
27.4
27.8

3.9
3.8
3.3
3.2
3.2

18.0
20.0
22.1
24.2
24.6

1970
1971
1972
1973
1974

100.7
117.3
133.3
146.8
147.5

72.8
87.6
103.3
114.5
109.3

35.9
48.5
60.7
65.1
56.0

27.1
38.7
50.1
54.6
43.4

37.0
39.1
42.6
49.4
53.4

11.2
13.1
15.7
18.1
18.1

6.6
5.5
4.8
6.4
8.1

19.2
20.5
22.1
24.9
27.2

27.9
29.7
30.0
32.3
38.1

3.1
3.8
4.2
4.7
5.1

24.8
25.9
25.8
27.6
33.0

1975
1976
1977
1978
1979

145.6
165.4
193.1
230.2
259.8

102.3
121.5
150.0
180.0
203.2

51.6
68.3
92.0
109.8
116.4

36.3
50.8
72.2
85.6
89.3

50.7
53.2
58.0
70.2
86.8

14.3
14.1
16.4
20.6
28.3

8.3
7.4
8.0
11.5
15.6

28.2
31.6
33.7
38.2
42.8

43.3
44.0
43.1
50.1
56.6

6.1
6.8
7.1
8.1
8.6

37.2
37.2
36.0
42.0
48.1

1980
1981
1982
1983
1984

259.7
272.0
260.6
294.9
348.8

196.1
207.3
197.5
231.5
278.6

100.4
99.2
84.7
125.5
153.8

69.6
69.4
57.0
94.6
113.8

95.7
108.0
112.9
106.0
124.8

34.6
40.2
44.1
43.9
59.1

14.6
18.0
18.5
13.8
14.8

46.6
49.8
50.2
48.2
50.8

63.6
64.7
63.1
63.5
70.2

9.6
10.4
10.0
10.6
11.2

54.0
54.3
53.1
52.9
59.0

1985
1986
1987
1988
1989

377.4
407.7
419.4
432.3
443.6

299.5
323.1
328.7
337.5
345.5

158.5
187.1
194.7
198.1
196.6

114.7
133.2
139.9
138.9
139.2

141.1
136.0
134.1
139.4
148.9

72.6
69.5
68.9
71.5
73.9

17.1
14.9
15.0
16.5
20.4

51.3
51.6
50.1
51.5
54.6

77.8
84.6
90.6
94.8
98.1

12.0
12.4
14.1
12.3
12.2

65.8
72.2
76.6
82.5
86.0

1990
1991
1992
1993*.

442.1
403.4
436.0
470.3

334.7
293.5
317.3
342.7

182.9
157.8
187.8
207.9

128.0
110.6
129.6
144.5

151.8
135.7
129.4
134.8

72.5
54.8
45.0
47.3

23.8
22.3
20.7
20.7

55.4
58.7
63.7
66.8

107.5
109.9
118.8
127.6

12.1
12.8
14.3
14.5

95.4
97.1
104.5
113.1

1929
1933
1939

10.8
2.9
8.2

8.3
1.2
4.4

3.6
.5
2.7

1940
1941
1942
1943
1944

8.7
12.0
14.1
8.3
5.3

5.1
6.2
3.4
2.0
2.2

1945

5.8
14.3

1947
1948
1949

1946

3.0

New series
2.5
3.5

New series

See next page for continuation of table.




328

TABLE B-53.—New construction activity, 1929-93—Continued
[Value put in place, billions of dollars; monthly data at seasonally adjusted annual rates]

Public construction

Private construction

Year or month

Total
new
construction

Total
Total 2

1992: Jan
Feb
Mar

Nonresidential buildings and other
construction 1

Residential
buildings 1

New
housing
units

Total

Commercial 3

Total
Industrial

Federal

State and
local 5

Other 4

£==

417.6
416.5
433.8
429.9
436.7
434.9

300.0
297.8
312.3
313.6
314.8
319.3

172.1
171.7
180.3
185.4
184.4
186.7

121.1
120.1
127.0
131.0
128.8
129.4

127.9
126.1
131.9
128.2
130.5
132.6

45.8
45.7
46.2
44.7
44.4
47.4

22.2
21.5
24.5
21.1
21.2
20.5

59.9
58.9
61.2
62.4
64.9
64.7

117.7
118.7
121.5
116.3
121.9
115.6

14.6
14.4
14.6
13.6
14.9
14.0

103.1
104.4
106.9
102.6
107.0
101.6

June
July
Aug
Sept
Oct
Nov
Dec

432.0
430.4
433.5
442.6
449.3
455.2

314.0
312.3
317.4
324.8
328.2
335.4

184.6
187.3
189.2
194.6
119.3
206.4

126.8
127.9
129.1
132.1
135.4
138.9

129.4
125.0
128.2
130.3
128.9
128.9

43.8
43.0
44.1
45.6
44.8
43.6

21.1
18.9
19.3
19.4
19.2
20.0

64.5
63.1
64.9
65.3
64.8
65.3

118.0
118.1
116.1
117.7
121.1
119.9

13.7
13.0
13.2
14.4
15.8
16.0

104.3
105.1
102.9
103.3
105.2
103.9

1993: Jan
Feb
Mar
Apr
May
June

451.3
453.8
454.5
449.1
453.3
460.7

335.5
334.8
337.0
328.1
332.2
335.0

207.2
205.7
205.5
197.3
198.4
200.5

141.8
142.9
141.8
137.7
138.3
139.3

128.3
129.1
131.5
130.8
133.9
134.5

44.8
45.9
45.3
46.2
47.3
47.8

19.6
20.5
22.2
19.5
20.1
19.3

63.9
62.7
64.0
65.2
66.4
67.4

115.8
119.0
117.5
120.9
121.0
125.7

14.2
14.8
15.6
14.9
12.8
13.4

101.6
104.2
101.9
106.0
108.2
112.2

July
Aug
Sept
Oct

466.6
468.5
477.1
489.7
500.0
513.1

337.9
341.4
345.6
354.1
364.5
371.9

204.6
206.6
209.5
215.2
222.3
228.6

141.1
143.0
145.7
149.9
156.4
161.8

133.3
134.8
136.1
138.9
142.2
143.3

45.8
46.8
47.0
49.1
50.5
51.3

19.8
20.1
21.3
21.3
22.3
22.8

67.7
67.8
67.8
68.4
69.3
69.2

128.7
127.2
131.6
135.6
135.6
141.2

14.2
13.4
14.3
15.6
15.2
16.2

114.5
113.8
117.3
120.0
120.4
125.0

Nov
Dec

1
Beginning 1960, farm residential buildings included in residential buildings; prior to 1960, included in nonresidential buildings and
other construction.
2
Includes residential improvements, not shown separately. Prior to 1964, also includes nonhousekeeping units (hotels, motels, etc.).
3
Office buildings, warehouses, stores, restaurants, garages, etc., and, beginning 1964, hotels and motels; prior to 1964 hotels and
motels are included in total residential.
4
Religious, educational, hospital and institutional, miscellaneous nonresidential, farm (see also footnote 1 ) , public utilities
(telecommunications, gas, ejectnc, railroad, and petroleum pipelines), and all other private.
5
Includes Federal grants-in-aid for State and local projects.

Source: Department of Commerce, Bureau of the Census.




329

TABLE B-54.—New housing units started and authorized, 1959-93
[Thousands of units]
New private housing units authorized 2

New housing units started
Private and public*

Private (farm and nonfarm) 1

Year or month
Total
(farm and
nonfarm)

1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993

,

1,553.7
1,296.1
1,365.0
1,492.5
1,634.9
1,561.0
1,509.7
1,195.8
1,321.9
1,545.4
1,499.5
1,469.0
2,084.5
2,378.5
2,057.5
1,352.5
1,171.4
1,547.6
2,001.7
2,036.1
1,760.0
1,312.6
1,100.3
1,072.1
1,712.5
1,755.8
1,745.0
1,807.1
1,622.7
()

Type of structure

Type of structure
Nonfarm

Total
1 unit

1,531.3
1,274.0
1,336.8
1,468.7
1,614.8
1,534.0
1,487.5
1,172.8
1,298.8
1,521.4
1,482.3

()

1,517.0
1,252.2
1,313.0
1,462.9
1,603.2
1,528.8
1,472.8
1,164.9
1,291.6
1,507.6
1,466.8
1,433.6
2,052.2
2,356.6
2,045.3
1,337.7
1,160.4
1,537.5
1,987.1
2,020.3
1,745.1
1,292.2
1,084.2
1,062.2
1,703.0
1,749.5
1,741.8
1,805.4
1,620.5
1,488.1
1,376.1
1,192.7
1,013.9
1,199.7
1,285.1

1,234.0
994.7
974.3
991.4
1,012.4
970.5
963.7
778.6
843.9
899.4
810.6
812.9
1,151.0
1,309.2
1,132.0
888.1
892.2
1,162.4
1,450.9
1,433.3
1,194.1
852.2
705.4
662.6
1,067.6
1,084.2
1,072.4
1,179.4
1,146.4
1,081.3
1,003.3
894.8
840.4
1,029.9
1,123.4

1,164
1,285
1,318
1,095
1,197
1,141
1,106
1,229
1,218
1,226
1,226
1,286
1,171
1,180
1,124
1,206
1,248
1,248
1,232
1,328
1,371
1,390
1,450
1,540

976
1,137
1,050
939
1,019
994
961
1,038
1,045
1,079
1,089
1,133
1,051
1,036
987
1,059
1,107
1,079
1,064
1,183
1,166
1,211
1,285
1,330

2 to 4
units

Total
1 unit

5 units
or more

282.9
257.5
338.7
471.5
590.7
108.4
450.0
86.6
422.5
61.1
325.1
71.6
376.1
80.9
527.3
85.0
571.2
535.9
84.8
120.3
780.9
141.3
906.2
118.3
795.0
68.1
381.6
204.3
64.0
85.9
289.2
121.7
414.4
125.0
462.0
122.0
429.0
330.5
109.5
91.1
287.7
80.0
319.6
113.5
522.0
121.4
544.0
93.4
576.1
84.0
542.0
65.3
408.7
58.8
348.0
55.2
317.6
260.4
37.5
35.6
137.9
30.7
139.0
30.5
131.2

1,208.3
998.0
1,064.2
1,186.6
1,334.7
1,285.8
1,239.8
971.9
1,141.0
1,353.4
1,323.7
1,351.5
1,924.6
2,218.9
1,819.5
1,074.4
939.2
1,296.2
1,690.0
1,800.5
1,551.8
1,190.6
985.5
1,000.5
1,605.2
1,681.8
1,733.3
1,769.4
1,534.8
1,455.6
1,338.4
1,110.8
948.8
1,094.9
1,214.2

938.3
746.1
722.8
716.2
750.2
720.1
709.9
563.2
650.6
694.7
625.9
646.8
906.1
1,033.1
882.1
643.8
675.5
893.6
1,126.1
1,182.6
981.5
710.4
564.3
546.4
901.5
922.4
956.6
1,077.6
1,024.4
993.8
931.7
793.9
753.5
910.7
1,004.6

2to4
units

5 units
or more

77.1
192.9
64.6
187.4
67.6
273.8
87.1
383.3
118.9
465.6
100.8
464.9
84.8
445.1
61.0
347.7
73.0
417.5
84.3
574.4
85.2
612.7
88.1
616.7
132.9
885.7
148.6 1,037.2
117.0
820.5
64.3
366.2
63.9
199.8
93.1
309.5
121.3
442.7
130.6
487.3
125.4
444.8
114.5
365.7
101.8
319.4
88.3
365.8
133.6
570.1
142.6
616.8
120.1
656.6
108.4
583.5
89.3
421.1
75.7
386.1
67.0
339.8
54.3
262.6
43.1
152.1
45.8
138.4
51.2
158.3

Seasonally adjusted annual rates
(3)
(3)
(3)
(3)
(3)
(3)

1992:Jan
Feb..
Mar..

May June.
July
Aug
Sept
Oct
Nov
Dec
1993: Jan
Feb
Mar
Apr
May

(3)
(3)

June
July
Aug
Sept
Oct

Nov p
Dec"

,

(3)
(3)

28
25
51
28
32
40
25
31
28
18
28
32
26
24
32
26
26
31
54
17
33
34
33
33

160
123
217
128
146
107
120
160
145
129
109
121
94
120
105
121
115
138
114
128
172
145
132
177

1,077
1,135
1,082
1,040
1,053
1,048
1,083
1,081
1,120
1,141
1,136
1,196
1,157
1,141
1,034
1,101
1,121
1,115
1,162
1,242
1,271
1,304
1,374
1,476

893
948
896
858
877
878
882
885
918
954
963
1,037
972
957
871
925
919
925
977
1,015
1,047
1,097
1,145
1,198

45
41
44
42
45
48
42
52
45
51
49
45
45
45
43
49
46
47
51
47
57
57
58
52

139
146
142
140
131
122
159
144
157
136
124
114
140
139
120
127
156
143
134
180
167
150
171
226

1
Units in structures built by private developers for sale upon completion to local public housing authorities under the Department of
Housing and Urban Development "Turnkey" program are classified as private housing. Military housing starts, including those financed
with mortgages insured by FHA under Section 803 of the National Housing Act, are included in publicly owned starts and excluded from
total private starts.
2
Authorized by issuance of local building permit: in 17,000 permit-issuing places beginning 1984; in 16,000 places for 1978-83; in
14,000 places for 1972-77; in 13,000 places for 1967-71; in 12,000 places for 1963-66; and in 10,000 places prior to 1963.
3
Not available separately beginning January 1970.
4
Series discontinued December 1988.

Source: Department of Commerce, Bureau of the Census.




330

TABLE B-55.—Business expenditures for new plant and equipment, 1947-94
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Industries surveyed quarterly '
Manufacturing
Year or quarter

1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992 5
1993 5
1994
1992:1
I
I
Il
l
IV
1993:1
I
I
Ill5
IV ....
1994:I5
I s
I

All
industries

20.11
22.78
20.28
21.56
26.81
28.16
29.96
28.86
30.94
37.90
40.54
33.84
35.88
39.44
38.34
40.86
43.67
51.26
59.52
70.40
72.75
76.42
85.74
91.91
92.91
103.40
120.03
139.67
142.42
158.44
184.82
216.81
255.26
286.40
324.73
326.19
321.16
373.83
410.12
399.36
410.52
455.49
507.40
532.61
528.39
546.60
584.64
616.50
534.85
541.41
547.40
559.24
564.13
579.79
594.11
600.53

Total

Durable
goods

Addenda

Nonmanufacturing

Nondurable Total 2
goods

Mining

ComTrans- Public mercial
porta- utiliand
ties
tion
other

Total
nonfarm
busi-3
ness

Nonmanufacturing
Manufacturing

Total

Surveyed
quarterly

Surveyed
annually4

2.69
3.17
2.80

1.64
2.67
3.28

6.38
6.77
6.01

22.27
25.97
24.03

8.73
9.25
7.32

13.54
16.73
16.72

11.38
13.53
12.96

2.16
3.19
3.76

1.11
1.21
1.25
1.29

2.87
3.60
3.56
3.58
2.91

3.42
3.75
3.96
4.61
4.23

6.70
7.29
7.31
8.09
8.42

25.81
31.38
32.16
34.20
33.62

7.73
11.07
12.12
12.43
12.00

18.08
20.31
20.04
21.77
21.62

13.83
15.74
16.04
17.53
16.85

4.25
4.57
4.00
4.23
4.76

18.44
21.57
23.04
20.86
22.12

1.31
1.64
1.69
1.43
1.35

3.10
3.56
3.84
2.72
3.47

4.26
4.78
5.95
5.74
5.46

9.77
11.59
11.56
10.97
11.84

37.08
45.25
48.62
42.55
45.17

12.50
16.33
17.50
12.98
13.76

24.58
28.91
31.11
29.57
31.41

18.44
21.57
23.04
20.86
22.12

6.14
7.35
8.08
8.72
9.29

8.08
8.10
8.22
8.63
10.25

23.08
22.80
24.83
26.40
30.04

1.29
1.26
1.41
1.26
1.33

3.54
3.14
3.59
3.64
4.71

5.40
5.20
5.12
5.33
5.80

12.86
13.21
14.71
16.17
18.20

48.99
48.14
51.61
53.59
62.02

16.36
15.53
16.03
17.27
21.23

32.63
32.60
35.58
36.33
40.80

23.08 9.55
22.80 9.80
24.83 10.75
26.40 9.93
30.04 10.76

13.49
17.23
17.83
17.93
19.97

11.92
14.15
14.42
14.40
16.31

34.12
39.03
40.50
44.08
49.47

1.36
1.42
1.38
1.44
1.77

5.66 6.49
6.68 7.82
6.57 9.33
6.91 10.52
7.23 11.70

20.60
23.11
23.22
25.22
28.77

70.79
82.62
83.82
88.92
100.02

25.41
31.37
32.25
32.34
36.27

45.39
51.25
51.57
56.58
63.74

34.12
39.03
40.50
44.08
49.47

11.27
12.22
11.07
12.50
14.27

36.99
33.60
35.42
42.35
52.48

19.80
16.78
18.22
22.63
26.77

17.19
16.82
17.20
19.72
25.71

54.92
59.31
67.98
77.67
87.19

2.02
2.67
2.88
3.30
4.58

7.17
6.42
7.14
8.00
9.16

13.03
14.70
16.26
17.99
19.96

32.71
35.52
41.69
48.39
53.49

106.15
109.18
120.91
139.26
159.83

36.99 69.16
33.60 75.58
35.42 85.49
42.35 96.91
52.48 107.35

54.92
59.31
67.98
77.67
87.19

14.24
16.26
17.51
19.24
20.16

53.66
58.53
67.48
78.13
95.13

25.37
27.50
32.77
39.02
47.72

28.28 88.76 6.12 9.95
31.03 99.91 7.63 11.10
34.71 117.34 9.81 12.20
39.10 138.69 10.55 12.07
47.41 160.13 11.05 13.91

20.23
22.90
27.83
32.10
37.53

52.47
58.29
67.51
83.96
97.64

162.60
179.91
208.15
244.40
285.24

53.66
58.53
67.48
78.13
95.13

112.60
128.68
123.97
117.35
139.61

54.82
58.93
54.58
51.61
64.57

57.77
69.75
69.39
65.74
75.04

41.32
47.17
53.58
52.95
57.53

106.21
120.41
122.79
129.41
151.39

318.08
358.77
363.08
359.73
418.38

112.60
128.68
123.97
117.35
139.61

205.48
230.09
239.11
242.38
278.77

173.80
196.06
202.22
203.82
234.22

31.68
34.04
36.89
38.56
44.55

152.88
137.95
141.06
163.45
183.80

70.87 82.01
65.68 72.28
68.03 73.03
77.04 86.41
82.56 101.24

257.24 12.00 14.57 59.58 171.09
261.40 8.15 15.05 56.61 181.59
269.46 8.28 15.07 56.26 189.84
292.04 9.29 16.63 60.37 205.76
323.60 9.21 18.84 66.28 229.28

454.93
447.11
461.51
508.22
563.93

152.88
137.95
141.06
163.45
183.80

302.05
309.16
320.45
344.77
380.13

257.24
261.40
269.46
292.04
323.60

44.81
47.75
50.99
52.73
56.53

192.61
182.81
174.02
179.46
186.27

82.58
77.64
73.32
81.49
84.93

110.04
105.17
100.69
97.97
101.34

339.99 9.88 21.47 67.21 241.43
345.58 10.02 22.66 66.57 246.32
372.58 8.88 22.64 72.21 268.84
405.18 10.13 22.37 75.00 297.69
430.22 10.84 20.91 81.42 317.05

591.96 192.61 399.34 339.99 59.35
587.93 182.81 405.12 345.58 59.54
607.71 174.02 433.69 372.58 61.11
179.46
405.18
186.27
430.22

173.82
171.98
172.86
176.86

73.98 99.85 361.03
74.07 97.91 369.44
72.09 100.77 374.54
73.30 103.56 382.38

21.83
23.15
23.91
21.60

69.00
72.63
72.18
74.07

261.27
264.46
269.46
278.24

173.82
171.98
172.86
176.86

361.03
369.44
374.54
382.38

175.05
177.09
182.17
183.52

79.11 95.94 389.08 8.89 22.47
80.88 96.21 402.70 9.10 21.58
81.99 100.18 411.94 11.14 21.70
83.99 99.53 417.01 11.37 23.73

73.51
74.55
75.62
76.30

284.21
297.46
303.47
305.61

175.05
177.09
182.17
183.52

389.08
402.70
411.94
417.01

98.72 430.16 10.83 21.49 77.78 320.06
99.52 440.89 11.14 21.61 80.80 327.33

186.22
183.44

430.16
440.89

8.73
9.25
7.32

3.39
3.54
2.67

5.34
5.71
4.64

11.38
13.53
12.96

0.69
.93

7.73
11.07
12.12
12.43
12.00

3.22
5.12
5.75
5.71
5.49

4.51
5.95
6.37
6.72
6.51

13.83
15.74
16.04
17.53
16.85

12.50
16.33
17.50
12.98
13.76

5.87
8.19
8.59
6.21
6.72

6.62
8.15
8.91
6.77
7.04

16.36
15.53
16.03
17.27
21.23

8.28
7.43
7.81
8.64
10.98

25.41
31.37
32.25
32.34
36.27

616.38 186.22
624.33 183.44

87.50
83.92

173.80
196.06
202.22
203.82
234.22

12.71
15.81
14.11
10.64
11.86

8.92
9.20
8.98
8.47

13.56
12.67
11.75
10.81
13.44

1
2

108.95 88.76 20.19
121.38 99.91 21.47
140.67 117.34 23.33
166.27 138.69 27.58
190.11 160.13 29.98

These industries accounted for 90 percent of total nonfarm spending in 1992.
Excludes forestry, fisheries, and agricultural services; professional services; social services and membership organizations; and real
estate, which, effective with the April-May 1984 survey, are no longer surveyed quarterly. See last column ("nonmanufacturing surveyed
annually") for data for these industries.
3
"All industries" plus the part of nonmanufacturing that is surveyed annually.
4
Consists of forestry, fisheries, and agricultural services; professional services; social services and membership organizations; and
real estate.
5
Planned capital expenditures as reported by business in October and November 1993, corrected for biases.
Source: Department of Commerce, Bureau of the Census.




331

TABLE B-56.—Manufacturing and trade sales and inventories, 1950-93
[Amounts in millions of dollars; monthly data seasonally adjusted]
Total manufacturing and
trade

Manufacturing

Retail
trade

Merchant
wholesalers

Year or month
Sales*

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1992: Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct

Nov
Dec
1993:Jan
Feb
Mar

June
July
Aug
Sept
Oct

Nov p

Inventories 2

59,822
38,596
70,242
43,356
72,377
44,840
76,122
47,987
73,175
46,443
79,516
51,694
87,304
54,063
89,052
55,879
87,055
54,201
92,097
59,729
94,719
60,827
95,580
61,159
65,662 101,049
68,995 105,463
73,682 111,504
80,283 120,929
87,187 136,824
90,918 145,681
98,794 156,611
105,812 170,400
108,352 178,594
117,023 188,991
131,227 203,227
153,881 234,406
178,201 287,144
182,412 288,992
204,386 318,345
229,786 350,706
260,755 400,931
298,328 452,640
328,112 510,126
356,909 547,181
348,771 575,504
370,501 591,875
411,427 651,551
423,940 665,835
431,786 664,624
459,107 711,725
497,031 767,538
523,729 813,793
543,097 837,445
538,609 833,518
560,383 849,117
542,949 830,003
549,893 830,846
553,453 832,300
553,683 835,805
551,496 835,685
558,715 839,937
562,128 843,411
557,117 844,942
564,197 844,032
566,536 845,196
569,412 846,912
580,840 849,117
581,584 851,190
584,903 854,715
583,575 859,094
584,943 862,478
587,930 864,198
589,990 864,227
585,626 863,612
592,598 865,939
595,804 867,395
600,304 869,709
607,689 874,465

Ratio 3

1.36
1.55
1.58
1.58
1.60
1.47
1.55
1.59
1.61
1.54
1.56
1.56
1.54
1.53
1.51
1.51
1.57
1.60
1.59
1.61
1.65
1.61
1.55
1.52
1.61
1.58
1.56
1.53
1.54
1.52
1.55
1.53
1.67
1.56
1.53
1.55
1.55
1.50
1.49
1.53
1.53
1.54
1.50
1.53
1.51
1.50
1.51
1.52
1,50
1.50
i.52
1.50
1.49
1.49
1.46
1.46
1.46
1.47
1.47
1.47
1.46
1.47
1.46
1.46
1.45
1.44

Sales J

Inventories 2

18,634
31,078
21,714
39,306
22,529
41,136
24,843
43,948
23,355
41,612
26,480
45,069
27,740
50,642
28,736
51,871
27,248
50,203
30,286
52,913
30,878
53,786
30,922
54,871
33,358
58,172
35,058
60,029
37,331
63,410
40,995
68,207
44,870
77,986
46,486
84,646
50,229
90,560
53,501
98,145
52,805 101,599
55,906 102,567
63,027 108,121
72,931 124,499
84,790 157,625
86,589 159,708
98,797 174,636
113,201 188,378
126,905 211,691
143,936 242,157
154,391 265,215
168,129 283,413
163,351 311,852
172,547 312,379
190,682 339,516
194,538 334,799
194,657 322,669
206,326 338,075
223,541 367,422
232,724 386,911
239,459 399,068
235,518 386,348
244,511 379,238
235,239 384,828
239,081 383,771
242,011 383,508
242,706 382,502
241,804 383,404
246,459 382,908
246,259 383,369
241,716 385,186
246,078 384,013
245,459 383,095
248,525 381,055
256,609 379,238
252,845 378,624
256,800 379,232
258,979 379,539
255,114 380,307
254,007 381,591
258,299 381,326
251,680 381,561
256,556 381,392
260,088 380,689
260,471 380,301
265,574 380,181

Ratio 3

1.48
1.66
1.78
1.76
1.81
1.62
1.73
1.80
1.84
1.75
1.74
1.77
1.74
1.71
1.70
1.66
1.74
1.82
1.80
1.83
1.92
1.83
1.72
1.71
1.86
1.84
1.77
1.66
1.67
1.68
1.72
1.69
1.95
1.78
1.73
1.73
1.68
1.59
1.58
1.64
1.65
1.67
1.57
1.64
1.61
1.58
1.58
1.59
1.55
1.56
1.59
1.56
1.56
1.53
1.48
1.50
1.48
1.47
1.49
1.50
1.48
1.52
1.49
1.46
1.46
1.43

Sales *

Inventories 2

7,695
8,597
8,782
9,052
8,993
9,893
10,513
10,475
10,257
11,491
11,656
11,988
12,674
13,382
14,529
15,611
16,987
19,675
21,121
22,940
24,298
26,619
30,011
38,319
48,271
46,848
50,934
56,409
66,849
79,678
93,977
102,267
96,357
100,440
113,502
114,816
116,326
124,340
135,357
144,158
149,489
147,635
152,337
148,745
149,749
151,394
150,726
148,586
151,021
153,762
152,241
153,551
154,211
153,759
155,297
159,507
158,987
157,206
159,291
162,187
159,095
160,531
161,459
160,710
161,284
162,971

9,284
9,886
10,210
10,686
10,637
11,678
13,260
12,730
12,739
13,879
14,120
14,488
14,936
16,048
17,000
18,317
20,765
25,786
27,166
29,800
33,354
36,568
40,297
46,918
58,667
57,774
64,622
73,179
86,934
99,679
123,833
131,049
129,024
131,663
144,223
149,155
155,445
165,814
180,519
188,539
196,901
201,285
209,232
200,956
201,423
201,463
201,687
200,997
204,373
205,058
205,399
205,264
206,655
208,416
209,232
210,139
209,765
210,503
211,860
212,190
212,058
213,244
215,199
215,103
214,991
216,094

Ratio 3

1.07
1.16
1.12
1.17
1.18
1.13
1.19
1.23
1.24
1.21
1.21
1.21
1.18
1.20
1.17
1.17
1.22
1.31
1.29
1.30
1.37
1.37
1.34
1.22
1.22
1.23
1.27
1.30
1.30
1.25
1.32
1.28
1.36
1.28
1.23
1.28
1.32
1.29
1.30
1.29
1.29
1.34
1.34
1.35
1.35
1.33
1.34
1.35
1.35
1.33
1.35
1.34
1.34
1.36
1.35
1.32
1.32
1.34
1.33
1.31
1.33
1.33
1.33
1.34
1.33
1.33

Sales 1

Inventories 2

12,268
13,046
13,529
14,091
14,095
15,321
15,811
16,667
16,696
17,951
18,294
18,249
19,630
20,556
21,823
23,677
25,330
24,757
27,445
29,371
31,249
34,497
38,189
42,631
45,141
48,975
54,655
60,176
67,002
74,713
79,743
86,514
89,062
97,514
107,243
114,586
120,803
128,442
138,133
146,847
154,149
155,456
163,535
158,965
161,063
160,048
160,251
161,106
161,235
162,107
163,160
164,568
166,866
167,128
168,934
169,232
169,116
167,390
170,538
171,736
172,596
173,415
174,583
175,006
178,549
179,144

19,460
21,050
21,031
21,488
20,926
22,769
23,402
24,451
24,113
25,305
26,813
26,221
27,941
29,386
31,094
34,405
38,073
35,249
38,885
42,455
43,641
49,856
54,809
62,989
70,852
71,510
79,087
89,149
102,306
110,804
121,078
132,719
134,628
147,833
167,812
181,881
186,510
207,836
219,597
238,343
241,476
245,885
260,647
244,219
245,652
247,329
251,616
251,284
252,656
254,984
254,357
254,755
255,446
257,441
260,647
262,427
265,718
269,052
270,311
270,417
270,843
268,807
269,348
271,603
274,417
278,190

Ratio3
1.38
1.64
1.52
1.53
1.51
1.43
1.47
1.44
1.44
1.41
1.47
1.44
1.42
1.43
1.42
1.45
1.50
1.42
1.42
1.45
1.40
1.45
1.44
1.48
1.57
1.46
1.45
1.48
1.53
1.48
1.52
1.53
1.49
1.44
1.49
1.52
1.56
1.56
1.54
1.59
1.56
1.55
1.55
1.54
1.53
1.55
1.57
1.56
1.57
1.57
1.56
1.55
1.53
1.54
1.54
1.55
1.57
1.61
1.59
1.57
1.57
1.55
1.54
1.55
1.54
1.55

1
Annual data are averages of monthly not seasonally adjusted figures.
2
Seasonally adjusted, end of period. Inventories beginning January 1982 for manufacturing and December 1980 for wholesale and
retail trade are not comparable with earlier periods.
3
Inventory/sales ratio. Annual data are-, beginning 1982, averages of monthly ratios; for 1958-81, ratio of December inventories to
monthly average sales for the year; and for earlier years, weighted averages. Monthly data are ratio of inventories at end of month to
sales for month.

Note.—Earlier data are not strictly comparable with data beginning 1958 for manufacturing and beginning 1967 for wholesale and
retail trade.
Source: Department of Commerce, Bureau of the Census.




332

TABLE B-57.—Manufacturers' shipments and inventories, 1950-93

[Millions of dollars; monthly data seasonally adjusted]
Shipments

Year or month
Total

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982.....
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993 ".
.
1992: Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
1993:Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov p"
Dec

18,634
21,714
22,529
24,843
23,355
26,480
27,740
28,736
27,248
30,286
30,878
30,922
33,358
35,058
37,331
40,995
44,870
46,486
50,229
53,501
52,805
55,906
63,027
72,931
84,790
86,589
98,797
113,201
126,905
143,936
154,391
168,129
163,351
172,547
190,682
194,538
194,657
206,326
223,541
232,724
239,459
235,518
244,511
258,523
235,239
239,081
242,011
242,706
241,804
246,459
246,259
241,716
246,078
245,459
248,525
256,609
252,845
256,800
258,979
255,114
254,007
258,299
251,680
256,556
260,088
260,471
265,574
269,227

x

Inventories2

Durable
goods
industries

Nondurable
goods
industries

8,845
10,493
11,313
13,349
11,828
14,071
14,715
15,237
13,553
15,597
15,870
15,601
17,247
18,255
19,611
22,193
24,617
25,233
27,624
29,403
28,156
29,924
33,987
39,635
44,173
43,598
50,623
59,168
67,731
75,927
77,419
83,727
79,212
85,481
97,940
101,279
103,238
108,128
117,993
121,703
122,387
119,151
125,553
135,982
120,173
122,865
124,665
124,249
123,113
126,166
125,083
124,246
125,873
126,425
128,720
134,228
130,805
134,133
135,537
132,763
132,307
135,042
129,257
134,521
137,521
138,153
142,665
146,002

9,789
11,221
11,216
11,494
11,527
12,409
13,025
13,499
13,695
14,689
15,008
15,321
16,111
16,803
17,720
18,802
20,253
21,253
22,605
24,098
24,649
25,982
29,040
33,296
40,617
42,991
48,174
54,033
59,174
68,009
76,972
84,402
84,139
87,066
92,742
93,259
91,419
98,198
105,549
111,022
117,072
116,367
118,958
122,542
115,066
116,216
117,346
118,457
118,691
120,293
121,176
117,470
120,205
119,034
119,805
122,381
122,040
122,667
123,442
122,351
121,700
123,257
122,423
122,035
122,567
122,318
122,909
123,225

Nondurable goods industries

Durable goods industries
Materials
and
supplies

Total
Total

31,078
39,306
41,136
43,948
41,612
45,069
50,642
51,871
50,203
52,913
53,786
54,871
58,172
60,029
63,410
68,207
77,986
84,646
90,560
98,145
101,599
102,567
108,121
124,499
157,625
159,708
174,636
188,378
211,691
242,157
265,215
283,413
311,852
312,379
339,516
334,799
322,669
338,075
367,422
386,911
399,068
386,348
379,238
377,941
384,828
383,771
383,508
382,502
383,404
382,908
383,369
385,186
384,013
383,095
381,055
379,238
378,624
379,232
379,539
380,307
381,591
381,326
381,561
381,392
380,689
380,301
380,181
377,941

15,539
20,991
23,731
25,878
23,710
26,405
30,447
31,728
30,194
32,012
32,337
32,496
34,565
35,776
38,421
42,189
49,852
54,896
58,732
64,598
66,651
66,136
70,067
81,192
101,493
102,590
111,988
120,877
138,181
160,734
174,788
186,443
200,444
199,854
221,330
218,212
212,006
220,776
241,402
256,065
259,988
249,117
237,717
236,370
248,183
246,482
245,703
244,355
244,213
243,625
242,976
243,597
242,122
240,909
239,407
237,717
236,332
237,034
236,849
237,043
237,734
237,514
237,937
237,688
237,571
237,632
237,886
236,370

8,966
7,894
9,194
10,417
10,608
9,970
10,709
10,306
10,246
10,794
11,053
11,946
13,298
15,464
16,423
17,344
18,636
19,149
19,679
20,807
25,944
35,070
33,903
37,457
40,186
45,198
52,670
55,173
57,998
59,136
60,325
66,031
64,005
61,409
63,614
69,388
71,942
72,788
69,987
68,165
68,388
69,827
69,366
68,872
68,811
68,909
69,477
68,875
69,371
69,399
68,442
68,267
68,165
67,707
67,839
67,864
68,089
68,401
68,163
68,357
68,678
68,441
68,522
68,670
68,388

1

Work in
process

10,720
9,721
10,756
12,317
12,837
12,408
13,086
12,809
13,211
14,124
14,835
16,158
18,055
21,908
24,933
27,213
30,282
29,745
28,550
30,713
35,490
42,530
43,227
46,074
50,226
58,848
69,325
76,945
80,998
86,707
86,899
98,251
98,085
96,926
102,328
112,380
121,919
122,520
115,107
107,140
105,364
114,334
113,342
112,867
111,601
111,346
110,257
109,482
109,507
108,406
108,730
107,472
107,140
106,426
106,552
106,071
105,671
106,042
106,306
106,545
106,463
106,704
106,943
106,119
105,364

Finished
goods

6,206
6,040
6,348
7,565
8,125
7,816
8,217
9,222
9,039
9,647
9,888
10,317
10,836
12,480
13,540
14,175
15,680
17,757
17,907
18,547
19,758
23,893
25,460
28,457
30,465
34,135
38,739
42,670
47,447
54,601
52,630
57,048
56,122
53,671
54,834
59,634
62,204
64,680
64,023
62,412
62,618
64,022
63,774
63,964
63,943
63,958
63,891
64,619
64,719
64,317
63,737
63,668
62,412
62,199
62,643
62,914
63,283
63,291
63,045
63,035
62,547
62,426
62,167
63,097
62,618

Total

Materials
and
supplies

15,539
18,315
17,405
8,317 2,472
18,070
8,167 2,440
17,902
8,556 2,571
18,664
8,971 2,721
20,195
8,775 2,864
20,143
8,676 2,827
20,009
9,094 2,942
20,901
9,097 2,947
21,449
9,505 3,108
22,375
9,836 3,304
23,607
24,253 10,009 3,420
24,989 10,167 3,531
26,018 10,487 3,825
28,134 11,197 4,226
29,750 11,760 4,431
31,828 12,328 4,852
33,547 12,753 5,120
34,948 13,168 5,271
36,431 13,686 5,678
38,054 14,677 5,998
43,307 18,147 6,729
56,132 23,744 8,189
57,118 23,565 8,834
62,648 25,847 9,929
67,501 27,387 10,961
73,510 29,619 12,085
81,423 32,814 13,910
90,427 36,606 15,884
96,970 38,165 16,194
111,408 44,039 18,612
112,525 44,816 18,691
118,186 45,692 19,328
116,587 44,087 19,445
110,663 42,309 18,124
117,299 45,287 19,279
126,020 49,030 20,446
130,846 49,632 21,261
139,080 51,606 22,447
137,231 51,556 21,886
141,521 52,194 22,887
141,571 51,976 23,461
136,645 51,249 22,103
137,289 51,362 22,233
137,805 51,496 22,259
138,147 51,651 22,480
139,191 51,821 22,474
139,283 52,188 22,529
140,393 52,616 22,506
141,589 52,471 22,773
141,891 52,554 22,903
142,186 52,528 22,817
141,648 52,137 22,759
141,521 52,194 22,887
142,292 52,286 22,962
142,198 52,121 23,161
142,690 52,329 23,128
143,264 52,672 23,099
143,857 52,965 22,990
143,812 53,055 23,097
143,624 52,647 23,202
143,704 52,594 23,280
143,118 52,489 23,329
142,669 52,259 23,437
142,295 52,363 23,477
141,571 51,976 23,461

Annual data are averages of monthly not seasonally adjusted figures.
Seasonally adjusted, end of period. Data beginning 1982 are not comparable with data for prior periods.
Note.—Data beginning 1958 are not strictly comparable with earlier data.
Source: Department of Commerce, Bureau of the Census.
2




333

Work
in
Finished
proc- goods
ess

7,409
7,415
7,666
8,622
8,624
8,506
8,865
9,405
9,762
10,467
10,824
11,291
11,706
12,711
13,559
14,648
15,674
16,509
17,067
17,379
18,431
24,199
24,719
26,872
29,153
31,806
34,699
37,937
42,611
48,757
49,018
53,166
53,055
50,230
52,733
56,544
59,953
65,027
63,789
66,440
66,134
63,293
63,694
64,050
64,016
64,896
64,566
65,271
66,345
66,434
66,841
66,752
66,440
67,044
66,916
67,233
67,493
67,902
67,660
67,775
67,830
67,300
66,973
66,455
66,134

TABLE B-58.—Manufacturers' new and unfilled orders, 1950-93
[Amounts in millions of dollars; monthly data seasonally adjusted]

New ordersl

Unfilled orders2

Unfilled orders—shipments
IdllU"

Durable goods
industries
Year or month
Total
Total

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993"
1992 Jan

Fb
e
Mr
a
Ar
p
My
a

June
July

Ag
u
Sept
Ot
c
Nv
o
Dc
e
1993 Jan

Fb
e
Mr
a
My
a
June
July

Ag
u
Sept
Ot
c

Nov"
Dec ".

20 110
23,907
23 204
23 586
22,335
27 465
28,368
27 559
27,193
30,711
30,232
31,112
33,440
35 511
38,240
42,137
46,420
47 067
50,657
53,990
52,022
55,921
64,182
76,003
87,327
85,139
99,513
115,109
131,629
147,604
156,359
168,025
162,140
175,451
192,879
195,706
195,204
209,389
227,026
235,932
240,646
234,354
241,545
255,719
233,924
234,439
239,462
241,747
238,933
243,914
241,079
237,230
240,685
244,882
243,106
256,727
253,626
257,250
253,007
252,369
248,335
255,462
250,566
253,461
255,309
258,270
262,773
266,019

10165
12,841
12 061
12147
10,768
14 996
15,365
14111
13,387
15,979
15,288
15,753
17,363
18 671
20,507
23,286
26,163
25 803
28,051
29,876
27,340
29,905
35,038
42,627
46,862
41,957
51,307
61,035
72,278
79,483
79,392
83,654
78,064
88,140
100,164
102,356
103,647
110,809
121,445
124,933
123,556
117,878
122,614
133,300
118,996
118,369
121,882
123,221
120,522
123,746
119,846
120,007
120,608
125,656
123,096
134,348
131,266
134,533
129,903
129,838
126,783
132,252
128,520
131,752
133,176
136,613
139,675
142,658

NonCapital durable
goods
goods
indus- industries
tries,
nondefense

6,314
7,046
6,072
6,682
7,745
9,926
11,594
9,886
11,490
13,681
17,588
21,154
21,135
21,806
19,213
19,624
23,669
24,545
23,983
26,095
30,729
32,725
32,254
29,468
29,653
31,901
29,460
28,897
31,655
29,653
29,778
30,168
28,732
27,486
29,801
30,129
26,804
32,275
28,645
32,748
29,122
30,453
29,931
33,850
30,093
31,992
30,992
32,825
34,878
35,366

9 945
11,066
11143
11439
11,566
12 469
13,003
13 448
13,805
14,732
14,944
15,359
16,078
16 840
17,732
18,851
20,258
21265
22,606
24,114
24,682
26,016
29,144
33,376
40,465
43,181
48,206
54,073
59,351
68,121
76,967
84,371
84,077
87,311
92,715
93,351
91,557
98,579
105,581
110,999
117,090
116,476
118,932
122,419
114,928
116,070
117,580
118,526
118,411
120,168
121,233
117,223
120,077
119,226
120,010
122,379
122,360
122,717
123,104
122,531
121,552
123,210
122,046
121,709
122,133
121,657
123,098
123,361

Total

41456
67,266
75 857
61 178
48,266
60 004
67,375
53183
46,609
51,717
44,213
46,624
47,798
53 417
64,518
78,249
96,846
103 711
108,377
114,341
105,008
105,247
119,349
156,561
187,043
169,546
178,128
202,024
259,169
303,593
327,416
326,547
311,887
347,273
373,529
387,095
393,412
430,288
471,951
510,459
524,846
511,122
475,304
442,111
509,807
505,165
502,616
501,657
498,786
496,241
491,061
486,575
481,182
480,605
475,186
475,304
476,085
476,535
470,563
467,818
462,146
459,309
458,195
455,100
450,321
448,120
445,319
442,111

1

NonDurable
durable
goods
goods
industries industries

35 435
63^394
72 680
58'637
45,250
56 241
63,880
50 352
43,807
48,369
41,650
43,582
45,170
50 346
61,315
74,459
93,002
99 735
104,393
110,161
100,412
100,225
113,034
149,204
181,519
161,664
169,857
193,323
248,281
291,321
315,202
314,707
300,798
333,114
359,651
372,027
376,622
408,602
450,002
488,780
502,914
487,892
452,383
420,646
486,715
482,219
479,436
478,408
475,817
473,397
468,160
463,921
458,656
457,887
452,263
452,383
452,844
453,244
447,610
444,685
439,161
436,371
435,634
432,865
428,520
426,980
423,990
420,646

6 021
3,872
3 177
2 541
3,016
3 763
3,495
2 831
2,802
3,348
2,563
3,042
2,628
3 071
3,203
3,790
3,844
3,976
3,984
4,180
4,596
5,022
6,315
7,357
5,524
7,882
8,271
8,701
10,888
12,272
12,214
11,840
11,089
14,159
13,878
15,068
16,790
21,686
21,949
21,679
21,932
23,230
22,921
21,465
23,092
22,946
23,180
23,249
22,969
22,844
22,901
22,654
22,526
22,718
22,923
22,921
23,241
23,291
22,953
23,133
22,985
22,938
22,561
22,235
21,801
21,140
21,329
21,465

Total

3.42
3.63
3.87
3 35
3.02
2.94
2.71
2.58
2.64
2 74
2.99
3.25
3.74
3.66
3.79
3.71
3.61
3.32
3.26
3.80
4.09
3.69
3.24
3.24
3.57
3.89
3.85
3.87
3.84
3.53
3.60
3.67
3.59
3.63
3.64
4.00
4.14
4.08
3.46
3.04
4.00
3.92
3.84
3.84
3.86
3.74
3.71
3.75
3.65
3.65
3.57
3.46
3.56
3.51
3.42
3.46
3.42
3.33
3.41
3.30
3.22
3.21
3.12
3.04

NonDurable durable
goods
goods
industries industries

4.12
4.27
4.55
4.00
3.62
3.47
3.29
3.08
3.18
3.31
3.59
3.86
4.48
4.37
4.58
4.45
4.36
4.00
3.85
4.51
4.93
4.45
3.88
3.85
4.20
4.62
4.58
4.68
4.74
4.29
4.37
4.46
4.40
4.42
4.45
4.91
5.13
5.06
4.21
3.64
4.91
4.81
4.71
4.71
4.75
4.58
4.56
4.59
4.46
4.47
4.35
4.21
4.35
4.27
4.14
4.20
4.15
4.02
4.17
3.99
3.89
3.89
3.75
3.64

0.96
1.12
1.04
.5
8
.5
8
.2
9
.1
7
.8
7
.8
6
.2
7
.1
7
.9
7
.5
7
.3
7
.9
6
.9
6
.6
7
.6
7
.6
8
.1
9
.2
6
.2
8
.4
7
.1
7
.1
8
.2
8
.5
7
.9
6
.2
6
.9
6
.4
6
.8
6
.0
7
.3
8
.6
7
.8
7
.6
7
.1
8
.7
7
.2
7
.1
8
.0
8
.0
8
.0
8
.9
7
.8
7
.7
7
.9
7
.8
7
.8
7
.8
7
.7
7
.9
7
.9
7
.8
7
.9
7
.8
7
.8
7
.6
7
.6
7
.3
7
.1
7
.2
7
.2
7

Annual data are averages of monthly not seasonally adjusted figures.
Seasonally adjusted, end of period.
Ratio of unfilled orders at end of period to shipments for period; excludes industries with no unfilled orders. Annual figures relate
to seasonally adjusted data for December.
2
3

Note.—Data beginning 1958 are not strictly comparable with earlier data.
Source: Department of Commerce, Bureau of the Census.




334

PRICES
TABLE B-59.—Consumer price indexes for major expenditure classes, 1950-93
[For all urban consumers; 1982-84=100]
Food and

Housing

UcvcFdgcS

Year or
month

1950
1951
,
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983..
1984
1985.
1986
1987
1988
1989
1990
1991
1992
1993
1992:Jan
Feb
Mar
Apr
May
June....
July
Aug
Sept....
Oct
Nov
Dec
1993:Jan
Feb
Mar
Apr
May
June....
July
Aug
Sept....
Oct
Nov
Dec

All items
(CPI-U)

Totall

24.1
26.0
26 5
26.7
26.9
26.8
27.2
28.1
28.9
29.1
29.6
29.9
30.2
30.6
31.0
31.5
32.4
33 4
34.8
36.7
38.8
40.5
41.8
44.4
49.3
53.8
56.9
60.6
65.2
72.6
82 4
90.9
96 5
99.6
103.9
107.6
109.6
113.6
118.3
124.0
130.7
136.2
140 3
144.5
138.1
138.6
139.3
139.5
139.7
140.2
140.5
140.9
141.3
141.8
142.0
141.9
142.6
143.1
143.6
144.0
144.2
144.4
144.4
144.8
145.1
145.7
145.8
145.8

350
36.2
38.1
40.1
41.4
43.1
48.8
55.5
60.2
62.1
65.8
72.2
79.9
86 7
93.5
97.3
99.5
103.2
105.6
109.1
113.5
118.2
124.9
132.1
136.8
138 7
141.6
137.9
138.1
138.8
138.8
138.3
138.3
138.1
138.8
139.3
139.2
139.1
139.5
140.5
140.7
140.9
141.4
141.8
141.1
141.1
141.5
141.8
142.3
142.6
143.3

Food2

25 4
28.2
28 7
28.3
28.2
27.8
28.0
28.9
30.2
29.7
30.0
30.4
30.6
31.1
31.5
32.2
33.8

Umioo

Total

Shelter2

HouseOther
Transhold Apparel por- Medical Entergoods
and
Fuel and furnish2
and
taupkeep tion 2 care tainment services
other
ings
utilities2
and
operation
40 3
43 9
43 5

22.0
22.5

111

341

308

35.3
37.1
39.2
40.4
42.1
48.2
55.1
59.8
61.6
65.5
72.0
79.9
86 8
93.6
97 4
99.4
103.2
105.6
109.0
113.5
118.2
125.1
132.4
136.3
137 9
1409
137.2
137.5
138.1
138.1
137.4
137.4
137.2
138.0
138.5
138.3
138.3
138.7
139.8
139.9
140.1
140.6
141.1
140.4
140.3
140.8
141.1
141.6
141.9
142.7

32.0
34.0
36.4
38.0
39.4
41.2
45.8
50.7
53.8
57.4
62.4
70.1
811
90.4
96.9
99.5
103.6
107.7
110.9
114.2
118.5
123.0
128.5
133.6
137 5
141.2
135.7
136.1
136.6
136.5
136.7
137.7
138.3
138.6
138.4
138.5
138.5
138.5
139.3
139.7
140.2
140.4
140.5
141.5
141.9
142.3
142.3
142.2
142.0
142.3

23.1
24.0
24 5
24.7
25 2
25.4
25.8
26.1
26.5
27.0
27.8
28 8
30.1
32.6
35.5
37.0
38.7
40.5
44.4
48.8
51.5
54.9
60.5
68.9

810
90.5
96.9
99.1
104.0
109.8
115.8
121.3
127.1
132.8
140.0
146.3
1512
155.7
149.2
149.8
150.4
150.2
150.2
151.1
151.8
152.3
151.9
152.5
152.4
152.5
153.7
154.4
154.8
155.0
154.9
155.7
156.3
156.8
156.6
156.8
156.7
157.1

22 5
22.6
23.0
23.6
24.3
24 8
25.4
26 0
26.3
26.3
26.6
26.6
26.6
26.7
27 1
27.4
28.0
29.1
31.1
32.5
34.3
40.7
45.4
49.4
54.7
58.5
64.8
75 4
86.4
94.9
100.2
104.8
106.5
104.1
103.0
104.4
107.8
111.6
115.3
117 8
121.3
116.2
115.9
115.8
115.8
116.8
119.0
119.4
119.4
119.8
118.5
118.3
118.7
119.2
118.4
119.5
119.6
120.5
122.9
123.2
123.3
123.9
122.4
121.2
121.7

1
2
3

431

43.1
42.9
43.7
44.5
44.6
45.0
45 7
46.1
46.3
46.9
47.3
47.8
49.0
42 0
43.6
45.2
46.8
48.6
49.7
511
56.8
63.4
67.3
70.4
74.7
79.9
86 3
93.0
98 0
100.2
101.9
103.8
105.2
107.1
109.4
111.2
113.3
116.0
118 0
119.3
116.7
117.3
117.7
118.0
117.9
118.2
118.4
118.3
118.3
118.4
118.5
118.2
118.2
118.6
118.7
119.2
119.1
119.1
118.8
119.2
119.6
120.0
120.3
120.3

510
53.7
56.8
59.2
61.1
62.3
64.6
69.4
72.5
75.2
78.6
81.4
84.9
90 9
95.3
97.8
100.2
102.1
105.0
105.9
110.6
115.4
118.6
124.1
128.7
1319
133.7
127.9
130.2
133.4
133.3
133.1
131.0
129.2
130.2
133.3
135.0
134.5
131.4
129.7
133.4
136.2
136.9
135.0
131.9
129.4
131.9
134.6
136.1
136.2
132.6

22 7

241

15 1

159

25 7
26 5
26.1
25.8
26.2
27.7
28.6
29.8
29 8
30.1
30.8
30.9

Energy 3

16 7

314

31.9
32.3
33 3
34.3
35.7
37.5
39.5
39.9
41.2
45.8
50.1
55.1
59.0
61.7
70.5

831
93.2
97.0
99.3
103.7
106.4
102.3
105.4
108.7
114.1
120.5
123.8
126 5
130.4
124.5
124.1
124.4
125.2
126.3
126.9
127.2
126.9
126.8
128.0
129.2
129.0
129.1
129.2
129.0
129.4
130.2
120.3
130.3
130.2
130.1
131.8
132.6
132.1

173
17 8
18 2
18.9
19.7
20 6
21.5
22 3
22 9
23.5
24.1
24 6
25.2
26.3
28 2
29.9
31.9
34.0
36.1
37.3
38 8
42.4
47.5
52.0
57.0
61.8
67.5
74 9
82.9
92 5
100.6
106.8
113.5
122.0
130.1
138.6
149.3
162.8
177.0
190 1
201.4
184.3
186.2
187.3
188.1
188.7
189.4
190.7
191.5
192.3
193.3
194.3
194.7
196.4
198.0
198.6
199.4
200.5
201.1
202.2
202.9
203.3
204.4
204.9
205.2

40 7
43.0
45.2
47.5
50.0
51.5
52.9
56.9
62.0
65.1
68.3
71.9
76.7
83 6
90.1
96.0
100.1
103.8
107.9
111.6
115.3
120.3
126.5
132.4
138.4
142 3
145.8
140.1
140.7
141.2
142.0
142.0
142.0
142.4
142.6
143.2
143.5
143.7
143.8
144.3
144.5
144.8
145.3
145.0
145.5
145.3
145.8
146.6
147.3
147.7
147.8

35 1
36.9
38.7
40.9
42.9
44.7
46.4
49.8
53.9
57.0
60.4
64.3
68.9
75 2
82.6
91.1
101.1
107.9
114.5
121.4
128.5
137.0
147.7
159.0
171.6
183 3
192.9
178.6
179.4
179.8
180.3
181.3
181.5
182.3
183.9
187.0
187.9
188.0
189.1
191.0
191.5
192.0
192.4
193.2
193.1
193.7
193.4
193.1
193.4
193.8
194.2

21.5
21.5
21.9
22.4
22.5
22.6
22.6
22.5
22.9
23.3
23 8
24.2
24.8
25.5
26.5
27.2
29.4
38.1
42.1
45.1
49.4
52.5
65.7
86.0
97.7
99 2
99.9
100.9
101.6
88.2
88.6
89.3
94.3
102.1
102.5
103.0
104.2
100.1
99.0
98.9
99.5
102.4
105.9
106.0
105.4
105.9
104.5
104.5
103.9
103.4
102.2
102.5
103.1
104.4
106.5
105.8
105.2
105.2
105.4
103.7
102.4

Includes alcoholic beverages, not shown separately.
See table B-60 for components.
Household fuels—gas (piped), electricity, fuel oil, etc.—and motor fuel. Motor oil, coolant, etc. also included through 1982. See
table B-60 for the components.
Note.—Data beginning 1983 incorporate a rental equivalence measure for homeowners' costs.
Source: Department of Labor, Bureau of Labor Statistics.




335

TABLE B-60.—Consumer price indexes for selected expenditure classes, 1950-93

[For all urban consumers; 1982-84 = 100, except as noted]

Food
Year or month

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992.
1993
1992: Jan
Feb .
.
Mar
Apr
May
June
July
Aug
Sept

Ot
c

Nov
Dec
1993: Jan
Feb
Mar

Ar
p

May
June
July
Aug
Sept
Oct.
Nov
Dec

Fuel and other utilities

Shelter

Food and beverages

Renters costs

Fuels

Fuel oil
Gas
Other
and
(piped) utilities
Home- Mainteother
and
and
Total »
Away Total
Rent, owners' nance Total
At
elecTotal home from
public
Total 2 resi- costs 2 and
Total houserepairs
hold
tricity services
home
dential
fuel
(energy
comservmodities ices)

35.0
36.2
38.1
401
41.4
431
48.8
55 5
60.2
62 1
65 8
72.2
79.9
86.7
93.5
97.3
99.5
103.2
105.6
1091
113.5
118.2
124.9
132.1
136.8
138 7
141.6
137.9
1381
138.8
138.8
138.3
138.3
138.1
138.8
139.3
139 2
139.1
139.5
140.5
140.7
140.9
1414
141.8
141.1
141.1
141.5
141.8
142.3
142.6
143.3

25 4
28.2
28 7
28 3
28.2
27 8
28 0
28 9
30.2
29.7
30.0
30 4
30.6
311
31.5
32 2
33.8
34.1
35.3
37.1
39 2
40.4
42.1
48.2
55.1
59.8
61.6
65 5
72.0
79.9
86.8
93.6
97.4
99.4
103.2
105.6
109 0
113.5
118.2
125.1
132.4
136.3
137.9
140.9
137.2
137.5
138.1
138.1
137.4
137.4
137.2
138.0
138.5
138 3
138.3
138.7
139.8
139.9
140.1
140 6
141.1
140.4
140.3
140.8
141.1
141.6
141.9
142.7

27 3
30.3
30 8
30 3
301
29 5
29 6
30 6
32.0
31.2
31.5
318
32.0
32 4
32.7
33 5
35 2
35.1
36.3
38.0
39 9
40.9
42.7
49.7
57.1
61.8
63.1
66 8
73.8
81.8
88.4
94.8
98.1
99.1
102.8
104.3
107.3
111.9
116.6
124.2
132.3
135.8
136.8
140.1
136.4
136 6
137.5
137.4
136.2
136.1
135.7
136.9
137.4
137 2
137.0
137.5
139.1
139.1
139.4
140 0
140.7
139.3
139.1
139.7
140.0
140.8
141.2
142.3

21 5
219
221
22.6
23 4
24.1
24.8
25.4
26 0
26.7
27 3
27.8
28 4
29 7
31.3
32.9
34.9
37 5
39.4
410
44.2
49.8
54.5
58.2
62 6
68.3
75.9
83.4
90.9
95.8
100.0
104.2
108.3
112 5
117.0
121.8
127.4
133.4
137.9
140.7
143.2
139.7
139.9
140.1
140.2
140.4
140.7
140.8
141.0
141.2
1413
141.5
141.6
142.0
142.2
142.4
142 7
142.9
143.2
143.4
143.6
143.8
144.0
144.2
144.3

22 0
22 5
22 7
23 1
24 0
24 5
24.7
25.2
25 4
25.8
26 1
26.5
27 0
27 8
28.8
30.1
32.6
35 5
37.0
38.7
40.5
44 4
48.8
515
54 9
60.5
68.9
81.0
90.5
96 9
99.1 "'iifto
104.0 108.6
109.8 115.4
115 8 1219
121.3 128.1
127.1 133.6
132.8 138.9
140.0 146.7
146.3 155.6
151.2 160.9
155.7 165.0
149.2 158.8
149 8 160.2
150.4 161.2
150.2 160.1
150.2 159.5
151.1 161.0
151.8 162.8
152.3 163.5
151.9 161.7
152 5 1617
152.4 160.6
152.5 160.2
153.7 162.5
154.4 164.4
154.8 165.2
155 0 164 9
154.9 164.2
155.7 165.2
156.3 166.8
156.8 167.3
156.6 165.3
156.8 165.4
156.7 164.4
157.1 164.4

29 7
30.9
32 2
33 9
35.1
35 6
36.3
37 0
37 6
38.2
38.7
39 2
39.7
40 1
40.5
40 9
415
42.2
43.3
44.7
46 5
48.7
50.4
52.5
55 2
58.0
61 1
64 8
69.3
74.3
80.9
87.9
94.6
100.1 ""102:5
105.3 107.3
111.8 113.1
1183
1194
123.1 124.8
127.8 131.1
132.8 137.3
138.4 144.6
143.3 150.2
146.9 155.3
150.3 160.2
145.4 153.2
145.6 153 5
146.4 154.1
146.2 154.2
146.3 154.4
146.6 155.0
147.0 155.5
147.0 155.8
147.2 156.0
148 0 156 8
148.6 157.2
148.6 157.5
148.9 158.2
149.1 158.5
149.1 158.7
149 7 159 2
149.9 159.4
150.3 160.1
150.4 160.3
150.8 160.8
151.0 161.4
151.4 161.6
151.6 162.0
151.9 162.5

1

Includes alcoholic beverages, not shown separately.
December 1982 = 100.
See next page for continuation of table.
2




336

20 5
20.9
214
22.3
23 2
23 6
24.0
24.4
24 8
25.0
25 3
25.8
26 3
27.5
28.9
30.6
33.2
35 8
38.6
40.6
43.6
49.5
54.1
57.6
62 0
67.2
74.0
82.4
90.7
96.4
99.9
103.7
106.5
107.9
111.8
114.7
118.0
122.2
126.3
128.6
130.6
128.0
128.3
128.4
128.0
128.1
128.5
128.8
128.1
128.5
129.4
129.5
129.3
129.7
130.5
131.5
1318
131.6
131.2
131.3
131.6
131.3
130.8
127.9
127.6

22 5
22.6
23 0
23 6
24 3
24.8
25.4
26.0
26 3
26.3
26 6
26.6
26 6
26 7
27.1
27.4
28.0
29 1
31.1
32 5
34.3
40 7
45.4
49.4
54 7
58.5
64.8
75.4
86.4
94 9
100.2
104.8
106.5
104 1
103.0
104.4
107.8
111.6
115.3
117.8
121.3
116.2
115 9
115.8
115.8
116.8
119.0
119.4
119.4
119.8
118 5
118.3
118.7
119.2
118.4
119.5
119 6
120.5
122.9
123.2
123.3
123.9
122.4
121.2
121.7

"'21.4'
21.7
22.1
231
24.7
25 7
27.5
34.4
39.4
43.3
49 0
53.0
61.3
74.8
87.2
95.6
100.5
104 0
104.5
99.2
97.3
98.0
100.9
104.5
106.7
108.1
111.2
106.6
105.9
105.2
105.1
106.5
110.2
110.4
110.3
111.1
108.7
108.2
108.9
109.2
107.5
108.6
108 8
110.3
114.1
114.2
114.1
114.8
112.1
110.1
110.7

11 3
11.8
12 1
12 6
12.6
12 7
13.3
14 0
13.7
13.9
13.8
14 1
14.2
14 4
14.4
14 6
15.0
15.5
16.0
16.3
17 0
18.2
18.3
21.1
33.2
36.4
38.8
43 9
46.2
62.4
86.1
104.6
103.4
97.2
99.4
95.9
77.6
77.9
78.1
81.7
99.3
94.6
90.7
90.3
92.0
91.5
90.5
89.9
89.8
90.1
90.0
89.7
89.7
91.4
92.1
91.8
92.3
92.5
92.8
92 6
91.3
90.4
89.1
87.8
87.9
89.1
89.4
88.3

19 2
19.3
19 5
19.9
20.2
20.7
20.9
21.1
21.9
22.4
23.3
23 5
23.5
23 5
23.5
23 5
23.6
23.7
23.9
24.3
25 4
27.1
28.5
29.9
34.5
40.1
44.7
50 5
55.0
61.0
71.4
81.9
93.2
101.5
105.4
107.1
105 7
103.8
104.6
107.5
109.3
112.6
114.8
118.5
112.8
112 0
111.5
111.3
113.0
117.4
117.6
117.5
118.5
115 4
114.8
115.6
115.9
113.8
115.1
115 3
117.3
122.0
122.2
122.2
123.1
119.7
117.3
118.1

A6£
47.1
48.4
50 0
53.4
56 2
57.8
60.7
63.9
67.7
70 8
73.7
74.3
77.0
84.3
93.3
99.5
107.2
112.1
117.9
120.1
122.9
127.1
131.7
137.9
142.5
147.0
140.5
141.2
141.7
142.2
142.4
142.2
143.1
143.3
143.0
143 4
143.7
143.6
144.3
145.3
146.3
146 2
146.3
146.5
147.1
147.8
148.1
148.4
148.6
148.8

TABLE B-60.—Consumer price indexes for selected expenditure classes,

1950-93—Continued

[For all urban consumers; 1982-84=100, except as noted]
Medical care

Transportation
Private transportation
Year or month
Total
Total

New
cars

Used
cars

120.5
123.8
126.5
130.4

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

24.5
25.6
27.3
27.8
27.1
26.7
27.1
28.6
29.5
30.8
30.6
30.8
31.4
31.6
32.0
32.5
32.9
33.8
34.8
36.0
37.5
39.4
39.7
41.0
46.2
50.6
55.6
59.7
62.5
71.7
84.2
93.8
97.1
99.3
103.6
106.2
101.2
104.2
107.6
112.9
118.8
121.9
124.6
127.5

41.1
43.1
46.8
47.2
46.5
44.8
46.1
48.5
50.0
52.2
51.5
51.5
51.3
51.0
50.9
49.7
48.8
49.3
50.7
51.5
53.0
55.2
54.7
54.8
57.9
62.9
66.9
70.4
75.8
81.8
88.4
93.7
97.4
99.9
102.8
106.1
110.6
114.6
116.9
119.2
121.0
125.3
128.4
131.5

31.2
33.0
33.1
35.2
36.7
43.8
50.3
54.7
55.8
60.2
62.3
76.9
88.8
98.7
112.5
113.7
108.8
113.1
118.0
120.4
117.6
118.1
123.2
133.9

124.5
124.1
124.4
125.2
126.3
126.9
127.2
126.9
126.8
128.0
129.2
129.0
129.1
129.2
129.0
129.4
130.2
130.3
130.3
130.2
130.1
131.8
132.6
132.1

122.5
122.0
122.2
122.9
124.3
125.4
125.5
125.4
125.4
126.1
127.0
126.7
126.6
126.5
126.3
126.8
127.5
127.6
127.4
127.3
127.1
129.0
129.5
128.6

128.0
128.1
128.2
128.2
128.4
128.2
127.8
127.6
127.4
128.2
129.7
130.5
130.9
130.9
130.9
131.1
131.3
131.0
130.9
130.8
130.6
131.9
133.4
134.2

117.8
116.1
115.7
117.9
120.5
123.1
124.8
126.4
127.7
129.1
129.9
129.0
127.4
126.0
126.6
128.7
131.5
134.3
136.1
137.5
138.7
139.8
140.7
139.3

22.7
24.1
25.7
26.5
26.1
25.8
26.2
27.7
28.6
29.8
29.8
30.1
30.8
30.9
31.4
31.9
32.3
33.3
34.3
35.7
37.5
39.5
39.9
41.2
45.8
50.1
55.1
59.0
61.7
70.5
83.1
93.2
97.0
99.3
103.7
106.4
102.3
105.4
108.7
114.1

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1992: Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
1993:Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec

3

•

26.7
22.7
21.5
20.7
23.2
24.0
26.8
25.0
26.0
28.4
28.7
30.0
29.8
29.0
29.9

Motor
fuel 4

Automobile
maintenance
and
repair

19.0
19.5
20.0
21.2
21.8
22.1
22.8
23.8
23.4
23.7
24.4
24.1
24.3
24.2
24.1
25.1
25.6
26.4
26.8
27.6
27.9
28.1
28.4
31.2
42.2
45.1
47.0
49.7
51.8
70.1
97.4
108.5
102.8
99.4
97.9
98.7
77.1
80.2
80.9
88.5
101.2
99.4
99.0
98.0

18.9
20.4
20.8
22.0
22.7
23.2
24.2
25.0
25.4
26.0
26.5
27.1
27.5
27.8
28.2
28.7
29.2
30.4
32.1
34.1
36.6
39.3
41.1
43.2
47.6
53.7
57.6
61.9
67.0
73.7
81.5
89.2
96.0
100.3
103.8
106.8
110.3
114.8
119.7
124.9
130.1
136.0
141.3
145.9

94.5
92.9
93.4
95.0
99.4
102.9
102.8
101.7
101.7
101.6
102.2
100.2

139.0
139.7
140.3
140.5
140.8
141.2
141.4
141.6
142.2
142.5
142.8
143.2
143.4
144.3
144.7
145.2
145.4
145.8
146.2
146.2
146.8
147.1
147.4
147.7

98.6
98.0
97.3
98.4
99.7
99.8
98.1
97.0
96.1
99.7
98.4
94.8

Other

Public
transportation

Total

Medical
care
commodities

Medical
care
services

37.9
39.2
41.6
45.2
48.6
48.9
48.4
50.2
53.5
61.8
67.2
69.9
75.2
84.3
91.4
97.7
98.8
103.5
109.0
115.1
120.8
127.9
135.8
142.5
149.1
153.2
156.8

13.4
14.8
15.8
16.8
18.0
18.5
19.2
19.9
20.9
21.5
22.2
23.2
24.0
24.3
24.7
25.2
26.1
27.4
28.7
30.9
35.2
37.8
39.3
39.7
40.6
43.5
47.8
50.0
51.5
54.9
69.0
85.6
94.9
99.5
105.7
110.5
117.0
121.1
123.3
129.5
142.6
148.9
151.4
167.0

15.1
15.9
16.7
17.3
17.8
18.2
18.9
19.7
20.6
21.5
22.3
22.9
23.5
24.1
24.6
25.2
26.3
28.2
29.9
31.9
34.0
36.1
37.3
38.8
42.4
47.5
52.0
57.0
61.8
67.5
74.9
82.9
92.5
100.6
106.8
113.5
122.0
130.1
138.6
149.3
162.8
177.0
190.1
201.4

39.7
40.8
41.2
41.5
42.0
42.5
43.4
44.6
46.1
46.8
46.9
46.3
45.6
45.2
45.1
45.0
45.1
44.9
45.0
45.4
46.5
47.3
47.4
47.5
49.2
53.3
56.5
60.2
64.4
69.0
75.4
83.7
92.3
100.2
107.5
115.2
122.8
131.0
139.9
150.8
163.4
176.8
188.1
195.0

12.8
13.4
14.3
14.8
15.3
15.7
16.3
17.0
17.9
18.7
19.5
20.2
20.9
21.5
22.0
22.7
23.9
26.0
27.9
30.2
32.3
34.7
35.9
37.5
41.4
46.6
51.3
56.4
61.2
67.2
74.8
82.8
92.6
100.7
106.7
113.2
121.9
130.0
138.3
148.9
162.7
177.1
190.5
202.9

152.4
152.2
152.2
152.4
152.5
152.6
153.0
153.1
152.7
154.4
155.3
155.5
156.5
156.8
156.3
156.1
156.1
155.8
156.0
156.4
156.1
157.8
159.1
159.0

151.5
150.7
153.5
154.7
151.6
145.3
148.3
146.7
145.6
152.9
157.4
158.2
161.6
164.1
163.5
162.8
165.5
164.5
167.7
168.1
168.4
168.2
173.0
176.5

184.3
186.2
187.3
188.1
188.7
189.4
190.7
191.5
192.3
193.3
194.3
194.7
196.4
198.0
198.6
199.4
200.5
201.1
202.2
202.9
203.2
204.4
204.9
205.2

183.0
185.1
186.7
187.9
187.6
188.0
188.6
188.9
189.5
189.8
190.4
191.1
191.8
193.2
193.9
193.7
194.2
194.7
195.7
196.1
196.2
196.6
196.6
197.0

184.6
186.4
187.4
188.1
188.9
189.7
191.1
192.2
192.9
194.2
195.2
195.6
197.5
199.1
199.7
200.7
202.0
202.6
203.8
204.5
205.0
206.2
206.8
207.1

3
Includes other new vehicles, not shown separately. Includes direct pricing of new trucks and motorcycles beginning September
1982.
4
Includes direct pricing of diesel fuel and gasohol beginning September 1981.
5
Not available.

Note.—See Note, Table B-59.
Source: Department of Labor, Bureau of Labor Statistics.




337

TABLE B-61.—Consumer price indexes for commodities, services, and special groups, 1950-93

[For all urban consumers; 1982-84 = 100, except as noted]
Commodities

Year or month

All items
(CPI-U)

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1992: Jan
Feb
Mar

ffljZZZZ.
June
July
Aug
Sept
Oct
Nov
Dec
1993:Jan
Feb
Mar
May'.'.".'.'.'.!"'.!
June
July
Aug
Sept
Oct
Nov
Dec

All
commodities

24.1
26.0
26.5
26.7
26.9
26.8
27.2
28.1
28.9
29.1
29.6
29.9
30.2
30.6
31.0
31.5
32.4
33.4
34.8
36.7
38.8
40.5
41.8
44.4
49.3
53.8
56.9
60.6
65.2
72.6
82.4
90.9
96.5
99.6
103.9
107.6
109.6
113.6
118.3
124.0
130.7
136.2
140.3
144.5
138.1
138.6
139.3
139.5
139.7
140.2
140.5
140.9
141.3
141.8
142.0
141.9
142.6
143.1
143.6
144.0
144.2
144.4
144.4
144.8
145.1
145.7
145.8
145.8

29.0
31.6
32.0
31.9
31.6
31.3
31.6
32.6
33.3
33.3
33.6
33.8
34.1
34.4
34.8
35.2
36.1
36.8
38.1
39.9
41.7
43.2
44.5
47.8
53.5
58.2
60.7
64.2
68.8
76.6
86.0
93.2
97.0
99.8
103.2
105.4
104.4
107.7
111.5
116.7
122.8
126.6
129.1
131.5
127.2
127.6
128.4
128.8
129.1
129.2
129.0
129.3
129.9
130.3
130.5
130.1
130.4
130.9
131.4
131.9
132.0
131.4
130.9
131.1
131.3
132.3
132.5
132.0

Food

25.4
28.2
28.7
28.3
28.21
27.8
28.0!
28.9
30.2
29.7
30.0
30.4
30.6
31.1
31.5
32.2
33.8
34.1
35.3
37.1
39.2
40.4
42.1
48.2
55.1
59.8
61.6
65.5
72.0
79.9
86.8
93.6
97.4
99.4
103.2
105.6
109.0
113.5
118.2
125.1
132.4
136.3
137.9
140.9
137.2
137.5
138.1
138.1
137.4
137.4
137.2
138.0
138.5
138.3
138.3
138.7
139.8
139.9
140.1
140.6
141.1
140.4
140.3
140.8
141.1
141.6
141.9
142.7

Special indexes

Services
Medical
care
services

Commodities
All
less services
food

31.4
33.8
34.1
34.2
33.8
33.6
33.9
34.9
35.3
35.8
36.0
36.1
36.3
36.6
36.9
37.2
37.7
38.6
40.0
41.7
43.4
45.1
46.1
47.7
52.8
57.6
60.5
63.8
67.5
75.3
85.7
93.1
96.9
100.0
103.1
105.2
101.7
104.3
107.7
112.0
117.4
121.3
124.2
126.3
121.6
122.1
123.0
123.5
124.4
124.5
124.3
124.3
125.1
125.7
126.1
125.3
125.1
125.8
126.4
127.0
126.9
126.3
125.5
125.7
125.9
127.1
127.3
126.1

16.9
17.8
18.6
19.4
20.0
20.4
20.9
21.8
22.6
23.3
24.1
24.5
25.0
25.5
26.0
26.6
27.6
28.8
30.3
32.4
35.0
37.0
38.4
40.1
43.8
48.0
52.0
56.0
60.8
67.5
77.9
88.1
96.0
99.4
104.6
109.9
115.4
120.2
125.7
131.9
139.2
146.3
152.0
157.9
149.6
150.1
150.7
150.8
150.9
151.7
152.5
153.0
153.2
153.7
154.0
154.2
155.2
155.8
156.2
156.5
156.9
157.8
158.4
159.0
159.3
159.5
159.6
160.0

12.8
13.4
14.3
14.8
15.3
15.7
16.3
17.0
17.9
18.7
19.5
20.2
20.9
21.5
22.0
22.7
23.9
26.0
27.9
30.2
32.3
34.7
35.9
37.5
41.4
46.6
51.3
56.4
61.2
67.2
74.8
82.8
92.6
100.7
106.7
113.2
121.9
130.0
138.3
148.9
162.7
177.1
190.5
202.9
184.6
186.4
187.4
188.1
188.9
189.7
191.1
192.2
192.9
194.2
195.2
195.6
197.5
199.1
199.7
200.7
202.0
202.6
203.8
204.5
205.0
206.2
206.8
207.1

Services
less
medical
care
services

All
items
less
food

All
items
less
energy

All
items
less
food
and
energy

All
items CPI-U-X1
less (all items)
medi- (Dec. 1982
cal
= 97.6) J
care

23.8
25.3
25.9
26.4

22.8
23.6
24.2
25.0
25.4
25.9
26.3
26.8
27.4
28.3
29.3
30.8
32.9
35.6
37.5
38.9
40.6
44.3
48.3
52.2
55.9
60.7
67.5
78.2
88.7
96.4
99.2
104.4
109.6
114.6
119.1
124.3
130.1
136.8
143.3
148.4
153.6
146.3
146.6
147.1
147.2
147.3
148.1
148.8
149.2
149.4
149.9
150.1
150.3
151.2
151.7
152.1
152.3
152.6
153.6
154.1
154.7
155.0
155.1
155.2
155.6

26.6
26.6
27.1
28.0
28.6
29.2
29.7
30.0
30.3
30.7
31.1
31.6
32.3
33.4
34.9
36.8
39.0
40.8
42.0
43.7
48.0
52.5
56.0
59.6
63.9
71.2
81.5
90.4
96.3
99.7
104.0
108.0
109.8
113.6
118.3
123.7
130.3
136.1
140.8
145.1
138.3
138.8
139.5
139.7
140.1
140.7
141.1
141.4
141.8
142.4
142.7
142.5
143.1
143.7
144.2
144.6
144.8
145.1
145.2
145.6
145.9
146.4
146.6
146.4

28.9
29.7
29.9
30.4
30.7
31.1
31.5
32.0
32.5
33.5
34.4
35.9
38.0
40.3
42.0
43.4
46.1
50.6
55.1
58.2
61.9
66.7
73.4
81.9
90.1
96.1
99.6
104.3
108.4
112.6
117.2
122.3
128.1
134.7
140.9
145.4
150.0
143.3
144.0
144.7
144.9
144.9
145.0
145.3
145.8
146.2
146.9
147.1
147.1
147.9
148.7
149.1
149.5
149.6
149.6
149.7
150.3
150.6
151.2
151.5
151.7

28.9
29.6
30.2
30.6
31.0
31.4
31.8
32.3
32.7
33.5
34.7
36.3
38.4
40.8
42.7
44.0
45.6
49.4
53.9
57.4
61.0
65.5
71.9
80.8
89.2
95.8
99.6
104.6
109.1
113.5
118.2
123.4
129.0
135.5
142.1
147.3
152.2
144.9
145.6
146.4
146.6
146.7
146.9
147.3
147.7
148.1
149.0
149.3
149.2
149.9
150.8
151.4
151.7
151.7
151.8
152.0
152.6
152.9
153.5
153.9
153.9

28.7
29.5
29.8
30.2
30.5
30.8
31.1
31.5
32.0
33.0
33.7
35.1
37.0
39.2
40.8
42.1
44.8
49.8
54.3
57.2
60.8
65.4
72.9
82.8
91.4
96.8
99.6
103.7
107.2
108.8
112.6
117.0
122.4
128.8
133.8
137.5
141.2
135.5
135.9
136.5
136.7
136.9
137.4

26.2
28.3
28.8
29.0
29.2
29.1
29.6
30.5
31.4
31.6
32.2
32.5
32.8
33.3
33.7
34.2
35.2
36.3
37.7
39.4
41.3
43.1
44.4
47.2
51.9
56.2
59.4
63.2
67.5
74.0
82.3
90.1
95.6
99.6
103.9
107.6
109.6
113.6
118.3
124.0
130.7
136.2
140.3
144.5

137.6
138.0
138.4
138.8
139.0
138.9
139.5
140.0
140.4
140.8
141.0
141.1
141.1
141.6
141.8
142.3
142.5
142.5

1
CPI-U-X1 is a rental equivalence approach to homeowners' costs for the consumer price index for years prior to 1983, the first
year for which the official index (CPI-U) incorporates such a measure. CPI-U-X1 is rebased to the December 1982 value of the CPI-U
(1982-84 = 100); thus it is identical with CPI-U data for December 1982 and all subsequent periods. Data prior to 1967 estimated by
moving the series at the same rate as the CPI-U for each year.
Note.—See Note, Table B-59.
Source: Department of Labor, Bureau of Labor Statistics.




338

TABLE B-62.—Changes in special consumer price indexes, 1958-93
[For all urban consumers; percent change]
All items
(CPI-U)
Year or month

Dec.

Year

to

.

Dec.

to

Dec 1
1958.
1959
1960
1961
1962
1963
1964
1965
1966
1967.
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993

All items less
food

18
1.7
14
.7

13
1.6
1.0
19

3.5
30
4.7

6.2
5.6
33

3.4
8.7
12.3
6.9
49

6.7
90

13.3
12 5
8.9
3.8
3.8
3.9
3.8
1.1
4.4
44
4.6
6.1
3.1
29
2.7

Year

to

to

Dec 1

year
28
.7
1 7
1.0
10
13
1.3
16
2.9
31
4.2
5.5
5.7
44

18

16
2.2
34

5.6
7.3

.5

27
4.4

34
3.5
8.2
11.7

66
48
6.7
91
11.1
117
8.5
4.2
4.5
4.4
4.0
3.8
4.1
47
4.6
5.2
3.9
30

3.5
41
4.6
5.3
4.5
35
3.1

13
16
1.2
15

16
31

34

6.4
72
11.4
14 5
10.9
6.5
3.5
4.3
3.8
1.7

4.6
42
4.5
6.3
3.3
32
2.7

1.0
13

32
4.9
6.5
5.4

67

61
6.4
83
14.0
13 0
9.8
4.1
4.1
3.9
4.1

13
1.6

2.0
10
1.3

3.1

5.8
6.1
42

3.3
6.2
9.8
8.9

33
38
5.1

6.2
6.6
3 1
3.0
4.7
11.1
67

56
6.4

78
10.0
11 6
10.0
6.7
3.6
4.7

3.9
3.9
4.1
44
4.7
5.2
4.6
32
3.2

61
6.5
85

11.3
12 2
9.5
4.5
4.8
4.7
4.3
3.8
4.2
47
4.4
5.2
4.4
33
3.2

Year

Dec.

to

to

to

Dec. 1

year

17

28
.7
17

19

4.5
5.4
6.0
46
2.9
4.0
9.8
9.4

12.2

to

Dec1

13
19
1.3

13
1.3

Year

Dec.

to

year

1.3
1.3

1.0
10

30
2.9

76
11.3
13 5
10.3
6.2
3.2
4.3
3.6
1.9
3.6
41
4.8
5.4
4.2
30
3.0

2 1

All items less
medical care

All items less food
and energy

Year

to

21
2.1
17

2.1
10
1.3
10
16
1.0
16
35
33
5.0
5.6
6.6

6.2
11.0

Dec.
Dec 1

year

3.2

9.1
58
6.5

All items less
energy

24
2.0
13

1.3

13

13
1.6
12
24
36
4.6
5.8
6.3
47
3.0

3.6
8.3

9.1
65
6.3
74

9.8
12 4
10.4
7.4
4.0
5.0
4.3
4.0
4.1
44
4.5
5.0
4.9
37
3.3

year

17
1.4
13
.3

13
16
1.0
19
3.4
27
4.7

6.1
5.2
32
3.4
9.1
12.2
6.7
45
6.7
91
13.4
12 5
8.8
3.6
3.6
3.9
3.5
.7
4.3
42
4.5
5.9
2.7
27
2.6

2.8
1.0
13
1.0
1.0
1.0
1.3

1.6
3.1
2.1
4.2
5.4
5.9
41

3.2

6.4
11.2

9.0
5.3
6.3
7.6
11.5
13.6
10.4

5.9

2.9
4.1
3.4

1.5
3.5
3.9
4.6
5.2
3.9
2.8
2.7

Percent change from preceding period
Seasonally
adjusted

Unadjusted

1992-Jan
Feb
Mar

Aor

May
June
July

Aug

Sept
Oct
Nov
Dec
1993:Jan
Feb
Mar
Apr
May
J
June
July
Aug
Sept
Oct
Nov
Dec
1

Unadjusted

0.1
.4
.5
1
.1
.4
.2
3
.3
.4
.1
_.l

0.3
.2
.4
.3
.1
.2
.3
2
.1
.4
.2
.1

.5

.5
.3

.4

.3
.3
1
.1

.1
.4
.1

0
.1
.3

0
.3
.2
.4
.1
0

Seasonally
adjusted

0
.4
.2
.2

01
.4
.5
1
.3
.4
.3
2
.3
.4
.2
-.1
.4
.4

.3

.3
.1
.2
.1
.3
.2
.3
.1
-.1

Unadjusted

04
.5
.5
.1
0
.1
.2
3
.3
.5
.1
0
.5
.5
.3
.3
.1
0
.1
.4
.2
.4
.2
.1

0.3
.2
.4
.3
.3
.3
.3
1
.1
.5
.3
.1
.4
.4
.2
.3
.1
.1
.1
.3
0
.4
.1
.1

Changes from December to December are based on unadjusted indexes.

Note.—See Note, Table B-59.
Source: Department of Labor, Bureau of Labor Statistics.




339

Seasonally
adjusted

Seasonally
adjusted

Unadjusted

.4
.1
.4
.2
.1
.1
.3
0
.3

03
.5
.5
.1
.1
.1
.3
.3
.3
.6
.2
-.1
.5
.6
.4
.2
0
.1
.1
.4
.2
.4

.3
.3

0

0.3
.3
.3
.2
.1
.2
.2
3
.1
.4
.2
.2

.5

.3

Seasonally
adjusted

Unadjusted

0.4
.3
.3
.3
.3
.1
.3
.2
.1
.5
.3
.2
.5

.5

.1
.4
.2
.1
.1
.3
.1

.3
.3
.3

0.1
.3
.4
.1
.1
.4
.1
.3
.3
.3
.1
-.1
.4
.4

.3
.3
.1

.1

0
.4
.1
.4
.1

0

0.2
.2
.4
.2
.1
.2
.2
.2
.1
.4
.2
.1
.4
.4
.1
.4
.1
-.1
.1
.2
0
.4
.2
.1

TABLE B-63.—Changes in consumer price indexes for commodities and services, 1929-93
[For all urban consumers; percent change]
All items
(CPI-U)
Year

Total

Dec.
to
Dec 1

1929 ...

Year
to
year

Dec.
to

Dec. 1

Food

Year
to
year

0.6

1933....

Dec.
to
Dec 1

Total

Year
to
year

2.5

Medical care

Year
to
year

Dec.
to
Dec 1

Year
to
year

Dec.
to
Dec1

Year
to
year

Dec.
to
Dec 1

Year
to
year

1.2

6.9

-5.1

Dec
to
Dec 1

Energy 3

Medical
care 2

Services

Commodities

-2.8

-1.4

-0.7

-2.0

-2.5

-2.5

1.2

1.2

1.0

.7
9.9
9.0
3.0
2.3

.7
5.0
10.9
6.1
1.7

1.4
13.3
12.9
4.2
2.0

.7
6.7
14.5
9.3
1.0

2.5
15.7
17.9
3.0
0

1.7
9.2
17.6
11.0
-1.2

2.4
2.3
2.3
2.2

3.1
2.3
2.2

0
1.2
3.5
5.6
3.2

0
0
3.5
4.5
4.3

0
1.0
3.8
4.6
2.6

1.0
0
2.9
4.7
3.6

2.2
18.1
8.8
3.0
-2.1

2.3
8.3
14.4
8.1
-1.2

2.9
24.8
10.3
1.7
-4.1

3.0
10.6
20.5
7.2
-2.7

3.5
31.3
11.3
-.8
-3.9

2.4
14.5
21.7
8.3
-4.2

.7
3.6
5.6
5.9
3.7

1.5
1.4
4.3
6.1
5.1

3.1
9.0
6.4
6.9
1.6

3.1
5.1
8.7
7.1
3.3

2.6
8.3
6.9
5.8
1.4

2.6
5.0
8.0
6.7
2.8

5.9
6.0
.8
.7
-.7

1.3
7.9
1.9
.8
.7

7.8
5.9
_ 9

.7
9.0
1.3
-.3
-.9

9.8
7.1
-1.0
-1.1
-1.8

1.6
11.0
1.8
-1.4
-.4

3.6
5.2
4.4
4.2
2.0

3.0
5.3
4.5
4.3
3.1

4.0
5.3
5.8
3.4
2.6

2.4
4.7
6.7
3.5
3.4

3.4
5.8
4.3
3.5
2.3

2.0
5.3
5.0
3.6
2.9

1955
1956
1957
1958
1959

.4
3.0
2.9
1.8
1.7

— 4
1.5
3.3
2.8
.7

-.3
2.6
2.8
1.2
.6

-.9
1.0
3.2
2.1
0

-.7
2.9
2.8
2.4
-1.0

-1.4
.7
3.2
4.5
-1.7

2.0
3.4
4.2
2.7
3.9

2.0
2.5
4.3
3.7
3.1

3.2
3.8
4.8
4.6
4.9

2.6
3.8
4.3
5.3
4.5

3.3
3.2
4.7
4.5
3.8

2.2
3.8
4.2
4.6
4.4

-0.9
4.7

0
1.9

1960
1961
1962
1963
1964

1.4
.7
1.3
1.6
1.0

1.7
1.0
1.0
1.3
1.3

1.2
0
.9
1.5
.9

.9
.6
.9
.9
1.2

3.1
-.7
1.3
2.0
1.3

1.0
1.3
.7
1.6
1.3

2.5
2.1
1.6
2.4
1.6

3.4
1.7
2.0
2.0
2.0

3.7
3.5
2.9
2.8
2.3

4.3
3.6
3.5
2.9
2.3

3.2
3.1
2.2
2.5
2.1

3.7
2.7
2.6
2.6
2.1

1.3
-1.3
2.2
-.9
0

2.3
.4
.4
0
-.4

1965
1966
1967
1968
1969

1.9
3.5
3.0
4.7
6.2

1.6
2.9
3.1
4.2
5.5

1.4
2.5
2.5
4.0
5.4

1.1
2.6
1.9
3.5
4.7

3.5
4.0
1.2
4.4
7.0

2.2
5.0
.9
3.5
5.1

2.7
4.8
4.3
5.8
7.7

2.3
3.8
4.3
5.2
6.9

3.6
8.3
8.0
7.1
7.3

3.2
5.3
8.8
7.3
8.2

2.8
6.7
6.3
6.2
6.2

2.4
4.4
7.2
6.0
6.7

1.8
1.7
1.7
1.7
2.9

1.8
1.7
2.1
1.7
2.5

1970
1971
1972
1973
1974

5.6
3.3
3.4
8.7
12.3

5.7
4.4
3.2
6.2
11.0

3.9
2.8
3.4
10.4
12.8

4.5
3.6
3.0
7.4
11.9

2.3
4.3
4.6
20.3
12.0

5.7
3.1
4.2
14.5
14.3

8.1
4.1
3.4
6.2
11.4

8.0
5.7
3.8
4.4
9.2

8.1
5.4
3.7
6.0
13.2

7.0
7.4
3.5
4.5
10.4

7.4
4.6
3.3
5.3
12.6

6.6
6.2
3.3
4.0
9.3

4.8
3.1
2.6
17.0
21.6

2.8
3.9
2.6
8.1
29.6

1975
1976
1977
1978
1979

6.9
4.9
6.7
9.0
13.3

9.1
5.8
6.5
7.6
11.3

6.2
3.3
6.1
8.8
13.0

8.8
4.3
5.8
7.2
11.3

6.6
.5
8.1
11.8
10.2

8.5
3.0
6.3
9.9
11.0

8.2
7.2
8.0
9.3
13.6

9.6
8.3
7.7
8.6
11.0

10.3
10.8
9.0
9.3
10.5

12.6
10.1
9.9
8.5
9.8

9.8
10.0
8.9
8.8
10.1

12.0
9.5
9.6
8.4
9.2

11.4
7.1
7.2
7.9
37.5

10.5
7.1
9.5
6.3
25.1

1980
1981
1982
1983
1984

12.5
8.9
3.8
3.8
3.9

13.5
10.3
6.2
3.2
4.3

11.0
6.0
3.6
2.9
2.7

12.3
8.4
4.1
2.9
3.4

10.2
4.3
3.1
2.7
3.8

8.6
7.8
4.1
2.1
3.8

14.2
13.0
4.3
4.8
5.4

15.4
13.1
9.0
3.5
5.2

10.1
12.6
11.2
6.2
5.8

11.3
10.7
11.8
8.7
6.0

9.9
12.5
11.0
6.4
6.1

11.0
10.7
11.6
8.8
6.2

18.0
11.9
1.3

30.9
13.6
1.5
.7
1.0

1985
1986
1987
1988
1989

3.8
1.1
4.4
4.4
4.6

3.6
1.9
3.6
4.1
4.8

2.5
-2.0
4.6
3.8
4.1

2.1
_ g
3^2
3.5
4.7

2.6
3.8
3.5
5.2
5.6

2.3
3.2
4.1
4.1
5.8

5.1
4.5
4.3
4.8
5.1

5.1
5.0
4.2
4.6
4.9

6.8
7.9
5.6
6.9
8.6

6.1
7.7
6.6
6.4
7.7

6.8
7.7
5.8
6.9
8.5

6.3
7.5
6.6
6.5
7.7

1.8
-19.7
8.2

1990
1991
1992
1993

6.1
3.1
2.9
2.7

5.4
4.2
3.0
3.0

6.6
1.2
2.0
1.5

5.2
3.1
2.0
1.9

5.3
1.9
1.5
2.9

5.8
2.9
1.2
2.2

5.7
4.6
3.6
3.8

5.5
5.1
3.9
3.9

9.9
8.0
7.0
5.9

9.3
8.9
7.6
6.5

9.6
7.9
6.6
5.4

9.0
8.7
7.4
5.9

18.1
-7.4
2.0
-1.4

1939....
1940....
1941....
1942...
1943....
1944....
1945
1946
1947
1948
1949
1950...
1951...
1952...
1953...
1954...

1
2
3

.2

.7
-13.2

5.6
8.3
.4
.5
1.2

Changes from December to December are based on unadjusted indexes.
Commodities and services.
Household fuels—gas (piped), electricity, fuel oil, etc.—and motor fuel. Motor oil, coolant, etc. also included through 1982.

Note.—See Note, Table B-59.
Source: Department of Labor, Bureau of Labor Statistics.




340

TABLE B-64.—Producer price indexes by stage of processing, 1947-93
[1982 = 100]

Finished goods
Finished goods excluding consumer foods

Consumer foods
Year or month

1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963 . .
. .
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982 . .
.
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1992-Jan
Fb
e
Mar
Apr
May . .
.
June
July
Aug
Sept
Oct
Nov
Dec
1993-Jan
Feb
Mar
Apr .
May
June
July
Aug 1
Sept
Oct
Nov
Dec

Tntal

Total
finished
goods

Consumer goods
Total

26.4
28 5
27.7
28.2
30.8
30.6
30.3
30 4
30.5
313
32.5
33 2
33.1
33.4
33.4
33.5
33.4
33 5
34.1
35 2
35.6
36.6
38.0
39.3
40.5
41.8
45.6
52 6
58.2
60.8
64.7
69 8
77.6
88 0
96.1
100.0
101.6
103.7
104.7
103.2
105.4
108.0
113.6
119.2
1217
123 2
124.7
121.8
122 1
122.2
122.4
123.2
123 9
123.7
123.6
123 3
124.4
124.0
123.8
124 2
124.5
124.7
125.5
125.8
125.5
125.3
124 2
123.9
124 7
124.4
124.1

31.9
34 9
32.1
32.7
36.7
36.4
34.5
34 2
33.4
33 3
34.4
36 5
34.8
35.5
35.4
35.7
35.3
35 4
36.8
39 2
38.5
40.0
42.4
43.8
44.5
46.9
56.5
64 4
69.8
69.6
73.3
79 9
87.3
92 4
97.8
100.0
101.0
105.4
104.6
107.3
109.5
112.6
118.7
124.4
124 1
123 3
125.7
122.5
123 4
123.3
122.8
123.1
123 1
122.8
123.4
123.3
123.8
123.4
124.2
124 3
124.5
124.8
126.5
126.9
125.4
125.0
125 4
125.6
125 5
126.7
127.2

Crude

39.3
42 4
40.1
36.5
41.9
44.6
41.6
37 5
39.1
391
38.5
410
37.3
39.8
38.0
38.4
37.8
38 9
39.0
415
39.6
42.5
45.9
46.0
45.8
48.0
63.6
716
71.7
76.7
79.5
85 8
92.3
93 9
104.4
100.0
102.4
111.4
102.9
105.6
107.1
109.8
. 119.6
123.0
119 3
107 6
114.3
109.7
118 7
115.8
105.2
98.6
96 3
97.3
104.5
104 6
113.0
110.4
117.4
114 8
114.5
113.8
126.5
125.2
102.3
100.7
107 4
107.9
105 6
123.0
129.7

Processed
31.1
34 0
31.1
32.4
36.2
35.4
33.6
34 0
32.7
32 7
34.1
361
34.7
35.2
35.3
35.6
35.2
35 2
36.8
39 2
38.8
40.0
42.3
43.9
44.7
47.2
55.8
63 9
70.3
69.0
12.1
79 4
86.8
92 3
97.2
100.0
100.9
104.9
104.8
107.4
109.6
112.7
118.6
124.4
124 4
124 4
126.5
123.4
123 7
123.8
124.0
124.8
125 1
124.7
124.8
124 7
124.6
124.3
124.7
125 0
125.2
125.6
126.5
127.0
127.1
126.8
126 7
126.9
126 9
127.0
126.9

I

Total
Total

35.0
35.9
36.9
38.2
39.6
40.4
42.0
48 8
54.7
58.1
62.2
66 7
74.6
86 7
95.6
100.0
101.8
103.2
104.6
101.9
104.0
106.5
111.8
117.4
120 9
1231
124.4
121.5
1216
121.8
122.3
123.1
124 0
123.8
123.5
123 2
124.5
124.1
123.6
124 0
124.4
124.6
125.1
125.4
125.5
125.3
123 8
123.3
124 3
123.7
123.1

27.4
29 2
28.6
29.0
31.1
30.7
31.0
311
31.3
321
32.9
32 9
33.3
33.5
33.4
33.4
33.4
33 3
33.6
34 1
34.7
35.5
36.3
37.4
38.7
39.4
41.2
48 2
53.2
56.5
60.6
64 9
73.5
87 1
96.1
100.0
101.2
102.2
103.3
98.5
100.7
103.1
108.9
115.3
118.7
120 8
121.7
118.8
118.8
119.0
119.6
120.9
1221
122.0
121.5
121.4
122.3
121.7
121.1
1214
121.8
122.1
122.7
123.3
123.4
123.0
120.9
120.6
1212
120.3
119.4

Durable
32.9
35 2
36.1
36.5
38.9
39.2
39.5
39 8
40.2
416
42.8
43 4
43.9
43.8
43.6
43.4
43.1
43 3
43.2
43 4
44.1
45.1
45.9
47.2
48.9
50.0
50.9
55 5
61.0
63.7
67.4
73 6
80.8
910
96.4
100.0
102.8
104.5
106.5
108.9
111.5
113.8
117.6
120.4
123.9
125.7
128.1
125.8
125.5
125.8
125.6
125.6
125.2
125.4
125.1
123.4
127.1
127.1
126.9
127.2
127.6
127.6
127.9
127.8
127.7
127.9
127.9
126.4
129.2
129.7
129.7

Nondurable

Capital
equipment

24.2
25 7
24.7
25.1
27.0
26.3
26.6
26 7
26.8
27.3
27.9
27.8
28.2
28.4
28.4
28.4
28.5
28 4
28.8
29.3
30.0
30.6
31.5
32.5
33.5
34.1
36.1
44.0
48.9
52.4
56.8
60.0
69.3
85.1
95.8
100.0
100.5
101.1
101.7
93.3
94.9
97.3
103.8
111.5
115.0
117.3
117.6
114.4
114.6
114.8
115.7
117.5
119.5
119.2
118.6
119.3
118.9
118.1
117.2
117.6
117.9
118.4
119.1
119.9
120.1
119.5
116.6
116.8
116.5
114.9
113.6

19.8
21.6
22.7
23.2
25.5
25.9
26.3
26 7
27.4
29 5
31.3
32 1
32.7
32.8
32.9
33.0
33.1
33 4
33.8
34 6
35.8
37.0
38.3
40.1
41.7
42.8
44.2
50 5
58.2
62.1
66.1
71.3
77.5
85.8
94.6
100.0
102.8
105.2
107.5
109.7
111.7
114.3
118.8
122.9
126.7
129.1
131.4
128.6
128.7
128.9
129.1
129.0
128.9
128.8
128.9
128.1
130.2
130.2
130.2
130.8
131.1
131.2
131.2
131.2
131.0
131.3
131.2
130.3
132.4
132.5
132.7

finished
consumer
goods
28.6
30.8
29.4
29.9
32.7
32.3
31.7
31.7
31.5
32.0
32.9
33.6
33.3
33.6
33.6
33.7
33.5
33.6
34.2
35.4
35.6
36.5
37.9
39.1
40.2
41.5
46.0
53.1
58.2
60.4
64.3
69.4
77.5
88.6
96.6
100.0
101.3
103.3
103.8
101.4
103.6
106.2
112.1
118.2
120.5
121.7
123.0
120.0
120.3
120.4
120.7
121.7
122.6
122.4
122.2
122.2
122.9
122.4
122.2
122.5
122.8
123.1
124.0
124.5
124.1
123.8
122.4
122.2
122.6
122.3
121.8

i

1
Data have been revised through August 1993 to reflect the availability of late reports and corrections by respondents. All data are
subject to revision 4 months after original publication.

See next page for continuation of table.




341

T A B L E B-64.—Producer price indexes by stage of processing,

1947-93—Continued

[1982 = 100]
Crude materials for further processing

Intermediate materials, supplies, and components
Materials and
Year or month
Total

Foods
and
feeds 2

Processed
fuels
and
lubricants

components
Other

For
manufacturing

For
construction

Ton
containers

Supplies

Total

Foodstuffs
and
feed-

Other

Total

Fuel

Other

stuffs

1947
1948
1949

23 3
25.2
24.2

22 2
24.1
23.5

24 9
26.8
25.7

22 5
24.9
24.9

14 4
16.4
14.9

23 4
24.4
24.5

28 5
29.8
28.0

31 7
34.7
30.1

45 1
48.8
40.5

75
8.9
8.8

24 0
26.7
24.3

1950
1951
1952
1953
1954
1955
1956.
1957
1958
1959

25.3
28.4
27 5
27.7
27 9
28.4
29 6
30.3
30.4
30.8

24.6
27.6
26.7
27.0
27.2
28.0
29.3
30.1
30.1
30.5

26.9
30.5
29 3
29.7
29 8
30.5
32 0
32.7
32 8
33.3

26.2
28 7
28 5
29 0
291
30 3
318
32 0
32 0
32.9

15.2
15.9
15 7
15.8
15 8
15.8
16 3
17.2
16 2
16.2

25.2
29.6
28 0
28.0
28 5
28.9
310
32.4
33 2
33.0

29.0
32.6
32.6
31.0
317
31.2
32 0
32.3
33.1
33.5

32.7
37.6
34.5
31.9
316
30.4
30 6
31.2
31.9
31.1

43.4
50.2
47.3
42.3
42 3
38.4
37.6
39.2
41.6
38.8

8.8
9.0
9.0
9.3
8.9
8.9
9.5
10.1
10.2
10.4

27.8
32.0
27.8
26.6
26.1
27.5
28.6
28.2
27.1
28.1

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

30 8
30.6
30 6
30.7
30 8
31.2
32 0
32.2 ••"41.8"
415
33 0
34.1
42.9

30 7
30.3
30 2
30.1
30 3
30.7
313
31.7
32 5
33.6

33 3
32.9
32 7
32.7
331
33.6
34 3
34.5
35 3
36.5

32 7
32.2
32 1
32.2
32 5
32.8
33 6
34.0
35 7
37.7

16 6
16.8
16 7
16.6
16 2
16.5
16 8
16.9
16 5
16.6

33 4
33.2
33 6
33.2
32 9
33.5
34 5
35.0
35 9
37.2

33 3
33.7
34 5
35.0
34 7
35.0
36 5
36.8
37 1
37.8

30 4
30.2
30 5
29.9
29 6
31.1
331
31.3
318
33.9

38 4
37.9
38 6
37.5
36 6
39.2
42 7
40.3
40 9
44.1

21.1
216
22.5

10 5
10.5
10 4
10.5
10 5
10.6
10 9
11.3
115
12.0

26 9
27.2
27 1
26.7
27 2
27.7
28 3
26.5
27.1
28.4

1970
1971
1972
1973
1974
1975
1976.
1977
1978
1979

35 4
36.8
38 2
42.4
52.5
58.0
60.9
64.9
69.5
78.4

45 6
46.7
49 5
70.3
83.6
81.6
77.4
79.6
84.8
94.5

34 8
36.2
37 7
40.6
50 5
56.6
60.0
64.1
68.6
77.4

38 0
38.9
40 4
44.1
56 0
61.7
64.0
67.4
72.0
80.9

38 3
40.8
43 0
46.5
55 0
60.1
641
69.3
76.5
84.2

17 7
19.5
20 1
22.2
33 6
39.4
42 3
47.7
49.9
61.6

39 0
40.8
42 7
45.2
53 3
60.0
63.1
65.9
71.0
79.4

39 7
40.8
42 5
51.7
56 8
61.8
65 8
69.3
72.9
80.2

35 2
36.0
39 9
54.5
61.4
61.6
63 4
65.5
73.4
85.9

45 2
46.1
515
72.6
76 4
77.4
76.8
77.5
87.3
100.0

23 8
24.7
27 0
34.3
44 1
43.7
48.2
51.7
57.5
69.6

13 8
15.7
16.8
18.6
24.8
30.6
34.5
42.0
48.2
57.3

29.1
29.4
32.3
42.9
54.5
50.0
54.9
56.3
61.9
75.5

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989

90.3
98.6
100 0
100.6
103.1
102.7
991
1015
107.1
112.0

105.5
104 6
100.0
103.6
105.7
97.3
96.2
99 2
109.5
113.8

89.4
98.2
100.0
100.5
103.0
103.0
99.3
1017
106.9
111.9

91.3
97 9
100 0
102.8
105.6
107 3
108.1
109 8
116.1
121.3

85.0
100 6
100 0
95.4
95.7
92 8
72.7
73 3
71.2
76.4

114.5
114.4
114.7
116.2

113.3
111.1
110.7
112.7

114.5
114.6
114.9
116.4

122.9
124.5
126.5
132.0

85.9
85.3
84.5
84.7

891
96.7
100.0
100.4
105.9
109.0
1103
114 5
120.1
125.4
127.7
128.1
127.7
126.4

89 9
96.9
100 0
101.8
104.1
104.4
105 6
107 7
113.7
118.1
119.4
121.4
122.7
125.0

95.3
103.0
100.0
101.3
103.5
95.8
87.7
93 7
96.0
103.1

1990
1991
1992
1993

917
98.7
100 0
101.2
104.1
103.3
102 2
105 3
113.2
118.1
118.7
118.1
117.9
118.9

84.6
101.8
100.0
100.7
102.2
96.9
81.6
87 9
85.5
93.4
101.5
94.6
93.5
94.7

1992: Jan
Feb
Mar
May""'.""June

113.2
113.5
113.6
113.8
114.5
115.4

110.7
110.7
110.7
110.4
111.5
112.3

113.3
113.6
113.7
114.0
114.7
115.6

117.2
117.4
117.5
117.6
117.9
118.2

124.9
125.9
126.6
126.8
126.8
126.5

80.2
80.6
80.0
80.7
83.6
88.1

127.6
127.7
127.7
127.8
127.7
127.6

122.0
122.1
122.4
122.4
122.7
122.7

96.9
98.6
97.9
98.8
101.2
102.1

104.6
103.9
100.0
101.8
104.7
94.8
93.2
96 2
106.1
111.2
113.1
105.5
105.1
108.3
103.7
106.0
107.2
105.5
108.4
107.4

88.8
90.1
88.2
90.7
92.8
94.8

69.4
84.8
100.0
105.1
105.1
102.7
92.2
84.1
82.1
85.3
84.8
82.9
84.0
87.0
83.5
82.6
79.1
78.5
79.8
78.5

91.8
109.8
100.0
98.8
101.0
94.3
76.0
88.5
85.9
95.8
107.3
97.5
94.2
94.1
87.2
89.7
88.8
93.0
95.3
99.1

July
Aug
Sept
Oct
Nov
Dec

115.5
115.5
115.8
115.4
115.0
114.8

111.2
110.3
111.0
109.7
109.6
110.7

115.7
115.8
116.1
115.7
115.2
115.1

118.3
118.3
118.4
118.1
118.0
118.0

126.3
126.4
126.8
126.7
126.9
127.8

88.2
88.0
89.0
87.2
85.0
83.5

127.7
127.6
127.7
127.8
127.8
127.7

122.7
122.7
123.0
123.2
123.3
123.6

101.7
100.6
102.4
101.9
101.8
100.9

105.0
103.7
102.9
103.7
102.8
104.6

95.7
94.8
98.0
96.8
97.2
94.6

83.7
82.8
88.3
85.8
94.1
90.7

97.6
96.8
98.6
98.1
94.0
92.0

1993: Jan
Feb
Mar

June

115.2
115.6
116.0
116.3
116.2
116.7

110.9
109.8
109.9
111.2
111.8
111.1

115.4
115.9
116.3
116.6
116.5
117.0

118.4
118.7
118.8
119.1
118.9
118.8

129.1
130.9
132.5
132.8
132.0
131.3

83.2
83.3
83.8
84.3
85.2
88.1

126.7
126.8
126.7
126.5
126.5
126.5

124.2
124.3
124.3
124.8
124.7
124.7

101.4
101.4
102.6
103.9
106.5
104.2

105.6
106.0
108.3
110.4
112.2
107.2

94.8
94.6
95.0
95.8
98.8
98.3

90.6
83.4
81.4
82.4
89.4
94.9

92.4
96.1
97.9
98.5
99.1
95.3

July
Aug1
Sept
Oct
Nov
Dec

116.6
116.6
116.8
116.6
116.2
115.9

114.0
114.3
113.9
113.8
115.0
117.0

116.7
116.7
117.0
116.8
116.3
115.8

118.9
119.0
119.0
119.0
119.1
119.2

131.1
131.6
132.4
132.7
133.4
134.1

87.1
86.3
87.1
85.7
82.8
79.5

126.4
126.1
126.0
126.1
126.1
126.5

125.2
125.5
125.4
125.5
125.7
126.1

101.5
100.6
101.0
102.2
102.5
100.4

107.5
108.0
107.5
105.6
109.5
111.5

93.9
92.1
92.9
96.1
94.1
89.5

85.5
84.4
88.1
89.8
89.5
85.2

93.8
91.7
90.9
94.7
91.9
87.4

.

.

.

.

.. .

.

. .

fc=

2

Intermediate materials for food manufacturing and feeds.

Source: Department of Labor, Bureau of Labor Statistics.




342

108.9
101.2
100.4
102.4

TABLE B-65.—Producer price indexes by stage of processing, special groups, 1974-93
[1982=100]
Intermediate materials, supplies,
and components

Finished
goods

Crude materials for further
processing

Excluding foods and
energy
Year or month
Total

Foods

Energy
Total

Capital
equipment

Consumer
goods
excluding
foods
and
energy

Total

Foods
and
feeds1

Energy

Other

Total

Foodstuffs
and
feedstuffs

Energy

Other

1974

52.6

64.4

26.2

53.6

50.5

55.5

52.5

83.6

33.1

54.0

61.4

76.4

27.8

83.3

1975
1976
1977
1978
1979

58.2
60.8
64 7
69.8
77.6

69.8
69.6
73 3
79.9
87.3

30.7
34.3
39 7
42.3
57.1

59 7
63.1
66 9
71.9
78.3

58 2
62.1
66 1

60 6
63.7
67 3

816
77.4
79.6
84!8
94.5

38 7
41.5
46.8
49! 1
61.1

60 2
63.8
67 6

77.4
76.8
77 5
87.3
100.0

33.3
35.3
40 4
45.2
54.9

69.3
80.2
79 8
87.8
106.2

1980
1981
1982
1983
1984

88.0
96.1
100.0
1016
103.7

92.4
97.8
100.0
1010
105.4

85 2
101.5
100 0
95 2
91.2

1985
1986
1987
1988
1989

104.7
103 2
105.4
108 0
113.6

104.6
107 3
109.5
112 6
118.7

1990
1991
1992
1993

119.2
1217
123.2
124.7

1992:Jan
Feb
Mar
Apr
May
June.........

7L3

122

77.5

78.8

58 0
60.9
64 9
69!5
78.4

80.7

61.6
63.4
65 5
73.4
85.9

87 1
94.6
100.0
103 0
105.5

85 8
94.6
100.0
102 8
105.2

87 8
94.6
100 0
1031
105.7

90 3
98.6
100.0
100 6
103.1

105 5
104.6
100.0
103 6
105.7

84 9
100.5
100.0
95 3
95.5

90 3
97.7
100 0
1016
104.7

95 3
103.0
100.0
101 3
103.5

104.6
103.9
100 0
1018
104.7

87.6
63 0
61.8
59 8
65.7

108.1
110 6
113.3
117 0
122.1

107.5
109 7
111.7
114 3
118.8

108.4
111 1
114.2
118 5
124.0

102.7
99 1
101.5
107 1
112.0

97.3
96 2
99.2
109 5
113.8

92.6
72 6
73.0
70 9
76.1

105.2
104 9
107:8
1152
120.2

95.8
87 7
93.7
96 0
103.1

94.8
93 2
96.2
106 1
111.2

93.3
75.0
67 7
75.9

104.9
1031
115.7
133.0
137.9

124.4
124 1
123.3
125.7

75.0
77.8
78.0

126.6
1311
134.2
135.8

122.9
126 7
129.1
131.4

128.8
133 7
137.3
138.5

114.5
114 4
114.7
116.2

113.3
111 1
110.7
112.7

85.5

781

84.3
84.6

851

120.9
121 4
122.0
123.8

108.9
1012
100.4
102.4

113.1
105 5
105.1
108.3

85.9
80 4
78.8
76.7

136.3
128.2
128.4
140.1

121.8
122.1
122.2
122.4
123.2
123.9

122.5
123.4
123.3
122.8
123.1
123.1

74.3
74.3
74.4
75.4
77.8
81.0

133.4
133.5
133.7
134.0
134.2
134.1

128.6
128.7
128.9
129.1
129.0
128.9

136.4
136.4
136.6
137.0
137.5
137.3

113.2
113.5
113.6
113.8
114.5
115.4

110.7
110.7
110.7
110.4
111.5
112.3

80.1
80.4
79.9
80.6
83.4
87.8

121.1
121.4
121.6
121.8
121.9
122.0

96.9
98.6
97.9
98.8
101.2
102.1

103.7
106.0
107.2
105.5
108.4
107.4

74.4
75.5
72.2
75.0
77.4
80.1

123.0
125.2
128.1
129.1
129.7
129.2

July
Aug
Sept
Oct
Nov
Dec

123.7
123.6
123.3
124.4
124.0
123.8

122.8
123.4
123.3
123.8
123.4
124.2

80.4
80.2
80.8
80.0
78.4
76.4

134.2
133.8
133.2
135.2
135.2
135.4

128.8
128.9
128.1
130.2
130.2
130.2

137.5
136.8
136.4
138.2
138.3
138.6

115.5
115.5
115.8
115.4
115.0
114.8

111.2
110.3
111.0
109.7
109.6
110.7

88.0
87.8
88.7
87.0
84.9
83.4

122.1
122.2
122.4
122.3
122.3
122.4

101.7
100.6
102.4
101.9
101.8
100.9

105.0
103.7
102.9
103.7
102.8
104.6

81.0
79.7
83.8
82.9
83.8
79.8

130.0
130.8
130.4
128.2
127.1
129.7

1993:Jan
Feb
Mar
May'!'.!!!!!'.!
June

124.2
124.5
124.7
125.5
125.8
125.5

124.3
124.5
124.8
126.5
126.9
125.4

76.6
76.9
77.5
78.3
79.6
80.5

135.9
136.2
136.3
136.7
136.6
136.3

130.8
131.1
131.2
131.2
131.2
131.0

139.0
139.4
139.5
140.0
140.0
139.5

115.2
115.6
116.0
116.3
116.2
116.7

110.9
109.8
109.9
111.2
111.8
111.1

83.1
83.2
83.7
84.2
85.1
87.9

122.9
123.5
123.9
124.1
123.8
123.7

101.4
101.4
102.6
103.9
106.5
104.2

105.6
106.0
108.3
110.4
112.2
107.2

78.6
77.5
77.7
78.0
81.3
80.9

134.3
137.4
138.2
140.7
142.2
141.7

July
Aug 2
Sept
Oct
Nov
Dec

125.3
124.2
123.9
124.7
124.4
124.1

125.0
125.4
125.6
125.5
126.7
127.2

79.6
79.1
79.5
78.9
76.2
73.5

136.4
134.6
133.8
135.4
135.6
135.9

131.3
131.2
130.3
132.4
132.5
132.7

139.5 116.6
136.7 116.6
136.0 • 116.8
137.3 116.6
137.5 116.2
137.8 115.9

114.0
114.3
113.9
113.8
115.0
117.0

87.0
86.1
86.9
85.6
82.7
79.4

123.6
123.8
124.0
124.0
124.1
124.4

101.5
100.6
101.0
102.2
102.5
100.4

107.5
108.0
107.5
105.6
109.5
111.5

75.0
73.6
74.9
78.6
75.6
68.9

142.6
139.8
138.9
139.6
141.4
144.8

.

7?5

73.1 113.1
97.7 111.7
100.0 100.0
98 7 105 3
98.0 111.7

718

1
Intermediate materials for food manufacturing and feeds.
2
Data have been revised through August 1993 to reflect the availability of late reports and corrections by respondents. All data are
subject to revision 4 months after original publication.
Source: Department of Labor, Bureau of Labor Statistics.




343

T A B L E B-66.—Producer price indexes for major commodity groups,

1930-93

[1982 = 100]
Farm products and processed
foods and feeds
Year or month
Total

Farm
products

Processed
foods and
feeds

Industrial commodities

Total

Textile
products
and
apparel

Hides,
skins,
leather,
and
related
products

Fuels and
related
products
and
power1

Chemicals
and allied
products*

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

37.7
43.0
41.3
38.6
38.5
36.6
36.4
37.7
39.4
37.6

44.0
51.2
48.4
43.8
43.2
40.5
40.0
41.1
42.9
40.2

33.2
36.9
36.4
34.8
35.4
33.8
33.8
34.8
36.5
35.6

25.0
27.6
26.9
27.2
27.2
27.8
29.1
29.9
30.0
30.5

50.2
56.0
50.5
49.3
48.2
48.2
48.2
48.3
47.4
48.1

32.9
37.7
30.5
31.0
29.5
29.4
31.2
31.2
31.6
35.9

12.6
13.0
13.0
13.4
13.2
13.2
13.6
14.3
13.7
13.7

30.4
34.8
33.0
33.4
33.8
33.7
33.9
34.6
34.9
34.8

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

37.7
37.7
38.1
37.7
37.5
39.0
41.6
40.2
41.1
43.4

40.1
39.7
40.4
39.6
39.0
40.7
43.7
41.3
42.3
45.0

35.6
36.2
36.5
36.8
36.7
38.0
40.2
39.8
40.6
42.7

30.5
30.4
30.4
30.3
30.5
30.9
31.5
32.0
32.8
33.9

48.6
47.8
48.2
48.2
48.5
48.8
48.9
48.9
50.7
51.8

34.6
34.9
35.3
34.3
34.4
35.9
39.4
38.1
39.3
41.5

13.9
14.0
14.0
13.9
13.5
13.8
14.1
14.4
14.3
14.6

34.8
34.5
33.9
33.5
33.6
33.9
34.0
34.2
34.1
34.2

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

44.9
45.8
49.2
63.9
71.3
74.0
73.6
75.9
83.0
92.3

45.8
46.6
51.6
72.7
77.4
77.0
78.8
79.4
87.7
99.6

44.6
45.5
48.0
58.9
68.0
72.6
70.8
74.0
80.6
88.5

35.2
36.5
37.8
40.3
49.2
54.9
58.4
62.5
67.0
75.7

52.4
53.3
55.5
60.5
68.0
67.4
72.4
75.3
78.1
82.5

42.0
43.4
50.0
54.5
55.2
56.5
63.9
68.3
76.1
96.1

15.3
16.6
17.1
19.4
30.1
35.4
38.3
43.6
46.5
58.9

35.0
35.6
35.6
37.6
50.2
62.0
64.0
65.9
68.0
76.0

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989

102.9
105.2
100.0
102.4
105.5
95.1
92.9
95.5
104.9
110.9

88.0
97.4
100.0
101.1
103.3
103.7
100.0
102.6
106.3
111.6

112.2
105.7
103.6
107.0

95.9
98.9
100.0
101.8
105.4
103.5
105.4
107.9
112.7
117.8
121.9
121.9
122.1
124.0

1992: Jan....
Feb....
Mar....
Apr....
May...
June..

98.3
101.1
100.0
102.0
105.5
100.7
101.2
103.7
110.0
115.4
118.6
116.4
115.9
118.4
115.2
116.3
116.7
115.8
117.0
116.9

102.8
105.5
106.4
103.2
105.8
104.7

121.3
121.7
121.8
122.0
122.5
123.0

115.8
116.5
117.4
119.0
115.7
116.0
115.9
116.4
117.3
118.2

89.7
97.6
100.0
100.3
102.7
102.9
103.2
105.1
109.2
112.3
115.0
116.3
117.8
118.1
117.4
117.6
117.7
117.8
117.7
117.9

94.7
99.3
100.0
103.2
109.0
108.9
113.0
120.4
131.4
136.3
141.7
138.9
140.4
143.6
138.6
139.0
139.8
139.9
140.7
140.8

82.8
100.2
100.0
95.9
94.8
91.4
69.8
70.2
66.7
72.9
82.3
81.2
80.4
80.0
76.3
76.8
75.8
77.1
79.7
83.2

89.0
98.4
100.0
100.3
102.9
103.7
102.6
106.4
116.3
123.0
123.6
125.6
125.9
128.2
124.6
124.5
124.4
124.8
125.2
126.0

July....
Aug...
Sept..
Oct...
Nov...
Dec...

115.8
115.4
115.3
115.4
115.0
116.2

102.5
102.2
101.6
102.7
101.8
103.7

122.4
122.1
122.1
121.8
121.6
122.4

118.3
118.1
118.5
118.6
118.3
117.9

117.8
117.8
118.0
118.1
118.0
118.0

140.1
140.8
140.9
141.0
140.6
142.0

126.4
126.7
127.0
127.1
127.5
127.0

1993: Jan...

116.6
116.6
117.5
119.1
119.8
117.5

104.3
104.4
106.4
109.7
111.0
104.3

122.7
122.7
122.9
123.7
124.2
124.0

118.3
118.7
119.0
119.4
119.7
119.9

118.0
117.9
117.9
118.1
118.0
118.0

143.6
142.5
142.9
143.6
143.8
143.7

83.3
82.8
84.4
82.2
82.1
79.7
79.4
79.2
79.7
80.3
81.9
83.2

118.0
118.4
118.3
117.8
119.8
121.2

105.4
106.6
106.1
104.1
109.3
112.4

124.3
124.3
124.3
124.6
125.0
125.5

119.4
118.8
118.8
119.4
118.8
117.9

118.2
118.3
118.2
118.2
118.1
117.8

143.5
143.9
144.1
143.7
143.9
144.3

81.0
80.2
80.9
81.2
78.3
74.4

128.2
128.3
128.2
128.3
128.5
128.0

1990
1991
1992
1993

Feb...
Mar...
May"
June.
July...
Aug2
Sept..
Oct...
Nov...
Dec...
1

127.6
128.1
127.8
128.6
128.2
128.5

Prices for some items in this grouping are lagged and refer to 1 month earlier than the index month.
Data have been revised through August 1993 to reflect the availability of late reports and corrections by respondents. All data are
subject to revision 4 months after original publication.
2




344

TABLE B-66.—Producer price indexes for major commodity groups,

1950-93—Continued

[1982=100]
Industrial commodities—Continued

Year or month

Rubber Lumber
and
and
plastic
wood
products products

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1992: Jan...
Feb...
Mar...
Apr...
May..
June.
July...
Aug...
Sept.
Oct...

Nov...
Dec...
1993: Jan...
Feb...
Mar...
Apr...
May..
June.
July...
Aug 2
Sept,

Oct..
Nov..
Dec.

35.6
43.7
39 6
36.9
37.5
42.4
43.0
42.8
42.8
42.6
42.7
411
39.9
40.1
39.6
39.7
40 5
414
42.8
43.6
44.9
45.2
45.3
46.6
56.4
62.2
66.0
69.4
72.4
80.5
90.1
96.4
100.0
100.8
102.3
101.9
101.9
103.0
109.3
112.6
113.6
115.1
115.1
116.0
114.7
114.3
114.3
114.6
114.9
115.0
115.2
115.3
115.5
115.7
115.8
115.7
115.7
115.7
115.6
116.0
115.8
115.9
115.9
116.0
116.5
116.5
116.4
116.5

31.4
34.1
33 2
33.1
32.5
34.1
34.6
32.8
32.5
34.7
33.5
32.0
32.2
32.8
33.5
33.7
35 2
351
39.8
44.0
39.9
44.7
50.7
62.2
64.5
62.1
72.2
83.0
96.9
105.5
101.5
102.8
100.0
107.9
108.0
106.6
107.2
112.8
118.9
126.7
129.7
132.1
146.6
174.0
137.6
142.9
145.7
147.5
147.6
146.3
145.3
145.4
148.7
148.7
149.5
154.4
160.2
169.3
176.9
181.2
179.8
174.1
171.7
171.1
173.0
173.1
177.0
180.9

Pulp,
Metals Machinery Furniture
Nonpaper,
and
metallic
and
and
and
metal
household mineral
allied products equipment durables products
products
25.7
30 5
29 7
29.6
29.6
30.4
32.4
33.0
33.4
33.7
34.0
33.0
33.4
33.1
33.0
33 3
34.2
34.6
35.0
36.0
37.5
38.1
39.3
42.3
52.5
59.0
62.1
64.6
67.7
75.9
86.3
94.8
100.0
103.3
110.3
113.3
116.1
121.8
130.4
137.8
141.2
142.9
145.2
147.3
144.1
144.2
144.4
144.9
145.2
145.1
145.2
145.4
145.8
146.1
145.9
145.9
147.0
147.1
147.3
147.7
147.7
147.1
147.1
147.1
147.2
147.4
147.4
147.6

22.0
24.5
24 5
25.3
25.5
27.2
29.6
30.2
30.0
30.6
30.6
30.5
30.2
30.3
31.1
32.0
32.8
33.2
34.0
36.0
38.7
39.4
40.9
44.0
57.0
61.5
65.0
69.3
75.3
86.0
95.0
99.6
100.0
101.8
104.8
104.4
103.2
107.1
118.7
124.1
122.9
120.2
119.2
119.2
118.2
118.9
119.4
119.6
119.5
119.6
120.0
120.2
119.6
118.8
118.2
118.5
118.9
119.2
119.0
118.7
118.4
118.9
119.5
119.5
119.5
119.4
119.5
120.2

Source-. Department of Labor, Bureau of Labor Statistics.




345

22.6
25 3
25 3
25.9
26.3
27.2
29.3
31.4
32.1
32.8
33.0
33.0
33.0
33.1
33.3
33 7
34 7
35 9
37.0
38.2
40.0
41.4
42.3
43.7
50.0
57.9
61.3
65.2
70.3
76.7
86.0
94.4
100.0
102.7
105.1
107.2
108.8
110.4
113.2
117.4
120.7
123.0
123.4
124.0
123.3
123.5
123.6
123.4
123.4
123.2
123.1
123.2
123.2
123.3
123.4
123.5
123.9
123.9
123.9
124.0
123.9
124.0
124.0
124.0
124.1
124.1
124.1
124.2

40.9
44 4
43.5
44.4
44.9
45.1
46.3
47.5
47.9
48.0
47.8
47.5
47.2
46.9
47.1
46.8
47.4
48 3
49.7
50.7
51.9
53.1
53.8
55.7
61.8
67.5
70.3
73.2
77.5
82.8
90.7
95.9
100.0
103.4
105.7
107.1
108.2
109.9
113.1
116.9
119.2
121.2
122.2
123.6
121.8
121.8
121.9
122.0
122.1
122.2
122.2
122.2
122.4
122.3
122.6
122.6
122.6
122.9
123.0
123.2
123.4
123.6
123.8
124.0
124.0
124.2
124.4
124.5

23.5
25.0
25 0
26.0
26.6
27.3
28.5
29.6
29.9
30.3
30 4
30 5
30.5
30.3
30.4
30.4
30.7
312
32.4
33.6
35.3
38.2
39.4
40.7
47.8
54.4
58.2
62.6
69.6
77.6
88.4
96.7
100.0
101.6
105.4
108.6
110.0
110.0
111.2
112.6
114.7
117.2
117.3
120.0
117.2
117.1
117.3
116.9
116.9
117.0
117.1
117.4
117.4
117.4
117.7
117.8
118.4
118.6
118.9
119.6
119.7
120.0
120.2
120.5
120.7
121.3
121.4
121.3

Transportation
equipment
Motor
vehicles
Total
and
equipment

40.4
41.9
44.2
45.5
46.1
50.3
56.7
60.5
64.6
69.5
75.3
82.9
94.3
100.0
102.8
105.2
107.9
110.5
112.5
114.3
117.7
121.5
126.4
130.4
133.7
129.8
129.7
130.0
130.2
130.2
130.1
130.2
130.0
128.5
132.3
132.2
132.1
132.7
133.1
133.3
133.4
133.3
133.3
133.6
133.5
131.6
135.3
135.3
135.5

30.0
31.6
33 4
33.3
33.4
34.3
36.3
37.9
39.0
39.9
39 3
39 2
39.2
38.9
39.1
39.2
39.2
39 8
40.9
41.7
43.3
45.7
47.0
47.4
51.4
57.6
61.2
65.2
70.0
75.8
83.1
94.6
100.0
102.2
104.1
106.4
109.1
111.7
113.1
116.2
118.2
122.1
124.9
128.0
124.8
124.6
124.9
124.8
124.7
124.3
124.4
123.9
121.3
127.1
127.1
126.9
127.1
127.8
127.8
127.7
127.6
127.7
127.8
127.7
125.0
129.7
129.9
130.0

Miscellaneous
products

28.6
30.3
30.2
31.0
31.3
31.3
31.7
32.6
33.3
33.4
33.6
33.7
33.9
34.2
34.4
34.7
35.3
36.2
37.0
38.1
39.8
40.8
41.5
43.3
48.1
53.4
55.6
59.4
66.7
75.5
93.6
96.1
100.0
104.8
107.0
109.4
111.6
114.9
120.2
126.5
134.2
140.8
145.3
145.5
143.9
143.9
144.0
144.8
146.4
146.2
146.3
143.8
145.3
145.5
145.8
147.3
148.6
149.4
149.4
150.4
150.7
149.6
149.6
138.9
139.3
139.2
139.5
141.0

T A B L E B-67.—Changes in producer price indexes for finished goods, 1955-93
[Percent change]
Total
finished
goods

Finished
consumer
foods

Year or
month

1955
1956.....
1957.. .
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977.
1978
1979
1980
1981 .
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993..

Consumer
goods

Total
Dec to Year to Dec. to Year to
Dec 1
year
Dec1
year

1.0
4.2
34
3
-.3
18
6
3
3
6
33
2.0
17
31
4.9
2.1
3.3
39
11.7
18.3
6.6
3.8
6.7
93
12.8
11.8
71
3.6
.6
1 7
1.8
23
2^2
40
49
^
5.7
-.1
1.6
.2

0.3
26
38
22
-.3
9
0
3
3
3
18
3.2
11
28
3.8
3.4
31
32
91
15.4
10.6
4.5
6.4
79
11.2
13.4
92
4.1
1.6
21
1.0
14
2.1
25
52
4.9
2.1
1.2
1.2

-3.0
37
51
6
-3.7
53
19
6
14
6
91
1.3
3
46
8.1
-2.3
58
79
22 7
12.8
5.6
-2.5
6.9
11 7
7.4
7.5
15
2.0
2.3
35
.6
28
-.2
57
5.2
2.6
-1.5
1.6
2.4

-2.3
_ 3
33
61
-4.7
20
3
8
11
3
40
6.5
18
39
60
3.3
16
54
20 5
14.0
8.4
-.3
5.3
90
9.3
5.8
58
2.2
1.0
44
-.8
26
2.1
28
54
4.8
-.2
-.6
1.9

Finished
energy
goods

Finished goods excluding consumer foods
Capital
equipment

Dec. to Year to Dec. to Year to Dec. to Year to
Dec1
year
Dec1
year
year
Dec1
0.6
26
25

1.6
25
15
3
.9
3
3
0

o3
25
3.3
4.3
20
23
66
21.1
7.2
6.2
6.8
83
14.8
13.4
87
4.2
0
11
2.2
40
3.2
32
48
6.9
.3
1.6
-.4

26
28
3.5
37
20
40
16.2
12.1
6.2
7.1
72
11.8
16.2
10 3
4.6
1.8
14
1.4
26
2.1
24
50
5.0
3.0
1.8
1.1

0

o3

9
1.8
20
20
2.8
3.8
21
21
75
20.3
6.8
6.0
6.7
85
17.6
14.1
86
4.2
— .9
8
2.1
66
4.1
31
53
8.7
-.7
1.6
-1.4

9
1.5
18
23
23
3.0
35
18
46
17.0
10.4
6.2
7.3
7 1
13.3
18.5
10 3
4.1
1.2
10
1.1
46
2.2
24
56
5.9
2.9
1.8
.7

o
1.2
6
3

5.6
81
46
12
.9
3

o3
6
9
15
3.8
31
30
48
4.8
24
21
51
22.7
8.1
65
7.2
80
8.8
11.4
92
3.9
2.0
18
2.7
21
1.3
36
38
3.4
2.5
1.7
1.9

2.6
77
61
26
1.9
3
3
3
3
9
12
2.4
35
34
3.5
4.7
40
26
33
14.3
15.2
6.7
6.4
79
8.7
10.7
10 3
5.7
2.8
23
2.2
20
1.8
23
39
3.5
3.1
1.9
1.8

Dec

Year

Dec1

year

17.2
16.3
11.6
11.7
15.7
12.0
65
85
35.0
58.1
27.9
49.2
14 1 19 1
-.1 -1.5
-9.2 -4.8
42
42
-.2 -3.9
38 1 28 1
11.2 - 1 . 9
32
36
9.9
95
30.7
14.2
4.1
-9.6
_ 4
-.3
.2
-3.8

Finished goods
excluding foods
and energy

Dec to Year to
year
Dec. 1

17.7
6.0
5.7
6.2
84
9.4
10.8
7.7
4.9
1.9
20
2.7
27
2.1
43
4.2
3.5
3.1
2.0
.4

11.4
11.4
5.7
6.0
75
8.9
11.2
8.6
5.7
3.0
24
2.5
23
2.4
33
4.4
3.7
3.6
2.4
1.2

Percent change from preceding month

Unadjusted

1992: Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct.
Nov
Dec
1993: Jan
Feb
Mar
June
July
Aug 2 ...
Sept
Oct
Nov
Dec

-0.1
.2
.1
.2
.7
.6
-.2
-.1
-.2
.9
-.3
-.2
.3
.2
.2
.6
.2
-.2
-.2
-.9
-.2
.6
-.2
-.2

SeasonUnadally ad- justed
justed
0
.2
.2
.2
.3
.2
0
.1
.2
.1
-.2
0
.3
.4
.3
.6
0
-.6
0
-.6
.2
-.2
0
-.1

0.2
.7
-.1
_ 4
.2
0
-.2
.5
_ i
.4
-.3
.6
.1
.2
.2
1.4
.3
-1.2
-.3
.3
.2
-.1
1.0
.4

SeasonUnadally ad- justed
justed
-0.4
.4
-.1
-.3
.2
_ i
.7
.4
.1
-.6
1.3
-.6
0
.2
1.4
0
-1.0
-.2
.5
.7
-.5
.8
1.1

-0.2
.1
.2
.4
.7
.7
-.2
-.2
-.2
1.1
-.3
-.4
.3
.3
.2
.4
.2
.1
-.2
-1.2
_ 4
.8
_ 5
-.5

SeasonUnadally ad- justed
justed
0.1
.2
.3
.3
.4
.3
.1
-.2
.2
.1
-.1
-.3
.6
.5
.3
.4
0
-.4
0
-1.0
.1
-.2
-.2
-.4

-0.3
0
.2
.5
1.1
1.0
-.1
-.4
-.1
.7
-.5
-.5
.2
.3
.2
.5
.5
.1
— 3
-1.7
-.2
.5
-.7
_ 7

SeasonUnadally ad- justed
justed
-0.1
.3
.3
.4
.6
.4
.1
-.3
.2
.2
-.2
-.6
.6
.6
.5
.4
0
-.6
-.1
-1.5
.1
-.1
-.4
-.7

0.5
.1
.2
.2
-.1
-.1
-.1
.1
-.6
1.6
0
0
.5
.2
.1
0
0
-.2
.2
-.1
-.7
1.6
.1
.2

SeaSeasonUnadally
ally ad- justed
justed
justed
0.5
.1
.3
.2
.1
-.1
.1
.2
0
-.2
.2
.2
.5
.3
.2
.2
.1
-.2
.4
.2
0
-.4
.2
.3

-3.0
0
.1
1.3
3.2
4.1
-.7
-.2
.7
-1.0
-2.0
-2.6
.3
.4
.8
1.0
1.7
1.1
-1.1
-.6
.5
-.8
-3.4
-3.5

-2.0
1.3
.4
.7
.8
2.4
— 4
-.6
.1
1.0
-1.3
-2.4
1.0
1.7
1.1
.3
-.5
-.5
-.9
-1.0
0
1.3
-2.7
-3.5

Unadjusted

0.5
.1
.1
.2
.1
-.1
.1
-.3
-.4
1.5
0
.1
.4
.2
.1
.3
-.1
-.2
.1
-1.3
-.6
1.2
.1
.2

Seasonally adjusted
0.5
.1
.3
.3
.4
-.2
.1
0
.1
-.1
.2
.1
.4
.2
.2
.4
.1
-.4
.2
-1.0
.1
-.5
.4
.2

1
Changes from December to December are based on unadjusted indexes.
2
Data have been revised through August 1993 to reflect the availability of late reports and corrections by respondents. All data are
subject to revision 4 months after original publication.
Source: Department of Labor, Bureau of Labor Statistics.




346

MONEY STOCK, CREDIT, AND FINANCE
T A B L E B-68.—Money stock, liquid assets, and debt measures, 1959-93
[Averages of daily figures; billions of dollars, seasonally adjusted]

Ml

Year

year
and
month

December:
1959
1960
1961 ... .
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972 .
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1992:Jan
Feb

Mar

Apr
May
June
July
Aug
Sept

Oct

Nov

Dec
1993: Jan

Feb

Mar

Apr

May
June
July
Aug
Sept
Oct
Nov
Dec

M
2

Sum of
currency,
demand
deposits,
travelers
checks, and
other
checkable
deposits
(OCDs)

Ml plus
overnight
RPs and
Eurodollars,
MMMF
balances
(general
purpose and
broker/
dealer),
MMDAs, and
savings and
small time
deposits

140.0
140.7
145 2
147.8
153 3
160.3
167 9
172.0
183 3
197.4
203.9
214.4
228.3
249.2
262.8
274.3
287.5
306 3
331.1
358.2
382.5
408.5
436.3
474 4
521.2
552 4
620.1
724 5
750.0
787.1
794.6
827.2
899.3
1,026.6
1,131.2
911.5
926.2
935.1
941.2
952.2
952.5
963 2
975.5
990.1
1,006.0
1,019.1
1,026.6
1,033.2
1,033.0
1,035.2
1,043.0
1,066.9
1,073.3
1,085 3
1,094.4
1,106 8
1,116.4
1,125.9
1,131.2

M3

M2 plus
large time
deposits,
term RPs,
term
Eurodollars,

and

L

MO n |., c

(VIo piUS

other liquid
assets

institutiononly MMMF
balances

297.8
312.3
335 5
362.7
393 2
424.8
459 3
480.0
524 3
566.3
589.5
628.0
712.6
805.1
860.9
908 4
1,023.1
1163 5
1,286.4
1,388.5
1,496.4
1,629.2
1,792.6
1952 7
2,186.5
2 376 0
2,572.4
2 8161
2,917.2
3,078.2
3,233.3
3 345 5
3,445.8
3,494.8
3,551.7
3^451.0
3,467.7
3,467 8
3,464.8
3,467.8
3,464.2
3 465 4
3,473.6
3,481.0
3,491 5
3,496.2
3,494.8
3,485.7
3,474.1
3,471.6
3,473.8
3,503.0
3,509.6
3,515.7
3,518.9
3 5310
3,533.2
3,545.0
3,551.7

299.8
315.3
3410
371.4
406 0
442.5
482 2
505.1
557 1
606.2
615.0
677.3
776.1
886 0
984.9
1,070 3
1,172.1
13116
1,472.3
1,646.2
1,802.6
1,986.8
2,233.4
2 440 6
2,693.1
2 988 2
3,203.6
3 4917
3,674.8
3,915.4
4,056.1
4 116 7
4,168.1
4,163.4
4,207.7
4J72.2
4,189.0
4 184 8
4,177.9
4,180.1
4,172.5
41712
4,180.6
4,184.5
4,180.6
4,176.6
4,163.4
4,138.1
4,131.8
4,127.2
4,137.7
4,165.4
4,164.1
4,162.2
4,164.3
4,177.7
4,184.8
4,197.8
4,207.7

Debt1

Debt of
domestic
nonfinancial
sectors
(monthly
average)

388.6
403 6
430 8
466.1
503 8
540.4
584 4
614.7
666 5
728.9
763.5
816.2
902.9
1,022 9
1,142.5
1250 2
1,366.9
1516 4
1,705.0
1,910.3
2,115.6
2,323.5
2,596.0
2 850 3
3,154.4
3 529 5
3,830.9
4 1319
4,333.5
4,669.4
4,886.1
4 966 6
4,982.3
5,040.4

687.2
723.6
766 5
819.4
874 5
938.1
10051
1,072.3
1 146 6
1,238.1
1,329.3
1,419.6
1,552.0
1,707.5
1,894.1
2,067.0
2,251.4
2 496 3
2,813.7
3,192.2
3,568.2
3,896.8
4,278.7
4 6916
5,257.5
6 0061
6,901.1
7 778 6
8,543.3
9,306.1
10,030.7
10,670.1
11,145.5
11,721.1

4,978.3
4,999.1
5 010.0
5,009.0
5,011.4
5,017.2
5 014 7
51027.8
5,038.9
5 041.3
5,049.0
5,040.4
5,015.8
5,011.8
5,011.0
5,027.0
5,065.2
5,066.7
5,064.1
5,075.5
5,066.2
5,076.5
5,093.4

11,189.9
11,235.0
11,284.9
11,335.6
11,381.7
11,434.8
11494 1
11,553.4
11,597.8
11,625.7
11,665.6
11,721.1
11,757.8
11,781.6
11,821.3
11,867.4
11,912.7
11,976.1
12,033.4
12,088.3
12,141.9
12,179.2
12,241.8

Percent change from year or 6
months earlier2

Ml

0.5
32
1.8
37
4.6
47
2.4
66
7.7
3.3
5.1
6.5
92
5.5
44
4.8
65
8.1
8.2
6.8
6.8
6.8
87
9.9
60

12.3
16 8

3.5
4.9
1.0

41

8.7

14.2
10.2
11.5
13.4
14.4
14.0
13.7
11.8
11.3
10.6
11.8
13.8
14.1
15.6
14.5
11.8

9.1
7.4
9.4
9.1

10.1
11.9
13.8
14.1
11.1
10.8

M2

4.9
74
8.1
84
8.0
81
4.5
92
8.0
4.1
6.5
13.5
13.0

6.9
5.5

12.6
13 7
10.6

7.9
7.8
8.9

M3

5.2
8.2
8.9
93
9.0
90
4.7
10.3

8.8
1.5

10.1
14.6
14.2
11.2

9.1
8.9
10.9
12.7
13.5
11.8

9.5

89

9.3

-1.0

.4
.8
1.7
2.6
3.4
3.4
2.4
2.4

10.0
10.9

11.9
12.3
11.8
10.2
12.4

37
83
9.5
3.6
5.5
5.0
3.5
3.0
1.4
1.6
2.1
3.0
2.9
2.5
1.9
1.1
.8
.3
.8
1.5
1.6
1.8
1.2
.0
-.5

7.5
5.3
5.9
6.9
6.7
7.3
7.1
6.7
6.9
8.0
7.4
6.8
9.3

8.7
9.5

10.0
12.0

Debt

10.3
11.0

7.2
9.0
5.2

6.5
3.6
1.5
1.2
-.1
1.1
.6
1.6
1.7
1.1
.8
.2
-.0
-.4
-.0
.1
-.2
-.4
-1.6
-2.3
-2.7
-2.1
-.5

9.2
9.8
9.7

12.1
14.2
14.9
12.7

9.8
8.9
7.8
6.4

4.5
5.2

.0
1.2
1.6
2.4
2.3
1.6
2.1

4.2
4.2
4.5
4.5
4.8
5.2
5.4
5.7
5.5
5.1
5.0
5.0
4.6
4.0
3.9
4.2
4.2
4.4
4.7
5.2
5.4
5.3
5.5

1
Consists of outstanding credit market debt of the U.S. Government, State and local governments, and private nonfinancial sectors;
data derived from flow of funds accounts.
2

Annual changes are from December to December; monthly changes are from 6 months earlier at a simple annual rate.

Note.—See Table B-69 for components.
Data do not reflect revisions of February 3, 1994.
Source: Board of Governors of the Federal Reserve System.




347

TABLE B-69.—Components of money stock measures and liquid assets, 1959-93
[Averages of daily figures; billions of dollars, seasonally adjusted, except as noted]

Year
and
month

Currency

Travelers
checks

Demand
deposits

Other
checkable
deposits
(OCDs)

Overnight
repurchase
agreements
(RPs)
net, plus
overnight
Eurodollars »

Money market mutual
fund (MMMF)
balances

General
purpose
and
broker/
dealer 2

Institution
only 2

Savings
deposits,
including
money
market
deposit
accounts
(MMDAs) 3

NSA
December:

1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1992: Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct

Nov
Dec
1993:Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct

Nov
Dec
1
2
3

28.8
28.7
29.3
30.3
32.2
33.9
36.0
38.0
40.0
43.0
45.7
48.6
52.0
56.2
60.8
67.0
72.8
79.5
87.4
96.0
104.8
115.4
122.6
132.5
146.2
156.1
167.9
180.8
196.9
212.3
222.7
246.7
267.2
292.3
321.5
269.0
270.8
271.9
273.6
275.1
276.6
279.5
282.4
286.3
288.0
289.8
292.3
294.8
296.9
299.0
301.4
304.0
306.8
309.6
312.6
316.4
318.2
320.0
321.5

0.3
.3
.4
.4
.4
.5
.5

.6
.6
.7

.8
.9
1.0
1.2
1.4
1.7

2.1
2.6
2.9

3.3
3.6
3.9
4.1
4.1
4.7
5.0
5.6
6.1
6.6
7.0
6.9
7.8
7.8
8.1
8.0
7.7
7.7
7.7
7.7
7.7
7.7
7.7
7.8
8.1
8.3
8.2
8.1
8.0
8.0
8.0
8.1
8.2
8.0
7.9
7.8
7.8
7.9
8.0
8.0

110.8
111.6
115.5
117.1
120.6
125.8
131.3
133.4
142.5
153.6
157.3
164.7
175.1
191.6
200.3
205.1
211.6
221.5
236.7
250.4
257.4
261.2
231.2
234.0
238.5
244.0
266.9
302.3
287.1
287.1
279.8
278.2
290.5
340.8
386.1
296.3
303.3
308.0
310.8
314.6
312.3
317.5
322.5
329.0
336.0
339.5
340.8
341.9
341.8
341.9
347.3
359.2
360.7
365.9
370.9
376.6
380.2
385.5
386.1

0.0
.0
.0

.0
.1
.1
.1
.1
.1
.1
.2
.1
.2
.2
.3
.4
.9
2.7
4.2
8.4
16.8
28.0
78.4
103.8
131.9
147.3
179.7
235.3
259.3
280.7
285.3
294.5
333.8
385.2
415.7
338.6
344.3
347.5
349.0
354.7
355.9
358.6
362.8
366.7
373.7
381.6
385.2
388.6
386.4
386.3
386.2
395.5
397.8
401.9
403.1
406.0
410.1
412.5
415.7

Includes continuing contract RPs.
Data prior to 1983 are not seasonally adjusted.
Data prior to 1982 are savings deposits only; MMDA data begin December 1982.

See next page for continuation of table.




348

0.0

.0
.0
.0
.0
.0

.0
.0

.0
.0
2.2
1.3

2.3
2.8
5.3
5.7

5.9
10.7
14.9
20.7
21.7
28.8
36.6
39.9
55.6
60.6
73.5
82.3
84.1
83.2
77.6
74.7
76.3
74.7
84.7
77.9
77.9
74.7
72.8
69.8
74.6
75.2
78.7
76.2
77.1
75.8
74.7
73.3
74.0
74.5
72.8
70.0
73.6
77.2
78.3
81.9
84.3
84.8
84.7

0.0
.0
.0
.0
.0
.0
.0
.0
.0
.0
.0
.0
.0

.0
.0
1.7
2.7
2.4
2.4
6.4
33.4
61.6
150.6
185.6
139.1
168.0
177.2
209.0
222.6
242.9
317.4
350.5
363.9
342.3
336.4
360.3
362.3
358.0
354.5
354.9
353.5
350.4
348.9
343.9
346.3
343.7
342.3
340.0
333.2
332.7
331.7
335.5
334.3
333.2
331.5
329.4
330.0
333.5
336.4

0.0
.0
.0
.0
.0
.0
.0
.0
.0
.0
.0
.0
.0
.0
.0

.2
.4
.6
.9
3.1
9.5
15.2
38.0
50.0
41.9
63.2
65.5
86.1
92.7
92.0
108.8
135.9
182.1
202.3
198.8
186.1
192.0
192.2
195.9
202.2
206.3
212.5
220.9
220.7
210.9
209.2
202.3
197.7
201.9
200.9
200.4
202.8
198.1
195.0
193.3
194.1
196.6
196.7
198.8

146.5
159.1
175.5
194.7
214.4
235.3
256.9
253.2
263.7
268.9
263.6
260.9
292.2

321.4
326.8
338.4
388.8
453.0
492.1
481.7
423.6
400.1
343.9
400.0
685.0
704.7
815.1
940.9
937.6
926.6

891.0
920.8
1,042.5
1,186.0
1,218.6
1,060.3
1,080.7
1,094.3
1,107.5
1,119.6
1,126.0
1,134.5
1,145.7
1,158.9
1,170.5
1,180.4
1,186.0
1,184.4
1,182.4
1,178.8
1,181.6
1,193.7
1,198.8
1,200.1
1,205.1
1,208.7
1,209.6
1,214.5
1,218.6

TABLE B-69.—Components of money stock measures and liquid assets, 1959-93—Continued
[Averages of daily figures; billions of dollars, seasonally adjusted, except as noted]

Small
denomination
time
deposits4

Year
and
month

Large
denomination
time
deposits4

Term
repurchase
agreements
(RPs)
NSA

December:
1959
1960
1961
1962
1963....
1964
1965.
1966
1967.
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982 ..
1983
1984
1985
1986 .
1987
1988
1989
1990
1991
1992 ..
1993
1992-Jan
Feb
Mar
Apr
May
June
July
Aug
Sept

Oct

Nov
Dec
1993- Jan

Feb

Mar
Apr
May
June
July
Aug
Sept
Oct

Nov
Dec

....

11.4
12.5
14.8
20.1
25.6
29.2
34 5
55.0
77 8
100.6
120 4
151.1
189.7
231.6
265 8
287.9
337 9
390.8
445 5
521.0
634.4
728 7
823.2
851.0
784.1
888.9
885.5
858.9
922.8
1038 3
1,152.7
1,172.3
1,064.7
867.3
783.5
1,043.0
1,021.5
1,004.0
986.1
969.6
955 7
941.0
925.7
911.0
894 4
879.3
867.3
858.3
853 1
848.1
841.2
834.4
826.9
817.8
810.3
803.7
796.1
788.8
783.5

1.2
2.0
3.9
7.0
10.8
15.2
212
23.1
30 9
37.4
20 4
45.2
57.7
73.4
111 1
144.8
129 7
118.1
145 2
195.7
223.3
260.5
303.1
327.2
327.6
416.5
434.1
431.3
475.4
525 4
548.8
489.6
424.7
356.1
331.5
418.9
413.6
407.4
402.2
396.0
389.4
382.7
378.5
374.3
367 3
360.8
356.1
348.8
344 3
338.4
343.5
343.4
340.0
335.6
336.1
334.8
335.6
333.0
331.5

Term
Eurodollars

Shortterm
Treasury
securities

Bankers
acceptances

Commercial
paper

NSA

0.0
.0
.0
.0
.0
.0
0
.0
0
.0
27
1.6
2.7

0.7
.8
1.5
1.6
1.9
2.4
18
2.2
22
2.9
27
2.2
2.7

3.5
67
7.8
81

3.6
5.5
8.1
9.8

13.9
18 9
26.2
29.1
33.5
35.3
33.4
49.9
57.6
62.4
80.6
106.0
1218
99.0
89.6
72.5
81.1
95.3
71.0
72.6
74.3
74.1
76.4
76 4
75.2
76.0
77.8
79 9
81.8
81.1
80.1
82.3
86.0
88.9
89.8
92.8
96.5
96.5
96.4
95.1
94.5
95.3

14.8
20.2
31.8
44.7
50.3
67.5
81.7
91.5
82.9
76.5
83.8
91.0
105.7
79.5
68.7
57.6
45.6
47.8
55.7
56.1
58.0
54.9
52.8
51.9
51.1
51.4
49.4
48.1
47.2
45.6
43.5
46.7
49.8
48.7
48.7
45.5
41.9
44.1
45.2
45.4
50.0
47.8

4

Savings
bonds

0.6
.9
1.1
1.1
1.2
1.3
1.6
1.8
1.8
2.3
3.3
3.5
3.8

3.6
5.1

46.1
45.7
46.5
46.9
48.1
49.0
49 6
50.2
51.2
51.8
51.7
52.0
54.3
57.6
60.4
63.3
67.2
71.8
76.4
80.3
79.6
72.3
67.8
68.0
71.1
74.2
79.5
91.8
100.6
109.4
117.6
126.1
138.0
156.8

38.6
36.7
37.0
39.8
40.7
38.5
40 7
43.2
38.7
46.1
59.5
48.8
36.0
40.7
49.3
52.8
68.4
69.8
78.1
81.1
107.8
133.5
149.4
183.6
211.9
260.9
298.2
280.0
253.1
269.2
324.9
331.1
315.0
331.4

12.6
10.7
10.8
14.1
22.0
27.2
32.1
40.0
44.5
45.0
45.4
42.0
37.0
44.3
39.9
40.2
35.5
23.4
20.4

9.1
10.2
14.4
17.8
22.5
34.0
34.5
32.7
35.2
42.8
51.2
48.5
52.5
64.1
80.7
98.4
98.8
105.3
113.7
133.2
160.8
207.6
231.4
260.7
335.5
347.3
357.1
337.7
368.4

139.0
140.2
141.3
142.4
143.5
144.6
145.8
147.4
149.3
151.9
154.7
156.8
158.9
161.1
162.7
163.9
164.8
165.7
166.8
167.8
168.8
169.8
170.9

311.9
320.0
325.1
326.0
329.4
330.1
324.9
322.9
321.0
320.2
325.1
331.4
337.5
342.9
341.6
340.7
347.1
349.1
348.5
345.7
323.8
317.6
322.3

22.9
22.6
22.2
21.8
22.0
22.0
21.7
21.1
20.7
20.5
20.3
20.4
20.6
20.1
19.2
19.2
19.4
18.7
17.5
16.4
16.3
16.3
16.2

332.3
327.3
336.7
341.0
336.4
348.1
351.2
355.7
363.4
368.0
372.4
368.4
360.7
355.9
360.3
365.5
368.4
369.1
369.1
381.3
379.6
388.0
386.2

3.5
5.0

5.2
6.8
7.7

Small denomination and large denomination deposits are those issued in amounts of less than $100,000 and more than $100,000,
respectively.
Note.—NSA indicates data are not seasonally adjusted.
See also Table 6-68.
Data do not reflect revisions of February 3, 1994.
Source: Board of Governors of the Federal Reserve System.


http://fraser.stlouisfed.org/1 5 1 - 4 4 4
Federal Reserve Bank of St. Louis

349
0 - 9 4 - 1 2

TABLE B-70.—Aggregate reserves of depository institutions and monetary base, 1939-93
[Averages of daily figures l ; millions of dollars; seasonally adjusted, except as noted]
Adjusted for changes in reserve requirements 2

Borrowings of depository
institutions from the Federal
Reserve, NSA

Reserves of depository institutions
Year and month
Total

Nonborrowed

Nonborrowed
plus
extended
credit

Required

Monetary
base

Total

Seasonal

Extended
credit

December:
1959

11,109

10,168

10,168

10,603

40,880

941

1960
1961
1962
1963
1964

11,247
11,499
11,604
11,730
12,011

11,172
11,366
11,344
11,397
11,747

11,172
11,366
11,344
11,397
11,747

10,503
10,915
11,033
11,239
11,605

40,977
41,853
42,957
45,003
47,161

74
133
260
332
264

1965....
1966....
1967....
1968....
1969....

12,316
12,223
13,180
13,767
14,168

11,872
11,690
12,952
13,021
13,049

11,872
11,690
12,952
13,021
13,049

11,892
11,884
12,805
13,341
13,882

49,620
51,565
54,579
58,357
61,569

444
532
228
746
1,119

1970
1971
1972
1973
1974

14,558
15,230
16,645
17,021
17,550

14,225
15,104
15,595
15,723
16,823

14,225
15,104
15,595
15,723
16,970

14,309
15,049
16,361
16,717
17,292

65,013
69,108
75,167
81,073
87,535

332
126
1,050
1,298
727

41
32

1975
1976
1977
1978
1979

17,822
18,388
18,990
19,753
20,720

17,692
18,335
18,420
18,885
19,248

17,704
18,335
18,420
18,885
19,248

17,556
18,115
18,800
19,521
20,279

93,887
101,515
110,323
120,445
131,143

130
53
569
868
1,473

14
13
55
135
82

12

1980
1981
1982
1983
1984

22,015
22,443
23,600
25,367
26,845

20,325
21,807
22,966
24,593
23,659

20,328
21,956
23,152
24,595
26,263

21,501
22,124
23,100
24,806
25,990

142,004
149,021
160,127
175,467
187,237

1,690
636
634
774
3,186

116
54
33
96
113

3
148
186
2
2,604

1985
1986
1987
1988
1989

31,448
38,943
38,862
40,398
40,492

30,129
38,116
38,085
38,683
40,227

30,628
38,419
38,568
39,927
40,247

30,411
37,573
37,816
39,351
39,570

203,585
223,667
239,872
256,932
267,734

1,318
827
777
1,716
265

56
38
93
130

499
303
483
1,244
20

1990
1991
1992
1993

41,767
45,533
54,351
60,536

41,441
45,341
54,228
60,454

41,464
45,342
54,228
60,454

40,102
44,555
53,196
59,474

293,185
317,169
350,798
386,072

326
192
124
82

76
38
18
31

23
1
1
0

Jan

46,227
47,795
48,509
48,992
49,496
49,316

45,994
47,717
48,418
48,902
49,341
49,087

45,995
47,719
48,420
48,904
49,341
49,087

45,224
46,730
47,481
47,855
48,495
48,403

319,385
322,849
324,655
326,691
328,863
330,228

233
77
91
90
155
229

17
22
32
47
98
149

1
2
2
2
0
0

Dec

49,629
50,341
51,274
52,836
53,815
54,351

49,345
50,091
50,987
52,693
53,711
54,228

49,345
50,091
50,987
52,693
53,711
54,228

48,664
49,407
50,280
51,763
52,772
53,196

333,177
336,844
341,585
344,849
347,832
350,798

284
251
287
143
104
124

203
223
193
114
40
18

0
0
0
0
0
1

Jan
Feb
Mar
Apr
May
June

54,665
54,922
55,166
55,197
56,877
57,119

54,500
54,876
55,074
55,124
56,756
56,938

54,501
54,877
55,074
55,124
56,756
56,938

53,405
53,818
53,953
54,101
55,881
56,209

353,224
355,734
358,374
360,634
364,769
368,069

165
45
91
73
121
181

11
18
26
41
84
142

1
0
0
0
0
0

July
Aug
Sept
Oct

57,567
58,033
58,837
59,819
60,459
60,536

57,323
57,680
58,410
59,534
60,370
60,454

57,323
57,680
58,410
59,534
60,370
60,454

56,478
57,080
57,747
58,730
59,359
59,474

370,978
374,532
379,261
381,765
384,580
386,072

244
352
428
285
89
82

210
234
236
192
75
31

0
0
0
0
0
0

1992:

Feb
Mar
Apr
May
June
July
Aug
Sept
Oct

Nov
1993:

Nov
Dec
1

147

Data are prorated averages of biweekly (maintenance period) averages of daily figures.
2
Aggregate reserves incorporate adjustments for discontinuities associated with regulatory changes to reserve requirements. For
details on aggregate reserves series see Federal Reserve Bulletin.
Note.—NSA indicates data are not seasonally adjusted.
Monetary base data do not reflect revisions released on February 3, 1994.
Source: Board of Governors of the Federal Reserve System.




350

TABLE B-71.—Commercial bank loans and securities, 1972-93
[Monthly average; billions of dollars, seasonally adjusted ']
Loans and leases

Year and month

December:
1972...
1973...
1974...
1975...
1976...
1977...
1978...
1979....

1980....
1981....
1982....
1983....
1984...
1985....
1986...
1987...
1988...
1989...
1990...
1991....
1992...
1993...
1992:
Jan
Feb
Mar
Apr
May
June....
July
Aug
Sept....
Oct
Nov
Dec
1993:
Jan
Feb
Mar
June
July
Aug
Sept
Oct
Nov
Dec

Total
loans
and
securities2

U.S.
Govern-

Other
Total

securities

2

Commercial
Real
and
estate
industrial

Individual

NonState
ForLease
bank
and
Foreign financAgriSecu- finanpolitiOther
culeign official
ing.
rity
cial
cal
tural
banks insti- receivinstisubditutions ables
tutions
visions

93.4
99.4
107.5

390.1
460.2
519.9

137.1
165.0
196.6

98.1
117.3
130.1

86.3
98.6
102.4

15.6
12.9
12.7

21.7
28.5
34.5

14.3
17.2
18.3

3.9
6.2
8.3

1.6
2.1
2.2

1.4
2.1
3.2

10.1
10.2
11.5

745.1
804.6
891.5
1,013.9
1,135.6
1,238.6
1,307.0
1,400.4
1,552.2
1,722.9
1,910.4
2,093.7
2,241.2
2,422.9
2,590.8
2,732.4
2,836.9
2,937.6
3,087.2

89.0
88.2
86.3
116.7
136.3
136.6
137.6
144.3

111.2
113.5
122.7
129.2
141.9

517.2 189.3
554.8 190.9
632.3 211.0
747.1 •246.2
849.4 291.4

134.4
148.8
175.2
210.5
241.9

104.9
116.3
138.3
164.7
184.5

13.5
17.7
21.0
19.7
18.7

28.9
26.4
25.8
26.2
29.3

20.1
23.2
25.8
28.2
31.1

9.0
11.7
13.7
21.5
18.6

2.4
2.8
2.7
4.9
6.9

4.0
5.1
5.7
7.4
9.3

10.7
11.9
13.0
17.8
17.8

170.6
179.3
201.7
259.2
259.8
270.8
310.1
335.8
362.7
397.0

154.4
913.5
160.5
967.3
164.8 1,033.9
169.1 1,123.9
140.9 1,322.2

325.7
355.4
392.5
414.2
473.2

262.6
284.1
299.9
331.0
376.3

179.2
182.5
188.2
212.9
254.2

18.0
21.4
25.3
28.0
35.0

29.3
29.9
31.2
30.4
31.6

31.6
33.1
36.2
39.2
40.1

46.1

23.8
18.1
14.7
13.4
11.4

11.5
7.2
5.9
9.4
8.4

10.9
12.7
13.3
13.7
16.1

21.1
22.9
26.8
31.8
29.9

179.0
193.9
195.8
193.7
182.4

1,460.6
1,589.7
1,709.6
1,866.5
2,011.4

500.2
536.7
566.4
605.3
638.4

425.8
494.1
587.2
670.1
760.1

295.0
315.4
328.2
354.8
375.2

43.3
40.3
34.5
40.9
41.3

32.8
35.3
32.1
32.5
34.4

36.1
31.6
29.4
29.0
30.1

56.8
58.4
52.5
45.3
40.0

9.7
10.1
7.7
7.6
8.2

6.3
6.3
5.1
5.0
3.5

19.1
22.5
24.7
29.4
31.9

35.5
39.0
41.7
46.5
48.1

452.1
559.3
657.1
727.2

178.8
179.9
176.0
181.9

2,101.4
2,097.8
2,104.6
2,178.2

642.6
617.0
597.6
584.2

843.4
871.8
892.4
927.2

380.3
363.9
355.5
385.6

44.7
54.3
64.8
86.0

35.9
41.4
43.6
43.2

32.3
34.2
35.0
35.4

34.0
29.0
24.8
21.6

7.7
7.3
7.7
7.7

2.9
2.4
2.8
3.3

32.9
31.7
30.9
32.8

44.9
44.7
49.5
51.1

2,846.0
2,855.4
2,862.7
2,874.3
2,875.3
2,882.8

564.2
570.9
579.6
590.8
600.2
610.7

179.6
180.3
178.5
178.5
176.9
175.8

2,102.2
2,104.3
2.104.5
2,104.9
2,098.2
2,096.2

615.4
613.5
610.8
609.0
607.6
604.6

873.2
876.7
879.1
881.8
883.3
881.8

363.4
363.8
362.3
360.8
359.2
359.0

58.0
58.9
60.7
63.4
60.9
63.3

42.1
43.0
43.6
43.2
43.3
42.4

34.1
34.1
34.3
34.3
34.3
34.6

28.6
28.3
28.0
27.6
27.3
26.8

2.3
2.2
2.1
2.0
2.0
2.0

31.4
31.5
31.4
31.1
30.9
31.0

46.5
45.5
45.5
45.1
42.4
43.3

2,886.9
2,902.2
2,917.4
2,926.0
2,932.4
2,937.6

619.2
632.6
640.6
647.3
651.4
657.1

177.9
178.2
178.2
178.8
177.3
176.0

2,089.8
2,091.4
2,098.6
2,099.8
2,103.8
2,104.6

602.5
601.4
601.2
600.8
600.5
597.6

881.5
883.1
886.8
890.7
892.5
892.4

358.6
357.4
357.0
355.8
355.4
355.5

60.5
61.6
64.0
64.7
64.2
64.8

41.5
42.0
44.0
43.9
44.7
43.6

34.9
35.3
35.2
35.1
35.2
35.0

26.2
25.9
25.8
25.4
25.1
24.8

2.2
2.3
2.5
2.4
2.8
2.8

30.8
30.8
31.0
30.8
30.9
30.9

43.2
44.3
43.2
42.6
45.0
49.5

2,935.3
2,943.9
2,960.2
2,970.9
2,991.2
3,014.1
3,037.4
3,046.6
3,057"
3,056.6
3,072.6
3,087.2

656.5
666.2
680.2
691.0
693.5
704.3
708.2
714.8
720.6
718.4
720.0
727.2

174.5
176.4
179.0
181.0
181.2
179.6

2,104.4
2,101.3
2,101.0
2,098.9
2,116."
2,130.3

598.0
596.7
593.1
587.5
589.9
590.9

890.8
890.1
891.9
892.2
898.0
904.0

358.4
361.9
362.3
364.4
367.5
368.8

63.5
62.8
64.2
62.3
68.6
71.4

45.1
44.6
44.2
45.0
45.9
46.0

34.5
34.3
34.0
34.1
34.3
34.3

24.2
23.8
23.6
23.1
23.0
22.8

2.9
3.2
3.2
3.2
3.1
3.2

30.4
30.6
30.6
30.7
30.9
31.3

48.8
44.5
45.3
48.0
46.8
49.0

181.5
182.4
182.6
180.7
180.9
181.9

2,147.8
2,149.4
2,153.9
2,157.5
2,171.7
2,178.2

590.2
589.6

907.7
910.8
914.6
918.1
921.8
927.2

372.5
374.7

81.6
79.9
82.7
79.5
87.0
86.0

46.5
46.8
46.1
44.9
44.2
43.2

34.7
34.8
34.8
35.0
35.5
35.4

22.8
22.7

376.0
380.3
383.2
385.6

3.2
3.1
3.4
3.
3.3
3.3

31.6
31.7
31.8
32.1
32.5
32.8

47.9
46.0
47.3
47.3
49.1
51.1

572.5
647.8
713.7

586.2
585.7
585.4
584.2

22.4
22.2
21.8
21.6

1
Data are prorated averages of Wednesday figures for domestically chartered banks and for foreign-related institutions beginning July
1981. Prior to July 1981, data for foreign-related institutions are averages of current and previous month-end data.
2
Excludes loans to commercial banks in the United States.

Note.—Data are not strictly comparable because of breaks in the series.
Source.- Board of Governors of the Federal Reserve System.




351

TABLE B-72.—Bond yields and interest rates, 1929-93

[Percent per annum]
U.S. Treasury securities

Year and
month

Bills
(new issues)
3month

Constant maturities 2

Corporate
bonds
(Nloody's)

x

6month

3year

10year

30year

Aaa

Baa

Highgrade
Newmunicihome
pal
mortbonds
gage
(Standyields3
ard &
Poor's)

Commercial
paper,
6
months4

Prime
rate
charged
by
banks 5

Discount
rate,
Federal
Reserve
Bank
of New
York 5

Federal
funds
rate 6

1929...
1933...
1939...

0.515
.023

4.73
4.49
3.01

5.90
7.76
4.96

4.27
4.71
2.76

5.85
1.73
.59

5.50-6.00
1.50-4.00
1.50

1940...
1941...
1942...
1943...
1944...

.014
.103
.326
.373
.375

2.84
2.77
2.83
2.73
2.72

4.75
4.33
4.28
3.91
3.61

2.50
2.10
2.36
2.06
1.86

.56
.53
.66
.69
.73

1.50
1.50
1.50
1.50
1.50

1945...
1946...
1947...
1948...
1949...

.375
.375
.594
1.040
1.102

2.62
2.53
2.61
2.82
2.66

3.29
3.05
3.24
3.47
3.42

1.67
1.64
2.01
2.40
2.21

.75
.81
1.03
1.44
1.49

1.50
1.50
1.50-1.75
1.75-2.00
2.00

1950...
1951...
1952...
1953...
1954...

1.218
1.552
1.766
1.931
.953

2.47
1.63

2.85
2.40

2.62
2.86
2.96
3.20
2.90

3.24
3.41
3.52
3.74
3.51

1.98
2.00
2.19
2.72
2.37

1.45
2.16
2.33
2.52
1.58

2.07
2.56
3.00
3.17
3.05

1.59
1.75
1.75
1.99
1.60

1955...
1956...
1957...
1958...
1959...

1.753
2.658
3.267
1.839
3.405

3.832

2.47
3.19
3.98
2.84
4.46

2.82
3.18
3.65
3.32
4.33

3.06
3.36
3.89
3.79
4.38

3.53
3.88
4.71
4.73
5.05

2.53
2.93
3.60
3.56
3.95

2.18
3.31
3.81
2.46
3.97

3.16
3.77
4.20
3.83
4.48

1.89
2.77
3.12
2.15
3.36

1.78
2.73
3.11
1.57
3.30

1960...
1961...
1962..
1963...
1964...

2.928
2.378
2.778
3.157
3.549

3.247
2.605
2.908
3.253
3.686

3.98
3.54
3.47
3.67
4.03

4.12
3.88
3.95
4.00
4.19

4.41
4.35
4.33
4.26
4.40

5.19
5.08
5.02
4.86
4.83

3.73
3.46
3.18
3.23
3.22

5.89
5.83

3.85
2.97
3.26
3.55
3.97

4.82
4.50
4.50
4.50
4.50

3.53
3.00
3.00
3.23
3.55

3.22
1.96
2.68
3.18
3.50

1965...
1966...
1967..
1968...
1969..

3.954
4.881
4.321
5.339
6.677

4.055
5.082
4.630
5.470
6.853

4.22
5.23
5.03
5.68
7.02

4.28
4.92
5.07
5.65
6.67

4.49
5.13
5.51
6.18
7.03

4.87
5.67
6.23
6.94
7.81

3.27
3.82
3.98
4.51
5.81

5.81
6.25
6.46
6.97
7.81

4.38
5.55
5.10
5.90
7.83

4.54
5.63
5.61
6.30
7.96

4.04
4.50
4.19
5.16
5.87

4.07
5.11
4.22
5.66
8.20

1970...
1971...
1972...
1973...
1974...

6.458
4.348
4.071
7.041
7.886

6.562
4.511
4.466
7.178
7.926

7.29
5.65
5.72
6.95
7.82

7.35
6.16
6.21
6.84
7.56

8.04
7.39
7.21
7.44
8.57

9.11
8.56
8.16
8.24
9.50

6.51
5.70
5.27
5.18
6.09

8.45
7.74
7.60
7.96
8.92

7.71
5.11
4.73
8.15
9.84

7.91
5.72
5.25
8.03
10.81

5.95
4.88
4.50
6.44
7.83

7.18
4.66
4.43
8.73
10.50

1975..
1976..
1977..
1978..
1979..

5.838
4.989
5.265
7.221
10.041

6.122
5.266
5.510
7.572
10.017

7.49
6.77
6.69
8.29
9.71

7.99
7.61
7.42
8.41
9.44

7.75
8.49
9.28

8.83
8.43
8.02
8.73
9.63

10.61
9.75
8.97
9.49
10.69

6.89
6.49
5.56
5.90
6.39

9.00
9.00
9.02
9.56
10.78

6.32
5.34
5.61
7.99
10.91

7.86
6.84
6.83
9.06
12.67

6.25
5.50
5.46
7.46
10.28

5.82
5.04
5.54
7.93
11.19

1980..
1981..
1982..
1983..
1984..

11.506
14.029
10.686
8.63
9.58

11.374
13.776
11.084
8.75
9.80

11.55
14.44
12.92
10.45
11.89

11.46
13.91
13.00
11.10
12.44

11.27
13.45
12.76
11.18
12.41

11.94
14.17
13.79
12.04
12.71

13.67
16.04
16.11
13.55
14.19

8.51
11.23
11.57
9.47
10.15

12.66
14.70
15.14
12.57
12.38

12.29
14.76
11.89
8.89
10.16

15.27
18.87
14.86
10.79
12.04

11.77
13.42
11.02
8.50
8.80

13.36
16.38
12.26
9.09
10.23

1985..
1986..
1987..
1988..
1989..

7.48
5.98
5.82
6.69
8.12

7.66
6.03
6.05
6.92
8.04

9.64
7.06
7.68
8.26
8.55

10.62
7.68
8.39
8.85
8.49

10.79
7.78
8.59
8.96
8.45

11.37
9.02
9.38
9.71
9.26

12.72
10.39
10.58
10.83
10.18

9.18
7.38
7.73
7.76
7.24

11.55
10.17
9.31
9.19
10.13

8.01
6.39
6.85
7.68
8.80

9.93
8.33
8.21
9.32
10.87

7.69
6.33
5.66
6.20
6.93

8.10
6.81
6.66
7.57
9.21

1990..
1991..
1992..
1993..

7.51
5.42
3.45
3.02

7.47
5.49
3.57
3.14

8.26
6.82
5.30
4.44

8.55
7.86
7.01
5.87

8.61
8.14
7.67
6.59

9.32
8.77
8.14
7.22

10.36
9.80
8.98
7.93

7.25
6.89
6.41
5.63

10.05
9.32
8.24
7.20

7.95
5.85
3.80
3.30

10.01
8.46
6.25
6.00

6.98
5.45
3.25
3.00

8.10
5.69
3.52
3.02

1

5.16
2.56
1.00
1.00
1.00
1.00
7
1.00
7
1.00
7

7
7

1.00
1.00
1.00
1.34
1.50

Rate on new issues within period; bank-discount basis.
Yields on the more actively traded issues adjusted to constant maturities by the Treasury Department.
Effective rate (in the primary market) on conventional mortgages, reflecting fees and charges as well as contract rate and
assuming, on the average, repayment at end of 10 years. Rates beginning January 1973 not strictly comparable with prior rates.
4
Bank-discount basis; prior to November 1979, data are for 4 - 6 months paper.
5
For monthly data, high and low for the period. Prime rate for 1929-33 and 1947-48 are ranges of the rate in effect during the
period.
6
Since July 19, 1975, the daily effective rate is an average of the rates on a given day weighted by the volume of transactions at
these rates. Prior to that date, the daily effective rate was the rate considered most representative of the day's transactions, usually
the one at which most transactions occurred.
7
From October 30, 1942, to April 24, 1946, a preferential rate of 0.50 percent was in effect for advances secured by Government
securities maturing in 1 year or less.
2
3

See next page for continuation of table.




352

TABLE B-72.—Bond yields and interest rates, 1929-93—Continued
[Percent per annum]
J.S. Treasury securities

Corporate
bonds
(Moody's)

HighComgrade
Newmermunici- home
cial
pal
mortpaper,
bonds
gage
3
6
(Stand- yields
months 4
ard &
Poor's)

3month

1989:
Jan
Feb
Mar

Jay!!!!!!!!!!!!

June
July
Aug
Sept
Oct

Nov
Dec

1990:
Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct

Nov

Dec

1991:
Jan
Feb
Mar

Apr

May
June
July
Aug
Sept

Oct

Nov
Dec

1992:
Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov

Dec
1993:
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
&:::::::::::
Nov
Dec

6month

Constant maturities2
3year

10year

30year

Aaa

Baa

Prime
rate
charged
by
banks 5

Discount
rate,
Federal
Reserve
Bank
of New
York5

High-low

Year and
month

Bills
(new issues) l

High-low

Federal
funds
rate6

8.00
7 90
7.90

9.62
9.64
9.80
9.79
9.57
9.10
8.93
8.96
9 01
8.92
8 89
8!86

10.65
10.61
10.67
10.61
10.46
10.03
9.87
9.88
9 91
9.81
9 81
9.82

7.41
7.47
7.61
7.49
7.25
6.97
6.97
7.08
111
1.11
113
7.01

9.52
9.82
9.99
10.17
10.18
10.42
10.48
10.22
10 24
10.11
10 09
10.07

9.02
9.35
9.97
9.78
9.29
8.80
8.35
8.32
8 50
8.24
8 00
7.93

10.50-10.50
11.50-10.50
11.50-11.50
11.50-11.50
11.50-11.50
11.50-11.00
11.00-10.50
10.50-10.50
10 50-10 50
10.50-10.50
10 50-10 50
10.50-10.50

6.50-6.50
7.00-6.50
7.00-7.00
7.00-7.00
7.00-7.00
7.00-7.00
7.00-7.00
7.00-7.00
7 00-7 00
7.00-7.00
7 00-7 00
7.00-7.00

9.12
9.36
9.85
9.84
9.81
9.53
9.24
8.99
9 02
8.84
8 55
8.45

8 21
8.47
8.59
8.79
8.76
8.48
8 47
8.75
8.89
8.72
8 39
8.08

8 26
8.50
8.56
8.76
8.73
8.46
8 50
8.86
9.03
8.86
8 54
8.24

8 99
9.22
9.37
9.46
9.47
9.26
9 24
9.41
9.56
9.53
9 30
9.05

9 94
10.14
10.21
10.30
10.41
10.22
10 20
10.41
10.64
10.74
10 62
10.43

7 13
7.21
7.29
7.36
7.34
7.22
7 15
7.31
7.40
7.40
7 10
7.04

9 91
9.88
10.03
10.17
10.28
10.13
10 08
10.11
9.90
9.98
9 90
9.76

7 96
8.04
8.23
8.29
8.23
8.06
7 90
111
7.83
7.81
7 74
7.49

10 50-10 00
10.00-10.00
10.00-10.00
10.00-10.00
10.00-10.00
10.00-10.00
10 00-10 00
10.00-10.00
10.00-10.00
10.00-10.00
10 00-10 00
10.00-10.00

7 00-7 00
7.00-7.00
7.00-7.00
7.00-7.00
7.00-7.00
7.00-7.00
7 00-7 00
7.00-7.00
7.00-7.00
7.00-7.00
7 00-7 00
7.00-6.50

8 23
8.24
8.28
8.26
8.18
8.29
815
8.13
8.20
8.11
7 81
7.31

7.38
7.08
7.35
7 23
7.12
7.39
7.38
6.80
6.50
6 23
5.90
5.39

8.09
7.85
8.11
8 04
8.07
8.28
8.27
7.90
7.65
7 53
7.42
7.09

8.27
8.03
8.29
8 21
8.27
8.47
8.45
8.14
7.95
7 93
7.92
7.70

9.04
8.83
8.93
8 86
8.86
9.01
9.00
8.75
8.61
8 55
8.48
8.31

10.45
10.07
10.09
9 94
9.86
9.96
9.89
9.65
9.51
9 49
9.45
9.26

7.05
6.90
7.07
7 05
6.95
7.09
7.03
6.89
6.80
6 59
6.64
6.63

9.65
9.57
9.43
9 60
9.52
9.46
9.43
9.48
9.30
9 04
8.64
8.53

7.02 10.00- 9.50
6.41 9.50- 9.00
6.36 9.00- 9.00
6 07 9 00- 9 00
5.94 9.00- 8.50
6.16 8.50- 8.50
6.14 8.50- 8.50
5.76 8.50- 8.50
5.59 8.50- 8.00
5 33 8 00- 8 00
4.93 8.00- 7.50
4.49 7.50- 6.50

6.50-6.50
6.50-6.00
6.00-6.00
6 00-5 50
5.50-5.50
5.50-5.50
5.50-5.50
5.50-5.50
5.50-5.00
5 00-5 00
5.00-4.50
4.50-3.50

6.91
6.25
6.12
5 91
5.78
5.90
5.82
5.66
5.45
5 21
4.81
4.43

3.88
3.94
4.19
3.93
3.78
3.81
3.36
3 23
3.01
2.98
3.35
3.39

5.40
5.72
6.18
5.93
5.81
5.60
4.91
4 72
4.42
4.64
5.14
5.21

7.03
7.34
7.54
7.48
7.39
7.26
6.84
6 59
6.42
6.59
6.87
6.77

7.58
7.85
7.97
7.96
7.89
7.84
7.60
7 39
7.34
7.53
7.61
7.44

8.20
8.29
8.35
8.33
8.28
8.22
8.07
7 95
7.92
7.99
8.10
7.98

9.13
9.23
9.25
9.21
9.13
9.05
8.84
8 65
8.62
8.84
8.96
8.81

6.41
6.67
6.69
6.64
6.57
6.50
6.12
6 08
6.24
6.38
6.35
6.24

8.49
8.65
8.51
8.58
8.59
8.43
8.00
8 00
7.93
7.90
8.07
7.88

4.06
4.13
4.38
4.13
3.97
3.99
3.53
3 44
3.26
3.33
3.67
3.70

6.50-6.50
6.50-6.50
6.50-6.50
6.50-6.50
6.50-6.50
6.50-6.50
6.50-6.00
6 00-6 00
6.00-6.00
6.00-6.00
6.00-6.00
6.00-6.00

3.50-3.50
3.50-3.50
3.50-3.50
3.50-3.50
3.50-3.50
3.50-3.50
3.50-3.00
3 00-3 00
3.00-3.00
3.00-3.00
3.00-3.00
3.00-3.00

4.03
4.06
3.98
3.73
3.82
3.76
3.25
3 30
3.22
3.10
3.09
2.92

3.17
3.08
3.08
3.00
3.07
3.23
3.15
3.17
3.06
3.13
3.27
3.25

4.93
4.58
4.40
4.30
4.40
4.53
4.43
4.36
4.17
4.18
4.50
4.54

6.60
6.26
5.98
5.97
6.04
5.96
5.81
5.68
5.36
5.33
5.72
5.77

7.34
7.09
6.82
6.85
6.92
6.81
6.63
6.32
6.00
5.94
6.21
6.25

7.91
7.71
7.58
7.46
7.43
7.33
7.17
6.85
6.66
6.67
6.93
6.93

8.67
8.39
8.15
8.14
8.21
8.07
7.93
7.60
7.34
7.31
7.66
7.69

6.18
5.87
5.65
5.78
5.81
5.73
5.60
5.50
5.31
5.29
5.47
5.35

7.82
7.77
7.46
7.46
7.37
7.23
7.20
7.05
6.95
6.80
6.80
6.92

3.35
3.27
3.24
3.19
3.20
3.38
3.35
3.33
3.25
3.27
3.43
3.40

6.00-6.00
6.00-6.00
6.00-6.00
6.00-6.00
6.00-6.00
6.00-6.00
6.00-6.00
6.00-6.00
6.00-6.00
6.00-6.00
6.00-6.00
6.00-6.00

3.00-3.00
3.00-3.00
3.00-3.00
3.00-3.00
3.00-3.00
3.00-3.00
3.00-3.00
3.00-3.00
3.00-3.00
3.00-3.00
3.00-3.00
3.00-3.00

3.02
3.03
3.07
2.96
3.00
3.04
3.06
3.03
3.09
2.99
3.02
2.96

8.29
8.48
8.83
8.70
8.40
8.22
7.92
7.91
111
7.63
7 65
7.64

8.38
8.49
8.87
8.73
8.39
8.00
7.63
111
7 74
7.61
7 46
7.45

9.20
9.32
9.61
9.40
8.98
8.37
7.83
8.13
8 26
8.02
7 80
111

9.09
9.17
9.36
9.18
8.86
8.28
8.02
8.11
8 19
8.01
1 SI
7.84

8.93
9.01
9.17
9.03
8.83
8.27
8.08
8.12

7 64
7.76
7.87
7.78
7.78
7.74
7 66
7.44
7.38
7.19
7 07
6.81

7 52
111
7.83
7.82
7.82
7.64
7 57
7.36
7.33
7.20
7 04
6.76

8 13
8.39
8.63
8.78
8.69
8.40
8 26
8.22
8.27
8.07
7 74
7.47

6.30
5.95
5.91
5 67
5.51
5.60
5.58
5.39
5.25
5 03
4.60
4.12

6.34
5.93
5.91
5 73
5.65
5.76
5.71
5.47
5.29
5 08
4.66
4.16

3.84
3.84
4.05
3.81
3.66
3.70
3.28
3 14
2.97
2.84
3.14
3.25
3.06
2.95
2.97
2.89
2.96
3.10
3.05
3.05
2.96
3.04
3.12
3.08

815

Sources: Department of the Treasury, Board of Governors of the Federal Reserve System, Federal Housing Finance Board, Moody's
Investors Service, and Standard & Poor's Corporation.




353

TABLE B-73.—Total funds raised in credit markets by nonfinancial sectors, 1984-93

[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Item

1984

1985

1986

1987

1988

1989

1990

1991

1992

Net credit market borrowing by nonfinancial sectors
Total net borrowing by domestic nonfinancial sectors
U.S. Government
Treasury issues
Agency issues and mortgages..
Private domestic nonfinancial sectorsDebt capital instruments
Tax-exempt obligations...
Corporate bonds
Mortgages
Home mortgages
Multi-family residential..
Commercial
Farm
Other debt instrumentsConsumer credit
Bank loans n.e.c
Open-market paper...
Other

764.6

934.6

855.8

739.9

752.6

723.0

631.0

475.5

582.4

197.2

225.7

216.0

143.9

155.1

146.4

246.9

278.2

304.0

197.4
-.2

225.8
-.1

215.6
.4

142.4
1.5

137.7
17.4

144.7
1.6

238.7
8.2

292.0
-13.8

303.8
.2

567.4

708.9

639.9

596.0

597.5

576.6

384.1

197.3

278.4

329.2

523.4

478.4

497.9

436.4

408.3

293.1

313.4

254.0

58.7
48.1
222.4

178.6
83.2
261.7

45.7
127.1
305.6

83.5
78.8
335.7

53.7
103.1
279.6

65.3
73.8
269.1

57.3
47.1
188.7

69.6
78.8
165.1

65.7
67.3
121.1

136.2
25.1
62.3
-1.2

172.3
30.3
65.6
-6.6

204.2
36.4
75.1
-10.1

241.6
24.9
76.2
-6.9

219.6
16.1
48.5
-4.6

212.5
12.0
47.3
-2.7

177.2
3.4
8.9
-.8

166.0
-2.5
.9
.7

176.0
-11.1
-45.5
1.6

238.3

185.5

161.5

98.1

161.0

168.3

91.0

-116.1

24.4

81.7
64.0
21.7
70.9

82.3
43.8
14.6
44.8

57.5
58.9
-9.3
54.3

32.9
14.7
1.6
48.9

50.1
44.7
11.9
54.3

49.5
36.4
21.4
61.0

13.4
4.2
9.7
63.6

-13.1
-46.8
-18.4
-37.8

9.3
-5.6
8.6
12.0

567.4

708.9

639.9

596.0

597.5

576.6

384.1

197.3

278.4

State and local governments
Households
Nonfinancial business

35.7
221.2
310.5

134.0
295.6
279.3

59.2
266.2
314.5

83.0
307.5
205.5

48.9
300.1
248.4

63.5
276.7
236.3

54.5
207.7
121.9

62.3
168.4
-33.4

59.4
215.0
4.0

Farm
Nonfarm noncorporate..
Corporate

-.4
123.3
187.6

-14.5
133.2
160.6

-16.9
106.1
225.3

-11.1
76.0
140.7

-10.0
57.2
201.3

.5
49.4
186.5

1.8
19.4
100.7

2.4
-24.5
-11.3

1.5
-39.4
41.8

8.4

1.2

9.7

6.2

6.4

10.2

23.9

13.9

24.2

3.8
-6.6
6.2
5.0

3.8
-2.8
6.2
-6.0

3.1
-1.0
11.5
-3.9

7.4
-3.6
3.8
-1.4

6.9
-1.8
8.7
-7.5

4.9
-.1
13.1
-7.6

21.4
-2.9
12.3
-7.0

14.1
3.1
6.4
-9.8

17.3
2.3
5.2
-.6

773.0

935.8

865.6

746.2

758.9

733.1

654.9

489.4

606.6

By borrowing sector-

Foreign net borrowing in United States..
Bonds
Bank loans n.e.c
Open-market paper
U.S. Government and other loans..
Total domestic plus foreign

Direct and indirect supply of funds to credit markets
Total funds supplied to domestic nonfinancial sectors
Private domestic nonfinancial sectorsDeposits and currency
Checkable deposits and currency
Time and savings deposits
Money market fund shares
Security repurchase agreements
Foreign deposits
Credit market instrumentsForeign funds
At banks
Credit market instruments
U.S. Government and related loans, net..
U.S. Government cash balances
Private insurance and pension reserves..
Other sources




764.6

934.6

855.8

739.9

752.6

723.0

631.0

475.5

446.7

487.2

329.9

405.0

421.8

285.4

259.7

-38.4

67.8

310.1

204.0

273.0

163.3

225.7

162.8

96.9

-22.3

-11.2

37.0
221.2
48.7
9.8
-6.5

56.9
122.6
2.1
17.7
4.7

114.1
86.2
41.8
20.0
10.8

18.1
99.4
25.2
21.5
-1.0

29.1
139.7
16.9
32.9
7.1

9.6
70.1
85.6
-2.1
-.3

21.9
28.4
54.9
-22.1
13.9

70.1
-104.9
29.8
-14.5
-2.8

131.0
-133.4
.8
-.5
-9.1

136.6

283.2

56.9

241.7

196.1

122.6

162.8

-16.1

79.0

76.0

86.1

115.7

107.9

117.9

74.8

105.9

2.8

149.6

9.0
67.1

19.6
66.5

12.9
102.8

43.7
64.2

9.3
108.6

-9.5
84.4

23.8
82.1

-22.8
25.6

48.9
100.7

16.0
4.0
139.9
81.9

37.4
10.3
215.7
98.0

17.0
1.7
233.7
157.8

5.6
-5.8
184.8
42.4

-18.2
7.3
127.7
96.1

-49.9
-3.4
293.7
122.3

17.3
5.3
146.8
96.0

32.8
5.5
297.9
175.0

20.5
-5.9
167.3
183.0

354

582.4

TABLE B-73.—Total funds raised in credit markets by nonfinancial sectors, 1984-93—Continued
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
1991

1993

1992

Item

Net credit market borrowing by nonfinancial sectors
Total net borrowing by domestic nonfinancial
sectors
U.S. Government...
Treasury issues
Agency issues and mortgages
Private domestic nonfinancial sectors...
Debt capital instruments
Tax-exempt obligations
Corporate bonds
Mortgages
Home mortgages
Multi-family residential..
Commercial
Farm
Other debt instruments
Consumer credit
Bank loans n.e.c
Open-market paper
Other
By borrowing sector:

425.5

565.4

500.0

411.4

603.3

586.2

610.8

529.1

399.3

667.5

579.7

191.7

269.3

379.5

272.5

323.8

352.9

299.1

240.1

229.6

348.2

177.2

268.7 335.0
3.8 - 1 1 . 2

352.5
.4

290.1
9.0

237.4
2.7

226.4
3.2

344.1
4.1

160.9
16.2

215.7
-24.0

275.5 408.2
-6.2 -28.8

233.8

296.1

120.5

138.9

279.5

233.4

311.7

289.0

169.7

319.2

402.5

371.1

376.6

222.8

283.1

329.7

224.1

272.2

190.1

237.5

266.7

317.3

62.3
76.7
232.2

69.6
96.5
210.5

68.8
81.6
72.3

77.6
60.2
145.2

68.0
76.3
185.4

76.6
77.8
69.8

75.8
61.3
135.1

42.4
53.7
93.9

62.4
75.0
100.2

67.2
64.9
134.5

38.9
55.2
223.2

167.1
12.1
47.7
5.2

160.2 160.1 176.5 216.5 111.6 203.3 172.8 128.4 176.2
-6.6 -12.8
11.7 - 3 4 . 2
11.6 - 1 6 . 9 - 1 1 . 2 - 2 7 . 9
.2
40.1 - 5 5 . 6 - 2 8 . 6 - 4 6 . 9 - 2 5 . 7 - 5 7 . 7 - 5 1 . 6 - 2 1 . 7 - 2 9 . 1
4.2
.8
.6
.2
-1.5
2.1 - 2 . 9
.8

229.7
.2
-6.9

-137.3 - 8 0 . 5 -102.2 -144.2 - 5 0 . 2
-5.1
-16.1
-59.5 -30.2
-25.1 -16.5
-36.7 -28.8

-20.4 -10.7
-44.0 -53.7
-26.9
-5.0
-10.9 -74.9

233.8

296.1

State and local governments..
Households
Nonfinancial business

62.6
130.1
41.0

59.7
52.8
74.0
195.1 154.5 193.8
41.3 - 8 6 . 8 - 1 2 9 . 0

120.5

138.9

Farm
Nonfarm noncorporate...
Corporate

9.8
21.2
10.0

.2
4.3 - 4 . 6
20.2 - 8 1 . 5 - 5 7 . 9
20.9 - 9 . 6 - 6 6 . 5

9.3

279.5

233.4

62.1
66.9
199.2 176.5
18.2 - 1 0 . 1

57.8 - 6 0 . 4

23.8

34.3

1.9

57.7

Bonds
Bank loans n.e.c
Open-market paper
U.S. Government and other loans....

11.3
10.9
8.1
-3.5
46.7 - 5 1 . 9
-8.4 -15.9

15.6
1.4
16.0
-9.2

18.5
6.5
14.9
-5.6

4.9
1.5
-8.0
3.6

21.9
14.1
27.8
-6.1

504.9

523.7

445.6

605.3

644.0

483.3

85.2
60.8
8.1
24.2
-8.0

169.7

319.2

402.5

73.5
35.1
71.2
217.7 266.6 137.4
20.5 - 1 2 . 7 - 3 8 . 9

68.9
215.8
34.5

43.7
322.4
36.4

311.7

99.0 - 6 7 . 7

289.0

-.1
3.4
4.6
3.6
-1.6
-2.5
4.3
-21.8 -47.4 -37.3 -51.0 -36.7 -31.4 -14.1
62.5
46.0
33.7
39.9
.3
35.7
57.9

Foreign net borrowing in United States..

Total domestic plus foreign

52.5

22.9
48.2
19.2
31.8
21.4 - 3 9 . 7
34.8
25.4 - 2 4 . 2
3.9 - 2 3 . 0 - 3 7 . 0

39.4

13.5
- 9 . 8 -14.7
27.7 - 2 4 . 1
-47.3
2.5 - 2 . 6
9.3
4.5 - 1 . 1
40.8

-.6

50.3

26.8

78.5

20.3
22.2
75.6
3.9 - 1 0 . 3
1.6
13.1 - 1 2 . 1 - 2 1 . 7
.5
-.4
-5.3

30.4
6.5
-.6
-9.5

85.5
1.0
-1.6
-6.4

694.2

658.2

667.5

579.7

37.8

648.7

528.5

449.5

Direct and indirect supply of funds to credit markets
Total funds supplied to domestic nonfinancial
sectors
Private domestic nonfinancial sectors
Deposits and currency
Checkable deposits and currency
Time and savings deposits
Money market fund shares
Security repurchase agreements
Foreign deposits
Credit market instruments
Foreign funds
At banks
Credit market instruments..
U.S. Government and related loans, net
U.S. Government cash balances
Private insurance and pension reserves
Other sources

425.5
38.5
60.8

565.4

411.4

603.3

133.1 -157.0 -168.2

206.6

500.0

5.4 - 5 7 . 9

37.2
70.9
-34.3 -50.3
115.4 - 2 . 2
-47.4
.7
-43.9
19.9
-22.3
127.8

610.8

529.1

399.3

59.4 - 5 4 . 1

59.4

382.1

8.2 - 3 2 . 7

-241.3

71.2 - 9 1 . 5

76.6 163.9 135.5
37.0 147.9
135.5
-174.3 - 1 6 0 . 8 - 8 6 . 1 -175.3 - 1 4 3 . 8 - 1 2 8 . 6
23.1 - 2 3 . 7 - 3 5 . 4
19.2
39.3
-13.5
6.2
5.9 - 8 . 7
12.9 - 1 2 . 4
-17.1
24.1 - 1 0 . 3
1.2 - 2 1 . 3
11.6
-28.8
92.1
-70.7
135.5
-62.3
-99.1
150.9
33.9
90.8
158.9 129.7
-64.2
40.5
219.1
80.7
42.2
-5.7
78.4
13.1 - 7 . 3
1.5 - 9 8 . 3
78.1
27.4
41.3
96.5 140.7
87.5
34.2
-.5

96.6
46.3
31.3 - 2 3 . 2
396.7 117.9
- 8 8 . 3 305.1

355

35.4 - 1 0 1 . 5
153.5

53.7

15.7 122.7 126.7
-202.7 - 3 0 . 7 -127.0
65.2
51.7
-45.1
2.7 - 4 . 7
-2.2
-11.9

.9

4.4

-140.8 -118.1 -155.2
54.4
-18.8
73.2

74.0 - 4 7 . 5
122.9 - 7 1 . 5 - 4 3 . 5
33.1 - 4 4 . 9
15.7
4.4 - 1 3 . 5
8.7 - 3 0 . 1
1.3
5.2
49.8 170.8 225.8 222.9 359.9
371.3 305.5
56.6 413.3
206.9 276.4 163.2 192.7 319.4

Source: Board of Governors of the Federal Reserve System.




-97.5

586.2

158.1
68.6
89.5

141.6
-2.3
144.0

53.4 - 7 0 . 8
9.0
3.6
180.6 286.6
231.0 320.3

TABLE B-74.—Mortgage debt outstanding by type of property and of financing, 1940-93
[Billions of dollars]
Nonfarm properties

Nonfarm properties by type of mortgage
Conventional 2

Government underwritten
End of year
or quarter

1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1991: I...
II.
Ill
IV
1992: I..
IV..
1993: I....
II...
III..
1
2

All
properties

36.5
37.6
36.7
35.3
34.7
35.5
41.8
48.9
56.2
62.7
72.8
82.3
91.4
101.3
113.7
129.9
144.5
156.5
171.8
190.8
207.5
228.0
251.4
278.5
305.9
333.3
356.5
381.2
411.1
441.6
473.7
524.2
597.4
672.6
732.5
791.9
878.6
1,010.3
1,163.0
1,328.4
1,460.4
1,566.7
1,641.1
1,828.8
2,054.6
2,312.8
2,615.4
2,963.2
3,248.6
3,549.6
3,761.5
3,923.4
4,042.9
3,812.0
3,874.2
3,874.6
3,923.4
3,959.7
3,982.9
4,020.6
4,042.9
4,059.2
4,099.6
4,160.2

Farm
properties

6.5
6.4
6.0
5.4
4.9
4.8
4.9
5.1
5.3
5.6
6.1
6.7
7.2
7.7
8.2
9.0
9.8
10.4
11.1
12.1
12.8
13.9
15.2
16.8
18.9
21.2
23.1
25.1
27.5
29.4
30.5
32.4
35.4
39.8
44.9
49.9
55.4
63.9
72.8
86.8
97.5
107.2
111.3
113.7
112.4
105.9
95.2
87.7
83.0
80.5
78.4
79.1
80.7
79.7
79.3
79.9
79.1
80.2
80.4
80.6
80.7
80.8
80.8
80.9

Total

30.0
31.2
30.8
29.9
29.7
30.8
36.9
43.9
50.9
57.1
66.7
75.6
84.2
93.6
105.4
120.9
134.6
146.1
160.7
178.7
194.7
214.1
236.2
261.7
287.0
312.1
333.4
356.1
383.5
412.2
443.2
491.8
562.0
632.8
687.5
742.0
823.2
946.4
1,090.2
1,241.7
1,362.9
1,459.5
1,529.8
1,715.1
1,942.2
2,206.9
2,520.2
2,875.5
3,165.7
3,469.1
3,683.1
3,844.2
3,962.2
3,732.3
3,794.9
3,794.8
3,844.2
3,879.5
3,902.5
3,940.0
3,962.2
3,978.4
4,018.8
4,079.3

1- to 4family
houses

17.4
18.4
18.2
17.8
17.9
18.6
23.0
28.2
33.3
37.6
45.2
51.7
58.5
66.1
75.7
88.2
99.0
107.6
117.7
130.9
141.9
154.6
169.3
186.4
203.4
220.5
232.9
247.3
264.8
283.2
297.4
325.9
366.5
407.9
440.7
482.1
546.3
642.7
753.5
870.5
965.1
1,039.8
1,081.7
1,199.4
1,335.1
1,504.7
1,707.1
1,936.1
2,169.3
2,408.4
2,615.4
2,778.8
2,953.5
2,649.9
2,700.1
2,722.8
2,778.8
2,823.1
2,856.7
2,911.4
2,953.5
2,976.8
3,026.9

Multifamily
properties

5.7
5.9
5.8
5.8
5.6
5.7
6.1
6.6
7.5
8.6
10.1
11.5
12.3
12.9
13.5
14.3
14.9
15.3
16.8
18.7
20.3
23.0
25.8
29.0
33.6
37.2
40.3
43.9
47.3
52.2
60.1
70.1
82.8
93.1
100.0
100.6
105.7
114.0
124.9
134.9
142.3
142.1
145.8
160.9
185.7
215.6
251.8
276.0
293.7
306.5
309.4
306.4
295.0
312.3
314.8
305.9
306.4
309.0
304.8
302.0
295.0
293.6
290.6
290.9

Commercial
properties

6.9
7.0
6.7
6.3
6.2
6.4
7.7
9.1
10.2
10.8
11.5
12.5
13.4
14.5
16.3
18.3
20.7
23.2
26.1
29.2
32.4