View original document

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

Economic Report
of the President
Transmitted to the Congress February 2005
Together with the Annual Report
of the Council of Economic Advisers

Economic Report
of the President

Transmitted to the Congress
February 2005
together with

THE ANNUAL REPORT
of the

COUNCIL OF ECONOMIC ADVISERS
UNITED STATES GOVERNMENT PRINTING OFFICE
WASHINGTON : 2005

For sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov Phone: (202) 512-1800 Fax: (202) 512-2250
Mail Stop: SSOP, Washington, DC 20402-0001
ISBN 0-16-073258-1

Economic Report of the President

| i

C O N T E N T S
Page

ECONOMIC REPORT OF THE PRESIDENT...............................................

1

ANNUAL REPORT OF THE COUNCIL OF ECONOMIC ADVISERS*......

7

CHAPTER 1. THE YEAR IN REVIEW AND THE YEARS AHEAD .............. 31
CHAPTER 2. EXPANSIONS PAST AND PRESENT ...................................... 49
CHAPTER 3. OPTIONS FOR TAX REFORM ................................................ 71
CHAPTER 4. IMMIGRATION ........................................................................ 93
CHAPTER 5. EXPANDING INDIVIDUAL CHOICE AND CONTROL...... 117
CHAPTER 6. INNOVATION AND THE INFORMATION ECONOMY ..... 135
CHAPTER 7. THE GLOBAL HIV/AIDS EPIDEMIC ..................................... 155
CHAPTER 8. MODERN INTERNATIONAL TRADE ................................... 173
APPENDIX A. REPORT TO THE PRESIDENT ON THE ACTIVITIES
OF THE COUNCIL OF ECONOMIC ADVISERS DURING 2004.............. 189
APPENDIX B. STATISTICAL TABLES RELATING TO INCOME,
EMPLOYMENT, AND PRODUCTION.......................................................... 201

* For a detailed table of contents of the Council’s Report, see page 11

Economic Report of the President

| iii

ECONOMIC REPORT
OF THE PRESIDENT

Economic Report of the President

| v

ECONOMIC REPORT OF THE PRESIDENT

To the Congress of the United States:

The United States is enjoying a robust economic expansion because of the
good policies we have put in place and the strong efforts of America’s workers
and entrepreneurs. Four years ago, our economy was sliding into recession.
The bursting of the high-tech bubble, revelations of corporate scandals,
and terrorist attacks hurt our economy, leading to falling incomes and
rising unemployment.
We acted by passing tax relief so American families could keep more of
their own money. At the same time, we gave businesses incentives to invest
and create jobs. Last year, we gained over 2 million new jobs, and the
economy’s production of goods and services rose by 4.4 percent. The unemployment rate is now 5.2 percent, which is lower than the average of each of
the past three decades and the lowest since the attacks of September 11,
2001. Our pro-growth policies are taking us in the right direction.
As I start my second term, we must take action to keep our economy
growing. I will not be satisfied until every American who wants to work can
find a job. I have laid out a comprehensive strategy to sustain growth, create
jobs, and confront the challenges of a changing America.
I am committed to restraining spending by eliminating government
programs that do not work and by making government provide important
services more efficiently. I have pledged to cut the deficit in half by 2009,
and we are on track to do so.
The greatest fiscal challenges we face arise from the aging of our society.
Because Americans are having fewer children and living longer, seniors are
becoming a larger proportion of the population. This change has important
implications for the Social Security system, because the benefits paid to
retirees come from taxes on today’s workers. In 1950, there were 16 workers
paying into Social Security for every person receiving benefits. Now there are
just over 3, and that number will fall to 2 by the time today’s young workers

Economic Report of the President

| 3

retire. We will not change Social Security for those now retired or nearing
retirement. We need to permanently fix the Social Security system for our
children and grandchildren. I will work with the Congress to fix Social
Security for generations to come.
The current tax code is a drag on the economy. It discourages saving and
investment, and it requires individuals and businesses to spend billions of
dollars and millions of hours each year to comply with the complicated
system. I will lead a bipartisan effort to reform our tax code to make it
simpler, fairer, and more pro-growth.
We are working to make health care more affordable and accessible for
American families. The Medicare modernization bill I signed gives seniors
more choices and helps them get the benefits of modern medicine and
prescription drug coverage. We have created health savings accounts, which
give workers and families more control over their health care decisions. We will
open or expand more community health centers for those in need. To help
control health costs and make health care more accessible, we must let small
businesses pool risks across states so they can get the same discounts for health
insurance that big companies get. We will increase the use of health information technology that will make health care more efficient, cut down on
mistakes, and control costs.
Our litigation system encourages junk lawsuits and harms our economy,
and the system must be reformed. I support medical liability reform to control
the cost of health care, keep good medical professionals from being driven out
of practice, and ensure that patient care—not avoidance of lawsuits—is the
central concern in all medical decisions. I support class action reform to
eliminate the waste, inefficiency, and unfairness of the class-action system.
And I support reforms to the asbestos litigation system in order to protect
victims with asbestos-related injuries and prevent frivolous lawsuits that harm
our economy and cost jobs.
I will continue to push for energy legislation to help keep our economy
strong. We must modernize our electricity system to make it more reliable.
To make our energy supply more secure, we must explore for more energy
in environmentally friendly ways in our own country, develop
alternative sources of energy, and encourage conservation.
I will work to further simplify and streamline federal regulations that hinder
growth and encumber our job creators. Our economy needs to allow entrepreneurs to spend more time doing business and less time with their lawyers
and accountants.
I believe that Americans benefit from open markets and free and fair trade,
and I am working to open up markets around the world and make sure that

4 | Economic Report of the President

the playing field is level for our workers, farmers, manufacturers, and other job
creators. In the past four years, we concluded free-trade agreements with
Singapore, Chile, Australia, Morocco, Bahrain, Jordan, and six countries in
Central America and the Caribbean. My Administration will continue to work
to expand trade on a multilateral, regional, and bilateral basis, and to enforce
our trade laws to help ensure a level playing field.
I have a plan to prepare our young people for the jobs of the 21st century.
We have brought greater accountability to our public schools and are working
to improve our high schools. We have made Pell grants available to one
million more students, and we will work to make college more affordable by
increasing the size of Pell grants for low-income students. We are reforming
our workforce training programs to help Americans obtain the skills needed
for the jobs that our economy is creating.
I have an ambitious agenda for the next four years. During my first term,
working with the Congress, I put policies in place to ensure a rapid recovery and
to support strong growth. In my second term, together we will cut the budget
deficit in half, fix Social Security, reform the tax code, reduce the burden of junk
lawsuits, ensure a reliable and affordable energy supply, continue to promote free
and fair trade, help make health care affordable and accessible for American
families, and expand the quality and availability of educational opportunities.
These policies will produce an economic environment that continues to unleash
the creativity and energy of the American people.

THE WHITE HOUSE
FEBRUARY 2005

Economic Report of the President

| 5

THE ANNUAL REPORT
OF THE
COUNCIL OF ECONOMIC ADVISERS

Economic Report of the President

| 7

LETTER OF TRANSMITTAL

COUNCIL OF ECONOMIC ADVISERS,
Washington, D.C., February 11, 2005

MR. PRESIDENT:
The Council of Economic Advisers herewith submits its 2005 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,

N. Gregory Mankiw
Chairman

Kristin J. Forbes
Member

Harvey S. Rosen
Member

Economic Report of the President

| 9

C O N T E N T S

Page

overview .............................................................................................

17

chapter 1. the year in review and the years ahead.......................
Developments in 2004 and the Near-Term Outlook........................
Consumer Spending....................................................................
Residential Investment ................................................................
Business Fixed Investment...........................................................
Business Inventories ....................................................................
Government Purchases ................................................................
Exports and Imports ...................................................................
Employment ...............................................................................
Productivity.................................................................................
Wages and Prices .........................................................................
Financial Markets........................................................................
The Long-Term Outlook Through 2010..........................................
Growth in GDP over the Long Term ..........................................
Interest Rates over the Long Term...............................................
The Composition of Income over the Long Term .......................
Conclusion.......................................................................................

31
31
33
34
34
35
36
36
38
39
39
42
42
43
47
47
48

chapter 2. expansions past and present ..........................................
Overview of the Current Expansion .................................................
Consumption ..............................................................................
Investment ..................................................................................
Exports........................................................................................
Labor Market ..............................................................................
Summary.....................................................................................
Symmetry in Recessions and Expansions..........................................
Real GDP ...................................................................................
Components of Real GDP ..........................................................
The Labor Market.......................................................................
A Possible Explanation: The Financial Accelerator ......................
Summary.....................................................................................
Stabilization Policy ...........................................................................
Business Cycles: Causes ...............................................................
Economic Policy..........................................................................
Policy Design: Challenges ...........................................................
Fiscal Policy.................................................................................

49
50
51
52
53
54
56
57
57
58
58
59
61
61
61
62
63
64

11

Monetary Policy ..........................................................................
Conclusion.......................................................................................

67
70

chapter 3. options for tax reform ..................................................
Why Do We Need Tax Reform? .......................................................
The Direct Burden of the Tax System: Taxes Paid .......................
High Compliance Costs ..............................................................
Effects on Behavior and Excess Burden .......................................
Income Taxation Versus Consumption Taxation...............................
Fairness .......................................................................................
Effects on Growth of the Economy .............................................
Simplification..............................................................................
Tax Reform Prototypes.....................................................................
Consumption Tax Prototypes ......................................................
Reform Within the Current System ............................................
Conclusion.......................................................................................

71
71
71
73
74
77
78
80
82
82
82
87
91

chapter 4. immigration.....................................................................
Immigration and Economic Growth ................................................
Immigrants and Employment Growth ........................................
Immigrants and Regional Growth ...............................................
How Many Immigrants? .............................................................
Legal and Illegal Immigrants .......................................................
From Which Tempest-Tossed Shores?..........................................
Immigrant Education and Earnings ............................................
The Role of Labor Market Institutions.............................................
Institutions and Immigrant Unemployment................................
Benefits and Costs of Immigration...................................................
Labor Market Impact of Immigration .........................................
Fiscal Impact of Immigration ......................................................
Immigrants and Public Assistance ...............................................
Immigrants and Social Security ...................................................
Additional Benefits to Immigration.............................................
Immigration Policy...........................................................................
Current U.S. Immigration Policy ................................................
Employment-Based Immigration.................................................
Undocumented Immigration.......................................................
Conclusion.......................................................................................

93
94
94
95
96
96
97
99
100
101
104
104
106
107
108
108
109
110
111
113
115

chapter 5. expanding individual choice and control ..................
The Meaning of Property Rights ......................................................
The Economic Effects of Property Rights.........................................
The Success of Property Rights in Addressing Policy Issues ..............

117
118
118
121

12 | Economic Report of the President

Addressing Air Pollution Through Tradable Permits....................
Addressing Overfishing Through Property Rights .......................
School Voucher Programs............................................................
The Application of Property Rights to Current Policy Issues............
Personal Retirement Accounts .....................................................
Health Savings Accounts .............................................................
Millennium Challenge Accounts .................................................
Conclusion.......................................................................................

122
123
125
127
127
129
130
133

chapter 6. innovation and the information economy .................
Growth of the Information Economy...............................................
Growth in Computer and Internet Use .......................................
Illegal Acts on the Internet ..........................................................
Competition Versus Economic Regulation .......................................
Telephone Service: A Natural Monopoly?.........................................
Long-Distance Services................................................................
Mobile Wireless Telephone Services ............................................
Talking on the Internet: Voice over Internet Protocol..................
Realizing the Promise of Broadband.................................................
Universal, Affordable Access to Broadband .................................
Conclusion.......................................................................................

135
136
136
141
142
146
146
147
149
150
150
153

chapter 7. the global hiv/aids epidemic ........................................
A Global Crisis.................................................................................
Disease Characteristics and Treatments.............................................
The Economic Impact of HIV/AIDS...............................................
Direct Economic Impacts on Households ...................................
Indirect Economic Impacts on Households.................................
Macroeconomic Impacts .............................................................
Getting Prevention, Treatment, and Care to the Field ......................
A Role for Differential Pricing ....................................................
Humanitarian Aid .......................................................................
Development of New Treatments and Vaccines ................................
Incentives for Innovation ............................................................
Conclusion.......................................................................................

155
156
157
159
159
161
162
162
164
165
167
167
171

chapter 8. modern international trade ........................................
Free Trade: Beyond the Basics ..........................................................
Globalization and the Terms of Trade..........................................
The Impact of Trade on Labor Markets.......................................
The U.S. Advantage in Services Trade .........................................
Foreign Direct Investment: An Increasingly Important Part of Trade
The Global Supply Chain and FDI.............................................
How Inward FDI Strengthens Domestic Firms ...........................

173
173
174
176
178
179
180
181

Contents

| 13

Encouraging FDI ........................................................................
Achievements in Trade Negotiations.................................................
Trade with China ........................................................................
Intellectual Property Rights .........................................................
Trade Liberalization.....................................................................
Conclusion.......................................................................................

181
182
182
184
186
188

appendixes
A. Report to the President on the Activities of the Council of
Economic Advisers During 2004................................................. 189
B. Statistical Tables Relating to Income, Employment,
and Production ........................................................................... 201
1-1.
1-2.
3-1.
3-2.
4-1.
4-2.
1-1.
1-2.
1-3.
1-4.
1-5.
1-6.
2-1.
2-2.
2-3.
2-4.
2-5.
2-6.
2-7.
2-8.
2-9.

list of tables
Administration Forecast ............................................................ 43
Accounting for Growth in Real GDP, 1953-2010..................... 45
Sources of Federal Revenues, Fiscal Year 2005........................... 72
Comparison of Tax Revenues: United States, G-7, and
OECD, 2002 ............................................................................ 72
Foreign-Born Share of Employment Growth by Occupational
Category, 1996 to 2002 ............................................................ 95
Median Weekly Earnings by Educational Attainment, 2003 ..... 100
list of charts
Real and Nominal Price of West Texas Intermediate
Crude Oil .................................................................................
Investment Growth and the Acceleration of Nonfarm
Business Output........................................................................
Saving, Investment, and the Current Account Balance..............
Labor Productivity, Nonfarm Business Sector ...........................
Inflation and Inflation Expectations..........................................
Okun’s Law Estimation of Potential GDP Growth ...................
Real Gross Domestic Product....................................................
Real Personal Consumption Expenditures.................................
Real Nonresidential Investment ................................................
Real Residential Investment ......................................................
Real Exports of Goods and Services ..........................................
Nonfarm Payroll Employment ..................................................
Nonfarm Business Productivity .................................................
Recessions and Expansions: Real GDP......................................
Recessions and Expansons: Nonfarm Payroll Employment .......

14 | Economic Report of the President

33
35
37
39
41
44
50
51
52
53
54
55
56
57
59

2-10. Growth in Personal Income During Expansion Years,
Before and After Taxes ..............................................................
2-11. Real Government Spending (Consumption and Gross
Investment)...............................................................................
2-12. The Real and Nominal Federal Funds Rate...............................
2-13. Real GDP Growth ....................................................................
3-1. Share of Federal Taxes With and Without Tax Cuts, 2004 ........
3-2. Effective Federal Tax Rates With and Without Tax Cuts, 2004.
3-3. Percent Reductions in Total Federal Taxes, 2004.......................
4-1. Foreign-Born Share of Employment Growth by Census
Division, 1996 to 2003.............................................................
4-2. Number and Share of Foreign-Born in U.S. Population,
1850—2003 .............................................................................
4-3. Foreign-Born Population by Immigrant Status, 2003................
4-4. Foreign-Born Population by World Region of Birth, 2003 .......
4-5. Educational Attainment, 2003 ..................................................
4-6. Male Unemployment Rate by Nativity, 2000-2001 ..................
4-7. Youth Unemployment Rate by Nativity, 2000 ..........................
6-1. Growth in Gross Domestic Product Due to the Information
Technology Sector.....................................................................
6-2. Business-to-Consumer E-Commerce.........................................
6-3. Business-to-Business E-Commerce............................................
6-4. U.S. Wireline and Mobile Wireless Telephone Service ..............
6-5. Average Price Per Minute of Mobile Wireless Telephone
Service.......................................................................................
7-1. Estimated HIV Infection Levels, 2003......................................
7-2. Changes in Life Expectancy, 1960 to 2002 ...............................
7-3. Agricultural Labor Force Loss Due to HIV/AIDS, 2000
and 2020...................................................................................
8-1. Imports and the Unemployment Rate, 1960-2004 ...................
8-2. Trade in Business, Professional, and Technical Services .............
8-3. U.S. Imports of Goods..............................................................
1-1.
1-2.
2-1.
3-1.
3-2.
3-3.

list of boxes
Oil Prices and the Economy......................................................
Okun’s Law ...............................................................................
Is the Economy More Stable?....................................................
Complexity of the Current System............................................
The Initial Effects of the 2003 Reductions in Tax Rates on
Dividends..................................................................................
What Is the Current Distribution of the Tax Burden?...............

Contents

65
66
68
69
78
79
79
96
97
98
98
99
103
103
137
138
140
148
148
157
158
160
176
178
185
32
44
69
73
76
78

| 15

3-4.
4-1.
5-1.
5-2.
6-1.
6-2.
7-1.
7-2.

The Equivalence of Sales Taxes and Value Added Taxes.............
Wage Impacts of Immigration...................................................
The Benefits of Homeownership...............................................
The Benefits of Land Titles.......................................................
Airline Computer Reservation Systems .....................................
Satellite Television .....................................................................
Uganda’s Success Story ..............................................................
Creative Ways to Encourage Innovation....................................

16 | Economic Report of the President

83
106
119
131
139
145
166
168

Overview

I

n 2004, the U.S. economic recovery blossomed into a full-fledged expansion,
with strong output growth and steady improvement in the labor market. Real
gross domestic product (GDP) grew by 4.4 percent in 2004 for the year as a
whole. About 2.2 million new payroll jobs were created during 2004—the
largest annual gain since 1999. The unemployment rate fell to 5.4 percent by
year’s end, below the average of each of the past three decades. Inflation
remained moderate, especially excluding volatile energy prices. The U.S.
economy is on a solid footing for sustained growth in the years to come.
This is a marked reversal from the economic situation the Nation faced
when President Bush came into office. Four years ago, the economy was
sliding into recession after the bursting of the high-tech bubble of the 1990s.
The economy was then affected by revelations of corporate scandals, slow
growth among our major trading partners, and the terrorist attacks of
September 11, 2001. Business investment slowed sharply in late 2000 and
remained soft for more than two years. The economy lost over 900,000 jobs
from December 2000 to September 2001, and then almost another 900,000
jobs in the three months after the 9/11 attacks.
Prompt and decisive policy actions helped to counteract the effects of these
adverse shocks to the economy. Substantial tax relief together with expansionary monetary policy provided stimulus to aggregate demand that softened
the recession and helped put the economy on the path to recovery. In addition to providing timely short-term stimulus, the President’s pro-growth tax
policies have improved incentives for work and capital accumulation, thereby
fostering an environment conducive to long-term economic growth.
This Report discusses macroeconomic developments of the past year, the
Administration’s forecast for the years to come, and several topics related to
salient economic issues.

The Year in Review and the Years Ahead
Chapter 1, The Year in Review and the Years Ahead, reviews economic
developments in 2004 and discusses the Administration’s forecast for 2005 to
2010. Solid economic growth continued in 2004, and the Administration’s
forecast calls for further expansion in 2005, with real GDP growing faster
than its historical average and the unemployment rate continuing to decline.
The economy is expected to continue on a path of strong, sustainable growth.
17

Real GDP expanded by 3.7 percent during the four quarters of 2004, and
by 4.4 percent for the year as a whole compared with 2003. The solid advance
in real GDP during 2004 was supported by gains in consumer spending, business fixed investment, and, to a lesser extent, housing investment, inventory
accumulation, and government spending. Net exports (exports less imports)
held down growth in all four quarters as the trade deficit rose in the third
quarter to a record high as a percentage of GDP. Progress toward strengthened
economic growth among U.S. trading partners led to an increase in exports,
but imports continued to outpace exports as U.S. domestic demand and
demand for imported oil remained strong. The economy’s strong growth
performance came about in the face of higher oil prices, which likely reduced
growth somewhat during the year. The Administration expects real GDP to
grow 3.5 percent during the four quarters of 2005, in line with the consensus
of professional forecasters. This growth is expected to be driven by continued
gains in consumer spending, investment growth, and stronger net exports.
The labor market strengthened during the year. The unemployment rate,
which declined 0.5 percentage point to 5.4 percent by the end of 2004, is
projected to edge down further to 5.3 percent by the fourth quarter of 2005.
Nonfarm payroll employment, which grew about 180,000 per month during
2004, is projected to grow about 175,000 per month in 2005, in line with
other professional forecasts.
Inflation increased from the extremely low levels of 2003, partly because of
rapid increases in energy prices. Inflation as measured by the consumer price
index excluding food and energy remained in the moderate 2 percent range,
and inflation expectations remain low.
The economy made these advances even as energy prices soared, the Federal
Reserve raised interest rates, and the demand-side effects of fiscal policy stimulus began to recede in the second half of 2004. This continued growth
indicates that the economy has shifted from a policy-supported recovery to a
self-sustaining expansion.

Expansions Past and Present
Chapter 2, Expansions Past and Present, compares the current economic
expansion to previous expansions. The current expansion and the previous
one that started in 1991 followed especially shallow recessions, and both
exhibited relatively moderate overall growth in key economic variables.
Shallow recessions typically are followed by shallow recoveries and deep recessions by robust recoveries. The recent recession stands out in that there were
no consecutive quarters of decline, with revised data showing that real GDP
dropped in the third quarter of 2000 and the first and third quarters of 2001,
but grew in the intervening quarters.
18 | Economic Report of the President

Consumption and residential investment continued to grow throughout
the recession, while business investment fell sharply in the recession and
continued to decline for five quarters after the overall economy had bottomed
out. Both of these developments likely reflect the important role of fiscal and
monetary stimulus in supporting household demand and the unusual extent
to which the recession resulted from a collapse in investment following the
bubble of the late 1990s. The relationship between firms’ abilities to invest
and the state of economic activity has been deemed the “financial accelerator,”
in that changes in activity affect firms’ ability to invest and this in turn further
affects activity, in a way that tends to accentuate economic fluctuations. Fiscal
and monetary policy actions have counterbalanced these forces. Without the
boost to disposable income from tax relief, the recession would have been
deeper and longer.
The relatively weak payroll employment growth in the initial stages of the
current expansion likely reflects both the shallowness of the recession and the
unusually strong growth of productivity in the recession and expansion. In an
average expansion before the 1990s, employment recovered along with
output at the start of the expansion and regained its previous peak about three
quarters after the trough. In the expansion of the 1990s, however, employment continued to fall for two quarters after the expansion had commenced
and did not reach its previous peak value until another six quarters had
passed. In the most recent expansion, employment continued to fall for seven
quarters after the recession had ended and regained its prerecession level only
at the beginning of 2005, some 12 quarters after the end of the recession.
The moderate employment growth reflects especially strong productivity
growth during the current expansion. Productivity growth has averaged
4.2 percent per year at an annual rate in the most recent expansion, up
substantially from the 2.5 percent growth rate seen on average from 1995 to
2000. In the short run, greater productivity growth sets the bar higher for
employment growth. With increased productivity, a given amount of output
can be produced with fewer hours worked, so real GDP must grow more
quickly for employment to grow. In the long run, however, higher productivity growth leads to higher income per person, and will thus be expected to
be positive for employment growth.
That the recent recessions and expansions have been especially moderate
suggests the possibility that the economy has become more stable in general.
If so, then part of this stability is likely attributable to more active and timelier stabilization policy. Other factors possibly contributing to a more stable
economy include improved inventory management that lessens the volatility
of production changes, and the ongoing shift in the U.S. economy toward the
service sector, the output of which has typically been more stable than the
production of goods.

Overview

| 19

Options for Tax Reform
Chapter 3, Options for Tax Reform, discusses why tax reform is vital to a
stronger economy, and examines several basic prototypes for reform. The
President has not endorsed any specific proposal, and the chapter does not
advocate the adoption of any particular prototype for reform.
The current Federal tax system is unnecessarily complex and distorts incentives for work, saving, and investment. In addition to the dollar amounts of
taxes paid, the tax system imposes two indirect burdens on taxpayers and on
the U.S economy as a whole: the costs (in time and money) of complying
with tax rules and the costs (including slower economic growth) of taxinduced distortions of economic activity. The Internal Revenue Service
estimated that for tax year 2000, individual taxpayers spent 3.2 billion hours
on tax compliance, an average of 25.5 hours per return, and spent $19 billion
on tax preparers, computer software, and similar expenses.
High tax rates reduce incentives for work, saving, and investment, distort
economic decisions, and divert resources from productive activity into tax
avoidance, ultimately reducing economic growth and lowering living standards. High tax rates lead people to work less, to take their compensation in
nontaxable forms such as health insurance, and to alter their portfolios to
focus on tax-favored investments. The current tax system also distorts many
business decisions, resulting in inefficient use of resources and reduced
economic output. Double taxation of corporate income raises the cost of
capital and would therefore be expected to have an adverse effect on investment. Double taxation further leads firms to finance investment with debt
instead of equity, creates a bias in favor of using business forms such as partnerships and subchapter S corporations that are not subject to the double tax,
and discourages paying dividends. The Jobs and Growth Tax Relief
Reconciliation Act of 2003 (JGTRRA) reduced this double tax by reducing
the individual income tax rates for both dividends and capital gains, and
appears to have led to a sizable increase in dividend payments by firms.
Tax reform proposals generally follow either the principle of taxing
consumption or the principle of reforming the existing system to conform
more closely to a pure income tax.
Most proposals for tax reform involve variations on a few basic types of
taxes. The main types of consumption taxes are the retail sales tax, the value
added tax, the flat tax, and the consumed income tax. The retail sales tax
imposes tax liability when an individual purchases goods or services for
consumption, whereas the value added tax levies tax on the same base but the
tax is collected instead on the value added to the good or service at each stage
of its production. The flat tax consists of a business tax and an individual-level
tax, both with a single flat tax rate, in which wages are taxed at the individual
20 | Economic Report of the President

level rather than being included in the business tax base. This allows for
building progressivity into the system by providing an exemption of, say,
$40,000 for a family of four. While these taxes appear to be quite different,
they are equivalent from an economic standpoint because consumption is the
overall tax base in each case.
Important benefits could also be obtained through simplification and
reform of the current tax system. A reformed version of the current system
would reduce transition and adjustment costs, and considerable benefits
could be obtained by simplifying and rationalizing tax provisions that overlap
or are otherwise overly complex.
The Administration’s tax program has already significantly reformed the tax
system. Achievements include lowering marginal tax rates, reducing the
double tax on corporate income, simplification, and improved fairness for
families. The tax relief passed during the President’s first term also increased
the overall progressivity of the Federal tax system. The bottom 40 percent of
the population in terms of income received the largest percentage reductions
in total Federal taxes, and the share of taxes paid by the top 20 percent in
terms of income increased as a result of the tax cuts enacted since 2001.
Possible additional reforms would be to lower tax rates further and broaden
the base; rationalize the current multitude of saving incentives; further reduce
or eliminate the remaining double taxation of corporate income; and simplify
the complex system of depreciation rules. Reform within the current system
would also address the Alternative Minimum Tax (AMT), which adds considerable complexity, and which, under current law, is expected to affect a
rapidly growing number of taxpayers over the next five years.
Although tax reform has been discussed for many years, it is a particularly
pressing need at the current time. Increasing numbers of taxpayers will be
affected by the Alternative Minimum Tax, which will be a major source of
frustration and complexity. In addition, the tax reductions enacted since 2001
will expire in a few years unless they are extended or a new, reformed tax
system is adopted. If these provisions are allowed to expire, the result will be
substantial increases in taxes on taxpayers in all income groups, with the
largest percentage increases being imposed on lower- and middle-income
households.

Immigration
Chapter 4, Immigration, examines the economic impact and implications
of immigration. In recent decades, the United States has experienced a surge
in immigration not seen in over a century. Immigration has touched every
facet of the U.S. economy and, as the President has said, America is a stronger
Overview

| 21

and better Nation for it. A comprehensive accounting of the benefits and
costs of immigration shows that the benefits of immigration exceed the costs.
Immigrants have settled in all parts of our Nation and have generally
succeeded in finding jobs quickly, helped in large measure by the flexibility of
the U.S. labor market. One indicator of this success is that foreign-born
workers in the United States have a higher labor force participation rate and
a lower unemployment rate than foreign workers in most major immigrantreceiving countries.
While flexible institutions may speed the economic integration of the
foreign-born, the distribution of the gains from immigration can be uneven.
Less-skilled U.S. workers who compete most closely with low-skilled immigrants have experienced downward pressure on their earnings as a result of
immigration, although most research suggests these effects are modest. Also,
communities contending with a large influx of low-skilled immigrants may
experience an increased tax burden as immigrant families utilize publicly
provided goods such as education and health care.
U.S. immigration policy faces a complicated set of challenges, perhaps
more so now than ever before. Policy should preserve America’s traditional
hospitality to lawful immigrants and promote their economic contributions.
Yet these goals must be balanced with the Nation’s many needs, including the
imperative for orderly and secure borders. These challenges have only grown
in a post-9/11 world. The persistence of undocumented immigration and
problems with employment-based immigration suggest that current policy
falls short in addressing the demand for immigrant workers and the need for
national security. The President’s proposed Temporary Worker Program
recognizes these problems and would implement necessary reforms.

Expanding Individual Choice and Control
Chapter 5, Expanding Individual Choice and Control, examines the role
played by property rights in providing the link between people’s effort and
their reward. Having property rights allows people to know that they will reap
the rewards of their efforts and entrepreneurship.
When used in economics, the term resource refers not just to natural
resources, such as land or clean air, but to anything of value, such as skills. A
property right refers broadly to the arrangements society uses to assign people
control over resources. Property rights have a variety of names, including
deeds, titles, permits, vouchers, allowances, or accounts. Patents and copyrights are also property rights, establishing control over inventions, books,
songs, and other creative concepts. The essential idea is the same in each case:
the owner of the property right controls how something valuable is used.
22 | Economic Report of the President

That control is defined using a bundle of specific rights. The bundle is
commonly thought to consist of three main elements: the right to exclusive
use of the resource, the right to income derived from the resource, and the
ability to transfer those rights. Property rights can include a range of those
elements, from weak rights (which might only include the right to use the
resource) to strong rights in all three elements.
Property rights have a profound effect on the choices people make. In
addition to giving them the incentive to maintain and invest in things, people
will use resources more prudently if they own them. Property rights are essential
for markets to function. The lack of a clear title might prevent a car purchase. A
home buyer is unlikely to sign on the dotted line if she is not sure that the seller
actually owns the house. Without property rights, would-be entrepreneurs
cannot secure loans they might need to help their businesses grow.
Property rights are essential to the efficient operation of markets, which in
turn allocate resources to their most highly valued use. Clearly defined rights
are important in avoiding overuse of resources and in encouraging the
improvement of resources. Property rights further provide incentives to invest
in, maintain, and improve resources over time. The benefits of homeownership come about because individuals have control and responsibility over their
property and their lives.
The thoughtful application of property rights has already brought about a
number of policy improvements. Introducing a property-rights regime for air
quality reduced emissions almost 30 percent more than the required level and
achieved annual cost savings estimated at hundreds of millions of dollars per
year. The use of property rights for fisheries has mitigated overfishing while
increasing commercial fishermen’s profits and promoting a more stable
industry. The application of property rights to education has facilitated
greater school choice and improved student performance. These uses of property rights have given control to people with the best information and
incentives to use the resources in question.
Providing people with ownership, individual choice, and control of assets
could help address several current concerns. Giving families more control over
their retirement by establishing personal retirement accounts they actually
own would improve the Social Security system. Offering people greater
control over the money used for their health care would reduce health care
spending and increase the number of people with health care insurance.
Providing countries greater ownership (that is, more control) over how they
use the development assistance they receive will make them active partners in
the programs funded.

Overview

| 23

Innovation and the Information Economy
Chapter 6, Innovation and the Information Economy, provides an overview
of recent developments in information technology and discusses some of the
economic issues relevant to this especially dynamic sector of the economy.
Innovation and information technology are increasingly key contributors to
economic growth and productivity. Our Nation’s growing prosperity depends
on fostering an environment in which innovation will flourish.
Information technology has made many workplace tasks easier, boosting
people’s productivity. One recent study finds that labor productivity in the
nonfarm business sector grew at an annual rate of 2.4 percent from 1996
through 2001, and attributes nearly three-quarters of this growth to the accumulation of information technology capital together with improvements in
how people use this capital. Of the 2.9 percent growth in real gross domestic
product (GDP) in 2003, some 0.8 percentage point was attributable to
information technology.
A key development of the growing information economy is that more people
are using computers and communicating over the Internet. Usage of the
Internet includes email and the rapid growth of e-commerce, which includes
transactions with consumers and transactions between businesses. Consumers
have benefited from e-commerce through the greater variety of goods available
online and through the additional competition and lower prices resulting from
the spread of e-commerce. A downside is the rise of online theft, vandalism,
and fraud. The Administration has taken actions to protect property rights
and ensure that the Internet and other new technologies are safe venues
for commerce.
The process by which innovations such as the Internet come about involves
the invention, commercialization, and diffusion of new ideas. At each of these
stages, people are spurred to action by the prospect of reaping rewards from
their investment. Government thus has an important role to play in defining
and protecting property rights in intellectual and physical capital so that
entrepreneurs will be spurred to innovate.
In a free market, innovators vie to lower the cost of goods and services, to
improve their quality and usefulness, and—most importantly—to develop
new goods and services that promise benefits to customers. An innovation
will succeed if it passes the market test by profitably delivering greater value
to customers. Successful innovations blossom, attracting capital and diffusing
rapidly through the market, while unsuccessful innovations can wither just as
quickly. In this way, markets allow capital to flow to its highest-valued uses.
Competition drives the broad diffusion of innovative low-cost, high-quality
information services. This has held true in markets for mobile wireless
telephones, satellite television, and dial-up and broadband Internet services.
24 | Economic Report of the President

This engine of growth can falter, however, if government policies distort the
market signals that guide innovative activity. Well-meaning policies to
promote the diffusion of a service or foster entry into new markets can have
unintended consequences. A policy to subsidize an existing service so that
more people will consume it can deter development of innovative new services that people might otherwise prefer. In addition, potential pioneering
investors forced to share the fruits of their investment with new entrants
would find it less profitable to invest in the first place, and a new market may
never be developed. As circumstances change and industries evolve, existing
government regulations may need rethinking. In particular, economic regulations aimed at correcting an absence of competition may lose their rationale
when competition from new technologies emerges.

The Global HIV/AIDS Epidemic
Chapter 7, The Global HIV/AIDS Epidemic, examines the economic issues
posed by the acquired immunodeficiency syndrome (AIDS) epidemic. The
disease has already killed over 25 million people, and currently over
40 million people are living with the human immunodeficiency virus (HIV),
the virus that causes AIDS. The chapter discusses the nature of the crisis, its
consequences, and what governments can do to create affordable access to
existing treatments while encouraging research toward the development of
new medical therapies to combat this disease.
The impact of HIV/AIDS varies across the world, both in terms of the scale
of the epidemic and the ability to treat infected individuals. Less-developed
countries are particularly hard hit on both accounts. Almost two thirds of all
people with HIV live in sub-Saharan Africa, a region that makes up only one
tenth of the world’s population. At the same time, few infected individuals in
the region receive adequate treatment for the disease.
While the disease’s impacts on human health and mortality are widely
recognized, the HIV/AIDS epidemic also has devastating economic consequences that exacerbate the humanitarian crisis. AIDS deepens poverty,
intensifies food shortages, and, in some cases, erases decades of economic
progress. HIV/AIDS-related illnesses directly decrease the income of an
affected household. Even if an infected family member is able to work, a sick
worker is likely to be less productive than a healthy one. The disease predominantly affects the working-age population, and thus can leave too few people
to support the aging and young populations. AIDS can also impose debilitating costs on other members of a household, for example as other family
members may need to miss work or school to care for a patient. The disease
can further change the way that affected families make long-term decisions,
Overview

| 25

because they do not expect family members to live as long and because their
needs become more immediate due to pressing health concerns. As a result,
children may be pulled out of school in order to supplement the declining
family income, resulting in a loss in the children’s future earning potential.
Impacts such as this can combine to create a vicious cycle of increased poverty
in the short run and an inability of households to improve their condition in
the long run.
The President has made fighting the worldwide HIV/AIDS epidemic a
priority of U.S. foreign policy. He has taken bold action against the crisis
through his Emergency Plan for AIDS Relief. Understanding the unique challenges presented by this epidemic is essential to designing policies to prevent
the spread of the disease and to treat those who are already infected. A
comprehensive and integrated approach of prevention, treatment, and care is
essential to quelling the epidemic. In poor countries, treatment affordability
and the lack of health care infrastructure are major concerns. Compassionate
pricing policies and aid from developed nations can play an important role in
expanding access to treatment.
To continue the development of better treatments and to work toward
eradication of HIV/AIDS, drug companies need to maintain the highest
possible quality of research. Intellectual property laws are important to
ensuring appropriate incentives for innovation to create the next generation
of therapies and to develop a safe and effective vaccine.

Modern International Trade
Chapter 8, Modern International Trade, examines the benefits of free trade
and discusses the progress the Administration has made in opening global
markets. Open markets and free trade raise living standards both at home and
abroad. Any move toward economic isolationism would threaten the competitive gains made by U.S. exporters while harming U.S. consumers and firms
that benefit from imports.
The President’s policy of opening markets around the world is based on a
long history of intellectual support for free trade, starting with the nineteenth
century theory of comparative advantage advanced by David Ricardo.
Ricardo illustrated the ways in which free trade allows countries to mutually
benefit from specializing in producing products at which they are adept and
then exchanging those products. This rationale remains the same, even with
advances in technology and new types of trade. The principle of comparative
advantage applies to the burgeoning trade in services, in which the performance of U.S. service workers and firms has been particularly strong. The
United States exports more services than it imports, and this surplus has been
26 | Economic Report of the President

growing in recent years. Moreover, U.S. services exports tend to involve
relatively highly skilled and highly paid occupations, such as engineering,
financial services, or architectural services.
Richer economic models that take into account the features of the modern
world show that countries as a whole still gain from free trade. There are,
however, differing impacts of trade on different parts of the economy and the
labor force. Policies aimed at supporting individuals affected by trade are thus
vital to ensuring that its gains are widely shared. To this end, the
Administration has proposed a reform of the overall workforce training
system to help Americans obtain marketable skills needed to compete for jobs
in emerging and innovative fields. The Administration recognizes that effective workforce training requires the cooperation of the private sector and
community colleges and has worked to nurture these partnerships through
the High Growth Job Training Initiative at the Department of Labor and
through the recently enacted Community-based Job Training Grants. In addition, the Administration has proposed the establishment of Personal
Reemployment Accounts, an innovative approach to worker retraining, and
has worked to enhance the long-standing Trade Adjustment Assistance
program, which provides training and income support to workers directly
hurt by import competition. As part of the Trade Act of 2002, eligibility was
extended to workers indirectly affected by trade, such as workers employed by
firms that supply goods and services to industries directly affected by trade
competition. Benefits were enhanced to include a health insurance tax credit
and a wage supplement for older workers who found new jobs that did not
pay as well as their previous jobs. This assistance, which will total $12 billion
over 10 years, will ease the adjustment for displaced workers and help them
move into jobs for which their skills are most in demand.
Foreign direct investment is playing an increasingly important role in world
trade, as companies invest across borders to gain skills, technology, resources,
and market access. A good deal of evidence suggests that increased employment at the foreign subsidiaries of U.S. firms is associated with a corresponding
increase in employment in the U.S. parent company. Similarly, recent research
shows that one dollar of spending on capital investments abroad by U.S. firms
is associated with an additional three and a half dollars of spending on capital
investment at home. The available evidence thus suggests that, on the whole,
overseas expansion by U.S. firms goes hand-in-hand with expansion at home.
Subsidiaries of foreign firms operating in the United States make important
positive contributions to the U.S. economy as well. Foreign direct investment
into the United States is associated with the adoption of new technology, techniques, and skills by locally-owned companies. U.S. subsidiaries of foreign
companies employed 5.4 million U.S. workers in 2002, nearly 5 percent of
total private-sector employment. This is up from 3.9 million workers in 1992
(4.3 percent of total private employment at that time).
Overview

| 27

The Administration has pushed aggressively to open global markets to trade
through multilateral talks under the auspices of the World Trade Organization
(WTO), and through agreements to liberalize trade between the United States
and various partners. The Administration has worked to ensure that the benefits
promised under the agreements are realized for U.S. consumers, workers, manufacturers, farmers, and service providers. At the same time, lower trade barriers
benefit people in U.S. trading partner countries. When U.S. trading partners do
not fulfill their obligations, the Administration has sought their compliance
through a practical, problem-solving approach. When that fails, however, the
Administration has utilized formal dispute-settlement mechanisms.
The integration of the Chinese economy into the global trading system has
been an important development in recent years. The Administration has
worked to ensure that China lives up to the agreements it has signed,
including lowering its barriers to trade, addressing concerns about intellectual
property protection, and adopting and enforcing the rules of the multilateral
trading regime. Trade between the United States and China has been growing
rapidly. For goods trade through November 2004, China ranked as the thirdlargest trading partner of the United States. For most of the period since
China’s WTO accession, U.S. exports to China have been growing at a rate
faster than its imports from China, but this export growth is occurring from
a much smaller base.
The Administration’s vigorous pursuit of trade liberalization has paid off in
progress on the Doha Development Agenda. The United States played a leading
role in the intensive negotiations that led to an agreement establishing a framework for the ongoing talks at the WTO. These talks, which were launched in
2001 in Doha, Qatar, have focused on measures that will especially benefit
developing nations, including the elimination of agricultural export subsidies.
Trade agreements were also concluded in 2004 with Australia, Morocco,
Bahrain, and with the participants in the Central American Free Trade
Agreement (CAFTA), including Costa Rica, El Salvador, Guatemala,
Honduras, Nicaragua, and the Dominican Republic. At the same time, the
United States continued negotiations with the five nations of the Southern
African Customs Union (Botswana, Lesotho, Namibia, South Africa, and
Swaziland) while launching new negotiations with Thailand, Panama, and the
Andean nations Colombia, Ecuador, and Peru. The President has also
announced to Congress his intention to begin free trade agreement negotiations
with the United Arab Emirates and Oman. When combined with agreements
already negotiated by the Administration, partner countries accounting for
almost $50 billion in 2003 trade have committed to eventually eliminate tariffs
on almost all U.S. exports. Tariffs that averaged as high as 19.6 percent for U.S.
exports will be reduced to zero as a result of these agreements.

28 | Economic Report of the President

Conclusion
The last year has seen the U.S. economy strengthen from recovery into a
solid and sustainable expansion. With the near-term outlook bright, this
provides an opportunity to put renewed focus on longer-term economic challenges. The President’s agenda is focused on these challenges—on taking the
actions needed to bring about a better economic future shared by all
Americans. The President’s policies are designed to foster rising living
standards at home, while encouraging other nations to follow our lead.

Overview

| 29

C H A P T E R

1

The Year in Review and the Years Ahead

T

he recovery of the U.S. economy blossomed into a full-fledged expansion
in 2004, with solid output growth and steady improvement in the labor
market. Payroll employment increased by about 2.2 million jobs, the largest
annual gain since 1999, and the economy expanded 3.7 percent during the four
quarters of the year. The economy made these advances even as energy prices
soared, the Federal Reserve raised interest rates, and the demand-side effects of
fiscal policy stimulus began to recede in the second half. Such continued growth
indicates that the economy has shifted from a policy-supported recovery to a
self-sustaining, healthy expansion.
This chapter reviews the economic developments of 2004 and discusses the
Administration’s forecast for the years ahead. The key points in this chapter are:
• Real gross domestic product (GDP) grew solidly during 2004. Business
investment in equipment and software accelerated, and consumer
spending growth remained strong.
• Labor markets strengthened during the year. The unemployment rate
continued to decline, and employers created more than 2 million new jobs.
• Inflation rose from the extremely low levels of 2003, partly because of rapid
increases in energy prices. Nevertheless, core consumer price index (CPI)
inflation has remained in the moderate 2 percent range, and inflation
expectations remain low.
• The Administration’s forecast calls for the economic expansion to
continue this year, with real GDP growing faster than its historical
average and the unemployment rate continuing to decline. The economy
is expected to continue on a path of strong, sustainable growth.

Developments in 2004 and the Near-Term Outlook
Real GDP grew a robust 3.7 percent during the four quarters of 2004,
above the average historical pace. (Real GDP growth was 4.4 percent on a
year-over-year basis comparing GDP for 2004 as a whole with GDP for 2003
as a whole.) Growth was supported by gains in consumer spending, business
fixed investment, and, to a lesser extent, housing investment, inventory accumulation, and government spending. Net exports (exports less imports) held
down growth in all four quarters as the trade deficit rose in the third quarter
to a record high as a percentage of GDP. Strengthening economic growth
among our trading partners led to an increase in exports, but imports
31

continued to outpace exports as U.S. domestic demand and demand for
imported oil remained strong. The rise in crude oil prices reduced growth
somewhat during the year (Box 1-1).
The Administration expects real GDP to grow 3.5 percent during the four
quarters of 2005, in line with the consensus of professional forecasters. This
growth is forecast to be driven by continued gains in consumer spending,
investment growth (although slower than in 2004), and stronger net exports.
The unemployment rate, which declined 0.5 percentage point to 5.4 percent
during the four quarters of 2004, is projected to edge down further to
5.3 percent by the fourth quarter of 2005. Nonfarm payroll employment,
which grew about 180,000 per month during 2004, is projected to grow about
175,000 per month in 2005, in line with other professional forecasts.

Box 1-1: Oil Prices and the Economy
Rising oil prices hindered growth in 2004. Boosted by strong world
demand and both domestic and foreign supply disruptions, the price of
crude oil purchased by refiners increased almost continuously from $29
per barrel in December 2003 through October 2004 when it peaked at
$46 per barrel. A more-widely followed (but less comprehensive)
measure, the spot price of West Texas Intermediate crude oil, peaked
even higher, at $53 per barrel for the month of October. These prices
were historical highs in nominal terms, and were about 60 percent of
the all-time high in real terms (Chart 1-1). Crude oil prices then dropped
off in November and December. For 2004 as a whole, refiners’ acquisition cost was almost $9 per barrel above its year-earlier level.
High oil prices are a headwind for the economy because they raise
the cost of production, thus weakening the supply side of the economy,
and absorb income that could have been used for other purchases, thus
weakening the demand side of the economy. The United States imports
about two-thirds of its crude oil (about 10 million barrels per day), and
so the higher oil prices caused the bill for imported oil to increase by
about $32 billion (or 0.3 percent of GDP) in 2004. This increase acted
like a tax holding back aggregate demand.
One rule of thumb is that a $10 per barrel increase in the price of oil
reduces the level of real GDP by roughly 0.4 percent after four quarters.
Thus the roughly $9 per barrel increase in average oil prices for 2004
may have held back real GDP growth by 0.3 or 0.4 percentage point. If
oil prices move as expected by the futures market, average oil prices in
2005 will only slightly exceed the 2004 average—so oil prices are
expected to be only a minor impediment to 2005 growth.

32 | Economic Report of the President

Consumer Spending
Consumer spending continued its solid growth in 2004. Real personal
consumption expenditures, which account for 70 percent of GDP, rose
3.9 percent during the four quarters of 2004. Consumer spending has been
boosted by continued gains in disposable personal income and a rebound in
household wealth. Real disposable personal income—after-tax income
adjusted for inflation—rose by 2.3 percent at an annual rate during the first 11
months of 2004. Household net worth, meanwhile, grew at a 6 percent annual
rate in the first three quarters of 2004 (on top of a 13-percent gain during
2003), as equity prices moved up and housing prices continued to increase.
Personal saving fell to 0.8 percent of disposable personal income in the first
11 months of the year, down from an average of 1.4 percent in 2003. The
Administration forecast assumes that the saving rate will be roughly flat in the
coming years. Consumer spending is projected to continue its solid growth in
2005, supported by solid consumer sentiment (which was above average
historical levels in December), projected real compensation gains, and the
recent rebound in household wealth. Real consumer spending is projected to
grow somewhat more slowly than overall real GDP during the projection
period to 2010.
Chapter 1

| 33

Residential Investment
The housing sector remained strong through year-end 2004. Residential
investment increased 6 percent during the four quarters of 2004, following a
12 percent gain during 2003. Demand for new housing has been stimulated
by low mortgage rates. Rates on 30-year fixed-rate mortgages averaged 5.8
percent in 2004—about the same as a year earlier, but lower than at any other
time in the past 30 years. Sales of new single-family homes during 2004 were
the highest since at least 1963, when the government began tracking this
information, and the homeownership rate was a record 69 percent.
The strength in housing demand has been reflected in home prices. An
index of prices for houses involved in repeat transactions (that is, sales prices
of the same house over time) increased by 13 percent during the four quarters
ended in the third quarter of 2004—the biggest four-quarter increase since the
late 1970s. The rapid increase in demand and prices has further helped support
gains in home construction. Housing starts totaled 1.95 million units during
2004, making it the strongest year for housing starts since 1978.
The growth of new housing starts will likely slow in 2005. Long-term
Treasury rates are projected to increase, leading mortgage rates to edge up as
well. In addition, demographics suggest that the formation of new households
is unlikely to support additional increases in housing activity. Taken together,
these factors suggest that residential construction is likely to edge lower in the
next couple of years and to remain roughly flat during the years through 2010.

Business Fixed Investment
Real business fixed investment (firms’ outlays on equipment, software, and
structures) grew 9.9 percent during 2004, following a 9.4 percent gain during
2003. Growth was concentrated in equipment and software (up 13.6 percent),
while nonresidential construction edged lower. Within the equipment and
software category, growth during the four quarters of 2004 was particularly
strong in computer equipment and software. Investment in transportation
equipment also grew rapidly in 2004, overtaking its pre-9/11 level in the
fourth quarter.
Nonresidential structures investment edged down during the four quarters
of 2004, with a notable decline in investment in power and communications
facilities. Real nonresidential construction has been stagnant since 2002, as
vacancy rates in both office and industrial buildings have remained high.
Construction of shopping centers and other multi-merchant structures has
been robust, however.
Projections of future investment growth are based, in part, on the observation that growth in investment spending correlates well with the acceleration
(that is, the change in the growth rate) of business output (Chart 1-2); the
34 | Economic Report of the President

reasons for this correlation are discussed more fully in Chapter 2, Expansions
Past and Present. Equipment investment spending grew quite fast during 2003
and 2004, consistent with the rapid acceleration of nonfarm output growth
from 2001 to 2003. The 3.5 percent growth projected for real GDP during
the four quarters of 2005 is solid but below the growth rates of 2003 and
2004. It follows, therefore, that the growth of investment is likely to be slower
in 2005 than in 2004. In addition, the termination of the special investment
expensing provisions allowed under the Jobs and Growth Tax Relief
Reconciliation Act of 2003 (JGTRRA) is likely to have advanced into 2004
some investment spending that might have been planned for early 2005. The
end of this policy could limit investment growth in the first quarter of 2005.

Business Inventories
Businesses rebuilt inventories in 2004; inventory investment was solidly
positive during the year, after being slightly negative in 2003. Inventory
investment contributed an average of 0.35 percentage point to real GDP
growth during the four quarters of 2004.
Inventories appear to be lean relative to economy-wide sales and shipments,
with the inventory-to-sales ratio for manufacturing and trade close to its
historic low. Assessing just how lean these inventories are is difficult, however,

Chapter 1

| 35

as ongoing improvements in supply-chain management (such as just-in-time
practices, discussed in Chapter 2) have reduced the need for inventory stocks.
Inventories grew almost as fast as sales in 2004, and the inventory-to-sales
ratio for manufacturing and trade edged down only slightly last year.
Inventory investment in 2005 is projected to be sufficient to hold the inventory-to-sales ratio approximately constant, and the pace of inventory
investment is projected to contribute little to GDP growth in 2005.

Government Purchases
Real Federal purchases (consumption expenditures and gross investment)
grew at a 4 percent rate during the four quarters of 2004, with most of that
growth accounted for by defense spending. Total nominal Federal expenditures (including transfer and interest payments) slowed to a 5 percent rate of
growth during 2004 from a 6 percent rate in 2003.
After several difficult years, the budget position of states and localities
improved recently due to a combination of spending restraint and renewed
growth of revenues. The level of real state and local consumption and gross
investment was little changed during 2004, the lowest growth in real
spending since the early 1980s. State and local revenues have been boosted by
increased household income and consumer spending, as well as by additional
federal grants authorized under JGTRRA. Spending restraint, together with a
pickup in revenues, boosted the net saving of state and local governments to
roughly $11 billion during the first three quarters of 2004, roughly reversing
the dissaving during the year-earlier period. Real state and local spending is
projected to pick up from last year’s slow growth, to about 2 percent per year
during the projection period.

Exports and Imports
The trade deficit expanded substantially during 2004. Real exports
increased 4 percent, as economic growth strengthened among our major
trading partners, but real imports increased even faster (at a 9.2 percent rate),
partly due to the more robust recovery in the United States than abroad. The
trade deficit on goods and services reached about 51⁄4 percent of GDP in the
third quarter of 2004.
The rapid increases in real imports were widespread and included capital
goods and industrial supplies, petroleum, and consumer goods.
All the major categories of real nonagricultural exports (capital goods,
industrial supplies, motor vehicles, consumer goods, and services) contributed
to the growth of overall exports. Agricultural exports declined, however, as
exports of beef fell on concerns about “mad cow” disease. Due to the detection of the first known case of “mad cow” disease in the United States in late
36 | Economic Report of the President

2003, a number of countries that together account for most U.S. beef exports
have completely or partially halted purchases of American beef. As a result,
beef exports—which were $3.1 billion in 2003—have now fallen to about
$0.5 billion at an annual rate.
The rapid growth of imports relative to exports largely reflects faster growth
in the United States than among our trading partners, as U.S. demand for
imports increases faster than foreigners’ demand for our exports. For example,
the U.S. economy grew faster than its trading partners in the Organization for
Economic Cooperation and Development (OECD) during the four quarters
of 2003 (4.4 percent versus 2.2 percent), and the OECD growth estimate
for the four quarters of 2004 also shows slower growth elsewhere in the
OECD (2.7 percent) than the 3.7 percent official estimate of growth for the
United States.
The current account deficit, which primarily reflects the trade deficit but
also includes net international flows of investment income and transfers,
widened to about 5.6 percent of GDP in the second and third quarters. The
current account deficit represents the inflow of capital that is needed to
finance domestic U.S. investment in excess of domestic saving. Over the latter
half of the 1990s and the early 2000s, the U.S. current account deficit
expanded as domestic investment grew faster than saving (Chart 1-3). More
recently, the current account deficit has expanded as the national saving rate
has fallen.

Chapter 1

| 37

Looking ahead, stronger growth in U.S. trading partners appears to favor
continued gains in export growth. Growth among the non-U.S. members of
the OECD is projected to increase from 2.7 percent during the four quarters
of 2004 to 3.0 percent during the four quarters of 2005. This growth should
support growth in U.S. exports. This effect will likely be augmented by an
expected rise in the U.S. share of world exports, owing in part to recent
declines in the value of the dollar against other major currencies. Overall, the
Administration projects real exports to grow noticeably faster than GDP in
2005. The projected moderation of U.S. GDP growth in 2005 and 2006
together with the recent change in the exchange value of the dollar suggest
that growth in real imports will slow in the future.

Employment
Nonfarm payroll employment increased about 2.2 million during 2004,
the largest annual gain since 1999. The unemployment rate declined to
5.4 percent in December 2004, well below the 6.3 percent peak of June 2003.
The unemployment rate in 2004 was below the averages of the 1970s, the
1980s, and the 1990s.
Job gains were spread broadly across major industry sectors in 2004. The
service-providing sector accounted for 85 percent of job growth during the
year, in line with its 83 percent share of overall employment. The goodsproducing sector accounted for the remaining 15 percent of the gains, in line
with its 17 percent share of overall employment. Within the goods-producing
sector, employment growth was concentrated in construction; manufacturing
employment also increased, the first such gain since 1997.
These employment figures reflect the benchmark adjustment of the
employment data in early February 2005. The employment data for 2004 will
also be affected by next year’s benchmarking process, which will cover the
period from March 2004 to March 2005.
The Administration projects that employment will increase at a pace of
about 175,000 jobs per month on average during the 12 months of 2005—a
projection that is in line with the consensus of private forecasters. The unemployment rate is projected to edge down to 5.3 percent by the fourth quarter
of 2005. Employment growth is not expected to slow by as much as output
growth because productivity (output per hour) is projected to increase at a
slower pace than in 2004, and more of the projected output growth may be
translated into labor demand and employment in 2005 than in 2004.

38 | Economic Report of the President

Productivity
Recent productivity growth has been extraordinary. Nonfarm productivity
has grown at a 4.2 percent annual rate since the business-cycle peak in the first
quarter of 2001, a period that includes both recession and recovery. This is a
1.8 percentage point acceleration from the already rapid 2.4 percent annual
growth rate recorded from 1995 to 2001 (Chart 1-4).
Although the cause of the 1995 acceleration is not well understood,
plausible explanations have been offered relating to capital deepening, especially of informational and organizational capital. But none of these
explanations helps to explain the post-2000 productivity acceleration, which
occurred despite a slowing of investment in both conventional capital goods
and information technology (IT).

Wages and Prices
Following very low inflation during 2003, most measures of inflation
increased during 2004, with the largest increases in those price indexes that
include energy. For example, the consumer price index (CPI) increased
3.3 percent over the 12 months of 2004, well above the 1.9 percent rise

Chapter 1

| 39

during the previous year. Excluding the volatile food and energy components,
core consumer prices increased 2.2 percent during 2004, up from 1.1 percent
during 2003. About 0.4 percentage point of the year-to-year acceleration in
the core CPI is accounted for by used car prices, which dropped sharply in
2003 before rebounding in 2004. Consumer energy prices increased
17 percent in 2004—with particularly large (27 percent) increases in petroleum-based energy prices. Food prices increased 2.7 percent during 2004,
down slightly from their 3.6 percent rise in 2003.
Hourly compensation of workers grew solidly during the year, mostly
because of rising benefits. Private-sector hourly compensation, as measured by
the employment cost index (ECI), increased 3.8 percent during the
12 months of 2004—down slightly from its 4.0 percent year-earlier pace. The
wages and salaries component of this measure rose 2.4 percent during the
year, while benefits increased by 6.9 percent. The increase in hourly benefits
was led by an increase in employer contributions to defined benefit
programs—which increased at a 66 percent annual rate during the first three
quarters of 2004, according to the employer costs for employee compensation
index (derived from the same survey as the ECI, but with different weights).
This rapid increase occurred as employers made “catch-up” contributions to
their pension plans to offset some of the underfunding that developed in
recent years. Employer-paid health premiums rose 7.3 percent during 2004
according to the ECI, a smaller increase than the 10.5 percent during 2003.
The effects of these gains in hourly compensation on unit labor costs were
mostly offset by the rapid growth rate of productivity during the first three
quarters of 2004. Unit labor costs rose at only a 0.7 percent annual rate during
the first three quarters of 2004, after falling from 2001 through 2003. Most of
the increase in prices during 2004 was attributable to widening gross profit
margins rather than to increasing costs, suggesting some tightness in product
markets. Consistent with this product-market tightness, delivery lags lengthened during the first half of 2004, as reported by manufacturing supply
managers. These supply delivery lags increased much more slowly toward yearend, however, and the experience of the last two expansions suggests that these
lags are likely to recede as the economy reconfigures itself for sustained growth.
Last year’s increase in inflation appears likely to have been a temporary
phenomenon rather than the beginning of a sustained increase. Inflation, as
measured by the CPI, is expected to stabilize at a 2.4 percent annual rate in
future years, up only slightly from the 2.2 percent increase in the core CPI
during 2004. In 2005 and 2006, the overall consumer price index is projected
to be held down by anticipated declines in energy prices consistent with the
declines implicit in the futures market for crude oil. The inflation fluctuations
during the past year have not affected long-term inflation expectations, which
remain stable (Chart 1-5).
40 | Economic Report of the President

The projected path of inflation as measured by the GDP price index is
similar, but a bit lower. It is projected to fall to 1.9 percent during the four
quarters of 2005, down slightly from the 2.2 percent annual rate of increase
in the GDP price index excluding food and energy during 2004. During the
next several years, the GDP price index is projected to increase at a 2.0 or 2.1
percent annual rate—a stable pace of inflation consistent with the projected
unemployment rate of 5.1 percent.
These inflation projections—although revised up from a year ago—are
close to those of the consensus of professional economic forecasters.
The wedge between the CPI and the GDP measures of inflation has implications for Federal budget projections. A larger wedge would reduce the
Federal budget surplus because cost-of-living adjustments for Social Security
and other indexed programs rise with the CPI, whereas Federal revenue tends
to increase with the GDP price index. For a given level of nominal income,
increases in the CPI also cut Federal revenue because they raise income tax
brackets and affect other inflation-indexed features of the tax code. Of the
two indexes, the CPI tends to increase faster in part because it measures the
price of a fixed basket of goods and services. In contrast, the GDP price index
increases less rapidly because it reflects the choice of households and businesses to shift their purchases away from items with increasing relative prices

Chapter 1

| 41

and toward items with decreasing relative prices. In addition, the GDP price
index includes investment goods, such as computers, whose relative prices
have been falling rapidly. Computers, in particular, receive a much larger
weight in the GDP price index (1 percent) than in the CPI (0.2 percent).
During the 10 years ended in 2003, the wedge between inflation in the
CPI-U-RS (a historical CPI series designed to be consistent with current CPI
methods) and the rate of change in the GDP price index averaged
0.4 percentage point per year. The wedge was particularly high during 2004
when the CPI increased 1.0 percentage point faster than the GDP price
index, reflecting the roughly 50 percent increase in oil prices, which have a
much larger weight in consumption prices than in GDP as a whole. Since
domestic production accounts for only about a third of U.S. oil consumption,
the weight of oil prices in GDP is roughly one-third of its weight in the
consumption basket. As this boost from higher oil prices unwinds over the
next couple of years, the wedge between CPI and GDP inflation is likely to
be lower than its recent average. During the entire 2004 to 2010 period, the
wedge is projected to average 0.4 percentage point, equal to the
Administration estimate of the wedge in the long term.

Financial Markets
Stock prices fluctuated within a relatively narrow range for the first eight
months of the year, and then increased during the last four months. Over the
12 months of 2004, the Wilshire 5000, a broad index of stock prices, rose
11 percent. These gains built on the 29 percent gains that were recorded
during 2003.
Long-term interest rates fluctuated substantially during 2004, but finished the
year essentially unchanged. The yield on 10-year Treasury notes fell by
0.3 percentage point from January through March, to about 3.8 percent. The
yield then increased sharply in the next two months, rising 0.9 percentage point,
coinciding with a pickup in the core CPI and several months of strong job
growth. Rates began to fall again in early June, as monthly increases in the core
CPI and job growth moderated. The 10-year rate declined during the second half
of the year, even as the Federal Reserve’s Open Market Committee raised the
(overnight) Federal funds rate at every meeting from June through December.
The 10-year rate ended the year at about the same level as it had begun.

The Long-Term Outlook Through 2010
The U.S. economy continues to be well-positioned for long-term growth.
The Administration projects that GDP will expand strongly through 2010,
inflation will remain contained, and labor markets will continue to
42 | Economic Report of the President

strengthen. The forecast is based on conservative economic assumptions that
are close to the consensus of professional forecasters. These assumptions
provide a prudent and cautious basis for the budget projections.

Growth in GDP over the Long Term
The Administration projects that real GDP will grow at an average annual
rate of 3.3 percent during the four years of 2005 to 2008 (Table 1-1), roughly
in line with the consensus forecast for those years. This pace is slightly above
the expected 3.2 percent annual growth in potential GDP (a measure of
productive capacity), so the unemployment rate is projected to edge lower
from 5.4 percent at the end of 2004 to 5.1 percent by the end of 2006. The
unemployment rate is expected to remain flat thereafter as the economy grows
at its potential rate of 3.2 percent in 2007 and 2008 and 3.1 percent in 2009
and 2010. As discussed below, potential GDP growth is expected to slow
somewhat after 2008, as labor force growth declines.
The projected growth of GDP is conservative relative to recent experience.
The economy grew more than 4 percent during 2003 and is estimated to have
grown 3.7 percent during the four quarters of 2004. Moreover, Okun’s Law,
a well-known economic rule of thumb, suggests that potential GDP growth
has been about 3.5 percent in recent years (Box 1-2).

TABLE 1-1.— Administration Forecast 1

Year

Nominal
GDP

Real GDP
(chaintype)

GDP price
index
(chaintype)

Consumer Unemployment
price
rate
index
(percent)
(CPI-U)

Percent change, fourth quarter to fourth quarter

Interest
rate,
91-day
Treasury
bills 2
(percent)

Interest
rate,
10-year
Treasury
notes
(percent)

Nonfarm
payroll
employment
(millions)

Level, calendar year

2003 (actual) .......

6.2

4.4

1.7

1.9

6.0

1.0

4.0

129.9

2004 .....................
2005 .....................
2006 .....................
2007 .....................
2008 .....................
2009 .....................
2010 .....................

6.3
5.5
5.6
5.4
5.4
5.3
5.3

3.9
3.5
3.4
3.2
3.2
3.1
3.1

2.3
1.9
2.0
2.1
2.1
2.1
2.1

3.4
2.0
2.3
2.4
2.4
2.4
2.4

5.5
5.3
5.2
5.1
5.1
5.1
5.1

1.4
2.7
3.5
3.8
4.0
4.1
4.2

4.3
4.6
5.2
5.4
5.5
5.6
5.7

131.3
133.4
135.5
137.5
139.2
140.9
142.5

1
Based on data available as of December 3, 2004. Figures cited in the text for 2004 are based on data
available through January 28, 2005, and so may differ from figures shown here.
2

Secondary market (bank discount basis).

Sources: Council of Economic Advisers, Department of Commerce (Bureau of Economic Analysis), Department of
Labor (Bureau of Labor Statistics), Department of the Treasury, and Office of Management and Budget.

Chapter 1

| 43

Box 1-2: Okun’s Law
One way of estimating the economy’s potential growth rate is
through the empirical regularity known as Okun’s Law, which relates
changes in the unemployment rate to GDP growth (Chart 1-6). The chart
plots the four-quarter change in the unemployment rate (which has
been adjusted to account for demographic changes) against the fourquarter growth rate of real output. According to Okun’s Law, the
unemployment rate falls when output grows faster than its potential
rate and rises when output growth falls short of that potential. The rate
of real GDP growth consistent with a stable unemployment rate is then
interpreted as the rate of potential growth; this potential can be estimated as the rate at which the fitted line in Chart 1-6 crosses the
horizontal axis. As can be seen by the position of the two parallel lines,
the pace of potential real GDP growth appears to have picked up after
1995. The lower line, which is drawn through data for 1980–1995,
suggests that potential real GDP grew at a 2.8 percent annual rate
during those years. The upper line—which is drawn through data for
1996–2004 and is estimated so as to be parallel to the lower line—
suggests that real potential GDP growth accelerated to a 3.5 percent
annual rate during the past nine years.

44 | Economic Report of the President

The growth rate of the economy over the long run is determined by its
supply-side components, which include population, labor force participation,
productivity, and the workweek. The Administration’s forecast for the contribution of different supply-side factors to real GDP growth is shown in
Table 1-2.
As seen in the fourth column of the table, the supply-side composition of
real GDP growth has been unusual since the beginning of 2001, with exceptionally high productivity growth (4.2 percent at an annual rate) being
partially offset by a large decline in the ratio of nonfarm business employment
to household employment. This unusual pattern reflects the discrepancy
between the slow growth of employment as measured by the employer survey
and the more rapid growth of employment as measured by the household
survey—a disparity that has not been adequately explained. Declines in the
labor force participation rate have also held down real GDP growth during the
past four years, although the reasons for these declines may be partly cyclical.

TABLE 1-2.— Accounting for Growth in Real GDP, 1953–2010
[Average annual percent change]
Item

1953 Q2 1973 Q4 1995 Q2 2001 Q1 2004 Q3
to
to
to
to
to
1973 Q4 1995 Q2 2001 Q1 2004 Q3 2010 Q4

1) Civilian noninstitutional population aged 16 and over 1 ..........
2) Plus: Civilian labor force participation rate ........................

1.6
.2

1.4
.4

1.2
.1

1.2
-.5

1.1
-.1

3) Equals: Civilian labor force 2 ....................................................
4) Plus: Civilian employment rate ............................................

1.8
-.1

1.8
.0

1.4
.3

.7
-.4

1.0
.1

5) Equals: Civilian employment 2 ..................................................
6) Plus: Nonfarm business employment as
a share of civilian employment 2 3 ...............................

1.7

1.8

1.7

.4

1.1

-.1

.1

.5

-.9

.0

7) Equals: Nonfarm business employment...................................
8) Plus: Average weekly hours (nonfarm business) .................

1.6
-.3

1.8
-.3

2.1
-.3

-.6
-.4

1.1
.1

9) Equals: Hours of all persons (nonfarm business)....................
10) Plus: Output per hour (productivity, nonfarm business) .....

1.3
2.5

1.6
1.5

1.9
2.4

-1.0
4.2

1.2
2.5

11) Equals: Nonfarm business output............................................
12) Plus: Ratio of real GDP to nonfarm business output 4 .........

3.8
-.2

3.1
-.2

4.3
-.5

3.2
-.4

3.8
-.4

13) Equals: Real GDP......................................................................

3.6

2.8

3.8

2.8

3.3

1

Adjusted by Council of Economic Advisers to smooth discontinuities in the population series since 1990.

2

Bureau of Labor Statistics research series adjusted to smooth irregularities in the population series since 1990.
Line 6 translates the civilian employment growth rate into the nonfarm business employment growth rate.

3

4
Line 12 translates nonfarm business output back into output for all sectors (GDP), which includes the output of
farms and general government.
Note: The periods 1953 Q2, 1973 Q4, and 2001 Q1 are NBER business-cycle peaks. Detail may not add to total
because of rounding.
Sources: Council of Economic Advisers, Department of Commerce (Bureau of Economic Analysis), and Department
of Labor (Bureau of Labor Statistics).

Chapter 1

| 45

The 4.2 percent rate of productivity growth during the past three and a half
years is remarkable, particularly because this period included a recession, and
is well above the already strong 2.4 percent productivity growth experienced
from 1995 to 2001. The causes of the post-2001 productivity acceleration
remain a mystery at this time, and so it seems unwise to presume that the
rapid growth of the last few years will be sustained indefinitely. The
Administration expects nonfarm labor productivity to grow at a 2.5 percent
annual pace over the next six and a quarter years. This is a bit below the
assumed 2.6 percent trend rate of growth, similar to the 2.4 percent pace
during the 1995–2001 period, and only modestly above the 2.3 percent
average pace since the data series began in 1947.
Growth of the labor force (also shown in Table 1-2) is projected to
contribute 1.0 percentage point per year, on average, to growth of potential
output through 2010. Labor force growth results from changes in the
working-age population and the participation rate. The Bureau of the Census
projects that the working-age population will grow at an average annual rate
of 1.1 percent through 2010. This pace is more rapid in the near future and
then trails off after 2008. The last year in which the labor force participation
rate increased was 1997, suggesting that the long-term trend of rising participation has ended. Since then, the participation rate has fallen at an average
0.2 percent annual pace.
Demographic factors will likely lead to yet lower participation in future
years. Baby boomers are currently in their forties and fifties. Over the next
several years they will move into older age brackets with lower participation
rates. As a result, the labor force participation rate is projected to edge down
an average of 0.1 percent per year through 2010. The decline may be greater,
however, after 2008, which is the year that the first baby boomers reach the
early-retirement age of 62. Together with the expected deceleration of the
growth of the working-age population, the falling participation rate works to
slow the growth rate of potential output to 3.1 percent in 2009–2010.
An expanding workweek is projected to add 0.1 percentage point to
potential GDP growth during the projection period. Most of this increase
occurs in the next couple of years during the period of strong cyclical labor
demand, rather than as a permanent feature of long-term growth. The ratio
of nonfarm employment to household employment (which, as noted above,
subtracted a puzzling 0.9 percentage point from real GDP growth during
2001–2004) is projected to contribute nothing toward real GDP growth
during the projection period. It is possible, however, that it might reverse
course during the next few years, offsetting its recent weakness. Such a
development would add to real GDP growth.

46 | Economic Report of the President

In sum, potential real GDP is projected to grow at a 3.2 percent annual
pace through 2008, and then to slow to 3.1 percent in 2009 and 2010. Actual
real GDP growth during the six-year forecast period is projected to be
slightly higher, at 3.3 percent, as the unemployment rate declines and the
workweek expands. The economy is forecast to grow at potential beginning
in 2007, and the unemployment rate is projected to stabilize at 5.1 percent.

Interest Rates over the Long Term
The Administration forecast of interest rates is based on financial market
data as well as a survey of economic forecasters. The yield curve, which shows
how the yield on Treasury securities rises with the maturity of those securities,
is currently steeper than usual. This steepness suggests that financial market
participants expect short-term interest rates to rise. The Administration forecast thus projects gradual increases in the interest rate on 91-day Treasury bills
to continue through 2010—with most of the increase expected during the
next two years. This rate is expected to reach 4.2 percent in 2010, at which
point the real interest rate on 91-day Treasury bills will be close to its historical average. The projected path of the interest rate on 10-year Treasury notes
is consistent with the path of short-term Treasury rates. By 2010, the 10-year
rate is projected to be 5.7 percent, 3.3 percentage points above expected CPI
inflation—a typical real rate by historical standards. By 2010, the projected
term premium (the difference between the 10-year interest rate and the
91-day rate) of 1.5 percentage points is in line with its historical average.

The Composition of Income over the Long Term
A primary purpose of the Administration’s economic forecast is to estimate
future government revenues, which requires a projection of the components
of taxable income. The Administration’s income-side projection is based on
the historical stability of the long-run labor compensation and capital shares
of gross domestic income (GDI). During the first three quarters of 2004, the
labor compensation share of GDI was only 56.8 percent—well below its
1959–2003 average of 57.9 percent. From this jumping-off point, the labor
share is projected to slowly rise to 57.8 percent by 2010.
The labor compensation share consists of wages and salaries, which are
taxable, employer contributions to employee pension and insurance funds
(that is, fringe benefits), which are not taxable, and employer contributions
for government social insurance. The Administration forecasts that the wage
and salary share of compensation will be roughly stable during the projection
period. One of the main factors boosting non-wage compensation during the

Chapter 1

| 47

past two years has been employer contributions to defined-benefit pension
plans, and although these contributions are likely to remain high in the next
few years, they are not projected to rise as a share of compensation after 2004.
The capital share of GDI is expected to fall from its currently high level
before plateauing near its historical average. Within the capital share, a nearterm decline in depreciation (an echo of the decline in short-lived investment
during 2001 and 2002) is expected to boost corporate profits, which in the
third quarter of 2004 were about 10.2 percent of GDI (excluding the temporary negative effects of hurricanes)—a figure well above its post-1959 average
of 8.5 percent. From 2005 forward, the profit share is expected to slowly edge
down toward its long-term average.
The projected pattern of book profits (known in the national income
accounts as “profits before tax”) reflects the termination of the window for
expensing of equipment investment allowed under the Job Creation and
Worker Assistance Act of 2002 and the Jobs and Growth Tax Relief
Reconciliation Act of 2003. These expensing provisions reduced taxable
profits from the third quarter of 2001 through the fourth quarter of 2004.
The expiration of the expensing provisions increases book profits from 2005
forward, however, because investment goods expensed during the three-year
expensing window will have less remaining value to depreciate. The share of
other taxable income (the sum of rent, dividends, proprietors’ income, and
personal interest income) is projected to fall in coming years, mainly because
of the delayed effects of past declines in long-term interest rates, which reduce
personal interest income during the projection period.

Conclusion
Supported by expansionary fiscal and monetary policy, the economy now
appears to have shifted from a tentative recovery to a sustained expansion.
Consumer spending remains strong, businesses are continuing to invest, and
employment growth has rebounded. Prospects remain bright for continued
growth in the years ahead. And yet much work remains in making our economy
as productive as possible. Later chapters of this Report explore how pro-growth
policies, such as reforming our tax system, expanding the reach of property
rights, and encouraging innovation, can enhance our economic performance.

48 | Economic Report of the President

C H A P T E R

2

Expansions Past and Present

T

he U.S. economy began to expand rapidly in mid-2003, an expansion that
carried through to 2004. Real gross domestic product (GDP) rose by
4.0 percent from the third quarter of 2003 to the third quarter of 2004.
Employment grew steadily in 2004, with more than 2.6 million jobs created on
net since the job market turned around in August 2003. The unemployment
rate has declined from a high of 6.3 percent in June 2003 to 5.4 percent in
December 2004—a rate below the average unemployment rate of the 1970s,
1980s, and 1990s. Inflation picked up modestly over the course of 2004 but
remains low by historical standards, with consumer prices having increased by
3.3 percent during 2004. This state of affairs—strong growth, declining unemployment, and moderate inflation—is remarkable in light of the powerful
contractionary forces at work since early 2000: the bursting of the high-tech
bubble of the 1990s, revelations of corporate scandals, weak growth in the
United States’ major trading partners, the war in Iraq, and the impact of the
terrorist attacks.
The recent recession and expansion took place against the backdrop of an
economy undergoing fundamental changes. At the beginning of the twentieth
century, the agricultural sector was the biggest employer; at the beginning of
the twenty-first, the service-providing sector employed the most people.
Technical progress has spurred productivity growth and raised living standards. The labor force increased enormously, as the population grew and the
labor force participation rate of women rose over the course of the last
century. The development of new financial instruments helped people
become financially secure, and the expansion of the mortgage market has
helped a record number of people own homes.
Given these large changes in the structure of the U.S. economy, the nature
of economic expansions has probably also changed over time. Enough time
has now elapsed in the current expansion to allow fruitful comparisons with
previous expansions. The key findings are:
• The last two expansions—the one starting in 1991 and the current
one—are similar to each other, but dissimilar to previous expansions.
Both have exhibited relatively moderate overall growth in key
economic variables.
• The last two expansions followed especially shallow recessions.
Generally, shallow recessions are followed by shallow recoveries and deep
recessions by robust recoveries.

49

• Stabilization policy—fiscal and monetary policy—has been particularly
active during the last recession and expansion. The boost to disposable
income from fiscal policy has been especially strong. Without these
strong policies, the recession would have been deeper and longer.

Overview of the Current Expansion
Chart 2-1 plots the level of real GDP in the current expansion, the
expansion of the 1990s, and the average of the five expansions from 1960 to
1990. The average provides a historical benchmark for the behavior of expansions; the year 1960 is chosen as a starting point to balance the need to
smooth behavior over multiple expansions with the need to recognize that
changes in the nature of the economy over time make earlier expansions less
comparable to current ones. In each expansion, real GDP is normalized to
100 at the trough of the preceding recession (which is also the beginning of
the expansion). Dates of the troughs are determined by the National Bureau
of Economic Research. In the chart, each expansion begins at the vertical line
at 0; points to the left of that line occur during the preceding recessions. The
slope of each line is related to GDP growth: steeper slopes imply bigger
changes in the level of real GDP per quarter, or faster growth.

50 | Economic Report of the President

The behavior of real GDP is similar in the 1990s and current expansions,
but both are different from the average prior expansion. In particular, real
GDP has risen less robustly during the last two expansions than it did, on
average, in the other expansions since 1960.
In the average contraction prior to 1990, the level of real GDP reached its
peak approximately four quarters before the eventual trough; in the 19901991 contraction, GDP reached its peak two quarters before the trough.
There were no consecutive quarters of decline in the most recent contraction,
with revised data showing that real GDP dropped in the third quarter of 2000
and the first and third quarters of 2001, but grew in the intervening quarters.

Consumption
The largest component of GDP, real personal consumption expenditures,
shows a similar pattern (Chart 2-2). Consumption behavior during the last
two expansions has been almost identical, with the two recent expansions
differing from prior expansions.
In the prior recessions, on average, consumption growth moderated
starting six quarters before the recession’s eventual trough, did not actually fall
until two quarters before the trough, and began to rise in the quarter before
the trough. In the 1990-1991 recession, consumption rose rapidly until two

Chapter 2

| 51

quarters before the trough, dropped sharply until the trough, and mostly grew
thereafter. The most recent recession stands out as different in that consumption continued to grow throughout. This likely reflects the important role of
fiscal and monetary stimulus in supporting demand and the unusual extent
to which the recession resulted from a collapse in investment following the
bubble of the late 1990s.

Investment
In an average expansion prior to 1990, total nonresidential investment
started to rise at the business cycle trough, but initially rose at a slower pace
than consumption (Chart 2-3). In the expansion of the 1990s, however,
investment continued to fall for four quarters after the trough, and in the
most recent expansion, investment fell for five quarters after the overall
economy had bottomed out.
Residential investment in the average of prior recessions began to drop
eight quarters before the business cycle trough and rose quite sharply in the
four quarters after the trough (Chart 2-4). The housing market has been
strong in the current expansion, though housing investment has been
increasing at a more moderate pace than in expansions before 1990. This
pattern is likely the result of the unusual circumstance in which residential
investment did not falter along with the broader economy. In turn, this lack
52 | Economic Report of the President

of faltering may be attributable to low mortgage rates and to the movement
of households’ funds out of equities and into housing.
Real house prices have also behaved quite differently across the two most
recent expansions. Real prices dropped throughout the expansion of the
1990s, reaching a low in 1995. They have risen by a total of about 44 percent
since then. More than half of this increase, about 25 percent, has occurred
since 2000. The recent increases in house prices, which have been particularly
large in some urban markets, have raised concerns that the housing market
may be in a “bubble.” It is worth noting in this context that home equity as
a share of net worth dropped during the 1990s, as real stock prices rose
rapidly while house prices fell for the first half of the decade. This share has
been rising since the late 1990s, but remains below its high of about
22 percent reached in 1985. This rebalancing of portfolios, pushing up the
share of home equity in net worth closer to its historical norm, raises the
demand for housing. This increase in housing demand may thus be partly
responsible for the recent run-up in house prices.

Exports
At the beginning of the current expansion, exports roughly matched the
behavior of expansions prior to 1990, in which exports picked up relatively

Chapter 2

| 53

slowly at the start of the expansion (Chart 2-5). An increase in the rate of growth
of exports during the last year has moved their behavior closer to that of the
1990s expansion. The decline in exports during the most recent recession was
particularly large relative to previous ones, as economic growth among major
U.S. trading partners slowed more than in most past business cycles; in contrast,
exports continued to rise during the 1990-1991 recession. Thus both recent
recessions and expansions show anomalous behavior, though in different ways.

Labor Market
The behavior of the labor market was unusual in the most recent recession
and the last two expansions. Before 1990, on average, payroll employment
started to decline about three quarters before a business cycle trough—that is,
employment on average has continued to rise in the early part of recessions
(Chart 2-6). In an average expansion, employment begins to grow at the start of
the expansion and reaches its previous peak three quarters after the trough. In
the expansion of the 1990s, however, employment continued to fall for two
quarters after the business cycle trough and did not reach its previous peak value
until another six quarters had passed. In the most recent expansion, employment
continued to fall for seven quarters after the recession had ended and appears to
be on track to reach its prerecession level by early 2005. Though both of the
54 | Economic Report of the President

most recent expansions have shown relatively weak employment growth, they
were also preceded by smaller declines in employment prior to the trough.
The recent behavior of productivity can account for much of the difference
in employment growth (Chart 2-7). Productivity, defined as output per hour
worked, had been growing in line with the rates seen in past expansions, but
then accelerated four to six quarters after the most recent trough. At 11 quarters after a business cycle trough, productivity is usually about 8.5 percent
above its value at the trough; it is currently about 12 percent above its trough
value. During the most recent expansion, productivity growth has averaged
4.2 percent per year at an annual rate, up substantially from the 2.5 percent
growth rate seen on average from 1995 to 2000. By contrast, though the level
of productivity growth was quite high during the 1990s, at an annual growth
rate of 2.1 percent, even three years after the 1991 trough the level of productivity was not as high relative to its trough value as had been the case in prior
expansions. Hence current productivity growth particularly stands out.
In the short run, greater productivity growth sets the bar higher for
employment growth. With increased productivity, a given amount of output
can be produced with fewer hours worked, so real GDP must grow more
quickly for employment to grow. In the long run, however, higher productivity growth leads to higher income per person, and will thus be expected to
Chapter 2

| 55

be positive for employment growth. This is because part of the increase in
output is distributed to workers in the form of higher real wages and benefits
and part to owners of capital in the form of profits. The fraction of national
income accorded to profits has risen in recent years, with the share going to
profits at 10.9 percent in the third quarter of 2004, up from an average of
9.3 percent during the 1980s and 1990s. The fraction accorded to wage
payments and benefits has been approximately constant over longer periods
of time. A return to the historical pattern would result in rising real wages.
The behavior of unemployment during the recent expansion, though
atypical when compared with expansions from the 1960s through the 1980s,
roughly matches the behavior of unemployment during the 1990s: a
continued rise in unemployment after the beginning of the expansion,
followed by a gradual decline about a year later.

Summary
The beginnings of the last two expansions have been characterized by
moderate growth in key macroeconomic variables: real GDP, consumption,
investment, employment, and unemployment. The beginning of the most
recent expansion has seen slower growth in investment and employment than
the last one. The pace of economic expansion picked up, however, in the
56 | Economic Report of the President

middle of 2003. The more moderate rate of employment growth is at least
partly explained by unusually robust growth in productivity—which further
indicates higher future real wage growth. Unemployment rose by less than in
the last recession and expansion. Both of the most recent expansions were
preceded by relatively mild recessions: the drop in real GDP was relatively
small, and consumption did not drop at all in the most recent recession.

Symmetry in Recessions and Expansions
The last two expansions, though moderate, were preceded by shallow
recessions. Past recessions were deeper and subsequent expansions more rapid.
Together, the two sets of observations suggest that the rate of expansion may
be related to the rate of contraction. This section evaluates that hypothesis.

Real GDP
Chart 2-8 plots the total percent contraction in real GDP during all
recessions since 1960 against the percent expansion in real GDP in the four
quarters following the trough. The latter time period is chosen to allow a
uniform standard of comparison across expansions. Each point is labeled by

Chapter 2

| 57

the year corresponding to the start of the recession as dated by the National
Bureau of Economic Research. A regression line is drawn through the points;
the position of the line is determined by a statistical procedure known as
linear regression, which tries to determine the best possible line by minimizing the squares of the sums of the vertical distances between each point
and the line. The line provides the best estimate for how much of an increase
in real GDP at the beginning of an expansion can be expected for a given
decline in real GDP during a recession.
The graph confirms the hypothesis. For example, the 1981 recession and
its aftermath saw a sharp drop in real GDP followed by a sharp rise, while
the 1990-1991 recession saw a shallow drop in real GDP followed by a
shallow rise. The regression line is upward-sloping, providing statistical
evidence that shallow recessions were followed by initially shallow expansions and sharp recessions by initially sharp expansions. An inset on the
graph indicates a correlation of about 0.5. A correlation measures how
closely two variables are related: a value of 1.0 indicates that the variables
move together perfectly, 0 indicates that the variables are unrelated, and
-1.0 indicates that the variables move in opposite directions. A value of
0.5 indicates a fairly strong relationship.
The most recent recessions and expansions have been fairly moderate.
Indeed, real GDP actually rose over the course of the most recent recession;
this is true whether the last recession is dated to have started in the fourth
quarter of 2000 or the first quarter of 2001.

Components of Real GDP
Given the symmetry in contractions and expansions of real GDP, one
would expect some, if not all, of GDP’s components—consumption, investment, government spending (on consumption and investment), and net
exports—to show a similar pattern. The behavior of two major parts of overall
investment, real investment in equipment and software and inventory
investment, most strongly matches that of real GDP.

The Labor Market
The relationship between the drops in employment during contractions
and the initial rises in employment during the subsequent expansions is even
stronger than the relationship between GDP declines during recessions and
GDP increases during expansions (Chart 2-9).
Drops in employment during contractions and rises during expansions are
smaller than many of the other variables we have seen—ranging between a
decline of 3 percent and an increase of 3.4 percent. The most recent contractions saw especially small declines in employment—between 0.8 percent and
58 | Economic Report of the President

1.2 percent. Employment continued to decline into the beginning of the
expansions, though by less than 1 percent in each case. As noted above, given
the rises in GDP of over 2 percent during the first year of each expansion, the
difference reflects strong productivity growth.

A Possible Explanation: The Financial Accelerator
The charts above provide evidence that moderate recessions are followed, at
least initially, by moderate expansions, and sharp recessions by initially
rapid expansions. This is seen most strongly in the behavior of real GDP
and employment.
The largest component of GDP to follow the same pattern, investment,
suggests a possible explanation for this relationship. Investment is positively
correlated with GDP growth, rising when GDP growth is rising and falling
when GDP growth is falling. This relationship is known as the “accelerator
model” of investment: higher GDP growth leads to more investment, which
in turn leads to even faster GDP growth. A shock that leads to a large decline
in investment will thus cause an even larger decline in GDP growth. When
that shock disappears, and investment rebounds to its previous level, GDP
growth will also show a similar rebound.
Research over the past two decades on the role of financial markets in investment has provided an explanation for the relationship between investment and
Chapter 2

| 59

GDP growth. To buy new capital goods, firms rely on several sources of
financing. These include internal funds, such as retained earnings or capital
infusions from firm owners, and external funds, such as the proceeds from
loans and the sales of stocks and bonds. The amount of internal funds is related
to the firm’s cash flow. In response to a slowdown in sales, cash flow will likely
decline, reducing the amount of internal funds and therefore increasing the
amount a firm needs to obtain from external finance. But lenders will be less
willing to loan funds to firms with smaller cash flow, and the value of firms’
collateral is also likely to have decreased, further reducing their ability to obtain
loans. Hence firms might be forced to reduce their investment. This reduction
in turn will lead to lower output, lower cash flow, and yet again lower investment—leading to a further deceleration in output. The effect can work in
reverse during economic expansions, with rising GDP making it easier for
firms to get financing for new investment projects. This theory provides a
possible explanation for why changes in the amount of investment can have a
multiplier impact on the broader economy.
The “financial accelerator” effect is roughly proportional to the size of the
decline in GDP, since the change in cash flow and the value of collateral
would be expected to be roughly proportional to the decline in output. There
is no consensus, however, about the magnitude of the accelerator effect. One
study assessing the response of investment by firms to a monetary policy
tightening, both with and without a financial accelerator, showed that the
presence of an accelerator can cause the decline in investment to double
compared to a situation in which there is no accelerator effect. Another study
noted that small firms, which are likely to be more limited in their ability to
borrow than large firms, show much larger declines in inventory and sales
growth during recessions than do large firms. This finding further suggests an
important role for the financial accelerator.
The accelerator theory can also provide a link between asset price bubbles
and recessions and expansions. When the prices of equities or real estate rise,
the resulting increases in asset values raise the value of collateral, making it
easier for firms to obtain financing for investment—thus further raising
output growth. Conversely, declines in asset values from the bursting of asset
price bubbles can discourage investment.
Although the financial accelerator theory helps explain why on average the
depth of the recession corresponds to the initial strength of the expansion, the
theory will not explain the behavior of all recessions and expansions.
Investment is affected by things other than output growth, and, as will be
discussed more fully later in the chapter, economic shocks can affect other
components of GDP. In the most recent recession, for example, investment
fell more rapidly than in the average recession, but the fall in output was not
particularly large. The solid growth in consumption, boosted by expansionary
monetary and fiscal policy, helped reduce the fall in output.
60 | Economic Report of the President

Summary
Moderate recessions are followed by moderate expansions and sharp
contractions by rapid recoveries. This may be a consequence of the “financial
accelerator” model of investment, in which firms’ ability to borrow is related
to the growth rate of output.
Seen in this context, the unusually moderate growth experienced at the
beginning of the two most recent expansions seems less unusual, since the
preceding recessions were also relatively mild. This observation begs the question of why the most recent recessions were mild. One possibility is that
stabilization policy may have been more active and more effective during the
last two recessions and subsequent expansions. This hypothesis can be
assessed by looking at the two components of fiscal policy—taxes and
spending—and at monetary policy.

Stabilization Policy
Before discussing specific details of stabilization policy, it will be useful to
review what is known about the causes of business cycles, the effects of policy
on economic activity, and the resulting challenges to the development and
implementation of effective policy.

Business Cycles: Causes
Standard economic models suggest that long-run growth of real GDP is an
outcome of technological progress, the accumulation of capital, and growth
in the labor force. The models also suggest that either a larger labor force with
a fixed capital stock or a larger capital stock with a fixed labor force will
produce smaller and smaller additional amounts of output—a phenomenon
known as diminishing returns. Hence capital accumulation alone and increases
in the labor force alone will eventually result in higher levels of output but
slower rates of output growth.
In the very long run, output will grow only if technological progress
enables the production of more output for a given amount of capital and
labor. In the short run, various shocks—unexpected events that cause large
changes in the demand or supply of goods—can lead to recessions and
expansions. The recessions and expansions can be seen as deviations from the
long-run growth path.
Economic shocks can be divided into disturbances that affect aggregate
demand and those that affect aggregate supply. Aggregate demand is the
economy-wide demand for goods and services. It consists of consumer
spending, investment, government purchases, and net exports (exports less
Chapter 2

| 61

imports). Aggregate supply is the economy-wide supply of goods and services. Equilibrium in the economy occurs when aggregate demand equals
aggregate supply.
Shocks that depress aggregate demand tend to lower output, lower
employment (that is, raise unemployment), and put downward pressure on
prices. For example, a decline in stock prices could lead to lower consumption
spending. Shocks that raise aggregate demand have the opposite effect; they
raise output, raise employment (lowering unemployment), and put upward
pressure on prices. For example, greater optimism by firms about the state of
the economy could lead to higher investment spending. Research has found
that shocks to aggregate demand tend to affect output first rather than prices,
but that these effects are temporary, lasting only a few years. However, such
disturbances have long-lasting effects on the levels of prices and wages. That
is, an increase in demand will lead to a temporary boost for output but a
permanent rise in the price level (though not necessarily the inflation rate).
Shocks to aggregate supply, in contrast, tend to move output and prices in
opposite directions. A beneficial shock to aggregate supply, such as a rise in
productivity, raises output, lowers unemployment, and puts downward pressure on prices. An adverse shock to aggregate supply, such as an increase in
the price of energy, has the opposite effects. To the extent that aggregate
supply disturbances influence the determinants of long-run growth—the
accumulation of capital, the supply of labor, and technological progress—
supply shocks can also have long-lasting, even permanent, effects on the level
and growth rate of output.

Economic Policy
The tools available to policymakers to affect the economy over a short
horizon (up to a few years) can be divided into fiscal policy and monetary
policy. Fiscal policy involves decisions about taxes, transfers (such as unemployment insurance, Social Security, or Medicare payments), and government
purchases of goods and services. Changes in all of these affect aggregate
demand. In the short run, lower taxes or higher transfer payments can lead to
higher disposable incomes and thereby boost consumption spending.
Government purchases directly affect spending and support aggregate demand.
The effects of tax cuts may depend on the expected duration of the cut. A
prominent theory of consumption, the life-cycle/permanent-income hypothesis,
argues that people choose their consumption to be in line with their expected
lifetime resources. To the extent they are able, people keep their consumption
constant over drops in income that are expected to be temporary by
borrowing or using their savings. Expected temporary increases in income
should be saved rather than consumed. Only sustained changes in income
would translate into equal-sized changes in consumption. Under this theory,
62 | Economic Report of the President

permanent cuts should permanently raise consumer spending, as consumers
would view disposable income as permanently higher, while temporary tax
cuts should only be saved. But even temporary cuts could boost spending,
however, if people cannot spend as much as they would like or need to due to
constraints on their ability to borrow.
Tax changes can also increase the incentives for investment, boosting the
investment part of aggregate demand. Some tax changes can also raise aggregate supply by, for example, boosting incentives for labor supply or
permanently increasing the incentives to accumulate capital, or by removing
distortions. These changes would be expected to augment the long-run
growth rate of the economy.
Monetary policy in the United States is conducted by the Federal Reserve
Board’s Federal Open Market Committee (FOMC). The FOMC targets a
short-term interest rate, the Federal Funds rate, the rate at which banks make
overnight loans to one another. This interest rate in turn influences other
short-term and long-term nominal and real (inflation-adjusted) interest rates
in the economy. In turn, these interest rates affect interest-sensitive components of aggregate demand, such as investment and consumption of durable
goods (goods used for long periods, such as refrigerators and cars). These
components of demand are especially affected by changes in interest rates
because firms often need to borrow to make investments and consumers need
to borrow to purchase durable goods. Low real interest rates raise aggregate
demand by boosting consumption and investment; high real rates reduce
aggregate demand. The effects of monetary policy on output and other real
variables will generally be temporary. In the long run, the output effects of the
changes in aggregate demand caused by monetary policy largely disappear,
leaving effects only on the level of prices.
Research suggests that price stability—a low and stable rate of inflation—
may have important effects on aggregate supply and might therefore be
conducive to GDP growth. High and widely-varying rates of inflation create
substantial amounts of uncertainty about real rates of return, making it
difficult for people to make decisions about investment.

Policy Design: Challenges
Policymakers use the elements of monetary and fiscal policy to try to reduce
the size of economic fluctuations. Making recessions more moderate helps
people by decreasing the amount of unemployment and limiting the amount
of real income loss. Restraining expansions to sustainable levels reduces the
risks of high inflation. Such policy is often called countercyclical, since the aim
of the policy is to moderate the business cycle.
There is a broad consensus on the mechanisms by which fiscal and monetary policy affect the macroeconomy, but less agreement about the timing and
Chapter 2

| 63

magnitude of their effects. Fiscal policy changes, especially tax policy changes,
can work fairly rapidly. For example, a temporary investment incentive can
cause firms to move investment forward and undertake projects now instead
of in the future. But enacting such a policy through the legislative and
executive branches of the government can take time. Monetary policy can be
changed more quickly, as the FOMC has eight scheduled meetings per year
and can meet more often if economic conditions warrant. In contrast to fiscal
policy, however, it takes time for interest-rate changes to affect spending
because investment plans take time to adjust to changing financial conditions.
This uncertainty about the duration and magnitude of policy effects means
that policymakers considering changes in fiscal or monetary policy must forecast future aggregate demand and supply disturbances and their impact. For
example, a policymaker considering a tax cut must think about the state of
the economy in six months and beyond, when the tax cut will have its initial
impact. The same is true for monetary policy, in which it can take even more
time for policy changes to have an impact. Economic forecasting is inherently
difficult. It is not easy to determine the state of the economy even six months
out. Economic shocks are by definition unexpected. New kinds of shocks can
make predictions even more difficult. For example, the oil-price shocks of the
1970s were likely hard to forecast, since such sharp increases had not been
observed in the past.
Successful execution of policy requires not only choices about the type and
extent of policy, but also about timing and duration. While these are all difficult decisions to make, there is evidence that there has been improvement over
time. Technological improvements and economic research have allowed economists and policymakers to get more and better data more quickly on the state
of the economy. Economic models have improved as new ideas are developed
and some older ideas fail the test of time. Computers have allowed the simulation of more alternative policy scenarios. Policymakers learn from the past.
The following sections compare the behavior of fiscal and monetary policy
across recessions and expansions since 1960 to assess differences in the application and effects of policy over time.

Fiscal Policy
The two components of short-run fiscal policy, taxes and government
spending (consumption and gross investment), show different behavior across
economic expansions. The following subsections consider each in turn.

Taxes
The President signed three major tax bills into law between 2001 and 2003:
the Economic Growth and Tax Relief Reconciliation Act (EGTRRA) in June
2001, the Job Creation and Worker Assistance Act (JCWAA) in March 2002,
64 | Economic Report of the President

and the Jobs and Growth Tax Relief Reconciliation Act (JGTRRA) in May
2003. A fourth bill, the Working Families Tax Relief Act (WFTRA), signed
in October 2004, extends some provisions of the previous bills.
These bills—described in further detail in Chapter 3, Options for Tax
Reform, and in the 2004 Economic Report of the President—were designed
to boost both aggregate demand and aggregate supply. The aggregate demand
effects came in several parts. First, tax cuts to individuals raised real disposable income (real income less taxes) and thereby supported consumption.
Second, the tax cuts provided incentives for investment, both by lowering tax
rates on personal capital income and by increasing the amount of investment
allowed to be expensed by businesses. The investment incentives were also
designed to have long-term effects on aggregate supply, by increasing the
amount of capital accumulation.
The impact of the boost to aggregate demand can be assessed by plotting
the growth of real income and real disposable income across expansions
(Chart 2-10). During the first three years of an average expansion, disposable
income growth is only slightly larger than personal income growth, suggesting
that tax policy provides only a small boost. In the 1990s expansion, there was
essentially no difference between real income growth and real disposable

Chapter 2

| 65

income growth. Tax policy neither stimulated nor contracted demand. In
contrast, the difference has been quite large in the most recent expansion.
After-tax income has grown at a much faster rate than before-tax income.
The timing of policy also likely helped stabilize the economy, which was
facing multiple contractionary forces in 2000 and 2001. The first tax relief act
was passed in the middle of the recession, so households received tax-cut
checks at an opportune time. Indeed, the decline in the personal saving rate
as a fraction of income indicates that, on average, people were spending,
boosting aggregate demand. The incentives for investment also included in
the tax relief act were important in light of the particularly sharp drop in
investment during the last recession.

Government Spending (Consumption and Gross Investment)
Government spending (consumption and gross investment) (Chart 2-11)
on average tends to rise as the economy goes into recession and continues to
rise during the beginning of the subsequent expansion. In the 1990s expansion, however, government spending flattened out and began to decline. In
the most recent expansion, government spending rose at a faster rate than
average, providing a bigger boost to aggregate demand. A significant portion
of this additional spending is attributable to increased defense and homeland
security spending.

66 | Economic Report of the President

Federal government revenues had been affected by both the recession,
which had been under way for some time before the terrorist attacks of 9/11,
and the subsequent moderate growth of output during the initial phase of the
expansion. About half of the change in the Federal government’s fiscal position from a surplus in fiscal year 2001 to a deficit in fiscal year 2004 was
attributable to the weaker economy and related factors. Just under a quarter
of the decline is attributable to increased spending, principally related to
defense and homeland security, and a little more than a quarter of the decline
is attributable to the tax cuts.
While it is undesirable to have government deficits, they are sometimes a
prudent price to pay for stimulating economic growth. Without aggressive
fiscal policy during the most recent recession and recovery, the large number
of severe shocks facing the economy might well have caused the recession to
have been much longer and deeper than it actually was, possibly further exacerbating the deficit. In contrast, reducing the deficit by reversing the tax cuts
would have caused growth to slow even further.
Fiscal policy provided significant stimulus during the most recent
recession and recovery through both lower taxes and increased spending.
Real government spending increased during the 1990-1991 recession, and
then remained at roughly its trough level for the next year before beginning
to decline. Hence spending provided only modest stimulus at the beginning
of the 1990s expansion.

Monetary Policy
Low real interest rates help stimulate real GDP growth by boosting investment and purchases of consumer durables, thereby raising aggregate demand;
high real rates likewise reduce real GDP growth. The Federal Reserve’s principal policy tool, the Federal Funds rate, influences other nominal and real
interest rates. When the real (inflation-adjusted) Federal Funds rate is low,
monetary policy will be stimulative (sometimes referred to as accommodative
or loose policy). When this rate is high, monetary policy will restrain real GDP
growth (sometimes referred to as tight monetary policy). “Low” and “high”
are both relative terms. In principle, it would be best to compare the real
Federal Funds rate with whatever interest rate would make policy neither
loose nor tight. This rate can be thought of as the long-run equilibrium rate
the economy would tend to move toward as the effects of economic shocks
wear off. In practice, this equilibrium rate is not observed. But over long
periods of time, the economy tends to drift back to its long-run equilibrium;
hence the average level of the real Federal Funds rate over a long period of
time can provide a useful, though necessarily imperfect, approximation for
the equilibrium rate.

Chapter 2

| 67

In Chart 2-12, the solid line plots the nominal Federal Funds rate; the dots
plot the expected real Federal Funds rate, obtained by subtracting a biannual
survey measure of inflation expectations (the Livingston survey) from the
nominal rate. The chart suggests that the real Federal Funds rate tends to fall
during recessions and rise during expansions—exactly what would be expected
from countercyclical monetary policy. But the timing of interest-rate changes
relative to the recessions and expansions has changed over time. First, declines
in the real Federal Funds rate have occurred longer before the beginning of the
last two recessions than before the other recessions after 1960. In some prior
recessions, real rates began to decline only after the recession began. Since it
can take time for real interest rate changes to affect spending, earlier actions by
the Federal Reserve can reduce the depth of recessions. Second, real rates have
remained low during the last two expansions for longer than during previous
expansions. The real Federal Funds rate has been well below its long-run
average since the beginning of 2001. This would be expected to have provided
additional stimulus at the beginning of the recovery and into the expansion.
During the course of 2004, the Federal Reserve raised its target for the nominal
Federal Funds rate from 1 percent to 2.25 percent. Although these increases in
the nominal rate also meant an increase in the real rate, the real rate still
remains well below its long-term average.

68 | Economic Report of the President

Fiscal policy played an especially important role in moderating the last
recession and in supporting the subsequent economic expansion. During the
most recent set of interest-rate cuts, the nominal Federal Funds rate was
reduced to 1 percent, possibly leaving the Federal Reserve with reduced ability
to provide additional stimulus. The Federal Reserve could have used other
means of further easing policy. For example, it could have tried to target a
long-term interest rate by buying or selling long-term bonds. Since long-term
rates remained well above zero, such a policy would have given the Federal
Reserve additional room to carry out further easing. The efficacy of this and
other nontraditional policy methods is unproven.
In sum, monetary and fiscal policy together likely explain a significant part
of the relative stability of the economy over the last two recessions and expansions (see Box 2-1 for further discussion).

Box 2-1: Is the Economy More Stable?
The relative moderation of the last two business cycles raises the
possibility that the economy may be becoming more stable generally.
In the 60 years since World War II, a visible shift in the volatility of the
growth rate of real GDP occurred in the early 1980s (Chart 2-13). Does
this indicate a change in the nature of the business cycle, and if so, what
caused the change?

Chapter 2

| 69

Box 2-1 — continued
A variety of reasons have been offered to explain this shift. One
possibility is that more active, and more effective, stabilization policy
had moderated economic fluctuations. Another is that the economy has
had a run of good luck; it has not experienced the same kinds of macroeconomic disturbances seen in earlier years, such as the oil-price
shocks seen in the 1970s and 1980s. Events of the past few years, such
as the terrorist attacks of 9/11 and the bursting of the high-tech bubble
of the 1990s, however, were significant shocks. The decline in volatility
could also be largely attributable to better inventory management. This
could be the result of the adoption of “just in time” methods, in which
goods are manufactured and supplied on demand. Yet another possibility is that an increasing proportion of the economy is now in the
service sector, which has tended to be more stable than the goodsproducing sector. It is likely that all of these effects have worked
together to reduce volatility.

Conclusion
Since the late 1980s, recessions and the initial stages of expansions have
become more moderate. Some of this change reflects the general positive relationship between the size of recessions and size of expansions, which is caused
at least in part by the relationship between firms’ abilities to invest and the
state of economic activity (the “financial accelerator”). The recent recessions
and expansions have been especially moderate, suggesting the economy has
become more stable in general. Part of this stability is likely attributable to
more active and timelier stabilization policy.

70 | Economic Report of the President

C H A P T E R

3

Options for Tax Reform

T

he current Federal tax system is unnecessarily complex and distorts
incentives for work, saving, and investment. As a result, it imposes large
burdens on taxpayers and on the U.S economy as a whole in the form of high
compliance costs and distortions in economic decisions.
Tax reform could make the tax system simpler and fairer and promote
growth of the economy. Various tax reform proposals have been made to
replace the current tax system. Most of these proposals are variations on a few
basic types of taxes. This chapter discusses these basic prototypes for reform.
The President has not endorsed any specific proposal, and this chapter does
not advocate the adoption of any particular prototype for reform.
The key points in this chapter are:
• The current tax system imposes high costs on society in addition to the
taxes actually collected.
• Income taxes and consumption taxes are the primary alternatives for
raising government revenues.
• The main types of consumption taxes are the retail sales tax, the value
added tax, the flat tax, and the consumed income tax.
• While the tax system could be completely redesigned, important benefits
could also be obtained through simplification and reform of the current
tax system.

Why Do We Need Tax Reform?
People often think of the tax burden in terms of the dollar amounts of taxes
paid, but this is only part of the total burden. The tax system also imposes two
indirect burdens: the costs (in time and money) of complying with tax rules
and the costs (including slower economic growth) of tax-induced distortions
of economic activity. Although all tax systems impose direct and indirect
costs, such costs are unduly high under the current system.

The Direct Burden of the Tax System: Taxes Paid
As measured by the revenues collected, the direct burden of Federal taxes is
estimated to be $2.1 trillion, or 16.8 percent of GDP in fiscal year 2005
(Table 3-1). This percentage is less than the average of about 18 percent for
the last 50 years because of the effects of the recession and of temporary
71

TABLE 3-1.— Sources of Federal Revenues, Fiscal Year 2005
Billions of
dollars

Source
Individual income taxes ..............................................
Corporation income taxes ...........................................
Social insurance receipts............................................
Excise taxes.................................................................
Estate and gift taxes ..................................................
Customs duties ...........................................................
Miscellaneous receipts................................................
Total ............................................................................

Percent of
total revenues

894
227
774
74
24
25
36
2,053

Percent of
GDP

43.5
11.0
37.7
3.6
1.2
1.2
1.8
100.0

7.3
1.9
6.3
.6
.2
.2
.3
16.8

Note: Detail may not add to totals because of rounding.
Source: Office of Management and Budget, Budget of the United States Government, Fiscal Year 2006.

economic stimulus provisions that expired at the end of December 2004, but
is projected to return to the historical average under proposed policies. The
largest share of revenues (over 92 percent) comes from taxes on income and
its components: the individual income tax (43.5 percent), payroll taxes for
Social Security and other social insurance programs (nearly 38 percent), and
the corporate income tax (11 percent).
Even when state and local taxes are included, the United States relies more
on taxes on income than most other developed countries (Table 3-2). Over
70 percent of taxes imposed by all levels of government in the United States
are individual income, corporate profit, and payroll taxes, compared to the
62 percent average for all Organization for Economic Cooperation and
Development (OECD) countries. The United States relies much less on taxes
on consumer goods and services (under 18 percent) than other countries
(32 percent average). Much of this difference reflects higher total tax burdens
in other OECD countries, which generally impose value added taxes (VATs)
on sales of goods and services in addition to income and payroll taxes.
TABLE 3-2.— Comparison of Tax Revenues: United States, G-7, and OECD, 2002
[Includes subnational governments]
Revenue source

United
Canada
States

France Germany

Italy

Japan

United OECD
Kingdom average

Percent
Total revenue as percent of GDP .........

26.4

33.9

44.0

36.0

42.6

25.8

35.8

36.3

Revenue by type as percent of total:
Income and profit...............................
Social security and payroll.................
Property and wealth 1..........................
Goods and services ............................
Other ..................................................

44.4
26.1
11.9
17.6
.0

46.2
17.2
9.8
26.3
.5

23.9
39.5
7.5
25.4
3.6

28.0
40.3
2.3
29.2
.0

32.5
29.4
5.1
26.9
6.0

30.6
38.3
10.8
20.1
.3

37.8
17.0
12.0
32.7
.0

35.3
26.3
5.5
31.9
.9

1

Includes taxes on real estate, net worth, estates, inheritances, and gifts.
Note: Detail by type may not add to 100 percent because of rounding.
Source: Organization for Economic Cooperation and Development (OECD), Revenue Statistics.

72 | Economic Report of the President

High Compliance Costs
The complexity of the U.S. income tax is legendary (Box 3-1), and it leads
to high compliance costs for taxpayers and the government.
The costs of the Internal Revenue Service (IRS) administering the tax system
and monitoring compliance are about 0.5 percent of revenues. But these are
just a small part of the compliance costs associated with the tax system, which
are estimated to be as much as 10 percent of revenues. The complexity of the
current system imposes substantial burdens on taxpayers in time and money
spent to prepare and file tax returns, maintain tax-related records, read and
understand instructions, engage in tax planning, and, for more than half of
individual taxpayers, pay a tax preparer. The IRS estimated that for tax year
2000, individual taxpayers spent 3.2 billion hours on tax compliance, an
average of 25.5 hours per return. Assuming a value of $15 to $25 per hour for

Box 3-1: Complexity of the Current System
The current tax system includes many provisions that duplicate or
conflict with each other and that are unnecessarily complicated. Some
examples of complexity affecting large numbers of taxpayers are:
• There are approximately 30 different kinds of special retirement or
special purpose savings accounts under the tax system. Each has
its own rules, and participation in one of them can affect whether
an individual can participate in another.
• Numerous phaseout provisions intended to limit tax benefits to
lower-income taxpayers require additional calculations and create
high marginal tax rates in the phaseout range. Two such provisions
apply to the taxation of Social Security benefits.
• Tax complexity is not just the bane of the wealthy. The Earned
Income Tax Credit, which provides a subsidy to the working poor
and is a basic element of our national income support system, has
13 pages of instructions and complex eligibility requirements.
• The Alternative Minimum Tax (AMT) requires taxpayers to calculate
their income taxes twice—once under regular tax rules and a
second time under AMT tax rates and rules. By 2010, more than
one in five taxpayers will have to calculate the AMT and pay it if it
is higher than their regular tax.
• Over 10 million dependents have to file income tax returns each
year. Many of them are teenagers with jobs or young children who
have modest amounts of investment income. The so-called Kiddie
Tax applies to a much smaller number of dependent filers, but
involves complex rules and can result in very high marginal tax
rates in certain cases.

Chapter 3

| 73

taxpayers’ time and adding the $19 billion spent on tax preparers, computer
software, and similar expenses results in a total estimated individual compliance cost between $67 billion and $99 billion. Burdens vary substantially
among taxpayers. For example, taxpayers with self-employment income spent
almost 60 hours preparing returns. Other taxpayers spent an average of
13.8 hours, but 10.9 more hours if they filed the Alternative Minimum Tax
(AMT) form.

Effects on Behavior and Excess Burden
The third type of burden imposed by the tax system, called excess burden,
arises when high tax rates reduce incentives for work, saving, and investment,
distort economic decisions, and divert resources from productive activity into
tax avoidance. Excess burden means that it costs the economy more than one
dollar to raise one dollar in revenue. High excess burden ultimately reduces
economic growth and lowers living standards. This section examines the
evidence of the effects of high tax rates on economic behavior and how these
effects translate into measures of excess burden.

Tax Effects on Individual Behavior
An individual’s after-tax return from increased work effort, saving, or
investment depends on the individual’s marginal tax rate, the tax rate that
applies to the last dollar of the individual’s income. For example, the after-tax
return from earning one additional dollar is $0.75 for a taxpayer in the
25 percent tax bracket. By reducing after-tax returns, high marginal tax rates
reduce incentives for additional work effort. The same principle applies to
saving and other economic activities.
A variety of statistical studies have found that high income tax rates
adversely affect labor supply, particularly for certain segments of the population. The income tax rate reductions in the 1980s significantly increased the
labor force participation and hours of work of high-income married women,
with a total increase in labor supply of as much as 12-15 percent. The effects
were much smaller for men (up to 2-3 percent) and for female heads of households (up to 4 percent). Some economists argue that these studies understate
the effects of taxes on labor supply because they do not include tax effects on
the intensity of work effort, career choice, and investments in human capital
(such as education), which are more difficult to measure.
In addition to reducing the numbers of hours they work, taxpayers respond
in many other ways to avoid the effects of high tax rates. For example,
taxpayers take their compensation in nontaxable forms such as health insurance and alter their portfolios to focus on tax-favored investments. The total
effect of such responses is summarized by the responsiveness of taxable
income to changes in marginal tax rates. While the results vary among studies,
74 | Economic Report of the President

a reasonable estimate is that a 10 percent decrease in after-tax returns leads to
about a 4 percent decrease in taxable income. Thus, for example, if the
marginal tax rate was increased from 25 percent to 28 percent, this would
reduce after-tax returns by 4 percent. Taxpayers’ behavioral responses
would reduce taxable income by 1.6 percent (0.4 times 4 percent), and this
would reduce the addition to revenue by nearly 15 percent.

Tax Effects on Business Behavior
Businesses can respond to taxes in various ways, including changing their
level of investment and employment, their method of finance, and their organizational form. Current law distorts many business decisions, resulting in
inefficient use of resources and reduced economic output.
Some of the largest distortions are associated with the corporate income
tax. This tax results in corporate income being taxed once under the corporate income tax and then a second time at the individual level when received
as dividends or when reinvested earnings result in taxable capital gains. This
double taxation of corporate income favors financing investment with debt
instead of equity because interest paid by the corporation on its debt is
deductible while dividend payments to shareholders are not.
Double taxation of corporate income also creates a bias in favor of using
business forms not subject to the double tax, such as partnerships, sole proprietorships, limited liability companies, and subchapter S corporations. The
double tax also discourages paying dividends. As a result, prior to the 2003
reductions in dividend tax rates, dividend payments by corporations had
declined since the 1980s (Box 3-2).
Current tax law also distorts decisions about investment in equipment and
buildings. Under an income tax, proper measurement of income requires that
the cost of investment in new equipment be depreciated by deducting the
decreases in economic value over the useful life of the investment, sometimes
called economic depreciation. Current depreciation rules, however, differ
significantly from an ideal measure of economic depreciation, leading to
biases among investment choices. For example, if a company chooses offices
with plaster walls, it would have to depreciate those walls over 39 years. But
because cubicle partitions are considered to be office furniture under IRS
rules, they can be depreciated over 7 years. Thus, the tax law favors the
purchase of cubicle partitions because the faster tax write-off saves the
company money.
Other research has shown the adverse effects of high tax rates on entrepreneurial activity. Several studies examined the response of small businesses to the
tax reductions of the 1980s and found that when income tax rates were reduced,
entrepreneurial businesses grew faster, were more likely to invest in new
equipment and structures, and were more likely to hire additional workers.

Chapter 3

| 75

Box 3-2: The Initial Effects of the 2003 Reductions in Tax Rates
on Dividends
Corporate income is taxed twice, first under the corporate income tax
and then a second time under the individual income tax as dividends or
capital gains. Consequently, the total Federal tax rate on corporate
income can be very high. For example, in 2000, the total Federal tax
rate on a dollar of corporate income paid out as a dividend could be as
high as 60.75 percent (calculated as the 35 percent corporate rate plus
an individual tax rate of up to 39.6 percent on the 65 cents of after-tax
corporate income available for dividends). State income taxes add to
this total.
Economists are in broad agreement that this system creates serious
economic distortions. Indeed, historically the United States was almost
alone among advanced countries in failing to provide some form of
relief from double taxation of corporate income. A key provision of the
Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA)
reduced the double tax by reducing the individual income tax rates for
both dividends and capital gains.
Proponents of JGTRRA argued that it would lead to more dividends
being paid by corporations. Was this prediction correct? One study
reported that in the first three months after the law was passed, corporate boards of directors increased dividends by 9 percent at their first
opportunity following enactment. A subsequent study found that the
percentage of publicly traded firms paying dividends began to increase
precisely when the new law became effective in 2003. This percentage
had been declining for more than 20 years. The study found that nearly
150 firms started paying dividends after the tax cut, adding more than
$1.5 billion to total quarterly dividends. The most notable example of a
company initiating payments is Microsoft Corporation, which previously had not paid dividends in spite of accumulating large cash
reserves. Many firms already paying dividends raised their regular dividend payments, and a smaller number of firms made special one-time
dividend payments to shareholders.
Overall, the response has been unprecedented in the recent history
of tax changes. Based on statistical analysis of the historical relationships between dividends and tax rates, another study estimated that
over time, dividends will increase by 31 percent, about $111 billion in
additional annual dividends at 2002 levels.

76 | Economic Report of the President

Excess Burden
Because taxes distort economic decisions and lead to inefficient use of
resources, they cause reductions in economic welfare that exceed the amount
of tax collected. These costs above and beyond the revenues collected are called
the “excess burden” of the tax system. Higher marginal tax rates lead to more
distortion in behavior, and therefore to greater excess burden. In addition, the
more responsive taxpayers are to higher marginal tax rates, the greater the
excess burden will be. A recent study estimated that the excess burden associated with increasing the individual income tax by one dollar is 30 to 50 cents.
In other words, the total burden of collecting $1.00 in additional income taxes
is between $1.30 and $1.50, not counting compliance costs.

Income Taxation Versus Consumption Taxation
The main bases available for Federal taxation are income and consumption.
Economists define income as the increase in an individual’s ability to consume
during a period of time. By this definition, anything that allows a person to
consume more is income, including compensation for services, interest, rents,
royalties, dividends, alimony, and pensions. This broad measure of income
also includes noncash benefits, such as health insurance provided by an
employer, and increases in the value of stock and other assets. While the base
of an income tax is the increase in potential consumption (i.e., income), a
consumption tax applies only to the portion of income that individuals
actually consume.
Tax reform proposals generally follow either the principle of taxing
consumption or the principle of reforming the existing system to conform
more closely to a pure income tax. In thinking about this distinction, it is
important to note that the current system already has many features of a
consumption tax: investment income is exempt from tax when it is saved in
certain forms, such as IRAs; unrealized capital gains are not taxed; and small
businesses can immediately deduct the cost of a certain amount of new investment, as would be the case under a consumption tax. Thus, characterizing the
current system as an income tax is something of a misnomer; it is more of a
hybrid between an income tax and a consumption tax.
Before turning to the main prototypes in the following section, this section
examines the choice between income and consumption taxation from
the standpoint of key criteria for evaluating a tax system: fairness, growth,
and simplification.

Chapter 3

| 77

Fairness
A traditional standard for fairness is that taxes should be levied according
to individuals’ ability to pay. Thus, proponents of income taxation argue that
it is fair because income best reflects the ability to pay taxes. In addition, a
common view is that individuals with higher incomes should pay a greater
proportion of their income in taxes—the tax system should be progressive. As
shown in Box 3-3, the current income tax system is highly progressive.
Box 3-3: What Is the Current Distribution of the Tax Burden?
A major criterion for judging a tax system is whether it is fair. One
way to examine this question is to look at the shares of the tax burden
borne by taxpayers in various parts of the income distribution. Nearly
two-thirds of the total Federal tax burden is borne by the top 20 percent
of taxpayers. This includes individual and corporate income taxes,
payroll taxes, and excise taxes, but not the effects of temporary
economic stimulus provisions that expired at the end of 2004. As
shown in Chart 3-1, the share of taxes of the top 20 percent increased
as a result of the tax cuts enacted since 2001.

Another way to look at fairness is in terms of taxes as a percent of
income. As shown in Chart 3-2, Federal taxes take a larger share of
income for higher-income groups, both before and after the tax cuts.

78 | Economic Report of the President

Box 3-3 — continued

The bottom 40 percent of the population received the largest
percentage reductions in total Federal taxes (Chart 3-3). After the tax
cuts, the bottom 40 percent of the population paid no income taxes,
and, on balance, received money back from the income tax system.
In summary, the tax relief passed during the President’s first term
increased the overall progressivity of the Federal tax system.

Chapter 3

| 79

Critics of consumption taxes often argue that they are regressive, that is, they
represent a higher proportion of the income of lower-income families.
Conventional analyses use an annual measure of income as a measure of
ability to pay and assume that the burden is borne by consumers. They generally show that a proportional tax on consumption would be highly regressive.
Annual incomes, however, often vary substantially from year to year, so one
year’s income may not be a good indicator of ability to pay. When a lifetime
measure of income is used, the regressivity of consumption taxes appears
less pronounced.
Some studies question whether income is the most appropriate basis for
measuring fairness. One reason for taxing consumption is the belief that it is
a better measure of lifetime ability to pay than annual income. If so, progressivity should be measured with respect to consumption rather than income,
and an inclusive flat rate consumption tax would be proportional by definition. In addition, as discussed below, there are ways to tax consumption while
addressing concerns about distributional fairness. Furthermore, increased
economic activity from a more efficient tax system could be sufficient to
improve the economic welfare of all income groups.
Finally, when considering the fairness of taxes, it is important to keep in
mind that the ultimate burden of a tax is not necessarily borne by the taxpayer
who writes the check to the government. In particular, the burden of taxes
paid by corporations is ultimately borne by individuals in their roles as stockholders, workers, and consumers. A common view of economists is that in the
short run, before there is time for economic adjustments, the burden of
increases in corporate income taxes is borne entirely by shareholders. Thus,
under this view, most of the corporate income tax burden is borne in the short
run by high-income households, because the ownership of corporate stock is
highly concentrated in high-income households. Over time, however, at least
part of the burden of corporate taxes is likely to be shifted to owners of
noncorporate businesses, workers, and consumers. Such shifting of tax
burdens can significantly affect perceptions of the fairness of particular taxes.
For example, the corporate income tax might be viewed as less fair if the
burden is seen as resulting in lower long-run wages for workers rather than
being incurred by well-to-do corporate shareholders.

Effects on Growth of the Economy
Increasing economic efficiency and promoting growth of the economy are
important goals for tax reform. A tax system that inflicts fewer distortions on
economic decisions would improve the efficiency of the use of resources in the
economy and thus improve the general welfare. One source of inefficiency is
tax preferences, that is, provisions that provide more generous tax treatment of
certain types of income and expenditures than would be accorded under a
80 | Economic Report of the President

more uniform or pure version of the tax. Such preferences cause investment
funds to flow to tax-favored lines of business at the expense of potentially more
productive investment and thus reduce the overall output of the economy.
Consumption tax proponents argue that a consumption tax would be more
conducive to growth than an income tax even in the absence of tax preferences. A consumption tax would be more neutral with respect to investment
decisions since new investments would be immediately deductible
(expensed). As noted above, the current income tax is not neutral among
investments, and it is inherently more difficult to achieve neutrality under an
income tax. By removing the tax on the returns to saving and investment, a
consumption tax would increase saving and investment. Over time, this
would increase the stock of capital. With a larger stock of capital, workers
would be more productive, and output and wages would rise. Some recent
research estimates that changing to a tax on consumption could increase the
net national saving rate by 16 to 43 percent after a year and by 12 to 31
percent after 14 years, depending on the type of tax adopted. National output
per capita would decrease by 0.5 percent or increase by up to 4.4 percent after
a year and increase by 0.5 to 6.3 percent after 14 years. The research suggests
that wages would increase by 0.8 to 1.4 percent after 14 years.
Reform of the income tax could also promote economic growth. Income
tax reform could lead to a more uniform, broad-based, low-rate income tax
that would reduce distortions in economic decisions. The above research
suggests that such an income tax reform would increase the saving rate by
10 percent after one year and by 6 percent after 14 years and that national
output per capita would increase by 3.8 percent after one year and by
4.4 percent after 14 years.
However, even if there are long-run economic gains from a tax reform
proposal, these must be weighed against the costs of transition from the
current tax system to the new one. Taxpayers would incur costs adjusting to
compliance under a new system and the IRS would incur start-up costs developing rules, forms, and administrative procedures. In addition, major tax
reform could result in significant gains or losses for some taxpayers when the
prices of assets change. If losers were to be fully compensated for their losses,
the potential gains from reform would be reduced. None of the preceding
analysis implies that tax reform should not be undertaken. Rather, the key
point is that transition issues need to be taken into account when assessing the
costs and benefits of the various reform proposals.
Finally, tax reform could impose large transition costs on state and local
governments. Some tax reform proposals call for repeal of Federal income
taxes. Since most state income taxes rely on the Federal tax as a starting point,
states would either have to find another source of revenue or administer their
income taxes on their own. Other proposals would impinge on the traditional
state reliance on sales taxes by adding a Federal tax on this base.
Chapter 3

| 81

Simplification
Proponents of consumption taxes argue that they would be simpler than
income taxes. Some consumption tax prototypes, such as a national retail sales
tax or a value added tax, would be simpler for individuals because the point of
collection would be shifted from individuals to businesses. This feature is not
unique to consumption taxes, however, because it would be possible to design
a comprehensive income tax that could be collected at the business level.
Consumption taxes would also be simpler because allowing immediate deduction for all purchases would eliminate the need to keep track of depreciation
deductions over time and to make distinctions among various types of property. In addition, the complexities associated with taxing capital gains would
be eliminated, since capital gains are not part of a consumption tax base.
Proponents of income taxes point out that the current income tax system
could be greatly simplified, and that starting from scratch, one could design a
much simpler system. They also note that it is unfair to compare an idealized
consumption tax with the current system. Thus, either a consumption tax or a
reformed income tax could be much simpler than current law, but there may
be some additional simplification potential under a consumption tax.

Tax Reform Prototypes
The previous section examined some general issues of tax reform. This
section considers the most prominent consumption tax prototypes and
potential reforms of the current system. The President has not endorsed any
specific proposal, and this chapter does not advocate the adoption of any
particular prototype for reform.

Consumption Tax Prototypes
If tax reform takes the path of taxing consumption rather than income,
there are four basic types of consumption taxes to consider: the retail sales tax,
the value added tax (VAT), the flat tax, and the consumed income tax. This
section begins with a brief description of the four taxes and then discusses
each in more detail.
The simplest consumption tax to understand is the retail sales tax, which
imposes tax liability when an individual purchases goods or services for
consumption. Retail sales taxes are levied by most states and many local
governments.
The starting point for thinking about value added taxes is to note that most
goods are produced in stages. For example, a farmer grows wheat and sells it
to a miller, who grinds it into flour and sells it to a baker, and so on until a
loaf of bread is delivered to a grocery store to be sold to consumers. Instead
82 | Economic Report of the President

of being collected all at once at the final sale to consumers, the value added
tax is levied on the value added to the good or service at each stage of its
production. At each stage, the tax base is receipts for the sale of goods and
services less purchases of goods and services from other firms (Box 3-4).

Box 3-4: The Equivalence of Sales Taxes and Value Added Taxes
The retail sales tax and value added tax provide different methods of
taxing the consumption of goods and services. Consider a simple
example of bread produced and sold to households. A farmer grows
wheat and sells it to a miller for $300. The miller grinds the wheat into
flour and sells it to a baker for $600. The baker transforms the flour into
bread and sells it to the grocer for $800. The grocer sells the bread to
consumers for $1,000.
Business
Farmer.....................................................................
Miller.......................................................................
Baker.......................................................................
Grocer .....................................................................
Total........................................................................

Purchases
$0
300
600
800
1,700

Sales
$300
600
800
1,000
2,700

Value
added
$300
300
200
200
1,000

20% value
added tax
$60
60
40
40
200

20%
sales tax
$0
0
0
200
200

Now consider a 20 percent tax on consumption. Under the retail
sales tax, the grocer would compute the tax as 20 percent of sales and
owe $200 to the government. The farmer, miller, and baker would not
pay sales tax because they sold only to other businesses for resale.
A 20 percent value added tax collects the same total revenue one
step at a time as value is added to the product at each stage. The miller
pays a VAT of $60, calculated by subtracting purchases of $300 from
$600 of sales and paying the 20 percent tax rate on the difference of
$300. The other businesses would compute their tax in the same way.
The total tax would add up to $200, the same amount as under the retail
sales tax.
A European VAT (called a credit-invoice VAT) is calculated by
imposing the tax on the full value and then giving a credit for VAT paid
at the previous stages. The grocer would compute the $40 VAT as
20 percent of sales of $1,000 (or $200) less tax credits of $160 shown on
the receipts for purchases of $800 from the baker. The other businesses
would compute their tax in the same way.
Consider what happens if the grocer fails to file and pay the amount
of tax that is owed. Under the sales tax, the full amount of tax is lost to
evasion. But under the VAT, only the tax on the last stage would be lost.
In addition, the invoices at each stage provide a paper trail that helps
improve compliance.

Chapter 3

| 83

Because the sum of value added at each stage equals the value of the final
product, taxing value added at each stage gives the same overall result as
taxing final products at the retail level. Therefore, the VAT is just another way
of taxing the same base as the retail sales tax. From an economic standpoint,
they are equivalent.
The flat tax consists of a business tax and an individual level tax, both of
which use a single flat tax rate. Calculation of the business tax base begins
with a computation like that of the VAT, receipts less purchases from other
firms. Next, wages are deducted from the business tax base. If wages are then
taxed at the same flat rate under the individual tax, the result is the same as
the VAT and retail sales tax. Therefore the key difference is that wages are
taxed at the individual level rather than being included in the business tax
base. This difference allows for building progressivity into the system by
providing an exemption of, say, $40,000 for a family of four.
Under a consumed income tax, taxpayers would first calculate their income
as they do under the current income tax. Then they would be allowed a
deduction for any saving during the year. Since consumption is equal to
income minus saving, this too is a consumption tax.
These seemingly quite different taxes are equivalent ways of taxing the same
base: consumption. As discussed in the following sections, the choice among
them is affected by various administrative and compliance issues as well as the
availability of mechanisms for obtaining distributional fairness.

National Retail Sales Tax
Sales taxes are levied by all but five states, and provide nearly 38 percent of
state tax revenues. Most state sales taxes are levied at rates between 4 percent
and 6 percent. Many states, however, exempt or apply a lower rate to food
purchases, prescription drugs, and certain other “necessities” to improve the
perceived fairness of the tax and also exempt most services.
Under a retail sales tax, individuals would no longer have to file tax returns
because taxes are remitted to the government only by retail businesses. This is
an important feature of retail sales taxes and other transactions-based taxes,
which shift the burden of complying with the tax system from individuals to
businesses. Since there would be many fewer tax filers, proponents argue that
total compliance costs would be much lower than under the current system.
Under a retail sales tax, only final sales to consumers should be taxed since
the intent is to tax consumption. Taxing business-to-business sales can result
in cascading, a situation in which the tax is imposed multiple times before the
consumer level. Nevertheless, states currently obtain about 40 percent of their
sales tax revenues from business-to-business sales, although many business-tobusiness sales are exempted. The economic distortions associated with
cascading can be severe at higher tax rates, and thus a national retail sales tax
84 | Economic Report of the President

would have to differ from state taxes by not taxing such sales. A related
problem is that it is sometimes difficult to distinguish final sales for consumption from sales for use in production. For example, how would a store selling
a computer know for certain whether it is being purchased for resale
(exempt), for use in another business (exempt), or for home entertainment
(taxable)? This issue would arise with many dual-use products and services.
To replace a significant portion of Federal tax revenues, tax rates for a
national retail sales tax would have to be much higher than current state and
local rates. The exact rate would depend on which Federal taxes were to be
replaced and on whether education expenses, prescription drugs, medical
expenses, and other necessary goods and services would be taxed. Some recent
research suggests that to replace revenues from the individual and corporate
income taxes, a national sales tax rate would have to be at least 30 percent if
the tax base were that of a “typical state” and business-to-business sales were
exempt. Such high rates could create strong incentives for tax evasion and
avoidance. Some tax economists believe that sales tax rates over 10 percent
could be problematic because of the incentive for evasion and avoidance.
Concerns about the impact of sales taxes on lower-income households
could be addressed by exempting certain necessary goods and services or by
providing a refundable tax credit sufficient to cover a certain amount of tax.
Exemptions and preferential rates to address equity concerns, however,
increase the complexity of sales taxes and lead to uneven taxation of consumption. Refundable credits could require the filing of some type of tax return by
lower income households. However, this would defeat one of the main goals
of the retail sales tax, which is reducing administrative burdens on households. In any case, both solutions would require higher tax rates to achieve a
given amount of revenue. Uneven taxation and high tax rates would undermine a principal potential benefit of this type of reform: reducing economic
distortions and promoting growth.

Value Added Tax (VAT)
Value added taxes are used in all European Union countries and in more
than 100 countries around the world. European countries, which generally
adopted VATs in the 1960s or early 1970s, typically impose a standard rate of
16 to 20 percent and a lower 5 to 10 percent or zero rate on products such as
food and drugs. It is important to note that countries adopting VATs have not
used them to replace income taxes; they are in addition to individual and
corporate income taxes.
VATs avoid the problem of cascading taxes by allowing credit for the VAT
paid on purchases. European VATs also create a paper trail that is believed to
improve compliance. In spite of these advantages, VATs have not received
serious consideration in the United States. Similar to the sales tax, VATs are

Chapter 3

| 85

viewed as regressive, at least when annual income is used as the measure of
ability to pay. Critics of the VAT are not mollified by the fact that it is possible
to impose lower VAT rates on commodities such as food. Another concern is
that VAT tax rates would tend to increase over time as has occurred in Europe
because the VAT is such an efficient and largely hidden tax.

The Flat Tax
Reducing the tax burden for low-income households is cumbersome under
the sales tax and VAT because they are collected at the business level. One of
the advantages of the flat tax is that it allows for progressivity by providing a
personal exemption based on family size.
The exemption leads to a fundamental trade-off in designing a flat tax. A
higher exemption level means more families at the bottom of the income scale
pay no tax and the distribution of the tax burden is more progressive. But the
higher the exemption, the higher the tax rate required to raise any given
amount of revenue. A higher rate reduces the anticipated gains in economic
efficiency. The Treasury Department estimated in 1996 that a 22.9 percent
tax rate would be required to raise as much revenue as the individual and
corporate taxes, while keeping the Earned Income Tax Credit and exempting
$40,700 income (at 2003 levels) for a family of four.
The flat tax would be simpler than the current tax system. The individual
tax is simple because it applies only to compensation for labor services and tax
liability varies only with family size. The business level tax is simpler than the
current corporate income tax. For example, since all purchases are deductible
immediately, there is no need to keep track of depreciation deductions over a
period of years or to distinguish between current expenses and capital costs.
The flat tax would also reduce the costs of tax planning. Applying the same
tax rate to all types of businesses and to both individual and business income
is important because it eliminates many opportunities for avoiding taxes by
changing the organizational form of a business or by shifting income to entities subject to lower tax rates and deductions to entities with higher rates. The
double tax on corporate income and the associated distortions would also be
eliminated.
A pure flat tax would eliminate many popular deductions, including those
for home mortgage interest and charitable contributions. Retaining these
deductions would require a higher tax rate and more complicated tax forms,
and thus lose some of the gains in economic efficiency and simplification. In
addition, some critics argue that even with a large exemption, the flat tax is
likely to shift tax payments away from the highest income groups and toward
lower- and middle-income groups. Finally, there would still be many
complexities and opportunities for tax avoidance and evasion. Suppose, for
example, that a business owner bought a computer for personal use. If the
86 | Economic Report of the President

owner claimed it was for business, he or she could deduct the entire cost of
the computer.
There are many variants of the basic flat tax idea. For example, some
proposals would allow for greater progressivity by using multiple tax rates in
the individual tax. Other proposals would retain some deductions, such as
those for charitable contributions or mortgage interest. Each variation
sacrifices some of the efficiency gains and basic simplicity of the flat tax to
achieve other goals.

Consumed Income Tax
Under a consumed income tax, taxpayers first compute income as they do
under the income tax. Then taxpayers are allowed an unlimited deduction for
net saving during the year. A consumed income tax is comparable to a traditional IRA for which contributions are deductible and withdrawals are subject
to tax, but would have no limits on contributions or penalties on withdrawals.
To prevent taxpayers from simply borrowing money and claiming a deduction
for putting the proceeds into a savings account, any borrowing would be
added to income and thus be taxable.
The consumed income tax offers more flexibility than the flat tax in
allocating the burden among income classes because the individual tax base is
broader and most proposals include a progressive rate structure. The primary
disadvantage is complexity. It retains the complexity of the current system
because taxpayers start by computing income as they would under current
law. Then a second procedure to compute saving net of borrowing adds an
additional layer of complexity.

Reform Within the Current System
A change to any of the consumption tax proposals would scrap the current
tax system and replace much or all of it with a new one. Businesses and individuals would have to learn how to comply with and best arrange their affairs
under the new system. A new administrative apparatus would be required for
some proposals. While sales taxes have long been used in this country and
VATs in many other countries, these are imposed at lower rates than would be
required to replace all Federal revenues and are used along with, rather than
as replacements for, income taxes.
Given the costs of transition to an entirely new tax system, some proposals
focus on reform within the current structure. Starting from the current system
would reduce transition and adjustment costs and considerable benefits could
be obtained by simplifying and rationalizing tax provisions that overlap or are
otherwise overly complex. Advantages of the prototypes and the tax principles
discussed above could guide the direction of reform.

Chapter 3

| 87

The Administration’s tax program has already achieved significant reforms
within the current system. Achievements include lowering marginal tax rates,
reducing the double tax on corporate income, simplification, and improved
fairness for families. This section discusses possible additional reforms that
would provide simplification, improve fairness, or promote economic growth.

Lower Tax Rates and Broader Base
The principle behind the Reagan Administration’s major tax reform in 1986
was to reduce tax rates and broaden the tax base by eliminating deductions and
tax credits. The Tax Reform Act of 1986 was largely successful in this effort.
Individual income tax rates were collapsed into two rates, 15 percent and
28 percent, with the top rate falling from 50 percent to 28 percent. The corporate tax rate was reduced, from 46 percent to 34 percent. Lowering rates
reduced the distortions of the tax system and is often credited with increasing
work effort and entrepreneurial activity and reducing tax avoidance activities.
The overall reform was revenue neutral and slightly progressive. Even though
the top marginal tax rates were reduced, progressivity was enhanced because
high-income taxpayers lost many tax preferences.
While the achievements of the 1986 reform have eroded over time, the
basic principles of lower rates and a broader base benefited the economy and
could be useful in guiding reform within the current system.

Rationalizing Saving Incentives
Income taxes create a bias against saving because taxpayers who choose to
save for later consumption have a larger total lifetime tax burden than those
who do not save. To offset this bias, current law includes a variety of provisions that promote saving. Some are targeted at individual saving for
retirement, some at employer plans for employee retirement, and some at
saving for specific purposes, such as education and medical expenses.
The multitude of special purpose saving options encourages taxpayers to
establish small pools of savings that can only be used for one purpose.
Taxpayers have less flexibility since saving intended for one purpose cannot be
used for another (except by paying a penalty). Taxpayers are likely to be
unaware of all the options available, frustrated trying to decide which options
are best for them, and confused by the detailed requirements. Since many
incentives are available only to certain taxpayers, the multitude of options
may add to perceptions that the tax system is unfair because some taxpayers
are eligible, but others are not. Moreover, the large number of special accounts
may be an impediment for lower-income and less sophisticated taxpayers
concerned about making the wrong choices, which can have sizable penalties
associated with them.

88 | Economic Report of the President

The current set of saving incentives could be combined into a simpler
system with one type of account for individual retirement saving, one for
employer-sponsored retirement saving, and one for lifetime saving for
anticipated future education, health, home purchases, or other expenses. The
President’s budgets have included proposals for Retirement Savings Accounts
(RSAs), Employer Retirement Savings Accounts (ERSAs), and Lifetime
Savings Accounts (LSAs). Under these proposals and after a transition period,
the savings incentives of over 90 percent of households would no longer be
adversely affected by the tax system.

Double Taxation of Corporate Income
Corporate income is taxed first at the corporate level and then a second
time under the individual income tax as dividends or capital gains. The tax
relief enacted in 2003 reduced the double tax by lowering individual income
tax rates for both dividends and capital gains. The current provisions expire
after 2008, however. Thus, tax reform could include a permanent extension
of current provisions or go further and completely eliminate double taxation
of corporate income.

Depreciation Rules
As discussed above, the logic of an income tax requires that firms be able to
deduct the amount by which their physical investments depreciate in value
each year. Current law allows deductions for different types of equipment and
buildings over nine recovery periods from 3 to 39 years. A 2000 Treasury
Department report on depreciation concluded that the current system is
based on outdated recovery periods, does not account for new industries and
technologies, and favors some assets while penalizing others. As a result, the
system distorts investment decisions and results in an inefficient allocation of
capital in the economy.
There are several approaches that reform could take. One option is to rationalize the current depreciation system to make it more neutral in its effects on
investment decisions. An effort to bring depreciation rules closer to economic
depreciation would raise a number of difficult measurement issues, however.
Another approach would simplify the current system by reducing the number
of recovery periods and grouping investments into broader categories.
A third approach is to increase investment incentives and move part way
toward a consumption tax by increasing the generosity of depreciation
allowances. For example, a temporary bonus depreciation provision in the
2002 tax bill allowed taxpayers to deduct 30 percent of the cost of an investment in the first year with the remaining 70 percent of the cost to be
deducted over the life of the investment. That is, 30 percent of the cost was
deducted immediately as under a consumption tax, while 70 percent was

Chapter 3

| 89

depreciated as under an income tax. First-year bonus depreciation was
increased to 50 percent in 2003 and 2004.
These approaches have the potential to improve the allocation of capital and
increase incentives for investment. The cost of increased incentives would have
to be balanced against other objectives, such as keeping income tax rates low.

The Alternative Minimum Tax (AMT)
The AMT is a separate tax system requiring taxpayers to compute their
income tax liability a second time under different rules and then pay the
AMT if it is higher than the regular tax. As a result, the AMT adds considerable complexity, and dealing with it must be an important element of any tax
reform. The predecessor to the current AMT was enacted in 1969 to ensure
that high-income taxpayers with substantial amounts of tax preferences would
at least pay a moderate sum in taxes. Unlike many income tax provisions,
Congress did not index the AMT for inflation. Later, Congress increased
AMT tax rates from 21 percent to 24 percent in 1991 and to 26 percent and
28 percent in 1993. With higher rates and no indexing for inflation, it was
only a matter of time before large numbers of taxpayers would be affected.
During the last several years, Congress has passed several temporary measures
to keep the number of AMT taxpayers from growing too rapidly. However,
under current law, the number of taxpayers paying the AMT is expected to
grow rapidly from 3 million in 2004 to 38 million by 2010. Most of the
newly-affected taxpayers will not be those with the highest incomes. One
study projects that under current law, over half of all taxpayers with incomes
of $75,000 to $100,000 (in $2003) and 94 percent of married taxpayers with
two children in that income range will be subject to the AMT by 2010.
Because taxpayers have to compute their taxes twice to see if they have to
pay the AMT, it is a major source of complexity. Further, the lowest rate
under the AMT is 26 percent, a higher rate than would otherwise be faced by
middle-income families. Finally, while some tax preferences are added back
into the tax base, many features of the AMT are inconsistent with sensible tax
principles. For example, some costs of earning income are not deductible and
personal exemptions are treated as a tax preference under the AMT.
Alternatives for AMT reform include repeal or limiting its effect to highincome taxpayers by increasing exemption levels and lowering AMT tax rates.
Significant changes to the AMT would be costly, however, as various estimates
suggest that the 10-year cost of full repeal would be nearly $1 trillion.

Simplification
Many provisions in the current tax system overlap, conflict, or are otherwise
overly complex. The Congressional Joint Committee on Taxation and others
have produced lists of such provisions. Elimination or simplification of such
provisions could substantially reduce compliance burdens and distortions of
90 | Economic Report of the President

the current system. In addition, some would broaden the tax base thus
allowing for further reductions in tax rates.
An example of the potential for simplification was provided when Congress
recently enacted legislation similar to an Administration proposal for a single
definition of a dependent child in determining when taxpayers can claim
several widely-used tax benefits. Previously, five different standards for a
dependent child applied under different tax provisions, leading to confusion
and inadvertent errors. This reform will benefit many lower- and middleincome households by providing a single set of rules and reducing
burdensome record-keeping requirements.
While there are many complex provisions, among the prime candidates for
simplification are the capital gains rates affecting certain special types of gains,
taxes on dependent children with small amounts of investment income, and
provisions that phase out certain tax benefits at higher income levels.

Conclusion
This chapter has examined problems of the current tax system and examined
some of the major options for tax reform. The President has not endorsed any
specific proposal. Well-designed reforms, however, should be able to simplify
the system and enhance both fairness and economic efficiency.
Although tax reform has been discussed for many years, it is a particularly
pressing need at the current time. Increasing numbers of taxpayers will be
affected by the alternative minimum tax, which will be a major source of frustration and complexity. In addition, the tax reductions enacted since 2001 will
expire in a few years unless they are extended or a new, reformed tax system is
adopted. If these provisions are allowed to expire, the result will be substantial
increases in taxes on taxpayers in all income groups, with the largest percentage
increases being imposed on lower- and middle-income households. Taken
together, these looming problems provide a natural opportunity to rethink the
entire system of taxation.

Chapter 3

| 91

92 | Economic Report of the President

C H A P T E R

4

Immigration

I

n recent decades, the United States has experienced a surge in immigration
not seen in over a century. Immigration has touched every facet of the U.S.
economy and, as the President has said, America is a stronger and better
Nation for it. Immigrants today come from countries around the world and
work in diverse occupations ranging from construction workers and cooks to
computer programmers and medical doctors.
Immigrants have settled in all parts of our Nation and have generally succeeded
in finding jobs quickly, helped in large measure by the flexibility of the U.S. labor
market. One indicator of this success is that foreign-born workers in the United
States have a higher labor force participation rate and lower unemployment rate
than foreign workers in most major immigrant-receiving countries.
While flexible institutions may speed the economic integration of the
foreign-born, the distribution of the gains from immigration can be uneven.
Less-skilled U.S. workers who compete most closely with low-skilled immigrants have experienced downward pressure on their earnings as a result of
immigration, although most research suggests these effects are modest. Also,
communities contending with a large influx of low-skilled immigrants may
experience an increased tax burden as immigrant families utilize publicly
provided goods such as education and health care.
U.S. immigration policy faces a complicated set of challenges, perhaps more
so now than ever before. Policy should preserve America’s traditional hospitality
to lawful immigrants and promote their economic contributions. Yet these goals
must be balanced with the Nation’s many needs, including the imperative for
orderly and secure borders. These challenges have only grown in a post-9/11
world. The persistence of undocumented immigration and problems with
employment-based immigration suggest that the United States needs to better
enforce immigration laws and do more to address the demand for immigrant
workers and the need for national security. The President’s proposed Temporary
Worker Program and increased funding for internal enforcement recognize
these problems and would implement necessary reforms.
The key points in this chapter are:
• The flexibility of the U.S. labor market helps immigrants succeed.
• A comprehensive accounting of the benefits and costs of immigration
shows that the benefits of immigration exceed the costs.
• Much immigration occurs outside the realm of immigration law; a
temporary worker program and better enforcement of current laws would
be expected to result in many improvements, including a reduction in the
number of undocumented immigrants.
93

Immigration and Economic Growth
Immigrants have contributed enormously to U.S. population and employment
growth. The foreign-born have grown among all occupations and regions of
the country and have spread beyond traditional immigrant centers and into
areas where previously few immigrants had lived. Following common practice, this chapter uses the terms immigrant and foreign-born interchangeably
and adopts the Census Bureau’s definition of foreign-born to mean any
person who is in the United States legally or illegally who was not a U.S.
citizen at birth (not born in the United States or of U.S. parents). This usage
differs from that of the U.S. Citizenship and Immigration Services, which
uses the term immigrant to refer to a subset of the foreign-born population,
namely lawful permanent residents (see below for an explanation of the
different immigrant categories).

Immigrants and Employment Growth
The foreign-born are associated with much of the employment growth in
recent years. Between 1996 and 2003, when total employment grew by
11 million, 58 percent of the net increase was among foreign-born workers. That
immigrants contributed so much to net employment growth is not surprising:
immigrants contributed almost as much to growth in the working-age population (51 percent) as they did to growth in employment. Almost all employment
growth among immigrants was among those who arrived in the United States
between 1995 and 2003. (Employment growth in this chapter is based on the
Current Population Survey or “household” survey because it provides information on place of birth and citizenship status—see Box 1-2 in Chapter 1 of the
2004 Economic Report of the President for a discussion of the payroll versus
household surveys.)
While employment of the foreign-born grew among all occupations,
immigrant contributions to job growth were especially large in the service
occupations and precision production, craft, and repair (a category that
includes mechanics, repairers, and construction workers) (Table 4-1). In some
occupations, natives were leaving even as the foreign-born were entering. For
instance, employment of natives as operators, fabricators, and laborers fell by
1.4 million between 1996 and 2002, while employment in such occupations
grew by 930,000 among the foreign-born. This should not be taken as
evidence that the foreign-born displace native workers; rather, it reflects the
fact that immigrants have made up all of the growth in the low-skilled workforce. As education levels rise among younger U.S. workers and older U.S.
workers retire, the number of low-skilled natives is declining.

94 | Economic Report of the President

TABLE 4-1.— Foreign-Born Share of Employment Growth by Occupational Category,
1996 to 2002
Occupational category

Employment growth Foreign(thousands)
born as
Foreign- percent
Total
of total
born

Total ................................................................
Executive, administrative, and managerial ....
Professional specialty .....................................
Technicians and related support ....................
Sales ................................................................
Administrative support, including clerical......
Service .............................................................

9,667
2,801
3,158
585
837
-177
2,032

5,575
504
852
181
480
296
1,253

57.7
18.0
27.0
30.9
57.3
(1)
61.7

Precision production, craft, and repair...........
Operators, fabricators, and laborers...............

1,044
-518

900
930

86.2
(1)

Farming, forestry, and fishing ........................

-97

178

(1)

Occupation examples

(1)
Managers, administrators
Doctors, scientists, teachers
Health and science technicians
Salespeople, cashiers
Clerks, secretaries, bookkeepers
Janitors, kitchen workers, grounds
workers
Mechanics, construction workers
Machine operators, bus and truck
drivers
Farmers, farm workers

1

Not applicable.
Note: Since data in this table end with 2002, total growth here is less than the 11 million increase mentioned in
the text, which is measured from 1996 to 2003. Data relate to persons aged 16 and over.
Source: Department of Labor (Bureau of Labor Statistics).

Immigrants and Regional Growth
Immigrants are not spread evenly across the United States but instead are
concentrated within certain states and cities. In 2000, 59 percent of the
foreign-born lived in just four states: California, New York, Texas, and Florida,
compared with only 29 percent of natives. Fully 21 percent of the immigrant
population lived in the metropolitan areas of New York and Los Angeles alone,
compared with 5 percent of the native-born. The foreign-born are concentrated in certain areas, not only because of the economic opportunities in these
regions, but also because new immigrants often prefer settling in cities in
which their fellow countrymen already reside. This enables new immigrants to
live among people who share their language and culture, as well as to use ethnic
networks to find jobs and learn about life in the United States.
While recent immigrants continue to settle disproportionately in cities and
states with large immigrant populations, both recent and earlier waves of
immigrants have increasingly pursued economic opportunities in areas where
few immigrants had lived previously. From 1996 to 2003, some of the fastest
job growth among the foreign-born took place in regions of the country where
few immigrants had worked at the beginning of the period (Chart 4-1). In the
East North Central region (Indiana, Illinois, Michigan, Ohio, and Wisconsin),
for example, immigrants accounted for 84 percent of employment growth
between 1996 and 2003, even though the foreign-born were only 5 percent of
workers in this region in 1996, compared to 11 percent nationwide. Even in
the East South Central states (Alabama, Kentucky, Mississippi, and Tennessee),
immigrants were only 2 percent of workers in 1996 but accounted for
47 percent of job growth during this period.
Chapter 4 | 95

Chart 4-1 Foreign-Born Share of Employment Growth by Census Division, 1996 to 2003
The foreign-born contributed 58 percent of growth in employment from 1996 to 2003.

< 40%
40 to 60%
60 to 80%
80% and over

Note: Data relate to persons aged 16 and over.
Source: Department of Labor (Bureau Labor Statistics).

How Many Immigrants?
The foreign-born have contributed to population growth almost as much as
they have contributed to employment growth. Population growth is the combination of natural growth (births minus deaths) and net immigration (immigrants
minus emigrants). Since 1970, immigrants have constituted an increasing share
of the rise in population. The U.S. population grew by 21.6 million between
1996 and 2003, with 41 percent of that increase from immigration.
By 2003, 33.5 million residents of the United States had been born in other
countries, and the foreign-born share of the population had risen from
5 percent in 1970 to 12 percent in 2003 (Chart 4-2). Nonetheless, as a share
of the population, the foreign-born are still less prevalent than at their peak
in 1890, when they accounted for 15 percent of U.S. residents.

Legal and Illegal Immigrants
The 33.5 million immigrants living in the United States can be divided
into four groups: naturalized American citizens, immigrants who have become
citizens by passing a citizenship test and fulfilling other requirements; permanent residents, immigrants who have “green cards” and the legal right to reside
permanently in the United States but have not become naturalized citizens;
temporary residents, people admitted to the United States temporarily for
a specific purpose, including visitors, students, and temporary workers
(referred to as nonimmigrants by immigration authorities); and undocumented
96 | Economic Report of the President

immigrants (also called illegal or unauthorized immigrants), people residing in
the United States illegally.
The number of foreign-born in the United States is measured primarily
through the decennial Census and, since 2000, updated annually using the
American Community Survey. The Census is believed to undercount the
number of foreign-born, especially among undocumented immigrants.
Taking into consideration the undercount in the undocumented immigrant
population and other factors, a 2004 study estimates that the foreign-born
population was 34.9 million, or 1.4 million higher than the official 2003 estimate. Chart 4-3 illustrates this study’s estimated breakdown of immigrants by
their immigration status. Legal non-citizens are about 38 percent of immigrants, with 12.0 million permanent residents and 1.2 million temporary
residents. An additional 34 percent are naturalized citizens, and the remaining
28 percent are undocumented immigrants.

From Which Tempest-Tossed Shores?
When Emma Lazarus wrote The New Colossus in 1883, immigrants were
overwhelmingly from Europe. Only a handful of immigrants were from Asia
or Latin America. The situation is reversed today. Over half of the foreignborn population was born in Latin America (Chart 4-4). Of those from Latin
America, over two-thirds are from Mexico or Central America. The next
Chapter 4

| 97

98 | Economic Report of the President

largest group of immigrants was born in Asia, with China, the Philippines,
and India the most prevalent Asian countries of birth. An additional 14 percent
of the foreign-born come from Europe, and the remaining 8 percent were
born in other areas of the world (mainly Africa, Oceania, and Canada).

Immigrant Education and Earnings
The foreign-born are disproportionately represented among those with
little schooling. Over one-fifth of immigrants have less than nine years
of education, compared with only 4 percent of the U.S.-born population
(Chart 4-5). The foreign-born are also slightly overrepresented among people
with an advanced degree (a master’s, professional, or doctoral degree):
10 percent of the foreign-born, but only 9 percent of U.S. natives, hold an
advanced degree. This difference in advanced degrees is greater for men.
Although native- and foreign-born women are equally likely to hold an
advanced degree, 12 percent of foreign-born men but only 10 percent of
native men have an advanced degree.
Schooling levels are correlated with region of origin. Immigrants from
certain world regions tend to be highly educated while those from other world
regions tend to have little schooling. For example, 25 percent of Asian-born
men in the United States hold advanced degrees, whereas only 10 percent

Chapter 4

| 99

failed to graduate from high school. In contrast, only 2 percent of male
immigrants from Mexico or Central America have a master’s degree or higher,
while 42 percent completed less than nine years of schooling and an
additional 22 percent attended high school but did not graduate.
Partly as a result of lower average education levels, the typical immigrant earns
less than the typical native. In 2003, median immigrant earnings were $511 per
week, or 74 percent of the median earnings of natives (Table 4-2). Within education groups, immigrants earn 82 to 94 percent of natives’ wages, with the
smallest earnings gap among college graduates. This earnings gap narrows over
time as most immigrant cohorts experience faster earnings growth than natives
with similar education.
TABLE 4-2.— Median Weekly Earnings by Educational Attainment, 2003
Educational attainment

Native-born

Foreign-born

Foreign-born
as percent of
native-born

$688
430
569
647
971

$511
369
467
576
909

74
86
82
89
94

All levels..............................................................................................
Less than a high school diploma ........................................................
High school graduate, no college........................................................
Some college, no degree .....................................................................
College graduate.................................................................................
Note: Data relate to full-time wage and salary workers aged 25 and older.
Source: Department of Labor (Bureau of Labor Statistics).

As a result of lower education levels and earnings and larger families,
immigrants are more likely than natives to be poor. In 2003, 16.6 percent of
immigrants were poor compared to 11.5 percent of U.S. natives. Despite
higher poverty rates, immigrants are more likely to participate in the workforce than natives, with 78 percent of male immigrants with less than a high
school education participating in the labor force compared to 47 percent of
their native counterparts. Among undocumented male immigrants,
96 percent are estimated to participate in the labor force.

The Role of Labor Market Institutions
U.S. immigrants are much more likely to work than immigrants in most
other industrialized nations, a distinction which may in part be due to labor
market institutions. Labor market institutions refer to the constraints that
govern the employer-employee relationship, including the policies that
influence the firm’s decision to hire and the worker’s decision to work.
The demand for workers is influenced by the regulations that determine

100 | Economic Report of the President

employment costs, including wage floors set by unions or the government,
non-wage costs such as payroll taxes, and laws that limit turnover such as rules
against firing workers. The supply of workers is likely affected by the institutions that provide welfare and unemployment benefits, with more generous
programs associated with fewer incentives to work and hence a lower labor
supply or more unemployment.
The United States is regarded as having relatively flexible labor markets,
which allow individual employers and workers greater discretion in setting
working conditions. This contrasts with highly-regulated labor markets in
which wage-setting and benefits determinations are often centralized. This
section compares the United States with some other Organization for
Economic Cooperation and Development (OECD) countries to see whether
there is a correlation between the extent of labor market regulations and the
unemployment rate of immigrants relative to natives.

Institutions and Immigrant Unemployment
Labor market regulations influence the level and flexibility of wages and
affect new workers’ chances of finding employment. In standard economic
analysis, unemployment results when total worker compensation—the sum
of wages and benefits—exceeds the market rate. This happens either when
compensation is fixed and cannot fall in response to increased labor supply, or
when wage floors and mandated benefits set worker compensation at a level
above the market rate. In both cases, immigrants may be more likely than
natives to be unemployed as a result.
If immigrants are less productive than natives, then regulations that
increase compensation for entry-level workers would be expected to affect
foreign workers more than natives. Immigrants may be less productive on
their initial arrival because they may lack the language skills, educational
background, or institutional knowledge that natives can draw upon to
enhance their job performance. A lower entry-level wage could compensate
for these shortcomings and would be expected to be followed by faster wage
growth as the immigrant learns new skills and gains experience. Several
studies have found that lower initial earnings among immigrants are
in fact correlated with higher rates of earnings growth.
Rules against firing workers are common in more-regulated markets and
can reduce new hiring, especially of immigrant workers. Immigrants might
initially be perceived as more risky hires because employers may not know
how to evaluate immigrants’ educational backgrounds, for example, or may
not be able to gauge their language proficiency. As a result, immigrants may
have to search longer for a job than would otherwise similar native workers.

Chapter 4

| 101

Immigrants may overcome communication, cultural, and other barriers
(including discrimination) by starting their own businesses. Entrepreneurship,
however, may be out-of-reach for some immigrants in highly-regulated
markets, which are often characterized by high business start-up costs and less
access to capital. At the same time, generous unemployment insurance in
more-regulated economies and welfare programs for refugees and asylum
seekers may discourage immigrants from looking for jobs in the first place.
The composition of employment growth is another important difference
between the United States and some Western European countries that may
influence immigrant unemployment rates. In the United States, the fastgrowing U.S. service sector provides greater opportunities to new workers
than does the service sector in many other countries. In Germany, where
immigrants are disproportionately employed in the service sector, the sector’s
relatively slow growth may have limited immigrant job opportunities. The
lack of growth in low-skill service jobs could simply be another consequence
of high-cost and high-tax markets, although some researchers point to
cultural or lifestyle differences as limiting the demand for things like fast food.
Immigrants in countries with highly-regulated labor markets tend to have
higher unemployment rates relative to natives than immigrants in countries
with flexible labor markets, such as the United States. Chart 4-6 shows the
average unemployment rates of native versus foreign males in major immigrant-receiving OECD nations during 2000-2001. The countries are ranked
according to the competitiveness of their labor markets, with less-regulated
countries at the top of the chart and more-regulated countries at the bottom.
Immigrant unemployment rates are generally lower and more similar to native
unemployment rates in less-regulated labor markets, such as in the United
States, than in highly-regulated labor markets such as those in Spain, Sweden,
Germany, and France. Male immigrants in France, for example, had a
17 percent unemployment rate in 2000-2001, 10 percentage points higher
than natives. Male immigrants in the United States, meanwhile, had a
4.4 percent unemployment rate, 0.5 percentage points lower than U.S. natives.

Unemployment Rates Among Immigrant Youth
Labor market inexperience may exacerbate the negative consequences of
rigid labor market institutions, perhaps more so for immigrants than natives.
Chart 4-7 compares unemployment rates among foreign and native youth
(aged 15 to 24) for a subset of the countries above. Relative unemployment
rates among immigrant youth (both men and women) are higher in heavily
regulated labor markets. In Sweden, immigrant youth have more than twice
the unemployment rate of native youth. In France, foreigners aged 15–24
have a 30 percent unemployment rate, compared to 18 percent for similarly
aged natives.
102 | Economic Report of the President

Chapter 4

| 103

Caveats to Consider
Many other factors that vary across countries affect these statistics. While
in the United States, “foreign” implies that the person was born abroad, that
is not the case in Europe or Japan where “foreigner” refers only to those who
are not citizens. Either group can be bigger depending on how much countries restrict access to citizenship; in some countries even second- and
third-generation immigrants are not citizens. In Germany and Japan, for
example, relatively few immigrants become citizens while much larger shares
of immigrants naturalize in the Netherlands and Sweden. As a result of these
differences and holding all else equal, foreigners in Germany would be more
comparable to natives in Germany, shrinking the difference in the unemployment rates as compared with foreigners in the Netherlands and Sweden who
would tend to be made up of relatively new immigrants.
Differences in immigration policies across countries also affect the comparison of immigrants’ labor market outcomes. Australia, for example, admits the
majority of its immigrants based on employment skills; its immigrants would
be expected to be better prepared for the job market than would immigrants
in countries which prioritize foreigners who are refugees or asylum seekers, or
family members of natives and prior immigrants, as in the United States.
Indeed, Australian immigrants have similar unemployment rates as Australian
natives (Chart 4-6). U.S. immigrants also have low unemployment rates,
however, even though U.S. immigration policy is principally based on family
ties. The last section of this chapter describes U.S. immigration policy
in more detail.

Benefits and Costs of Immigration
The gains from immigration are analogous to the gains from trade (see
Chapter 8, Modern International Trade, for a discussion explaining how countries gain from trade). In classical trade theory, countries benefit from trading
when they differ in some way. Similarly, the more different immigrants are from
natives, regardless of whether they have fewer or more skills, the bigger are the
economic gains from immigration. The skill composition of immigrants comes
into play in other ways, however. First, it determines which native workers gain
by immigration and which lose. Second, it determines whether immigration
positively or negatively affects government revenues and expenditures.

Labor Market Impact of Immigration
Standard economic theory suggests that an increase in the supply of labor,
such as an influx of immigrant workers, would be associated with lower
wages, other things being the same. Empirical estimates of how much native
104 | Economic Report of the President

wages fall in response to immigration, however, are typically small. The
magnitude of the wage impact is mitigated by two factors: how substitutable
immigrant workers are for natives and the response of existing factors of
production such as capital and labor to the influx of immigrants.
If foreign workers are not substitutable for natives, then immigration would
be expected to have little impact on the wages of natives. For example, an
immigrant with unique skills, such as a highly specialized scientist, or an immigrant who speaks little or no English, is unlikely to compete directly with most
U.S. workers. Instead, recent immigrants may be the most adversely affected
by the inflow of more immigrants. A new immigrant with limited English
skills, for example, will likely compete closely with other recent immigrants
with poor English ability and in jobs that do not require institutional, technical, or advanced language skills, such as janitorial services or child care. If
immigrants become concentrated in certain states or cities, natives might also
respond by moving to locations with relatively less competition from immigrants. Although research findings suggest so-called native flight may have
occurred in the 1980s, the experience of the 1990s suggests the opposite—that
immigrants and natives were drawn together by economic growth.
The supply of capital might also change with immigration. An increase in
the supply of labor means that each unit of capital becomes more productive
and thus more valuable. As a result, capital may flow into areas where there
has been immigration even while output in those areas shifts toward production of goods and services that are relatively more labor intensive. This
increased investment and production shift may in turn raise the demand for
labor and push wages partially back up.
Several economic studies have attempted to measure the wage impact of
immigration on natives and previous immigrants—a challenging task because it
is necessary to take into account all other factors that might plausibly affect
wages, such as the responses by capital and labor outlined above. Such studies
also have to take into account that immigration itself is driven by favorable
economic conditions such as high or rising wages. With those caveats in mind,
a typical finding is that, on average, immigration has little effect on native
wages. Box 4-1 reviews one of these studies in more detail. Generally, estimates
suggest that a 10 percent increase in the share of foreign-born workers reduces
native wages by less than one percent. Recent studies that look at wage effects
by skill levels typically find larger negative effects on less-skilled than mediumor high-skilled native workers. Adverse wage effects on previous immigrants
have been found to be on the order of 2 to 4 percent. It should be noted that
these studies typically identify the effect of immigration on natives by
comparing labor market outcomes of natives in response to differences in immigration across regions and over time. Analysis done at the national level relies
primarily on variation in immigration over time and finds larger adverse effects.

Chapter 4

| 105

Box 4-1: Wage Impacts of Immigration
The labor market effects of immigration can be identified by using
real-world events in which immigration occurs suddenly and is not
driven by economic factors. One such study measures native wages in
Miami before and after the Mariel Boatlift in which approximately
125,000 Cubans arrived between May and September of 1980. This influx
added 45,000 workers, or 7 percent, to Miami’s labor force in just a few
months. Despite the fact that a relatively high fraction of the new immigrants were low-skilled, these immigrants had virtually no effect on the
wages or unemployment rates of less-skilled workers in Miami.
This result could have been driven by labor and capital responses.
For example, natives and other immigrants who would otherwise have
moved to Miami to fill low-skill jobs may have decided not to do so
because of the rapid influx of Cuban immigrants over this period. In
addition, textile and apparel firms, industries that are well-suited to
utilize low-skilled labor, expanded in Miami, thereby cushioning the
adverse wage impact on Miami workers.

Fiscal Impact of Immigration
Immigrants—like all natives—affect the public finances, the revenues and
expenditures of local, state, and Federal governments. Immigrants contribute
money to public coffers by paying sales and property taxes (the latter are
implicit in apartment rents). Immigrants working “on the books” further
contribute through income and payroll taxes. Immigrants consume publicly
provided goods and services such as roads, police and fire protection, and
public schools. If they are eligible, some legal immigrants, such as naturalized
citizens and lawful permanent residents who have lived in the United States
for five years or more, may also receive assistance from programs such as food
stamps, Temporary Assistance to Needy Families (TANF), and Medicaid.
Supplemental Security Income (SSI) is generally restricted to citizens and to
lawful permanent residents who have worked in the United States for at least
10 years. The fiscal impact of immigration is the difference between how
much immigrants pay in to the government and the value of the public services they consume.
Some studies have calculated the fiscal impact of immigrants on an annual
basis and looked at whether the cost of providing public goods and services to
immigrant households increases the tax burden on native households in a given
year. Such studies have found that, while immigrants do not impose a net higher
tax burden at the Federal level, natives in states with a heavy concentration of
106 | Economic Report of the President

immigrants from Latin America do realize an increased overall tax burden.
Another approach in estimating the fiscal impact of immigration is to
compute the expected lifetime fiscal impact of immigrants who come to stay
permanently and their children, grandchildren, and future descendants. A
1997 study found that the net present value of immigrants’ estimated future
tax payments exceeded the cost of services they were expected to use by
$80,000 for the average immigrant and his or her descendants. Accounting
for the 1996 welfare reform, which restricted eligibility and imposed time
limits, this figure increased to $88,000. The value of services slightly exceeded
taxes paid by the original immigrant, but the contributions of the immigrant’s
descendants more than made up the difference.
The average impact masks two facts. First, immigrants typically do not
impose a net cost at the Federal level where most of the proceeds from payroll
taxes accrue, but rather at the state and local level through their use of public
schools and health care. Second, the average fiscal impact also masks the fact
that the fiscal effect of immigrants (like that of natives) varies by education
level. How much immigrants pay in and how many services they utilize
depend largely on whether they are families headed by skilled or unskilled
workers. Immigrants with a high school degree or better and their descendants contribute more in taxes than they use in public services, which
produces the overall positive impact mentioned above. But the average net
present value of the fiscal impact of an immigrant with less than a high school
education is negative $13,000. The impact of the original immigrant with
no high school diploma is negative $89,000, which is largely offset by the
positive $76,000 in contributions by the immigrant's descendants.
Fiscal contributions and receipts are also a function of an immigrant’s legal
status and the same net present value would not apply to an undocumented
immigrant or someone residing in the United States temporarily. More than half
of undocumented immigrants are believed to be working “on the books,” so they
contribute to the tax rolls but are ineligible for almost all Federal public assistance
programs and most major joint Federal-state programs. Over time, however, if
low-income immigrants attain legal status, they may become eligible for
more welfare programs. The U.S.-born children of an immigrant, legal or illegal,
are automatically citizens and eligible for government programs.

Immigrants and Public Assistance
Immigrant households, despite the restrictions on their eligibility, are more
likely than native households to participate in public assistance programs. In
2003, 16.7 percent of native households used a major welfare program,
compared with 25.5 percent of households with a foreign-born household
head. Major welfare programs in this case include TANF, SSI, food stamps,
public housing, and Medicaid. Immigrant families, which includes families
Chapter 4

| 107

with U.S.-born children, are more likely to use welfare as a result of their
higher poverty rates and lower rates of health insurance coverage. Medicaid
alone accounts for almost all the difference in the rates of public assistance for
these two groups. This is partly due to the fact that immigrants are more likely
to work in jobs without health insurance. Only 45 percent of immigrants
have employment-based coverage, compared to 62 percent of natives.

Immigrants and Social Security
While the number of immigrants with relatively low education levels tends
to put a strain on government budgets, several other immigrant characteristics have the opposite effect. First, compared to native workers, immigrants
are relatively young when they arrive. Green card recipients are overrepresented in the age groups between 10 and 39. Immigrants also have higher
fertility rates than natives. The influx of younger people and higher birth rates
expand the labor force and slow the ongoing decline in the ratio of workers
per retirees. This, in turn, contributes to the financing of pay-as-you-go
entitlement programs, such as Social Security and Medicare.
Many of these workers who have contributed to the Social Security system
return to their home countries and never file for benefits. In the case of Mexico,
millions of Mexicans have worked in the United States and returned home, but
only 37,000 non-U.S. citizens residing in Mexico received Social Security benefits in 2004. Undocumented immigrants without a valid Social Security
number cannot receive Social Security benefits, but as long as the employer
reports their earnings to the Social Security Administration (SSA), their earnings are subject to withholding of Social Security taxes. The SSA cannot identify
undocumented workers, but keeps track of the earnings of all workers who have
mismatched or invalid Social Security numbers in the so-called Earnings
Suspense File (ESF). The ESF was valued at $463 billion in 2002.
Totalization agreements are another way that foreign workers can affect
Social Security. Totalization agreements are binational treaties where U.S.
workers’ earnings abroad count toward their Social Security contributions
and similarly for foreign workers employed in the United States. Totalization
agreements exist with 20 countries.

Additional Benefits to Immigration
Calculations of the net benefits of immigration are typically made from the
natives’ point of view, hence the focus on fiscal and labor market impacts. But
immigration also benefits the immigrant and his or her family, who enjoy
increased income and improvements in their quality of life. Some of the
increased income may be sent home in the form of remittances, benefiting
family members who remain behind in the immigrant’s country of origin. In
108 | Economic Report of the President

addition, as migrants leave the country-of-origin, economic opportunities may
arise for others who stay put. If there is enough emigration, as in the case of
Mexico, the decrease in the supply of labor could even be enough to raise wages.
Migrant remittances can have important economic benefits in the origin
country. In 2003, remittances from the United States to Latin America
exceeded $30 billion. Remittances raise income, reduce poverty, and lower
income volatility in the recipient country, an important consideration in countries where economic crises are more common. Studies of Mexican migrants
have found that remittances are used for both day-to-day consumption, such as
food and housing, as well as for investments in human and physical capital,
such as starting a business, buying land, or building a home. The United States
has led efforts to facilitate remittances. At the G-8 Sea Island summit in Georgia
in June 2004, the President secured support for a plan to help developing countries by improving data on remittance flows and by reducing the costs of
international money transfers.
In the long run, international migration can also lead to institutional change
in the origin country. The fact that people are mobile means that countries
facing high emigration may try to retain or lure their citizens back. For
example, according to news reports, Mexico launched a crackdown on corrupt
customs agents who preyed on migrants as they returned home. As part of the
crackdown, Mexico appointed a border czar in 2001 and strengthened the
Paisano Program, which helps Mexicans return home for the holidays without
being harassed or extorted. The U.S. and Mexican governments also established Partnership for Prosperity, a large-scale binational public-private
economic development initiative. Meanwhile, Federal and state government
officials in Mexico launched programs such as Dos por Uno and Tres por Uno
to match remittance money going to infrastructure projects, such as paving
roads in migrant communities.

Immigration Policy
In a typical year, about two-thirds of new lawful permanent residents are
admitted into the United States or adjust immigration status based on their
family relationship with a U.S. citizen or permanent resident. (Adjustment of
status refers to foreigners inside the United States who apply for green cards so
they can stay here permanently.) While family-based immigration is prioritized
in U.S. immigration policy, employment-based immigration has grown in
importance in recent years largely through an increase in the number of skilled
temporary workers. Nonetheless, existing employment-based programs suffer
from many problems, including outdated processes for labor certification and
inflexible numerical caps. Immigration systems are also strained by the need
Chapter 4

| 109

for security measures, such as more extensive background checks on applicants.
At the same time, immigration continues to occur outside official channels in
the form of undocumented immigration.
According to the most recent estimates, there are about 10 million
undocumented immigrants in the United States, the majority of whom are
low-wage workers. More than one-half of undocumented immigrants are
from Mexico. One of the most pervasive features of undocumented immigration is that it is overwhelmingly driven by supply and demand: immigrants
want to work in the United States, and many American employers want to
hire them. Such a simple fact, however, has complex economic, humanitarian,
and security-related implications.
Many undocumented immigrants endure a perilous journey to make it to
the United States. To obtain work, some undocumented immigrants resort to
using false documents, such as fake Social Security cards or green cards. They
live in fear of deportation and may hesitate to contact law enforcement if they
become victims of crime or abuse. Once workers are here, additional undocumented immigration may take place as family members and friends join the
workers. As families grow, the children born in the United States to undocumented immigrants are U.S. citizens. Network-based migration and the
natural rate of population increase have created hundreds of thousands of
“mixed status” families, in which children, siblings, and parents have a
different immigration status.

Current U.S. Immigration Policy
Throughout the nineteenth and into the early twentieth century, the
United States had a generally “open door” policy toward immigration. Most
newcomers were admitted with the exception of those barred by the Chinese
Exclusion Act of 1882, prohibitions against prostitutes and felons, and a few
other exclusions. World War I, however, ushered in an era of restricted immigration—a policy that has persisted to the present day. The National Origins
Act of 1924 allowed immigration under country quotas that heavily favored
northern Europeans. The Immigration Act of 1965, which provides the
framework for current policy, abolished national-origins quotas and based
immigration policy largely on “family reunification.” While the Immigration
Act of 1990 increased the cap on employment-based green cards, such green
cards make up fewer than 15 percent of the total number of green cards issued
in a typical year.
Current immigration law provides for five major bases for obtaining
permanent residency in the United States—immediate relatives of citizens,
other family members, employment immigrants, “diversity” immigrants, and
refugees and persons granted political asylum. Immediate relatives include the
parents, spouses, and minor children of citizens; other family members
110 | Economic Report of the President

include siblings and adult children of citizens, as well as spouses and children
of permanent residents; employment immigrants are workers brought in to
work for U.S. employers; diversity immigrants come into the United States or
adjust status through the “green card” lottery where priority is given to
persons from certain underrepresented countries, such as many African
nations; and refugees and persons granted asylum (also called asylees) qualify
for permanent residence because they face persecution in their home countries. Refugees and asylees differ only in their location: refugees apply for
admission to the United States from abroad, while asylees apply for asylum
from within the United States.
All major permanent residence categories except immediate relatives of
citizens are subject to numerical limits: approximately 226,000 for other
family members, 140,000 employment immigrants, 55,000 diversity immigrants, and 10,000 asylees. Uncapped immediate relatives of citizens averaged
402,000 per year in 2000–2003. While there is no explicit limit on the
number of green cards allotted for refugees, the number of refugees who can
adjust status is limited by caps on refugee admissions that are set each year by
the President in consultation with Congress. The cap on refugee admissions
is 70,000 in fiscal year 2005.
Despite the overwhelming demand for permanent residence in all these
categories, thousands of allotted green cards are not being issued. Processing
backlogs are keeping green card issuances below their numerical caps and
contributed to a 34 percent decline in the number of new lawful permanent
residents in 2003. At the end of fiscal year 2003, there were 1.2 million
adjustment of status cases pending a decision.
As a result of numerical limits and backlogs, green card applicants filing as
“other family members” can expect to wait from 4 years (for unmarried adult
children of citizens) to over 12 years (for siblings of citizens). Waits are longer
for family-sponsored immigrants from certain overrepresented countries, such
as India, Mexico, and the Philippines, because family-sponsored green card
issuances to any single country cannot comprise more than 7 percent of the
total. In February 2005, Filipinos who immigrated as siblings of U.S. citizens
had waited 22 years for their green cards.

Employment-Based Immigration
Foreign workers come to the United States through employment-based
green cards, as described above, or with temporary worker visas. For these
purposes, there are at least 140,000 employment-based slots for permanent
residency available each year (the actual cap varies with the number of green
cards issued in the family program) and a variable number of temporary
worker visas. Employment-based green cards typically require the worker to
have at least a college degree or special skills; only 10,000 green cards are
Chapter 4

| 111

reserved for less-skilled workers. The allotment for employment-based green
cards includes the principal worker and any family members. Nevertheless,
for many years, the number of green cards issued fell far short of the 140,000
cap. During the height of the economic boom in the late 1990s, average
annual employment-based green cards numbered only about 80,000,
consisting of about 36,000 workers and 45,000 spouses and minor children.
The current situation is similar in that employment-based green card
issuances are below their caps again, although this time not for a lack of
demand. As of January 2005, there were 271,000 employment-based applications for adjustment of status pending, with about 191,000 of these
backlogged by the Department of Homeland Security (DHS).
A multitude of factors contribute to difficulties within the employmentbased green card program. Background checks and the sheer volume of
pending applications limit processing speed, as do cumbersome requirements
regarding the labor certification process. Labor certification for permanent
employment requires a firm to undergo an extensive, government-supervised
search for U.S. workers before the petition to hire a foreign-born worker can
be approved. Once the Department of Labor (DOL) certifies that no qualified U.S. worker is available for the position and the wages and working
conditions of existing workers will not be harmed by bringing in an additional foreign worker, then DHS and the Department of State can proceed
with processing the green card application. In addition to the DHS backlogs
mentioned above, there is a backlog of over 300,000 applications for labor
certification at DOL. The labor certification process typically takes several
years to complete and has been criticized as being time-consuming, costly,
and complicated.
The problems with labor certification have resulted in calls for reforms and
action by the Administration. In 2002, the Administration proposed to move to
a streamlined application process under which the employer would recruit
domestic workers before petitioning to hire a foreign worker. The final rule
regarding the new labor certification system was published in the Federal Register
on December 27, 2004. Under the new system, firms attest to appropriate recruitment procedures and DOL has the authority to audit all applications. DOL can
order supervised recruitment for employers found to have abused the program.
DOL expects that this simplification of the recruitment process and other
changes, such as electronic filing and automated processing, will greatly reduce the
time needed to process labor certification applications.
The waits and costs associated with traditional processing for employmentbased permanent residency have likely prompted employers to make greater
use of temporary worker visas. The number of visas issued to temporary
workers has more than doubled in the last decade, rising from 251,000 in
1992 to 593,000 in 2003. In contrast, the number of employment-based
green cards issued in 2003 was actually below the number issued in 1992,
112 | Economic Report of the President

despite the tremendous growth in the labor force during this time. Temporary
worker programs include the H-1B program for skilled workers, H-2A for
agricultural workers, and H-2B for other less-skilled workers. Skilled temporary workers can also be admitted as intra-company transferees (L-1 visas)
and, from Canada and Mexico, as North American Free Trade Agreement (or
NAFTA) workers (TN visas).
There are many reasons for all parties—employer, employee, and the
government—to prefer temporary worker visas. Temporary work visas are
issued for a limited period of time and are typically restricted to one employer,
so both employee and employer make a short-term commitment. The application process is simpler and thus generally less costly and timelier. In contrast
to permanent residents, who can apply to be naturalized after five years’ residence in the United States, temporary work visa holders are not eligible to
apply for citizenship. They are also ineligible for most forms of public assistance. Temporary workers can apply for a green card, however, if they qualify
and their employer agrees to support their application.
The unprecedented number of pending applications for employment-based
green cards is believed to stem from the high number of temporary workers that
came in under the H-1B program for skilled personnel in the late 1990s. In
fiscal year 2004, the cap on H-1B workers in the private sector reverted from a
temporary cap of 195,000 to the permanent cap of 65,000 workers per year.
This quantity has proven insufficient to meet demand. In 2004, the government ran out of H-1B visas in February, seven months before the end of the
fiscal year. In fiscal year 2005, the cap of 65,000 H-1Bs was reached in one day.
In light of the shortage of H-1B visas, legislation was passed as part of the
November 2004 Omnibus spending bill to provide an additional 20,000 H-1B
visas per year to foreign students graduating from U.S. universities.

Undocumented Immigration
The influx of low-wage workers, many of whom come illegally, is partly a
result of an immigration policy which, while having several employmentbased immigration programs to address the need for skilled workers, has
relatively few slots for low-skilled workers. The supply of green cards and
temporary worker visas typically allows fewer than 100,000 low-skilled
workers to come in each year. The sum is made up of 10,000 green cards and
66,000 H-2B visas for other low-skilled workers. In addition, about 14,000
agricultural workers were admitted with H-2A visas in 2003. In contrast,
according to the Current Population Survey, the number of low-skilled
foreign workers—workers who lack a high school degree—increased by about
225,000 per year between 1996 and 2003. Moreover, while H-2B visas for
less-skilled workers have run out in both fiscal years 2004 and 2005, no increase
or exemptions to the H-2B cap have been passed.
Chapter 4

| 113

The demand for foreign labor is not new. When the railroads were being
built in the nineteenth century, Mexican workers were recruited to expand the
workforce in the Southwest and Chinese workers immigrated to work in the
West. During World War II, labor shortages arose as U.S. men left their jobs
to join the armed forces. In 1942, the U.S. and Mexican governments initiated the Bracero Program, which allowed Mexican workers to come in and fill
seasonal jobs in agriculture. The need for workers did not end with the war,
however, and the Bracero Program was kept in place until 1964, bringing in
an average of about 200,000 workers per year. European countries, such as
France and Germany, faced similar increases in labor demand following the
war and instituted guest-worker programs around that time.
The end of the Bracero Program in 1964 and the imposition of quotas on legal
immigration from the Western Hemisphere in 1977 eliminated many of the
legal avenues by which to enter the United States from Latin America. The
ensuing flow of undocumented immigration continues to this day. The
Immigration Reform and Control Act (IRCA) of 1986 was an attempt to deal
with this problem by providing for legalization of undocumented immigrants,
increasing funding for the Border Patrol, and making it illegal to hire undocumented workers. To allow for additional worker inflows, IRCA also established
the H-2A visa program for temporary agricultural workers. However, H-2A visas
require employers to undergo a burdensome labor certification process and
follow extensive rules and, as a result, the program is little used.
The passage of IRCA failed to stop illegal immigration. Undocumented
immigration surged with U.S. growth in the early to mid-1990s.
Contributing factors were likely the forces of network migration, which may
have intensified following IRCA, and the 1994–1995 Mexican economic
crisis. In response to the resurgence of undocumented immigrant inflows,
border enforcement along the U.S.–Mexico border was dramatically increased
starting in 1993.
The President’s proposed Temporary Worker Program (TWP), announced
on January 7, 2004, seeks to address the economic and security issues
surrounding the flow of undocumented workers into the United States, as
well as the associated humanitarian concerns. The TWP would give temporary visas to foreign workers who fill jobs for which employers can show they
are unable to hire Americans. This would create an additional legal avenue to
match workers, including low-skilled workers, with U.S. employers. The visas
would last three years and, as long as the worker is employed, could be
renewed at least once. The program would also offer incentives for workers to
return home by setting up tax-preferred savings accounts where money could
be withdrawn for use in the home country. The U.S. government would also
work toward developing agreements with foreign nations to ensure TWP
workers’ U.S. earnings would be recognized by the public retirement
programs in their respective countries.
114 | Economic Report of the President

The TWP would allow new foreign workers to come in each year in
accordance with labor market demand. In addition, TWP eligibility would be
extended to undocumented workers who were present and working in the
United States on January 7, 2004, when the President made his announcement. The President also stated that there would continue to be increases in
border security and, under TWP, tough penalties would be imposed on
employers who continued to hire undocumented workers.
The President has proposed to more than double the funding dedicated to
worksite investigations. In this multi-pronged approach, TWP has many
advantages. It recognizes that an orderly and legal flow of workers will likely
increase national security and brings employers and undocumented workers
into compliance with the law. Employers will be able to legally hire the
workers they need once they demonstrate that no willing and able American
worker is available. Workers will be less likely to lie about their immigration
status, rely on false documentation, or work under assumed names. Workers
who abide by the rules of the program will not have to fear deportation. They
will be able to return home for visits to their families and have their U.S. earnings count toward their future retirement benefits.
The challenges for a program such as this are twofold: to ensure that
undocumented immigration does not continue—either in its current form or
as temporary workers overstay—once the temporary worker program is
implemented, and to minimize administrative burdens on employers who
participate. If the goals of the program are achieved, there should be reduced
demand for undocumented workers, leading to less illegal immigration.

Conclusion
Immigrant workers range from the seasonal agricultural laborer to the
Nobel prize-winning scientist. They are the doctors and nurses who serve
inner cities and rural areas, the professors who teach in our universities, and
the taxi drivers and hotel workers that travelers rely upon. Immigrants also
fill jobs that simply allow Americans to go to work every day, such as
housekeeping and child care.
From an economic standpoint, one important lesson to take away from
how the Nation has dealt with the unprecedented surge in immigration over
the last decade is the role of U.S. labor market institutions. Flexible labor
markets are important in generating job opportunities for workers, and
immigrants are no exception. The work ethic of U.S. immigrants bolsters
their economic contributions. Summing up the economic benefits and costs
of immigration shows that over time, the benefits of immigration exceed the
costs. Adjustment of the economy and native workers to immigration takes
time, however, and the adjustment period can present challenges.
Chapter 4

| 115

The lessons learned from recent decades can guide immigration reform and
make laws more consistent with economic realities and American values.
Under the President’s proposed Temporary Worker Program, employers who
show they cannot find an American worker to fill a job opening will be able
to legally hire a foreign worker. This simple guiding principle, combined with
better enforcement of immigration laws, has the potential to reduce undocumented immigration, bolster national security, and improve on the myriad
employment-based immigration programs in effect.

116 | Economic Report of the President

C H A P T E R

5

Expanding Individual Choice
and Control

A

farmer prepares the soil, plants seeds, and tends her crops. Her wheat will
not be ripe for months. How does she know she will reap the fruits of her
hard work? A businessman buys a factory, hires engineers, and purchases steel,
rubber, and glass, with the intention of manufacturing cars. How does he know
he will enjoy the benefits of his effort and investment? A pharmaceutical firm
invests millions now to develop a new drug that may, much later, help to cure
cancer. How does it know it will receive a return on its research expenditures?
Property rights provide the crucial link between people’s effort and their
reward. They are the instrument society uses to establish people’s control over
things. In practice, these go by many names, such as deeds, titles, permits,
vouchers, allowances, or accounts. Patents and copyrights are also property
rights, establishing control over inventions, books, songs, and other creative
concepts. The essential idea is the same in each case: the owner of the
property right controls how something valuable is used.
Property rights have a profound effect on the choices people make. In
addition to giving them the incentive to maintain and invest in things, people
will use resources more prudently if they own them. Property rights are essential
for markets to function. The lack of a clear title might prevent a car purchase. A
home buyer is unlikely to sign on the dotted line if she is not sure that the seller
actually owns the house. Without property rights, would-be entrepreneurs
cannot secure loans they might need to help their businesses grow.
The key points of this chapter are:
• Property rights are essential to the efficient operation of markets, which
in turn allocate resources to their most highly valued use. Clearly defined
rights are important in avoiding overuse of resources and in encouraging
the improvement of resources.
• The thoughtful application of property rights has already brought about
a number of policy improvements, such as reducing air pollution in a
low-cost way, protecting fisheries from overexploitation, and facilitating
greater school choice.
• Providing people with ownership and individual choice and control of
assets could help address several current concerns, including Social
Security reform and the encouragement of international development.

117

The Meaning of Property Rights
When used in economics, the term resource refers not just to natural
resources, such as land or clean air, but to anything of value, such as skills. A
property right refers broadly to the arrangements society uses to assign people
control over resources. Property rights give a homeowner control over his
house, a farmer control over her land, and an inventor control over his ideas.
That control is defined using a bundle of specific rights. The bundle is
commonly thought to consist of three main elements: the right to exclusive
use of the resource, the right to income derived from the resource, and the
ability to transfer those rights. Property rights can include a range of those
elements, from weak rights (which might only include the right to use the
resource) to strong rights in all three elements. For example, someone living
on a river might acquire the right to use the water flowing past her property,
but not the right to divert it and sell it to others. A car owner, on the other
hand, acquires the right to use the car, to sell the car, and to realize any gain
from the sale.
Even an exclusive right to control and use a resource, however, does not
mean an unrestricted right to use it. A car buyer gets the keys and the title, but
does not acquire the right to drive it at any speed or park it anywhere he
wishes; the car must be driven within the limits of the law. Property rights
typically come with restrictions on the use of the resource in question.

The Economic Effects of Property Rights
Property rights have a host of economic effects. Three especially important
effects are illustrated here. The first is the effect of property rights on the use
of a resource at one point in time. The second is the effect of property rights
on incentives to maintain and improve a resource over time. The third is the
effect that property rights have as a prerequisite for exchange.
The classic illustration of the effect of property rights at one point in time
involves numerous cows grazing on limited pastureland. If access to the
pasture is open to any and all cattle ranchers, then the pasture is an open access
resource, a resource no person or group of people has an exclusive right to use.
Individual property rights to the pasture are not established, and all ranchers
compete to use it. In this case, each rancher might be expected to allow his
cows to graze without limit, because each rancher bears only a fraction of the
cost of additional grazing. That added grazing, however, is costly to other
ranchers because less grass is available for their cows. Any individual rancher
does not directly bear the full cost imposed on other ranchers, and will not
take this cost into account when deciding how much to let his cows graze.
The common grazing pasture thus becomes overused.
118 | Economic Report of the President

This phenomenon, known as the “tragedy of the commons,” is likely to
occur for scarce resources for which access is open. A motorist entering a
crowded freeway does not take into account the effect her car has on the space
available for other cars, so freeways become overused at peak times.
The commons problem would be solved if someone owned the pasture or
had control over grazing. If the owner allowed only his cows to graze, then he
would have an incentive to consider the effect of one cow’s overgrazing on his
other cows. He would voluntarily restrict their grazing. The owner could also
limit access to the pastureland and charge other ranchers for grazing their
cows, according to the amount of grass their cows ate. Because it was costly
to them, each rancher would then reduce the amount of time his cows grazed.
In either case, ranchers conserve on the scarce resource of pastureland because
someone owns the land. Assigning property rights to the owner of the pasture
not only encourages conservation of the resource, but also resolves the conflict
among ranchers over the use of scarce land.
A second key effect of property rights is that they provide incentives to
invest in, maintain, and improve resources over time. To appreciate this effect,
think of a farmer using land that is not owned, but who nonetheless improves
it by weeding, reducing erosion, and controlling pests. She then plants wheat
and cultivates it. Without property rights, she has no legal right to prevent
someone else from harvesting her wheat crop when it ripens. If she knows in
advance that this might happen, she is unlikely to improve the land in the first
place, and is unlikely to work it in the future. Alternatively, if she has property rights to the land, she knows she will reap the benefit of her efforts, and
will invest in the land. Property rights provide an incentive to invest in
resources over time, and society will be better off as a result. Homeownership
provides another example, as discussed in Box 5-1.

Box 5-1: The Benefits of Homeownership
Homeownership provides one illustration of how property rights
promote investment that benefits society. Researchers have shown that
homeownership has many benefits beyond the economic advantages
of owning a home. For example, the children of parents who are homeowners are less likely than children of renters to drop out of high
school, or to have children as teenagers. Both of those effects are
largest for children of low-income households. Children living in homes
that are owned by the resident attain math and reading achievement
that is measurably higher. Additionally, homeowners are more likely to
be involved in their communities. Homeowners are more likely to know
the identity of the head of their local school board, to vote in local elections, and to work to solve local problems. In short, homeowners are

Chapter 5

| 119

Box 5-1 — continued
more likely to invest in their communities. The national homeownership
rate set a record of 69.0 percent in 2004, up 0.7 percentage point from
2003. The minority homeownership rate was also at a record high of
51.0 percent, up 1.5 percentage points from 2003.
The President’s policies have focused on dismantling barriers to
homeownership, especially among low-income and minority homeowners. On December 16, 2003, the President signed into law the
American Dream Downpayment Act of 2003, which helps low-income
families with their downpayment and closing costs. His housing
agenda includes increasing the supply of affordable homes through the
Single-Family Affordable Housing Tax Credit, increasing support for
self-help homeownership programs like Habitat for Humanity, simplifying the home-buying process, and increasing home-buying
education. These initiatives will further help to achieve the President’s
goal of increasing the number of minority homeowners by at least 5.5
million before the end of the decade.

A third effect of property rights stems from their transferability.
Transferable property rights (along with the enforcement of contracts)
underpin market exchange. Clearly defined property rights give people
certainty about what they can trade and keep. A market exists when valuable
items are exchanged, or when money is given in exchange for an item.
Without clearly defined, transferable property rights, markets will operate
either poorly or not at all.
Well-functioning markets are socially beneficial for several reasons. Markets
ensure that transactions benefit both parties. People will voluntarily give up
their right to a resource only when they receive something of greater benefit
in return. Markets ensure that resources are allocated to those who value them
the most.
Because markets generate prices, they also play a central role in
coordinating the behavior of buyers and sellers. Prices provide information
about the strength of demand for a good or service and the cost of producing
it. They also create incentives to act on that information. If the price of a good
rises, suppliers know to, and have an incentive to, shift scarce resources into

120 | Economic Report of the President

producing more of that good. Similarly, demanders know to cut back on
consumption of the good, and have an incentive to do so. This process
ensures that there is no enduring shortage or surplus of the good; the correct
amount is produced and consumed. This socially beneficial situation is based
on a well-functioning system of private property rights.
The historical record over the last several centuries indicates the importance
of strong property rights. The countries that are rich today are those that had
sufficiently strong property rights in place to encourage industrialization.
Evidence suggests that societies that have protected property rights over time
are more prosperous.
The different experiences of North and South Korea provide an example.
Prior to the division of the Korean peninsula in 1948, the North and the
South were similar to one another economically, geographically, ethnically,
and culturally. Following the Korean War, the North abolished private
property in land and capital, while the South maintained a system of
private property.
South Korea enjoyed one of the fastest surges of economic growth in
history, and is considered an Asian “miracle” economy. South Korean gross
domestic product grew from $85 billion in 1983 to $605 billion in 2003, an
increase of more than sevenfold in only two decades. By 2004, South Korea’s
GDP per capita was estimated to be over 13 times greater than North Korea’s.
Although a number of factors contributed to South Korea’s superior growth,
its stronger protection of property rights is recognized as a key factor. As the
next section illustrates, even countries with relatively strong property rights
systems benefit by extending them into new domains.

The Success of Property Rights
in Addressing Policy Issues
The property rights concept has been creatively expanded and applied to
help solve vexing policy issues. The use of property rights in practice illustrates the economic effects discussed earlier. Although there are many
examples of how property rights help solve policy problems, three are offered
here: pollution permits to help reduce air pollution in an efficient manner,
individual transferable quotas that help conserve fisheries, and school voucher
programs to help improve school performance. Each case is an example of
assigning property rights to people with the best information and incentives
to use the resources in question.

Chapter 5

| 121

Addressing Air Pollution Through Tradable Permits
Clean air is another example of an open access resource; overuse manifests
itself as air pollution. In the absence of government regulation, firms do not
pay for the air they pollute. This problem can be addressed by defining
property rights.
Title IV of the 1990 Clean Air Act Amendments introduced a property
rights regime for air quality by establishing a national cap-and-trade system for
sulfur dioxide (SO2) emissions. SO2 is a pollutant produced when a fuel
containing sulfur, such as coal or oil, is burned, as is done to create electricity,
for example. These emissions are not only associated with a wide array of
health concerns, but are also a key component of acid rain. Title IV’s cap-andtrade program works by capping the total amount of allowable SO2 emissions
from power plants nationwide and requiring that an emitting facility own a
permit for each unit of pollution emitted. The cap sets the total level of allowable emissions of SO2 from the power sector. The government also creates a
system of rigorous emissions measurement and enforcement.
Under the Title IV program, SO2 permits can be bought and sold by emitting facilities and by third parties. Trading allows firms with a high cost of
reducing pollution to purchase credits from firms whose emissions can be
reduced at lower cost, giving the industry an incentive to consider cleanup
cost differences both across and within firms. The air cleanup will be accomplished at a lower cost than if all plants were directly required to meet an
emissions standard that leads to the same overall level of pollution reduction.
Using permits or allowances, the government does not need to tell firms how
to lower pollution—it simply decides how much pollution needs to be
reduced in the aggregate, and leaves it to the firms to decide how best to
achieve that goal.
This example illustrates an additional benefit of pollution permits: they not
only create valuable incentives, but also give control over decisions to the
party that has the best information on how to clean up at the lowest cost.
Individual firms are likely to have much better information than regulators
about the idiosyncrasies of each plant. Pollution permits decentralize decision
making, give control to the party with the best information, and provide
incentives to act on that information.
The SO2 trading program has been successful both at reducing emissions
and at achieving those reductions at a lower cost than direct plant-level
emissions standards. Emissions were initially reduced almost 30 percent more
than the required level, compliance has been over 99.9 percent, and the
annual cost savings from this approach has been estimated at hundreds of
millions of dollars per year. A similar program exists in the eastern United
States to control nitrogen oxide emissions, which contribute to regional ozone
and smog problems.
122 | Economic Report of the President

In 2002, the President proposed “Clear Skies” air quality legislation that
would expand the use of this approach to achieve additional control of SO2 and
nitrogen oxides and to control mercury emissions. The mandatory program
would establish caps on power plant emissions of sulfur dioxide, nitrogen
oxides, and mercury in 2018 that are roughly 70 percent below 2000 levels.
Consistent with this legislative approach, in December 2003, the EPA
proposed the Clean Air Interstate Rule for states in the eastern half of the
United States whose sulfur dioxide and nitrogen oxide emissions contribute
to fine particle and ozone pollution in downwind states. The proposal would
require states to regulate power plant emissions and provides states with a
model cap-and-trade system similar to the regional nitrogen oxide program
described above. The rule would reduce emissions of sulfur dioxide from
power plants in those states by approximately 70 percent, and nitrogen oxide
to approximately 65 percent below 2002 levels. Additionally, under the Clean
Air Mercury Rule, the EPA proposed the first-ever regulatory action to reduce
mercury emissions from coal-fired power plants, and proposed a cap-andtrade approach as a way of achieving these reductions. The program would
cut mercury emissions by nearly 70 percent when fully implemented. Both
the Clean Air Interstate Rule and the Clean Air Mercury Rule are based on
an approach of establishing tradable emissions allowances in order to reduce
pollution in an effective and cost-efficient manner.

Addressing Overfishing Through Property Rights
Another industry that benefits from the creation of well-defined property
rights is commercial fishing. In the absence of regulation, fisheries are an open
access resource. Because fishermen do not own the stock of fish in the sea, the
fish they leave in the water may be caught by others, and there is no guarantee
that they will be there to catch in the future. Even though many fishermen
desire healthy fish populations for future use, individual conservation efforts
are less effective due to this tragedy of the commons. Consequently, some fish
stocks have declined worldwide, and fishermen must expend more effort and
resources to catch the remaining fish. Today, an estimated 70 percent of the
world’s fish species are either fully exploited or depleted. In the North Atlantic
region, populations of cod, hake, haddock, and flounder have fallen by as
much as 95 percent.
Overfishing leads to an array of economic problems. Because fish are less
able to reach maturity and reproduce, fish that are caught tend to be of lower
value. Fish become harder to catch as their stocks are depleted, and intense
competition for the remaining fish creates additional waste. In 1993, the
United Nations estimated that $124 billion was spent attempting to harvest
$70 billion worth of fish. When a fishery collapses, many fishermen lose their
jobs and their communities suffer. The collapse of the Atlantic cod stocks in
Chapter 5

| 123

the mid-1990s left more than 40,000 people unemployed in the Canadian
Maritime Provinces.
Governments have traditionally regulated fisheries with command-andcontrol approaches, which mandate many aspects of fishing by law. The
requirements govern various aspects of the fishing industry, such as the technology used, the length of fishing seasons, and fishing locations. These
approaches are not only difficult to enforce but they do not provide incentives
for fishermen to curb their fishing efforts. Command-and-control approaches
also require constant government intervention in order to set new specifications
for technological innovations, while fishermen are prevented from shifting to
lower-cost fishing methods by taking advantage of these innovations.
A property rights approach to fisheries management can effectively prevent
overfishing while increasing the profits of fishermen. One such system is to
issue individual transferable quotas (ITQs) to fishermen, which grant them
exclusive rights to harvest fixed percentages of the total allowable catch. (While
ITQs may be considered to create property rights, they are not “property interests” for purposes of the takings clause of the Fifth Amendment of the
Constitution.) Like pollution permits, ITQs are transferable, ensuring that the
fish will be caught by the most efficient and least wasteful boats, while all
owners of a fishery can reap the benefits of a healthy and profitable fish stock.
Unlike command-and-control approaches, ITQ programs end the
incentive for fishermen to “race to fish.” This observation is well demonstrated by Alaska’s sablefish and halibut fisheries where, prior to the
introduction of property rights, the fishing season was progressively shortened
to prevent the annual catch from exceeding its cap. Fishermen responded to
the shortened season by increasing the number of vessels in their fleets and
using more gear in an all-out effort to catch as much as possible before the
overall cap was reached. These “frantic derbies” led fishermen to take undue
risks by heading out in dangerous weather, and led to a glut of fresh fish on
the market during the few short weeks of harvest and scarcity the rest of the
year. Alaska’s halibut and sablefish ITQ programs, implemented in 1995,
ended the race for fish and increased season length from less than 5 days per
year to 245 days per year. Commercial fishermen have since enjoyed increased
profits, decreased costs of gear and fishing crews, and a safer and more stable
industry. The availability of high-quality halibut year-round has benefited
consumers, and environmental benefits have been realized in connection with
decreased halibut mortality.
ITQs have also been adopted in New Zealand, Iceland, Australia, Canada,
and Papua New Guinea, among other countries. They have improved fish
stocks while also increasing the profitability of many fisheries. New Zealand’s
extensive system of ITQs was introduced in 1986 and, as of 1996, it
accounted for more than 85 percent of that country’s total commercial catch.
New Zealand fish stocks are now healthy, and increases in quota prices
124 | Economic Report of the President

provide evidence of increased profitability. There is evidence that New
Zealand’s ITQs have also encouraged investment in scientific research.
Testimony to the ability of ITQs to mitigate overfishing and change the
fishers’ approach came when a New Zealand Ministry of Agriculture official
commented, “It’s the first group of fishers I’ve ever encountered who turned
down the chance to take more fish.”
One challenge in designing an ITQ program is determining the initial allocation of shares. To make the system politically viable, some areas have
provided shares to the current users of the fishery in proportion to their recent
catch levels. An alternative is to auction off the initial shares, which would
raise money for the public and ensure that, from the start, the shares go to
fishermen who value them the most.
Despite practical issues in designing ITQ programs, they hold tremendous
promise for managing our Nation’s fisheries in a manner that allows for
increased efficiency in fishing, fewer economic and safety risks for fishermen,
and fresher and higher quality seafood for consumers. The President supports
the further adoption of ITQ systems to manage our Nation’s fisheries, and the
Administration has called for new national guidelines to facilitate the implementation of these programs while maintaining regional flexibility and
ensuring fair and equitable quota allocations.

School Voucher Programs
The creation of property rights can be used to encourage better use of
resources even when there is no “tragedy of the commons” problem. School
voucher programs illustrate such benefits. Under many voucher systems,
eligible families receive money from their state or school district to pay
for their children’s education at a participating private school. Typically,
low-income families are eligible to receive vouchers.
When vouchers are not available, choosing a different school may come at
the high cost of paying the full tuition for a private school or physically moving
to a new district, if the district does not already offer a public school choice
program. By lowering the cost of private sources of education, vouchers
produce two main benefits. Most directly, families eligible for the vouchers are
better off because they have greater ability to select the school they prefer most.
Second, a well-designed voucher program can make all students in a school
district better off. If the availability of vouchers increases competition, then the
school has an incentive to provide a better education so that fewer students
leave. To the extent that schools then provide a higher quality education in a
more cost-effective manner, all the students who remain in the school are
better off, even those who are not eligible for a voucher.
The degree to which a voucher system benefits all the students in a school
system depends on the share of students who are eligible for a voucher, the
Chapter 5

| 125

size of the voucher, and the extent to which schools’ resources depend on the
number of students who use a voucher. The number of eligible students and
the amount of the voucher determine how many students will consider
switching schools. When more students are eligible and when schools are
competing for them, the gains from competition will be realized more
quickly. Few students actually need to switch schools to motivate schools to
improve. Instead, schools are motivated by the potential for competition,
which depends on the number of students who are seriously considering
switching, rather than the number who actually switch. The incentives
involved and the potential for competition also depend on how much money
is attached to the voucher.
Evidence indicates that voucher systems do indeed benefit both the students
who use them and those who do not. A study of the voucher program in
Milwaukee found that, after several years, the performance of students who
used vouchers had risen 11 percentile points in math and 6 percentile points
in reading relative to where they would have been if they had remained in their
local public schools. A gain of 6 percentile points means that the students
performed better than an additional 6 percent of the overall population of
test takers.
The students who remain in the public schools also benefit significantly. As
an example, consider the case of the Milwaukee voucher program. The
program has been in place since 1990 and was expanded in 1998 to allow up
to 15 percent of students to use a voucher. For the 2002–2003 school year,
students from low-income families received a voucher for up to $5,783 (over
50 percent of city per-pupil spending). Since the voucher amount is sufficient
to cover the cost of private elementary schools, but not most secondary
schools, more than 90 percent of all voucher users since the 1998–1999 school
year have been in grades one through seven. Consequently, studies of the
Milwaukee program have focused on elementary school students. After the
introduction of vouchers, test scores of fourth graders at schools where the
largest proportion of students were eligible for vouchers improved by 8.1, 13.8,
and 8.0 percentile points in math, science, and English, respectively, over the
students at comparison schools that were largely unaffected by vouchers.
This improved performance was not simply due to increases in school
spending. The key measure of a school’s efficiency—student achievement
divided by per-pupil spending—increased significantly in the schools where the
highest fraction of students were eligible for vouchers. In these schools, student
performance rose by between 0.9 and 1.7 percentile points per thousand dollars
in per-pupil spending. By making public schools more efficient, vouchers can
help to close the efficiency gap between public and private schools. The private
schools that accept voucher recipients usually have the same achievement levels
as the public schools they draw students from, but spend significantly less per
student on average. Based on their lower costs, voucher-accepting private
126 | Economic Report of the President

schools are four times as efficient as the local public schools from which they
receive students. Drawing from five studies of voucher programs, one researcher
notes that, while public schools spent an average of $9,662 per student,
voucher-accepting private schools spent only $2,427.
While students on average are better off under a well-designed voucher
program, one might still be concerned that many students are worse off. A
common worry with vouchers is that the most-motivated students will use
them, leaving the remaining students with a lower-quality peer group. One
researcher of the Milwaukee system concludes that, even if a student’s peer
group dropped from the 90th percentile of the district to the 10th percentile,
the student remaining in the school would still be at least as well off under
the voucher program because the effect of the increased school performance
would overwhelm this adverse change in the peer group. The decline in a
student’s peer group is merely hypothetical, since studies of the Milwaukee
system have found little evidence that the best students leave. In fact, instead
of being the best students at a school, future voucher users performed moderately below average in math and reading before they switched schools.
Vouchers are only one form of school choice. Additional forms include
charter schools and plans that allow students to attend other public schools.
When these programs are well designed, they too can produce efficiency gains
by causing schools to compete with one another for students.
Vouchers are consistent with expanding property rights because they
provide families with additional control over resources—financial resources in
this case. The available evidence indicates that this change in property rights
has produced positive outcomes for school systems that use well-designed
voucher programs.

The Application of Property Rights
to Current Policy Issues
Areas of current concern in which property rights could be usefully applied
or extended include personal retirement accounts, health savings accounts,
and Millennium Challenge Accounts.

Personal Retirement Accounts
Social Security is currently funded on a pay-as-you-go basis in which the present
generation of workers funds current retirees’ benefits. Social Security’s financial
viability is thus linked to the Nation’s demographics. Increased life expectancies and
lower birthrates have gradually reduced the worker-to-beneficiary ratio from
16-to-1 in 1950 to 3.3-to-1 today, with projections of 2-to-1 by 2040.
Projecting future tax revenues and payouts, Social Security will begin running
Chapter 5

| 127

deficits instead of surpluses by 2018, and Social Security assets and reserves
will be depleted by 2042.
Social Security is no longer a bargain for younger workers. A single male
worker with average earnings who was born in 2000 will receive a real return
of only 0.86 percent annually after Social Security pays what it is able to pay
him. For workers earning the maximum amount taxed ($90,000 in 2005),
the real annual return is minus 0.72 percent on the benefits Social Security
can actually pay.
The Social Security system can be less advantageous for divorced individuals
who do not share in the benefits of a previous spouse. To qualify for
spousal benefits under the current system, a marriage must last ten years. Fully
one-third of all marriages end prior to the ten-year eligibility requirement.
The President believes that personal retirement accounts must be part of a
comprehensive solution to strengthen Social Security. He has proposed that
younger workers be given the option to set aside part of their payroll taxes in
a personal retirement account. A personal retirement account provides ownership and control, and offers younger workers the opportunity to build a “nest
egg” for retirement that the government cannot take away. At retirement, the
money in an account would be available to the retiree to supplement traditional benefits under a reformed Social Secuity system. Procedures would be
established to govern how account balances would be withdrawn at retirement. This would involve some combination of annuities to ensure a stream
of monthly income, phased withdrawals indexed to life expectancy, and the
ability to withdraw as a lump sum any funds above a poverty-protection
threshold. At death, any balance in the account could be passed on to loved
ones, including widows, children, and grandchildren. The ability to inherit
personal accounts would enhance the financial security of many surviving
spouses and children.
Personal retirement accounts give younger workers the opportunity to
receive a higher rate of return than they receive under the current system.
Workers would have the flexibility to choose from several different low-cost,
broad-based investment funds and would be able to adjust investment allocations periodically. Account options and management would be similar to that
of the Federal employee retirement program, known as the Thrift Savings Plan
(TSP). Money in personal retirement accounts would be invested in a mix of
broadly diversified bond and stock funds. Workers could also choose a “life
cycle portfolio” that would automatically adjust the level of risk as the individual aged by gradually shifting the allocation of investment funds to weight
the portfolio more heavily toward bonds. To guard against sudden market
swings on the eve of an individual’s retirement, investment in a life cycle portfolio would be automatic when a worker reaches age 47, unless the worker and
his or her spouse specifically opt out. Personal retirement accounts would have
128 | Economic Report of the President

low administrative costs, estimated by the Social Security Administration
actuaries as roughly 30 basis points, or 0.3 percentage point. These costs are
much lower than the average costs associated with investments in stock or
bond mutual funds. Most of these fees would be for record keeping rather
than investment management.
By giving citizens greater control over their retirement assets, property rights
can make an important contribution to improving the U.S. retirement system.

Health Savings Accounts
Many employees currently have access to flexible spending accounts
through their employers. Using these accounts, employees can use before-tax
dollars to pay for doctor co-payments, medications, dependent care costs, or
insurance deductibles that they otherwise would pay for with after-tax dollars.
With flexible spending accounts, the employee must select a certain amount
of money to put into the account before the start of the year, during
the enrollment period. The employer, usually through a regular payroll
deduction, then deposits that amount into the account.
Flexible spending accounts are good for workers. Like employer
contributions to health insurance coverage, flexible spending account contributions are excluded from taxable income, allowing workers to use pre-tax
dollars to pay for uncovered medical costs. They also give employees added
choice in obtaining and paying for health-related services that are not typically covered by insurance. They have a disadvantage, however: if workers
overestimate their health care needs, and funds are not used before the end of
the plan year, the remaining money is lost. Most companies operate on a
calendar year, so the money typically must be used by December 31. This can
create a year-end rush to spend any remaining funds, even if the purchases are
of marginal value. Those who underestimate their spending will face a
shortage of pre-tax funds if there is no money in the account.
The use-it-or-lose-it feature weakens employee property rights in flexible
spending accounts. In December 2003, the President signed health savings
accounts (HSAs) into law. HSAs are actual savings accounts, owned by
employees. Money in the account can accumulate tax-free and can be
invested, similar to an individual retirement account. Unlike flexible spending
accounts, HSAs do not expire at the end of the year. Because the account
belongs to workers, HSAs do not tie the tax-advantaged treatment of health
care spending to a specific employer. They are portable. Workers own the
accounts and can take them from job to job or into retirement. HSAs also can
be passed on to heirs. These features, which extend from enhanced property
rights, are important advantages of HSAs.

Chapter 5

| 129

Participants in HSAs must be covered by a high-deductible health
insurance plan (a minimum annual deductible of $1,000 for individuals and
$2,000 for families). Contributions can be made each year up to the amount
of the policy’s annual deductible. The maximum contribution is the lesser of
the deductible amount under the high-deductible health insurance plan or
(for 2005) $2,650 for individuals or $5,250 for family coverage. These dollar
limits will be adjusted for inflation each year. Individuals over age 55 can
make extra contributions with the same tax advantages. Participants can withdraw funds as needed for deductibles and co-payments, as well as for
over-the-counter drugs, long-term care insurance, and health insurance
premiums when unemployed. Amounts withdrawn for any other purpose are
subject to taxation plus a 10 percent penalty. Once employees reach age 65,
they can take money out without penalty for any reason.
HSAs have major potential benefits. They can reduce health care spending
because, for amounts up to the deductible, people will choose to consume the
level of care that best suits their needs, rather than consuming the amount of
care provided by their health coverage. HSAs also are likely to increase the
number of insured because, using HSAs, premiums are paid with pre-tax
dollars. This effectively makes high-deductible health care plans less expensive
for the individual purchasing them.
The benefits of HSAs can be extended in a number of ways. More than half
of the uninsured are small-business employees and their families. The President
has proposed giving small-business owners a refundable tax credit for contributions made to their employees’ HSAs. He also has proposed extending the
benefits of HSAs to low-income Americans by providing a $1,000 direct
government contribution to their HSAs, combined with a refundable tax
credit up to $2,000 to help purchase a high-deductible health plan.

Millennium Challenge Accounts
Strengthening property rights systems creates a variety of benefits in
the context of international development, some of which are described in
Box 5-2, which discusses land titles in developing countries. To encourage
economic growth and poverty reduction in the developing world, the President
established the Millennium Challenge Account (MCA). The MCA represents
a significant change in the provision of economic development assistance to
developing nations. The MCA is based on the insight that development assistance is most effective when funds flow to countries that have policies and
institutions that promote growth. Only those countries that have taken
concrete steps to improve their own economies and governance structures, and
thus ensure that aid will be effective, are eligible for MCA assistance.
To receive grant assistance, a country must abide by three key principles:
economic freedom, just governing, and investment in people. Those principles
130 | Economic Report of the President

Box 5-2: The Benefits of Land Titles
Well-defined land titles exist in the United States and other industrialized
countries, but they are lacking in many other countries. In Haiti, for
example, 68 percent of urban residents and 97 percent of rural residents live in housing to which no one has clear title. By one calculation,
the total value of real estate occupied, but not owned, in the developing
world and former communist countries is at least $9.3 trillion. Many
countries are trying to close this gap. The Peruvian government, for
instance, awarded over 1.2 million land titles to families in the 1990s.
When titles are clear and secure they can be transferred, investment
can be rewarded, and houses can be rented or used as collateral. Both
rural and urban property is worth more when ownership is well
defined. After rural land was titled in Brazil, Indonesia, the Philippines,
and Thailand, its value rose between 43 and 81 percent. When urban
land was titled in the Philippines, its value rose by 14 percent in Manila
and by 58 percent in Davao. In both Guayaquil, Ecuador, and Lima,
Peru, urban land values rose by about 25 percent.
Secure land titles have profound effects on families. Adults can work
at jobs outside the home because they no longer need to spend time
physically guarding their informal claims. In Vietnam, families with
secure titles worked away from their farms nine weeks more, on
average, than those without secure titles. In Peru, adults in households
with land titles worked outside the home 20 hours more per week than
those without titles.
Because adults were working more, Peruvian children did not need to
work as much. Land titling in Peru resulted in about a 28 percent reduction in the probability of child labor. Argentine children living in titled
parcels enjoyed better weight-to-height scores (a measure of health
status), lower teenage-pregnancy rates, and less repetition of school
grades than children living in untitled parcels.
Families invest more in their homes and land when they have secure
titles. A titling program in Argentina caused new property owners to
improve the quality of their residences by 25 percent. Argentine families holding clear titles had significantly better roofs, walls, and garden
areas than those without clear titles. In Lima, Peru, almost half of families holding titles invested in improvements to their land, compared
with 13 percent of those without titles.
Business people also invest more when they have titles. In Romania,
Russia, Poland, Slovakia, and Ukraine, entrepreneurs who believe their
property rights are secure reinvest between 14 and 40 percent more of
their profits back in their businesses. Farmers in Thailand holding titles
invested so much more in their land that their output was 14 to 25
percent higher than those without titled land.

Chapter 5

| 131

Box 5-2 — continued
Secure land titles also facilitate borrowing because the land can then
be used as collateral for a loan. Farmers in Thailand borrowed between
50 percent and five times more if they had title to their land. Farmers in
Costa Rica, Ecuador, Honduras, and Jamaica received larger loans on
better terms if they held secure land titles. Residents of Lima, Peru used
secure land titles to obtain loans to purchase microbuses, construct
small factories, and invest in other small businesses.
Finally, secure land titles facilitate the renting and leasing of property.
Owners without a title may be reluctant to rent or lease their land for
fear the tenant will assert an ownership claim. They may prefer to leave
it vacant or rent it to family members only. The landless poor thus have
better access to land when it is titled. When secure titles were created
in the Dominican Republic, the number of plots leased out increased by
21 percent. Leasing also increased the access poor families had to land,
as 17 percent more households gained access. The percentage of poor
who are tenants increased by 40 percent, and the area rented to them
grew by 67 percent.

are in turn measured by a set of 16 quantitative indicators, including a measure
of a country’s civil and political liberties, rule of law, regulatory burden on
businesses, control of corruption, and the number of days needed to complete
any legal requirements to start a business. Such indicators are closely related to
the strength of a country’s property rights enforcement. Although the MCA
has many goals, it encourages and rewards property rights enforcement
through focus on both governing justly and economic freedom.
The MCA is also consistent with a property rights approach to development assistance because it allows countries greater ownership (that is, more
control) over how they use the resources they receive. Countries receiving
MCA assistance must be active partners in the development programs funded
by the MCA. Each country that qualifies to receive aid constructs a detailed
proposal of how the aid will be used, and then negotiates and signs a compact
with the Millennium Challenge Corporation (MCC), which administers the
MCA on behalf of the U.S. government. Not surprisingly, some countries are
including property rights programs in compact proposals, citing how important property rights are to sustained economic growth. The compact must
specify a limited number of clear, quantifiable goals, with concrete benchmarks, as well as the time needed to achieve those goals. Funding for all or
part of a particular MCA compact may be scaled back or ended for failure to
meet specific benchmarks. The MCA program does not impose a
132 | Economic Report of the President

development plan designed by others, but instead recognizes that recipient
countries themselves are in the best position to evaluate their own needs.
The MCA has the added advantage of encouraging countries to adopt
growth-promoting policies and institutions in order to qualify for this type of
aid. The MCC announced the selection of 17 countries eligible for fiscal year
2004 and 2005 funding, including Armenia, Benin, Bolivia, Cape Verde,
Georgia, Ghana, Honduras, Lesotho, Madagascar, Mali, Mongolia, Morocco,
Mozambique, Nicaragua, Senegal, Sri Lanka, and Yemen. Although the first
compacts for development assistance are still in process, the competitive
process for selection has already prompted efforts by several countries to
improve their institutions. For example, one country has publicly stated that
it passed anti-corruption legislation to help it qualify for MCA funding.

Conclusion
In a society governed by the rule of law, ownership of resources is
determined by the assignment of property rights. The term property rights
refers to a bundle of rights that include the right to use a resource, to capture
the income from the resource, and to transfer those rights. The assignment of
property rights determines who has control over resources. That is, property
rights determine who has the power to do what with which resources.
Using property rights to address policy problems is consistent with the
principles of a free society because it assigns decision-making authority to
individual decision-makers, rather than to central authorities. By giving firms,
individuals, and families the authority to make decisions about the use of
their own resources, property rights give control to those entities that have
both the best information and the strongest incentives to use those resources
efficiently.
Property rights solve the “tragedy of the commons” problem by
encouraging owners to reduce the intensity of resource use. If an open access
resource, such as fisheries or the air, is overused, assigning property rights to
that resource will encourage its conservation. Ownership of a resource also
encourages owners to invest in and improve the resource.
Property rights have important economic effects because they underpin
market operation. Markets are socially beneficial because they allocate
resources to their highest valued use and because they provide valuable price
signals to both buyers and sellers. Without well-defined and enforced
property rights, markets will work poorly or will not work at all.
Property rights analysis can illuminate similarities in policy solutions that
may at first seem very different. There are numerous examples of the success
of property rights in addressing policy problems, including air pollution,
Chapter 5

| 133

overfishing, and poorly performing public schools. Property rights have
facilitated cleanup of the air at low cost, have allowed fish stocks to recover, and
have improved the performance of schools in those areas where they have been
used effectively. Property rights can be used to help address other policy issues.

134 | Economic Report of the President

C H A P T E R

6

Innovation and the
Information Economy

I

nnovation is a primary engine of economic growth. Many commonplace
features of modern life, such as personal computers, the Internet, e-mail, and
e-commerce, have developed and diffused throughout the economy within a
short span of years. Our Nation’s growing prosperity depends on fostering an
environment in which innovation will flourish.
The innovative process involves the invention, commercialization, and
diffusion of new ideas. At each of these stages, people are spurred to action by
the prospect of reaping rewards from their investment. In a free market, innovators vie to lower the cost of goods and services, to improve their quality and
usefulness, and—most importantly—to develop new goods and services that
promise benefits to customers. An innovation will succeed if it passes the
market test by profitably delivering greater value to customers. Successful
innovations blossom, attracting capital and diffusing rapidly through the
market, while unsuccessful innovations can wither just as quickly. In this way,
markets allow capital to flow to its highest-valued uses.
This engine of growth can falter, however, if government policies distort the
market signals that guide innovative activity. Well-meaning policies to
promote the diffusion of a service or foster entry into new markets can have
unintended consequences. A policy to subsidize an existing service so that
more people will consume it can deter development of innovative new services that people might otherwise prefer. In addition, pioneering investors
forced to share the fruits of their investment with new entrants would find it
less profitable to invest in the first place, and a new market may never be
developed. When government regulation, instead of a competitive process,
“picks the winners,” people tend to lose.
This chapter provides an overview of recent developments in one especially
innovative sector of the economy: information technology. The main points
in this chapter are:
• Information technology is a key contributor to economic growth and
productivity, and its importance to the economy is growing.
• Competition drives the broad diffusion of innovative low-cost, highquality information services. This has held true in markets for mobile
wireless telephones, satellite television, and dial-up and broadband
Internet services.
• As circumstances change and industries evolve, existing government
regulations may need rethinking. In particular, economic regulations

135

aimed at correcting an absence of competition may lose their rationale
when competition from new technologies emerges.
• People are motivated to invest by the prospect of earning returns on their
investment. Government thus has an important role to play in defining
and protecting property rights in intellectual and physical capital so that
entrepreneurs will be spurred to innovate.

Growth of the Information Economy
Information technology (IT) has made enormous contributions to recent
economic growth. IT comprises four categories of industry: (1) hardware (such
as semiconductors and computers), (2) software/services (such as prepackaged
software and data processing), (3) communications equipment (such as household audio and video equipment), and (4) communications services (such as
telephone services and cable and other pay television services).
IT has made many workplace tasks easier, boosting people’s productivity.
One recent study finds that labor productivity in the nonfarm business sector
grew at an annual rate of 2.4 percent from 1996 through 2001, and attributes
nearly three-quarters of this growth to the accumulation of IT capital together
with improvements in how people use this capital. IT has likewise
contributed significantly to growth in our prosperity. Real gross domestic
product (GDP) grew 2.9 percent in 2003, of which 0.8 percentage point was
attributable to IT (Chart 6-1).

Growth in Computer and Internet Use
A key part of the growing information economy is that more people are
using computers and communicating over the Internet. At the time of an
October 1997 survey, 37 percent of households owned a computer. The corresponding figure for an October 2003 survey was 62 percent. Internet use from
home nearly tripled over these six years from 19 percent of households in 1997
to 55 percent in 2003. In the workplace, recent growth in Internet and e-mail
usage has also been dramatic. A survey found that in August 2000, 26 percent
of employed persons aged 25 and over used the Internet and e-mail at work,
while an October 2003 survey found the figure to reach 45 percent.
Explosive growth in Internet use has been a nationwide phenomenon. In
2001, only one state had more than 70 percent of its population using the
Internet from any location. In 2003, five more states had reached the
70 percent level, and only one state fell below the 50 percent mark. At
57.2 percent, Internet use in 2003 among people living in rural areas was
virtually on a par with the national average of 58.7 percent. Demographically,
Internet use increases with both income and educational attainment.
136 | Economic Report of the President

E-mail is the most common online activity, with more than 87 percent of
Internet users aged 15 and over sending and receiving e-mail in 2003. The
next most popular online activity, at more than 76 percent of Internet users
in 2003, is searching for information about products and services. Two-thirds
of Internet users obtained news, weather, and sports information online, and
more than half made purchases online in 2003.

E-Commerce Tops $1 Trillion
Transactions conducted online—e-commerce—exceeded $1.1 trillion in
2002. Business-to-consumer e-commerce, reckoned as the sum of transactions
in retail trade and in selected service industries (such as publishing, broadcasting, and telecommunications), reached $85 billion in 2002
(Chart 6-2). Retail trade e-commerce alone amounted to $44 billion in 2002,
with nonstore retailers—those selling primarily through “clicks” rather than
“bricks”—accounting for nearly three-quarters of this total. Online retail sales
have continued to grow rapidly. In the third quarter of 2004, retail trade
e-commerce was more than 21 percent higher than in the third quarter of 2003.
Consumers have gained from shopping online in at least two ways. First,
comparison shopping has become quicker and easier online. A consumer can
visit a succession of retail Web sites at virtually zero cost. Collecting a similar
amount of information by visiting brick-and-mortar retail stores would be far
Chapter 6

| 137

more time-consuming and costly. A consumer need not even canvass retail
Web sites individually; “shopbot” sites can gather such information on the
consumer’s behalf. As the cost of comparison shopping has fallen, price
competition has intensified, both among Internet retailers and between
Internet retailers and brick-and-mortar stores.
A number of recent studies have attempted to gauge the consumer benefits
from such intensified competition. Studies of the markets for books, automobiles, and life insurance have generally found that comparison shopping
online helps consumers obtain significantly lower prices, resulting in savings
estimated to be in the many hundreds of millions of dollars per year.
Intensified competition between online retailers and brick-and-mortar
retailers means that even consumers who do not shop online may be reaping
rewards from the spread of e-commerce.
A second way in which consumers have benefited from e-commerce is in the
greater variety of goods available online. For example, the number of book titles
available at one major online bookseller is 23 times greater than the number of
titles stocked in a major chain retail superstore. Greater variety means that
consumers can match purchases more closely to their individual tastes. A recent
study of book sales suggests that the consumer gains from greater variety online
are even larger than the gains from intensified price competition.

138 | Economic Report of the President

Changed circumstances, such as new retailing methods, can pose challenges
to existing regulatory frameworks, or even undermine the original rationale for
regulation. As the Internet changes how we live and work, government should
be attuned to these changes and adapt. The Internet is having an impact on
regulation given the growth of e-commerce, as illustrated in Box 6-1, and the
growth of broadband voice and data services, as discussed in a later section.
Although business-to-consumer online sales have captured much popular
attention, these are dwarfed by business-to-business e-commerce, which in
2002 accounted for more than 90 percent of all online transaction volume.
Manufacturing shipments transacted online were $752 billion in 2002, a
3.8 percent increase over 2001 (Chart 6-3). Online merchant wholesale trade
increased by 11.7 percent from the 2001 level, to reach $320 billion in 2002.

Box 6-1: Airline Computer Reservation Systems
In the first half of 2004, the Administration deregulated airline
computer reservation systems (CRS), which travel agents have used to
book airline flights for travelers. Regulatory restrictions imposed in the
1980s became obsolete as people gained new information sources over
the Internet. CRS centralize flight information across carriers and
provide easy booking capabilities to travel agents. Following airline
deregulation in the late 1970s, travel agents came to depend on CRS for
the latest schedule and fare information. At the time, CRS were largely
owned by individual airlines. This ownership raised concerns that CRSowning airlines might put rival airlines at a disadvantage in the system
so that travel agents would book a greater share of flights with the CRSowning airline. CRS suppliers might also lock travel agents in by
requiring long-term contracts and by structuring the programs to raise
switching costs. To address these issues, the Civil Aeronautics Board
instituted a series of regulations in 1984, which prevented a CRSowning airline from setting up its systems in a way that disadvantaged
other airlines or other CRS.
While the CRS rules may have been beneficial two decades ago,
subsequent industry changes have made the regulations largely
anachronistic through ownership changes and the development of
travel search engines on the Internet. The airlines have completely
divested the CRS, so concerns about discrimination against unaffiliated
airlines are no longer warranted. Equally important, the advent of the
Internet has provided carriers with an alternative avenue for disseminating their fare and schedule information to consumers. The growth of
the travel search engines has also enabled consumers to quickly
compare rates across airlines. The development of these direct-toconsumer channels has reduced the need for travel agencies and has

Chapter 6

| 139

Box 6-1 — continued
reduced travel agencies’ need for CRS, because they too can use the
Internet. These changes work to place greater competitive pressure on
the CRS vendors, which reduces the concern about their market power.
In light of these changes, the Administration acted to deregulate the
CRS market in the first half of 2004. Deregulation already appears to be
having a positive effect—industry news reports indicate that CRS prices
have fallen and are expected to continue to fall as old contracts expire
and new ones are negotiated.

In 2002 online transactions among businesses were larger than business-toconsumer e-commerce not only in absolute terms, but also as a fraction of
total value. Only 1.4 percent of retail trade revenues were transacted online in
2002. By contrast, 11.7 percent of all merchant wholesale trade and nearly
one-fifth of all manufacturing shipments were transacted online in 2002.

140 | Economic Report of the President

Illegal Acts on the Internet
The Internet provides tremendous opportunities to improve the way we
communicate, learn, entertain ourselves, and buy and sell goods and services.
Unfortunately, theft, vandalism, and fraud are also moving online. From an
economic perspective, these activities are costly because they violate the property rights of people, reducing their incentives to create new goods and
diverting resources from productive uses as people spend time trying to undo
the damage caused by computer viruses and Internet worms. More fundamentally, the growth in such activity could threaten public confidence in
using the Internet for productive purposes. As in the offline world, where
locks and inventory control tags deter property right violations, private sector
responses can make cybercrime more difficult. Government must also act
to protect property rights and ensure that the Internet and other new
technologies are safe venues for commerce.

Cybersecurity
The growing reliance on the Internet means that computer users are
exposed to new threats. Viruses and Internet worms impair computers and
prevent authorized users from gaining timely, reliable access to data or a
system. Attacks in cyberspace can maliciously modify, alter, or destroy data or
a computer system. Attackers access computers without authorization to view
or copy proprietary or private information, such as a credit card numbers or
trade secrets. At a deeper level, concerns have grown about how unauthorized
control over large numbers of systems by those with malicious intent can pose
threats to the security of sensitive information or to the functioning of critical infrastructures. In terms of prevention, the private sector is best equipped
to take steps against evolving cyber threats. The private sector owns most of
the computer systems and networks and can, in many cases, capture the benefits from investments in improved security. Private sector surveys suggest
that organizations are spending increasing amounts on IT security. The
President’s National Strategy to Secure Cyberspace also makes clear the Federal
government’s important role in promoting cybersecurity.

Fraudulent Spam and Spyware
Scams to defraud people are another type of property rights violation. The
Federal Trade Commission (FTC) has found that spam (unwanted, typically
commercial e-mail), in addition to being a nuisance, is mostly deceptive and
fraudulent. Of 1,000 pieces of spam examined by the Commission,
84.5 percent were deceptive on their face or advertised an illegitimate product
or service. As in the offline world, consumer awareness online is the first line of
defense in combating fraud. The anonymity and scope of the Internet can make

Chapter 6

| 141

it difficult for law enforcement agencies to track down sources of fraudulent
spam and spyware (which collects information from the victim’s computer).
Such activity is growing quickly and posing significant costs to victims and
companies. The President signed into law the Controlling the Assault of NonSolicited Pornography and Marketing Act of 2003 (CAN-SPAM Act), which
establishes a framework of administrative, civil, and criminal tools to help
America’s consumers, businesses, and families combat unsolicited commercial email. The problems associated with spam cannot be solved by Federal legislation
alone, but will require market responses in the development and adoption of
new technologies. The Federal government has also stepped up the pursuit of
purveyors of fraudulent spam and spyware. For example, in a joint law enforcement initiative, the FTC and the Department of Justice (DOJ) have brought
actions to shut down operations that hijacked logos from online businesses to
con hundreds of consumers into providing credit card and bank account
numbers. December 2004 saw the formation of a new public-private consortium that includes financial services firms, Internet service providers, IT
vendors, and law enforcement to fight Internet-based fraud.

Copyright Infringement
Copyrights encourage the development of goods such as books, songs, and
videos that are much costlier to produce initially than to replicate. Digital
technologies and the Internet have made possible high-quality reproduction
of music and video at nearly zero cost, and facilitated extensive unauthorized
use through mechanisms such as file-sharing networks. Industry is exploring
technological remedies to combat theft, but the Federal government is also
playing a role. The Attorney General has made enforcement of intellectual
property laws a high priority of the DOJ. The DOJ has expanded its
Computer Crime and Intellectual Property Section and created the Cyber
Division of the Federal Bureau of Investigation. In 2004, the DOJ launched
Operation Digital Gridlock, the first Federal enforcement action ever taken
against criminal copyright theft on peer-to-peer networks (that allow groups of
computer users with the same networking program to interconnect and
directly access files from one another’s hard drives).

Competition Versus Economic Regulation
An overly high price or low quality by a supplier opens the door to profit
opportunities for the supplier’s rivals. Rivals can expand their sales by undercutting price or offering superior quality or service. In this way, competition
drives suppliers to provide customers the greatest possible value consistent
with covering costs. Pursuit of profit opportunities also draws firms to enter
142 | Economic Report of the President

or develop new markets, which can lead to quantum leaps in consumer
welfare. A pioneering firm that develops a new service, for example, may for
a time reap high returns on its investment. But the high returns tend to draw
other firms to enter and thus intensify competition in the new market. As
competition drives down the innovative service’s price, the service will
become more broadly adopted by consumers. This pattern has unfolded time
and again in diverse sectors of the economy.
The promise of competition might not be fulfilled, however, if scale
economies in an industry are so great that only a single firm can supply the
market cost-effectively. A firm operates under economies of scale when its average
cost of supplying a good falls as the firm expands its scale of operations.
Economies of scale can arise, for example, if the up-front costs of setting up a
business are large. Once the groundwork of the business has been laid, the incremental cost of the good—the cost of supplying each additional unit—may be
low. Examples of industries in which suppliers compete in the midst of scale
economies include automobiles, software, and pharmaceuticals. Prices in such
markets can fall over time, as firms enter the market and competition drives
prices down toward the good’s incremental cost. But a firm will only enter a
market if it expects to earn enough of a margin above its incremental cost on
enough sales to cover its ongoing overhead costs and recover its up-front costs
of entry. In rare cases, up-front costs may be so large, and competition after
entry so intense, that no entrant could profitably challenge the incumbent
supplier’s monopoly. Such industries are called natural monopolies.
Natural monopolies are a rare exception to the competition that to a greater
or lesser degree characterizes most markets. Industries commonly given the
natural monopoly label have tended to have a highly capital-intensive infrastructure, such as the telephone system, cable television, railroads, and the
electricity distribution grid. A rationale for the economic regulation of these
industries has been that competition and its benefits would not naturally
arise. A monopolist has an incentive to restrict output and raise price above
the competitive level. In the absence of competition, regulation may offer the
prospect of a substitute, although a poor one, for the competitive process.
Ideally, the aim of economic regulation would be an industry outcome of
low prices and high quality that approaches what competition would have
accomplished, had competition been possible.
However, natural monopoly does not necessarily mean economic
regulation is needed to protect consumers from monopoly prices. While
natural monopoly means that competition in the field is unlikely to arise,
there could still be vigorous competition for the field—that is, competition
among firms to attain the position of monopolist. Municipalities can and do
exploit competition for the field, for example, by auctioning a monopoly
franchise, to extract concessions from the winning monopoly provider.

Chapter 6

| 143

Traditional, Rate-of-Return Regulation
Under traditional, rate-of-return regulation, the regulator estimates the firm’s
capital base and incremental cost. This approach allows the firm to charge prices
just high enough to yield a rate of return that would have attracted capital to
the industry, had the industry been open to competitive entry.
The traditional approach to regulation presents several difficulties. First,
measuring a firm’s capital base and incremental cost involves substantial
auditing effort and uncertainty for the regulator. Judging the appropriate rate
of return is also difficult, as it involves gauging the riskiness of capital investments in the industry. An especially problematic aspect of traditional
regulation, though, is its effect on incentives. A firm in a competitive
industry, and even an unregulated monopolist, has an incentive to trim its
costs to a minimum so that it can capture the highest possible profit. A firm
subject to rate-of-return regulation has no comparable incentive to keep costs
down. The higher the firm’s incremental costs, the higher the prices the regulator will generally allow the firm to charge to cover those costs. A key
problem is that the firm has an incentive to choose overly capital-intensive
technologies, because this increases the capital base to which the regulator
applies the firm’s allowable rate of return.

Price-Cap Regulation
Many Federal and state regulators have turned from traditional regulation to
price-cap regulation of industries considered to be natural monopolies. Prior
to 1984, all states regulated telephone service on a rate-of-return basis. By
September 2004, 37 states had switched to some form of price-cap regulation.
Under price-cap regulation, the regulator sets an initial price or basket of prices
that the firm can charge for its goods. The price caps are then updated over
time, by a positive factor to account for inflation and a negative offset to
account for the firm’s perceived ability to trim its costs through productivity
improvements. If the regulated firm succeeds in trimming costs by more than
than the productivity offset in the price cap, its profits will increase. The hope
is that price-cap regulation may avoid some of the perverse incentive effects of
traditional regulation, by de-linking the regulated firm’s returns from its
costs. Several recent studies have found that, in comparison with rate-of-return
regulation, price-cap regulation is associated with improvements in the technical efficiency of telecommunications providers, as well as greater investment
in modernizing switches and deploying fiber-optic cable.
Price-cap regulation is far from ideal, however, and in fact faces problems
similar to those of traditional regulation. In setting the initial price cap, the
regulator must measure the firm’s capital base and incremental costs, as well
as determine a rate of return that the capped prices should yield. This is identical to the process in traditional rate-of-return regulation. In setting an
144 | Economic Report of the President

inflation factor for the price cap’s growth, the regulator must assess both the
rate at which the firm’s input costs are likely to grow and the rate of productivity growth the firm is capable of achieving. Given difficulties in gauging
these rates, the regulator must make periodic adjustments to the price-cap
mechanism in light of industry outcomes. But if the regulated firm underperforms, is it because the regulator miscalculated, or because the firm failed to
pursue productivity improvements diligently?
Both rate-of-return and price-cap regulation suffer to some degree from
information problems. A regulator cannot know with precision all of the
economic factors relevant to setting prices. In practice, these types of regulation can lead to shortages, high costs, slowed innovation, or a combination of
all of these shortcomings. Where vigorous competition is feasible, market
forces can guide firms to deploy their resources in ways that benefit customers
far more effectively than could a price-setting regulator.
Advancing technology is providing competitive inroads to a number of
industries once considered natural monopolies. Satellite television offers a
competitive alternative to cable television service (Box 6-2), and wireless
telecommunications are competing with wireline telephone services. Such
technology-induced competition can be expected to increase as cable companies begin to offer voice communications and telephone companies roll out
video services.

Box 6-2: Satellite Television
Virtually all cable system operators hold franchise monopolies over
cable television service within their local service territories. Only a few
communities have issued multiple franchises, allowing for “overbuild”
competition between cable system operators in the local market. A
number of studies have found that cable rates in the 1980s were
roughly 20 percent lower in markets with cable overbuild competition
than in comparable markets served by cable franchise monopolists.
The rise of satellite TV services since the mid-1990s has also put
competitive pressure on cable system operators. A study of thousands of
cable systems across the United States finds that, controlling for a variety
of other factors, a cable system’s penetration rate (cable subscribers as a
ratio of homes passed by cable) tends to be lower in areas where satellite reception is better. This is consistent with satellite TV providing more
competition to cable TV where a larger fraction of households has access
to satellite reception. While satellite TV has taken market share away from
cable TV, the overall penetration of pay TV services among U.S. households has grown as satellite TV services have grown. As of June 1998,
78 percent of households with televisions subscribed to pay TV service.

Chapter 6

| 145

Box 6-2 — continued
By June 2003, this had grown to 88 percent. A recent study indicates that
the introduction of satellite TV led to substantial gains for consumers.
However, ongoing antitrust oversight of the pay TV industry remains
important. In 2002, both the FCC and the DOJ acted to block the merger
of the two primary satellite TV providers to prevent a loss of competition
in pay TV services.

Telephone Service: A Natural Monopoly?
Natural monopoly arguments have traditionally offered a rationale for
economic regulation of telephone service. It can be costly for entrants to
reproduce the incumbent local networks of copper wires or “loops” that
connect nearly every U.S. household to telephone service. Over the past two
decades, however, the wireline (land line) telephone monopoly has yielded to
encroaching competition from the entry of alternative suppliers of longdistance service in the 1980s, the explosive growth in mobile wireless
telephone service over the past decade, and the recent introduction of voice
communications over the Internet. Such proliferating competition has posed
challenges to the economic regulation of telephone services.

Long-Distance Services
Prior to 1984, both local and long-distance telephone service in the United
States was supplied primarily by a single firm, AT&T. As part of a 1982
antitrust settlement with the DOJ, AT&T was broken up in 1984 into a
number of regional exchanges providing local service and one long-distance
provider that retained the AT&T name. The breakup separated local telephone service, which remained rate-regulated because of its natural monopoly
characteristics or for jurisdictional reasons, from long-distance service and
equipment manufacturing—businesses viewed as potentially competitive.
Thereafter, competition in long-distance service progressed with the entry
and expansion of alternative providers.
Between 1984 and 2002, per-minute long-distance prices fell by more than
80 percent after adjusting for inflation. This resulted in part from the FCC
lowering per-minute access charges on long-distance calls, savings that were
passed through to long-distance customers as a result of the emerging competition among long-distance providers. At the same time, the proportion of
146 | Economic Report of the President

U.S. households connecting to local telephone service grew from
91.4 percent in 1984 to 93.3 percent in 1990. A study of telephone demand
over this period found that much of this increased penetration in telephone
service could be explained by the drop in long-distance prices. This reflects
the fact that consumers value connecting to the local telephone network for
the ability to place long-distance calls as well as local calls.
Goods tend to be supplied efficiently when prices reflect costs. If a price is
higher than the true cost of supplying an additional unit of a good, too little of
the good will be consumed relative to what would yield the greatest net benefits to consumers and producers. Telephone charges pegged to the volume of call
traffic tend to discourage call volume. This can lead to less than efficient utilization of the telephone network, if price exceeds the network costs of putting
through an additional call or minute of calling. By the same token, price reductions toward unit cost encourage more efficient utilization of the network and
increase the value consumers derive from connecting to the network.

Mobile Wireless Telephone Services
Whatever the prospects for competition in telephone service may have been
in decades past, substantial competition has emerged in recent years, and
more is on the way. Mobile wireless telephone service has grown by nearly
26 percent annually, from 16 million subscribers in the United States in 1993
to more than 158 million in 2003 (Chart 6-4). Nationwide, 54 percent of the
population subscribed to wireless service at the close of 2003. In contrast,
nationwide wireline telephone penetration was nearly 95 percent in 2003, but
the number of wireline telephone lines peaked in 2000, at 192.5 million lines,
and fell by about 5 million lines over the next two years. Some of this decline
likely reflects consumers choosing to switch from wireline to mobile wireless
telephone service.
Compared to wireline service, wireless service offers the convenience of
mobility and accessibility. Growing wireless penetration has been driven by a
rapid drop in wireless prices. The average price per minute of mobile wireless
telephone service fell from 47 cents in 1994 to about 11 cents in 2002
(Chart 6-5). Sharpening competition has helped drive the falling average
price per minute of mobile wireless telephone service over the past decade.
Wireless telephone services are carried over radio spectrum. Spectrum
generally refers to a broad range of frequencies of electromagnetic radiation,
which encompasses visible light. Frequencies higher than those of visible light
include ultraviolet light and x-rays, while lower frequencies include first infrared
light and then, as wavelengths grow longer, radio waves. Radio spectrum refers
to the lower range of frequencies, which carry broadcasting and mobile communications services. If two transmitters at the same geographic location were to
use the same frequency at the same time, they would interfere with each other,
Chapter 6

| 147

148 | Economic Report of the President

garbling their transmissions. To limit such interference problems, the Federal
government licenses rights to use specified bands of spectrum at specified locations. Federal government users of spectrum are licensed through the National
Telecommunications and Information Administration (NTIA). All other
spectrum users are licensed through the FCC.
In the early 1990s, government-issued spectrum licenses for wireless
telephone service were limited to just two cellular providers in each cellular
market area. A series of FCC-run auctions beginning in 1995 provided additional spectrum for digital personal communications services (PCS), enough
to support as many as eight wireless providers. By the end of 1999, 88 percent
of the Nation’s population could choose from three or more wireless providers
and 35 percent could choose from at least six. By the end of 2003, these
figures were up to 97 percent and 76 percent, respectively.

Talking on the Internet: Voice over Internet Protocol
Local exchange telephone networks are facing growing competition from
Internet-based telephone services. Unlike traditional circuit-switched telephone calls, communications using Voice over Internet Protocol (VoIP) break
the call stream into data packets sent over the Internet, turning your
computer into an alternative to traditional telephone service. Much of the
current volume of VoIP calls originates and terminates on public switched
telephone networks, by callers using digital subscriber line (DSL) broadband
services. But VoIP services are spreading to other network facilities, such as
those of cable television systems. According to news reports, several of the
country’s largest cable system operators plan to roll out VoIP services within
their service territories, which would make them available to millions of
households. News reports indicate that Wireless Fidelity (Wi-Fi) broadband
service providers are also exploring VoIP services. Looking ahead, electric utilities that develop broadband over power lines service could also provide VoIP
services. All of these recent developments, together with the rapid growth in
mobile wireless telephone service, suggest that the monopoly access to household voice communications that local telephone exchanges have had for
nearly a century is yielding to intensifying competition.
The prospect of growing VoIP traffic has raised concerns in some quarters
that this emerging competition may undermine the current structure of regulating telephone services. A basic rationale for the economic regulation of
telephone service has been the natural monopoly argument, that is, that
competition for telephone service was unlikely to arise. Economic regulation
then offered the prospect of an alternative way, although a problematic one,
of achieving some of the benefits of competition that customers have enjoyed
in most other markets. But with competition now emerging, the natural

Chapter 6

| 149

monopoly rationale for the economic regulation of telephone service is
beginning to fall away. Squelching competition as a threat to the existing
regulatory framework would turn matters on their head. Regulation should
adapt to changing market realities in ways that allow innovation to flourish
and consumers to choose among alternatives, while ensuring national
security, homeland security, law enforcement and public safety.

Realizing the Promise of Broadband
Broadband services offer download speeds much faster than dial-up
Internet access, enabling innovative features such as streaming video and
VoIP. For example, fiber-optic cable to the home can provide speeds of more
than 100 megabits per second. Broadband services have quickly been
embraced by the public, growing from 2.8 million high-speed lines (defined as
connection speeds over 200 kilobits per second in at least one direction) in
December 1999 to more than 32.4 million lines in June 2004. This represents
an annual growth rate of 72 percent. In the first few years after inception,
broadband penetration among U.S. households has outpaced the earlier
diffusion of dial-up Internet, mobile wireless telephones, personal computers,
videocassette recorders, and color television.

Universal, Affordable Access to Broadband
Last March, the President announced a national goal of universal,
affordable access to broadband services by 2007. The Administration’s
ongoing efforts to achieve this goal reflect a belief in the powers of competition and private sector innovation to bring the benefits of broadband to
consumers. As experience in the telephone industry has shown, competition
offers the most robust and reliable means of broadly diffusing important technologies. The Administration has taken steps to unleash the power of free
markets to deliver broadband services by removing disincentives to invest,
strengthening property rights, and allowing consumers rather than the
government to choose the technologies that best meet their needs.

Removing Disincentives to Invest
Competition in broadband service is growing. Already, many communities
have two providers of broadband service. In 1999, 33.7 percent of the zip
codes in the United States had at least two high-speed Internet access
providers. By the middle of 2004, the fraction had risen to 80.5 percent. So
far, competition in broadband has primarily been between DSL services
provided by telephone companies and cable modem services provided by
cable television system operators. Cable’s share in high-speed lines has grown
150 | Economic Report of the President

from 51.3 percent in December 1999 to 57.3 percent in June 2004. One
avenue by which telephone companies could compete more effectively in
broadband service is through investment in fiber-optic cable, which offers
faster connection speeds than can generally be achieved over the copper wires
of the traditional telephone network. According to news reports, fiber-optics
will allow telephone companies to offer television in addition to very highspeed broadband services, similar to the current offerings of many cable
television operators.
While fiber-optic high-speed lines have more than doubled between
December 1999 and June 2004, other forms of broadband delivery have
grown at an even faster pace, so that fiber’s share in high-speed lines has fallen.
Part of the reason may be that regulatory uncertainty has impeded fiber-optic
investment. The Telecommunications Act of 1996 requires telephone companies to provide portions of their network facilities for sale or lease at regulated
rates to competing local exchange companies. This process is known as
“unbundling” network elements. Until recently, it remained unclear whether
the Act’s unbundling requirements would extend beyond copper loops to also
cover fiber-optic cable. People are motivated to invest by the prospect of
reaping returns. In residential neighborhoods, an unbundling requirement
that would force investors to share the fruits of their investment in fiber-optic
cable with competitors could blunt incentives to invest in fiber-optics. The
result might not be more competition, but rather less innovation. The
Administration supported the FCC’s decisions in 2003 and 2004 to exempt
fiber-optic loops from unbundling requirements when this technology is
deployed to residential neighborhoods, including fiber-to-the-home, fiber-tothe-curb, and fiber-to-multi-dwelling-units. According to news reports in the
wake of these rulings, a number of major telephone companies have
announced plans to invest several billion dollars in deploying fiber-optic cable
to reach more than 20 million households within three years.

Setting Interference Standards
The Administration has also helped to lower barriers to the development of
new competition in broadband service. Broadband over power lines (BPL)
holds the promise of adding a “third wire” into the home to compete with
cable modem and DSL services. However, BPL generates radio waves that can
interfere with the operation of wireless systems. The Administration has
helped the FCC develop policies to address BPL interference issues.
Beginning in 2003, the Commerce Department’s NTIA undertook a detailed
technical examination of interference risks posed by BPL, by conducting
millions of measurements on test equipment. The NTIA submitted a report
and set of specifications to the FCC, which adopted final rules on BPL technical requirements in October 2004. Setting appropriate interference

Chapter 6

| 151

standards prevents those who deploy BPL technology from significantly
infringing on the spectrum rights of others, while allowing the technology to
enhance the broadband service options available to homes and businesses.

Strengthening Spectrum Rights
Another potential source of competition in the provision of broadband
service is third generation, or “3G,” wireless technologies. Wireless technology may revolutionize broadband competition by eliminating reliance on
wires and cables. The technology may hold particular value for areas with
sparse customers, where wire- and cable-based communications networks
may be particularly expensive to deploy.
The rising demand for wireless services may at some point strain the limits
of available spectrum. Aspects of the Federal government’s system of allocating spectrum licenses can make it difficult for promising new technologies
to displace lower-valued uses of spectrum. In May 2003, the President established the Spectrum Policy Initiative to reform spectrum management for the
twenty-first century. In June 2004, the Department of Commerce provided
two reports including policy recommendations to the President, and in
November the President directed Federal agencies to implement the reports’
recommendations. In particular, the President directed the Secretary of
Commerce, in coordination with other Federal agencies, to develop a plan
within one year for identifying and implementing incentives to promote
more efficient and effective use of spectrum, while protecting national and
homeland security, critical infrastructure, and government services.
One of many issues is the extent to which spectrum currently in
government hands could be released for commercial use. In July 2002, the
Department of Commerce produced a plan in concert with the FCC and
Department of Defense to release for commercial use a broad swath of radio
spectrum, while accommodating critically important spectrum requirements
for national security. In December 2004, the President signed into law a piece
of legislation to establish a spectrum relocation fund that will compensate
government agencies for putting spectrum they have used up for auction.
This will facilitate making Federal spectrum available when there are highervalued private sector uses and provide a better mechanism for relocating
Federal spectrum-dependent systems, with less uncertainty for both Federal
users and industry.
Making more spectrum available for private use is not the only way to
promote the development of promising new wireless technologies that provide
high-speed Internet and other services. Spectrum policy could also enable spectrum used by the private sector to become available for higher-valued uses
without making incumbent users worse off. As discussed in Chapter 5,
Expanding Individual Choice and Control, assigning tradable property rights
allows providers of the higher-valued uses to compensate incumbent holders
152 | Economic Report of the President

for their property rights. The Administration has encouraged the FCC to allow
greater use of secondary markets, through which licensees could sublease their
spectrum. The FCC adopted spectrum leasing rules in October 2003.

Simplifying Federal Rules
To promote widespread deployment of broadband networks, the
Administration has worked to ensure that broadband providers have timely
and cost-effective access to rights-of-way—the legal right to pass through property controlled by another—including access to conduits, corridors, trenches,
tower sites, and undersea routes. Such passageways often cross large areas of
land owned or controlled by the Federal government. The Administration has
established a Federal Right-of-Way Working Group under the Department of
Commerce to explore ways to simplify the tangle of Federal agency regulations
broadband providers must navigate in seeking rights-of-way over Federal lands.
The Working Group issued a report with a set of recommendations. In April
2004, the President instructed Federal government agencies to implement
these recommendations.

Conclusion
The information technology sector has been a vibrant part of our economy
and there is every indication that it will continue to be. The continued
strength of this sector depends on fostering an environment in which innovation will flourish. In a free market, innovators compete to lower the cost of
goods, improve their quality and usefulness, and develop entirely new goods
that promise quantum leaps in consumer welfare. People are motivated to
invest in developing new ideas and the infrastructure to enter new markets by
the prospect of earning returns on their investment. Government thus has an
important role to play in defining property rights in intellectual and physical
capital so that people will be spurred to invest and innovate, as well as
ensuring the development of an environment in which public safety and
national security are protected. Government efforts to hasten the spread of
innovative technologies should focus on lowering regulatory barriers that
impede market provision. But government should avoid “picking winners”
among emerging services. Doing so could entrench services that may become
outdated as the marketplace evolves and hinder people from choosing the
services they truly prefer. At this time, it is hard to predict the range of technologies that will emerge to deliver high-speed data services, or even what the
scope of these services will be. As people vote with their dollars, the market
winners that emerge will be those technologies and services that deliver
customers the greatest value.
Chapter 6

| 153

154 | Economic Report of the President

C H A P T E R

7

The Global HIV/AIDS Epidemic

S

ocieties worldwide face the challenge of curbing the acquired
immunodeficiency syndrome (AIDS) epidemic. The disease has already
killed over 25 million people, and currently over 40 million people are living
with the human immunodeficiency virus (HIV), the virus that causes AIDS.
The impact of HIV/AIDS varies across the world, both in terms of the scale of
the epidemic and the ability to treat infected individuals. Less-developed countries are particularly hard-hit on both accounts. Almost two-thirds of all people
with HIV live in sub-Saharan Africa, a region that makes up only one-tenth of
the world’s population. At the same time, few infected individuals in the region
receive adequate treatment for the disease. In addition to the devastation from
the immense loss of life, the disease also has economic consequences that
intensify the humanitarian crisis.
President Bush has made fighting the worldwide AIDS epidemic a priority
of U.S. foreign policy, and he has taken bold action against the crisis through
his Emergency Plan for AIDS Relief. Understanding the unique challenges
presented by this epidemic is essential to designing policies to prevent the
spread of the disease and to treat those who are already infected. This chapter
discusses the nature of the crisis, its consequences, and what governments can
do to create affordable access to existing treatments while encouraging
research toward the development of new medical therapies to combat this
disease. The key points of this chapter are:
• AIDS is a global problem with far-reaching consequences. While the
disease’s impacts on human health and mortality are widely recognized,
the AIDS epidemic also has devastating economic consequences that
exacerbate the humanitarian crisis.
• A comprehensive and integrated approach of prevention, treatment, and
care is essential to quelling the epidemic. In poor countries, treatment
affordability and the lack of health care infrastructure are major
concerns. Compassionate pricing policies and aid from developed
nations can play an important role in expanding access to treatment.
• To continue the development of better treatments and to work toward
eradication of HIV/AIDS, drug companies need to maintain the highest
possible quality of research. Intellectual property laws are important
to ensuring appropriate incentives for innovation to create the next
generation of therapies and to develop a safe and effective vaccine.

155

A Global Crisis
The scale of HIV/AIDS is far worse than forecasts initially indicated over a
decade ago. In 2003, there were more new cases of HIV/AIDS than in any
other single year since the disease emerged, with almost 5 million people
becoming infected around the globe. Roughly 2.9 million people died of the
disease in 2003 alone.
In the United States, AIDS is the fifth-leading cause of death in people
25–44 years of age. The U.S. Department of Health and Human Services
(HHS) estimated that over 400,000 people in the United States were living
with AIDS in 2003, and approximately 850,000–950,000 people were living
with HIV. The number of AIDS cases continues to increase among minority
populations, and African Americans accounted for 50 percent of new
HIV/AIDS diagnoses in 2003. One of the most disturbing statistics
surrounding the disease is that approximately 180,000–280,000 people in the
United States are living with an undiagnosed HIV infection. Patients who are
unaware of their infection are less likely to take precautions to prevent the
spread of the disease and are unable to begin effective treatment. Furthermore,
of the estimated 670,000 people who are diagnosed with HIV/AIDS, roughly
one-third may not be receiving treatment. Taken together, the estimates of
those untreated and untested suggest that close to half a million people in the
United States are living with HIV without treatment.
HIV/AIDS infection levels in some parts of the world greatly exceed those
in the United States. The Joint United Nations Programme on HIV/AIDS
(UNAIDS) estimates that 4.8 million people worldwide were newly infected
with HIV in 2003, which is the highest number of new infections in any
single year since the beginning of the epidemic in 1981. Approximately
2.9 million people died of AIDS in 2003, and UNAIDS estimates that over
20 million people have died from complications of AIDS since the first case
was identified. Estimates suggest that 8,000 people die and 14,000 are newly
infected with the virus each day. Because of aggressive prevention, treatment,
and care efforts, there has been a decline in the number of deaths among
AIDS patients in the United States, while the number of people living with
HIV/AIDS continues to increase in the United States and globally.
While the epidemic affects virtually every country in the world, the prevalence
of HIV/AIDS varies markedly across regions (Chart 7-1). Close to two-thirds
of those infected are Africans, for whom HIV/AIDS is the leading cause of
death. In seven countries in southern Africa, at least one out of every five adults
is living with HIV. In Swaziland, the HIV prevalence has reached nearly
40 percent among pregnant women; in South Africa, one in four women
between the ages of 20 and 29 is infected. HIV/AIDS is predominantly a
disease of young people; the majority of people who contract the disease
156 | Economic Report of the President

Chart 7-1 Estimated HIV Infection Levels, 2003
The HIV/AIDS epidemic affects virtually every country in the world, and the disease’s
prevalence varies markedly across regions.

Western Europe
580,000

North America
1,000,000
Caribbean
430,000

North Africa
& Middle East
480,000

Eastern Europe
& Central Asia
1,300,000
East Asia
900,000

South &
South-East Asia
6,500,000
Latin America
1,600,000

Sub-Saharan
Africa
25,000,000

Oceania
32,000

Source: UNAIDS, 2004.

become infected by the age of 25. As a result of its lethality and the relative
youth of its victims, HIV/AIDS has reduced life expectancy by more than
20 years in many African countries. Life expectancy in some countries is
projected to fall to roughly 30 years within the next decade, whereas in the
absence of HIV/AIDS some were expected to approach or exceed 70 years. Chart
7-2 shows this dramatic effect in some of the hardest-hit countries in Africa.

Disease Characteristics and Treatments
The human immunodeficiency virus (HIV) is an infectious agent that
damages the body’s immune system. As the viral infection progresses, individuals lose their ability to fight secondary infections and certain cancers. The
term acquired immunodeficiency syndrome (AIDS) describes the advanced stages
of HIV infection. The virus primarily infects an important part of the immune
system know as the CD-4 or “helper” T-cells, which lead the body’s attack
against infections. When these cells multiply to fight an infection, they themselves become more susceptible to HIV infection. The HHS definition of a
diagnosis of AIDS, established by the Centers for Disease Control and
Prevention, includes all HIV-infected people who have fewer than 200 CD-4
positive T-cells per cubic millimeter of blood (as compared to 1,000 or more
Chapter 7

| 157

in healthy adults). HIV-infected individuals with higher CD-4 counts can also
be diagnosed with AIDS if they develop one of several types of opportunistic
infections or cancers associated with severely compromised immune systems.
The symptoms and signs of opportunistic infections common in people
with AIDS can be highly debilitating. Many individuals who have progressed
to an AIDS diagnosis find it difficult to work or perform basic household
chores, and as the immune system continues to deteriorate, these effects
generally worsen. Studies in Western countries have found that the median
time it takes for an untreated HIV infection to progress to AIDS is about
10–12 years, though the amount of time varies widely across patients. If left
untreated, the majority of patients will die within one year of the progression
from HIV infection to full-blown AIDS.
Because no vaccine is available, the primary way to prevent HIV is through
the avoidance of behaviors that put a person at risk of contracting the infection. HIV is not spread through casual contact. The virus is most commonly
spread through unprotected sex with an infected partner, but it can also be
spread through contact with infected blood. Mothers can transmit HIV to
their babies during pregnancy, birth, or through breast milk while nursing. In
the case of mother-to-child transmission at birth, the administration of certain
drugs during labor can greatly reduce the likelihood of infecting the newborn.
158 | Economic Report of the President

There is no cure for HIV/AIDS, though the past decade has witnessed great
strides in the treatment of AIDS. Multiple categories of drugs are now available for combating the disease, but the administration of individual drugs
alone can render the treatment progressively less effective as the disease
develops resistance to the medication. To minimize resistance and maximize
effectiveness, health care providers use treatments comprised of a combination
of several drugs to suppress the virus. Even though the side effects can be quite
severe, this type of therapy is credited with dramatically improving the health
and life expectancy of HIV-infected individuals.
Advances in treatments have reduced the number of deaths caused by
HIV/AIDS, but despite price reductions by manufacturers and large-scale
international assistance, the price of these treatments has so far exceeded what
most residents of the developing world can afford. UNAIDS states that, in
low- and middle-income countries, death rates for HIV-infected 15–49 year
olds are up to 20 times greater than those of people living with HIV in industrialized countries, and differences in access to antiretroviral therapy can
largely account for this trend. Limited health care infrastructure and a lack of
trained health care professionals in poor countries, coupled with difficulties in
accessing even basic care, further increase the suffering of those that cannot
afford treatment.

The Economic Impact of HIV/AIDS
The vast scale of human suffering that AIDS causes and the sheer number
of lives lost to the disease make the epidemic a global emergency. Its scope
extends beyond the immediate humanitarian crisis as the epidemic affects
many aspects of economic and social development. Roughly 90 percent of
worldwide HIV/AIDS cases occur in Africa, Latin America, the Caribbean,
and Asia, where much of the affected population is already living in poverty.
AIDS deepens poverty, intensifies food shortages, and, in some cases, erases
decades of economic progress.

Direct Economic Impacts on Households
There are several mechanisms by which the disease hinders economic development, particularly in less-developed countries. First, HIV/AIDS-related
illnesses directly decrease the income of an affected household. Even if an
infected family member is able to work, a sick worker is likely to be less
productive than a healthy one. Many people with AIDS are unable to work
at all. The disease’s eventual lethality and loss of income-earning family
members exacerbates this reduction in a family’s income. One study estimates
that in South Africa and Zambia, for example, income in affected households
Chapter 7

| 159

typically fell by 66 to 80 percent due to AIDS-related illnesses. Furthermore,
15–24 year olds contract half of all new HIV infections worldwide, so a large
percentage of the current and future workforce in the hardest-hit countries is
dying. By predominantly affecting the working age population, the disease
leaves too few people to support the aging and young populations, both
within an individual family and within a society. One heavily impacted sector
is agriculture, and failure to produce food can have particularly devastating
effects on households and communities. The Food and Agriculture
Organization of the United Nations estimated that 7 million agricultural
workers died from AIDS between 1985 and 2000, and they projected that
16 million more will likely die by 2020. In some countries, this could mean
a loss of over 20 percent of the agricultural workforce (Chart 7-3).
At the same time that AIDS erodes a patient’s productive capacities, it can
impose debilitating costs on other members of a household. Medical expenses
rise with a patient’s health care needs, while other family members may need
to miss work or school to care for a patient. According to the 2004 Report by
UNAIDS, AIDS-care-related expenses on average can absorb one-third of an
affected household’s income. Many of these households are already poor and
face adversities such as chronic food shortages. Coupled with the fact that
AIDS patients need more calories than healthy individuals, the AIDSinduced deepening of poverty and the decrease in agricultural workers are
intensifying these food shortages.

160 | Economic Report of the President

AIDS is more damaging to a household’s income than other fatal diseases.
Several studies have found that adults with AIDS use more health care than
those with other illnesses. One study conducted in Thailand showed that the
loss of income from an AIDS death is, on average, more than 20 percent
greater than if the family member had died of another cause.

Indirect Economic Impacts on Households
In addition to the direct effect on poverty caused by the decrease in family
earnings and increase in family expenditures, HIV/AIDS can have consequences that indirectly affect households’ well-being. For example, the disease
can change the way that affected families make long-term decisions.
Subsistence households may alter their planning horizons because they do not
expect family members to live as long and because their needs become more
immediate due to pressing health concerns.
When families face the increasing costs described above, children may be
pulled out of school in order to supplement the declining family income,
resulting in a loss in the children’s future earning potential. Moreover, a
household might have less incentive to invest in education because of the
dramatic decrease in any one child’s life expectancy. Private-sector firms,
which also invest in human capital through education and training, have
similarly diminished investment incentives when human capital is short-lived.
Training and education can be expensive, but increased skills lead to longterm financial rewards, which cannot be fully realized when life expectancy
declines. All of these factors can combine to create a vicious cycle of increased
poverty in the short run and an inability of households to improve their
condition in the long run. Shorter planning horizons can potentially lead to
a variety of other indirect effects, such as quicker depletion of natural
resources and accelerated environmental degradation.
A high prevalence of HIV/AIDS in a community can also place extraordinary stress on social networks. These networks are important because they
frequently provide an informal kind of insurance in rural areas of developing
countries, where populations lack access to formal insurance markets. These
informal markets work by pooling risk across diverse households, so those
experiencing good times can help those experiencing bad ones. For example,
a household that loses a crop because of flooding can turn to friends in unaffected areas for help. These traditional means of dealing with hardship break
down in the case of HIV/AIDS because the disease is so widespread that it can
be difficult to turn to friends and family for help, since the disease is likely to
be directly affecting them as well. Households also can be burdened indirectly
by impacts on local labor markets, such as when labor shortages during
planting and harvesting seasons affect agricultural yields, thereby threatening
the availability of food for HIV-infected and noninfected households alike.
Chapter 7

| 161

Academic research has found evidence of these effects and has documented
still other effects of HIV/AIDS on individual families. One study finds that
in Uganda, HIV/AIDS increases the proportion of female-headed households
who are living in poverty. Another study finds that, in parts of Kenya, children in affected families sometimes have no caregivers in their households and
“manage their own household activities without the supervision of an adult.”
Research conducted in South Africa shows that affected households allocate
more resources to food, health, and rent and less to education and clothing
than nonaffected households, providing evidence that HIV/AIDS is placing
constraints on an entire generation’s capacity to pursue education and higher
income in the long run.

Macroeconomic Impacts
The aggregated effects of HIV/AIDS on individual households can create
serious macroeconomic consequences. Because decreased mortality and
increased education are two of the most significant factors in determining
economic growth, the HIV/AIDS epidemic has the potential to threaten the
economic well-being of entire societies. As discussed in the previous section,
the disease can decrease the overall level of skills in the workforce through a
number of mechanisms, because skilled workers die of AIDS, children drop
out of school, and firms and individuals invest less in human capital. This loss
of worker skills and capacity reduces economic growth. The disease can also
decrease productivity and distort labor market decisions, further slowing
economic development.
Although there is still a dearth of data documenting these effects, several
economic models estimate reductions in economic growth rates for African
countries. Recent studies tend to find more significant impacts than previous
estimates, most likely because the macroeconomic impacts become increasingly measurable as the disease affects a larger proportion of households,
workers, and employers. A report published in 2004 estimates that, over the
period from 1992 to 2002, HIV/AIDS, on average, reduced the rate of
economic growth in 33 African countries by 1.1 percent per year. This study
reports that by 2020, Africa alone could incur a loss of US $144 billion.

Getting Prevention, Treatment,
and Care to the Field
Combating the HIV/AIDS pandemic requires both a reduction in new
infections and adequate treatment and care for those already infected.
Interventions in countries such as Kenya, the Dominican Republic, Thailand,
Cambodia, and, most notably, Uganda, that have promoted risk avoidance
162 | Economic Report of the President

and risk reduction have helped reduce the number of new infections and
helped reduce the spread of HIV. For example, the Abstinence, Be Faithful,
and correct and consistent Condom use, or “ABC” approach, employs population-specific interventions that emphasize abstinence for youth and other
unmarried persons, including delay of sexual debut; mutual faithfulness and
partner reduction for sexually active adults; and correct and consistent use of
condoms by those whose behavior places them at risk for transmitting or
becoming infected with HIV.
Another important step toward quelling the AIDS epidemic is the widespread dissemination of currently available treatments and care. Recent
developments in drug therapy and other HIV-related disease care can substantially prolong survival and improve the quality of a patient’s life. Indeed,
evidence from a recent study suggests that the death rate from AIDS in some
developed countries has fallen by about 80 percent since more advanced drug
therapies became available in the mid-1990s. Unfortunately, in the world’s
poorest countries, where most HIV/AIDS patients live, access to these treatments is shockingly low. As stated by the President in January 2003:
There are whole countries in Africa where more than one-third of the
adult population carries the infection. More than 4 million require
immediate drug treatment. Yet across that continent, only 50,000
AIDS victims– only 50,000– are receiving the medicine they need.
Since the President’s speech, the United States and international partners
have made major investments to make safe and effective, low-cost antiretroviral (ARV) treatment more widely available throughout the developing
world. Many people are now on life-saving therapy in 15 focus countries as a
result of the President’s Emergency Plan, and the Global Fund (one-third of
whose resources come from the United States) has also made great strides in
placing patients on ARVs through a portfolio of grants to public-private
consortia throughout the world.
While as recently as two years ago, many analysts believed the sole problem
with access to ARV treatment was that drug prices were too high for most
patients to afford, price cuts by brand-name manufacturers and the wider availability of generic versions of ARVs have helped to improve access to these
treatments. Nevertheless, drug prices are still too high for most patients to afford
and health care infrastructures in developing countries have too few resources for
the effective distribution of treatment, even when drugs are available.
Two of the keys to expanding access to treatment in poor countries are low
prices and generous international aid. Without low prices, large-scale distribution is probably not possible even with generous amounts of aid. And even
at low prices, many of the poorest AIDS sufferers will not be able to afford
adequate treatment, since they face still more basic needs such as adequate
food and clean water. Thus low prices and generous aid must go together for
large-scale treatment dissemination to be possible.
Chapter 7

| 163

A Role for Differential Pricing
Charging different prices to different buyers of the same product can be an
important way to help poor populations access medical treatment. This
practice is pervasive throughout the economy, and ranges from senior citizen
discounts on movie tickets to cheaper college tuition for low-income families.
Competition in a market and the ability to resell a good make it difficult for
firms to charge different prices because of the opportunity for arbitrage, the
ability to make a profit by purchasing the product at the lower price and
reselling it at a higher price. This demand for the product at the lower price
and supply of the product at the higher price will cause prices to equalize, a
phenomenon that economists refer to as the law of one price. However, if a
good cannot easily be resold, as with movie tickets and college tuition,
differential pricing is possible. It is often in the interest of a profit-maximizing
firm to charge high prices to some customers while not relinquishing the
ability to sell to other customers who can afford the product only at lower
prices. This disparity might seem unfair since buyers of the same product are
being treated differently.
Drug companies have the ability to practice differential pricing because
they can possess intellectual property rights. When a firm is the first to
develop a new treatment or vaccine, it is awarded a patent that allows the
company to be the sole seller of the product for 20 years from the date a
patent is filed. (This generally works out to be approximately 10–14 years
from the time the drug is first available on the market.) Because the development of new drugs requires costly research and development, patent rights
provide important incentives for firms to take on the upfront costs of development; the reward for undertaking these risky activities is the promise of
high profits should their efforts to develop a new drug succeed. (Patent rights
and the ensuing incentives for innovation are discussed at greater length in the
next section.)
The market for AIDS drugs is a case in which differential pricing possibly
helps to create societal benefits beyond the profits enjoyed by firms with
market power, by allowing people in poor countries to pay less for their drugs.
This is already a common practice for pharmaceuticals, and some manufacturers of antiretroviral treatments have offered the drugs to developing
countries at lower prices than those that apply in the U.S. and Europe. The
AIDS drug PLC, for example, sells for $18 per day in the United States, but
sells for half that price ($9 per day) in Uganda. The drug companies can make
incremental sales at lower prices without incurring a loss, but if PLC were sold
everywhere for only $9, the companies would not recover their investment in
research and the drug would not be available to consumers in either country.
Consumers paying the higher price for a drug may believe that everyone
should have access to the drug at the lower price. However, if forced to sell at
164 | Economic Report of the President

only one price, the drug companies will generally need to set the price
somewhere between the highest and the lowest prices under differential pricing,
thus creating less access to the drug. Patients who could only afford the drug at
the lowest price would be unable to purchase it at the standardized price.
Therefore, offering drugs at lower prices in impoverished countries can play a
vital role in increasing the availability of AIDS drugs in less-developed countries.

Humanitarian Aid
Even with drugs available in developing countries at prices far below those
charged in the United States and other advanced economies, severe poverty
levels will continue to prevent many AIDS patients from receiving adequate
treatment. Effective new treatments can be produced at an incremental cost
of $600 per year, but most individuals in sub-Saharan Africa live on less than
$730 per year. Furthermore, the actual distribution of treatment requires
more than just an affordable supply of drugs; it requires a health care infrastructure that can adequately implement safe treatment programs. This is a
particular challenge for people living in remote rural areas.
The Bush Administration has laid out the President’s Emergency Plan for
AIDS Relief (the Emergency Plan), a five-year, $15 billion commitment to
fight the disease globally. The President’s Emergency Plan works in over 100
countries around the world while focusing on 15 of the countries most
affected by HIV/AIDS, with the goal of treating 2 million HIV-positive individuals, preventing 7 million new infections, and caring for 10 million
infected or affected by the disease, including orphans. It prioritizes treatment,
care, and prevention activities as the interventions most likely to mitigate the
disease’s consequences and reduce HIV infection. By prolonging life and
restoring health, treatment and care interventions can increase the productive
capacities of individuals, reduce the direct and indirect costs of care, and allow
those infected and affected by HIV/AIDS to focus on priorities such as work
and school, thereby securing the future of families and nations. The
Emergency Plan’s health care approach also sets out to work within hostcountry strategies to strengthen and develop health care networks that will
increase access to prevention, care, and treatment services, since the President
recognizes that all are crucial to winning the fight against HIV/AIDS.
The President’s plan also works with international partners to intensify the
worldwide response to the epidemic and to develop sustained collaborative
efforts. The Emergency Plan devotes $10 billion over five years to 15 of the
most afflicted countries in the world. It also commits $4 billion to HIV/AIDS
programs in an additional 85 countries, including international research in
support of new tools for combating HIV/AIDS, and it increases the United
States’ pledge to the Global Fund to Fight AIDS, Tuberculosis, and Malaria
by $1 billion over five years. The President made the inaugural pledge to the
Chapter 7

| 165

Global Fund in May of 2001, and at the end of 2004 the United States
remained the Global Fund’s largest donor, responsible for over 37 percent of
its pledges and 33 percent of its contributions. One success upon which these
efforts can build is the intervention strategies in Uganda, which successfully
turned around the HIV/AIDS crisis in that country. (Box 7-1).

Box 7-1: Uganda’s Success Story
A broad-based national effort and firm political commitment to
fighting the HIV/AIDS epidemic yields results, and no case illustrates
this point better than Uganda’s experience. Uganda was one of the first
nations to suffer the disease’s impacts, and now it has become one of
the earliest and greatest success stories. As elsewhere in sub-Saharan
Africa, AIDS has caused immense suffering in Uganda, reducing its
population’s life expectancy and thwarting its development. However,
the country has experienced substantial declines in infection rates
during the past decade, even as the rate of new infections continues to
increase in most other countries in the region. The percent of Ugandans
infected with HIV peaked at around 15 percent in 1991, and by 2001 it
had fallen to 5 percent. Prevalence among pregnant women, which is
used as a key indicator of the epidemic’s progress, has fallen by more
than half in some areas since 1993, and infection rates among men
have dropped by more than a third.
Under the leadership of President Yoweri Museveni, Uganda’s
government brought together groups and leaders from all sectors of
society to address the need to prevent further spread of the disease and
to provide treatment and care for those affected. In 1986, President
Museveni directly addressed the epidemic with a commitment to
prevention, and asserted that fighting AIDS was a patriotic duty of
Ugandan citizens. Calling for openness and communication, he was
joined by religious and traditional leaders, community groups, and
nongovernmental organizations (NGOs). In 1992, the President created
the multi-sectoral Uganda AIDS Commission to oversee the national
HIV/AIDS strategy.
Interventions in Uganda began with an aggressive public media
campaign to change risky behaviors and the establishment of a surveillance system to track the epidemic. The campaigns have been aimed at
both the general population and key target groups, particularly older
men and youth, while aggressively fighting stigmatizing and discriminating against people living with the disease. Sex education programs
in schools and on the radio have encouraged youth to delay the age at
which they first have sex, have encouraged monogamy, and have

166 | Economic Report of the President

Box 7-1 — continued
focused on the need for safe sex. Since 1990, a USAID-funded program
has contributed to increases in condom use from 7 percent nationwide
to more than 50 percent in rural areas and over 85 percent in urban
areas. In addition, Uganda’s HIV/AIDS surveillance system has trained
thousands of community-based AIDS counselors, health educators,
and other specialists. Further testimony to the government’s commitment are the many innovations that have been pioneered in Uganda,
such as HIV/AIDS testing with same-day results and accompanying
counseling services.
The open networks throughout Ugandan society for acquiring
information about HIV/AIDS have resulted in behavioral changes in its
population. The decline in the number of sexual partners of the average
Ugandan is perhaps the most important determinant of the nation’s
success in curbing the epidemic, and some have dubbed this experience a “social vaccine. The country’s success suggests that high-level
”
political commitment coupled with diverse, multi-sectoral participation
can turn the tide in the global fight against HIV/AIDS.

Development of New Treatments and Vaccines
While affordable treatments and their effective dissemination are immediate
needs, pharmaceutical companies need to continue to work toward the development of newer and better treatments as well as vaccines. This is important
not only to improve patients’ lives but also to strive toward the eventual eradication of the disease. In the United States, the principal reason that the
number of AIDS cases began to decline in the mid-1990s was the introduction
of new drugs for treating HIV. Researchers must continue to innovate in order
to make even better treatments available and develop safe and effective
vaccines. The development of resistance to existing medication, rendering
treatment less effective over time, underscores this importance.

Incentives for Innovation
Research and development of new drugs is a costly endeavor, and once
developed, new products must go through extensive testing and marketing.
On average, a new drug takes 12 years to develop and costs $800 million to
introduce to the market. For each new drug, the bulk of these costs are generally paid before production begins. Since their magnitude does not depend on
how much of the drug is produced, they are known as fixed costs.
Chapter 7

| 167

Once companies have incurred the fixed costs and a drug is available in the
marketplace, it is often inexpensive to produce the drug; that is, the marginal
cost, the additional cost of producing one more unit of the drug, is low. It is
similarly low-cost for other companies to copy and produce the drug, thus
avoiding the high fixed investment in research altogether while reaping the
benefits from a lucrative market with low marginal costs of production. In the
absence of intellectual property rights, no company would want to bear the
enormous fixed costs of research and development if they could simply profit
from other firms’ inventions. But without any company investing in these
fixed costs, innovation would be thwarted.
Patent rights provide an important means of giving firms the incentive to
bear the expensive costs of innovation. A patent grants a company the right to
be the sole producer and seller of a product it develops for a limited period of
time (20 years in the case of pharmaceuticals); thus, a patent protects the
innovator from direct competition so that it can recoup the money it has
spent in developing the new product. This intellectual property right makes
it possible for the pharmaceutical company to sell the new drug at a price
above its marginal cost of production, thereby generating a high enough
profit on its sales to recover its initial investment.
Diseases prevalent in poor geographical areas might not have lucrative
enough markets to provide incentives for private-sector companies to develop
treatments. For example, tropical diseases such as malaria, which generally
occur only in low-income countries, can have a drug market in which patients
are unable to pay enough for their treatments for firms to recover the high
costs of drug development. The degree to which private companies invest in
research and development could therefore fail to be commensurate with the
social and economic costs of these diseases, including HIV/AIDS. There are,
however, alternative ways to provide incentives for innovation. Prizes for
successful drug invention, patent buyouts, and advance commitments to
purchase the drugs are a few alternatives that are particularly promising
because they encourage research without disallowing competition once a drug
is developed (Box 7-2).

Box 7-2: Creative Ways to Encourage Innovation
Patent rights and direct government funding are currently the two
primary means by which the United States government spurs research.
To drive development for an AIDS vaccine, the Bush Administration
endorsed the Global HIV Vaccine Enterprise this past June at the G-8
summit. This initiative will accelerate HIV vaccine development by

168 | Economic Report of the President

Box 7-2 — continued
enhancing coordination, information sharing, and collaboration
globally. There is also a critical role for the private sector to play in
promoting innovation, especially in the development of a commercially
viable product such as a vaccine.
When a disease predominantly affects a poor population, the private
return to investment in vaccine research is likely to be quite low, even
under well-established patent laws, and even if the social value of
developing a vaccine is high. In other words, society as a whole may
place great value on the lives saved by a new vaccine, but the ability to
pay for vaccines by poor patients will not adequately represent this
social value and will be insufficient for firms to recover their research
expenditures. Patent rights alone can therefore, in some contexts,
provide insufficient incentives for innovation. They can also create
strong incentives to imitate existing successful inventions rather than
to take on new problems, because competitors can slightly alter a
patented approach in order to develop a competing product. While this
“free-riding” off initial research investment creates competition and
drives down prices, it also prevents the original developer from
recouping its research expenditure. Furthermore, imitation of existing
drugs may not be the socially optimal use of scientific research, since
the benefits of saving additional lives with novel products may very
well outweigh the benefits of lowering the prices of existing drugs.
Direct government funding of basic research can have an important
role but is inefficient when the motivation of the research is a commercially viable product. It is difficult to know the best projects to fund and
pharmaceutical firms have an advantage over government officials
when it comes to evaluating the potential of vaccines. Moreover, organized interests can influence the allocation of government funding
resources, and academics may be more interested in novel scientific
discoveries than in the technical challenges of commercial development.
Advocates of exploring alternate systems for encouraging pharmaceutical innovation argue that patents and government funding alone
have had difficulties stimulating sufficient research to develop vaccines
for diseases such as malaria, tuberculosis, and HIV/AIDS. Most research
on HIV/AIDS drugs is currently focused on treatments that will likely be
sold in rich countries, instead of on vaccines, which would likely be less
expensive and could be disseminated widely in poor countries. Indeed,
the research that is currently being conducted toward an AIDS vaccine
focuses predominantly on strains of the disease prevalent in rich countries rather than the strains most common in Africa, even though
two-thirds of all new infections occur there.

Chapter 7

| 169

Box 7-2 — continued
Several mechanisms have been suggested by economists as
promising ways to further encourage new research and development in
pharmaceuticals. For example, foundations can offer monetary prizes
for vaccine development in order to encourage innovation without
restricting competition in the market once the product is developed.
However, a prize alone would not ensure access to the vaccine by those
who need it. Alternatively, a foundation could “buy out” a patent (that
is, it could essentially compensate a firm for letting its patent expire
early). Like a prize, the patent buyout would provide incentives for innovation that are not tied to the market for purchasing the drug, thereby
promoting research and development even in markets of poor patients.
However, the buy-out may similarly fail to ensure large-scale access to
the vaccine since there is no guarantee that competition in the vaccine’s
market will be attractive to other producers. Particularly if the vaccine is
technically difficult to produce and if safety regulations are
burdensome, firms may not wish to enter the market for a new vaccine.
Some scholars have also suggested that another approach to encouraging vaccine research would be for a foundation or group of
foundations to make an advance commitment to purchase a vaccine at a
pre-specified price and quantity. Pharmaceutical firms then would have a
secure financial incentive for researching vaccines and treatments, even
if a disease affects predominantly poor populations, and, once
developed, widespread production of the vaccines could be ensured.

Despite years of both private and government-sponsored research, an HIV
vaccine remains elusive. Although the disease’s many strains and their ability
to evolve rapidly over time present scientific obstacles, there is also reason to
be optimistic that a vaccine will one day be possible. Some candidate HIV
vaccines have already been shown to protect monkeys against infection and
could induce immune responses in humans. To enhance coordination of
research efforts, the President, with other G-8 leaders, endorsed the establishment of the Global HIV Vaccine Enterprise and announced plans to establish
a second HIV Vaccine Research and Development Center in the United
States. The Administration has also urged fellow G-8 leaders to similarly
expand their commitment to vaccine development.

170 | Economic Report of the President

Conclusion
The United States and countries around the world must continue to fight
the spread of HIV/AIDS, aid those who are suffering as result of the
epidemic, and work toward eventual eradication of the deadly disease.
Interventions are particularly critical because the far-reaching economic
consequences of HIV/AIDS threaten the well-being of entire societies. The
President has developed a generous aid package with the Emergency Plan and
with donations to the Global Fund, and the Administration supports the
protection of intellectual property rights. Many other members of the international community have taken action against the HIV/AIDS crisis, and the
United Nations General Assembly Special Session on HIV/AIDS in 2001 has
affirmed the international community’s commitment to make progress in the
struggle against HIV/AIDS. Governments, donors, and private enterprise
around the world must continue to build upon the successes of these actions
to win the global fight against AIDS.

Chapter 7

| 171

C H A P T E R

8

Modern International Trade

O

pen markets and free trade raise living standards both at home and abroad.
The President’s policy of opening markets around the world is based on
this solid foundation. Yet, as international trade has grown in both volume and
scope, so too have concerns that old ideas about trade policies no longer apply
to today’s trade environment.
The key points in this chapter are:
• Free trade allows countries to mutually benefit from specializing in
producing products at which they are adept and then exchanging those
products. This rationale remains the same, even with advances in
technology and new types of trade.
• Foreign direct investment is playing an increasingly important role in
world trade, as companies invest across borders to gain skills, technology,
resources, and market access.
• The Administration has advanced multilateral, regional, and bilateral trade
agreements in order to open global markets. Lower trade barriers benefit
consumers worldwide and expand markets for America’s manufactured
goods, farm products, and services.

Free Trade: Beyond the Basics
The Administration’s pursuit of trade liberalization is based upon a long
history of intellectual support for free trade. Modern trade theory begins with
the nineteenth century’s David Ricardo. Ricardo’s central insight—his elegant
model of comparative advantage—is the starting point from which to explain
the gains from trade.
Ricardo’s model of comparative advantage addressed the question of how a
home country could compete with a foreign trading partner that is better at
producing everything. Ricardo showed that even if a foreign country could
produce each of two goods for less than the home country could (that is, the
foreign country has an absolute advantage in the production of the goods),
there could still be mutual gains from trading the two goods. The key to the
argument is that it is relative costs of production (comparative advantage) that
matter, not absolute advantage.
As an example of Ricardo’s theory of trade, consider a situation in which one
country requires two hours to produce a unit of each of two goods, while in a
second country it takes five hours to make Good One and ten hours to make
173

Good Two. In Ricardo’s simple model, the price of each good in the first
country before trade is one unit of the other good, because the two goods take
the same resources to produce. In the second country, Good Two would be
expected to cost twice as much as Good One, because it takes twice as much
labor to produce it. The first country has an absolute advantage in both goods,
but comparative advantage still provides a basis for trade. In this case, the
second country would gain from importing Good Two, which costs only half
as much in the other country (only one unit of Good One). The second
country would pay for these imports of Good Two by exporting Good One.
Similarly, the first country would import Good One, which in its trading
partner costs only one-half a unit of Good Two. It would pay for its imports
by exporting Good Two. In the end, world production rises as a result of trade,
and each country can consume more of both goods. This stylized example
illustrates that comparative advantage allows countries to gain when they
specialize in producing items in which they are relatively the most productive.
Critics do not usually argue that Ricardo’s theory of comparative advantage
is incorrect, but instead that it omits key aspects of trade that may undermine
the theory’s results and alter the consequent policy prescriptions. In basic
trade theory, for example, capital and labor do not move across borders
seeking the highest return. At least for capital, such movements are now
routine. Economic models that take into account both capital and labor
(Ricardo’s theory discussed only labor) show that countries as a whole still
gain from free trade. There are, however, differing impacts of trade on
different parts of the economy and the labor force. Policies aimed at
supporting individuals affected by trade are thus vital to ensuring that its
gains are widely shared. These policies are discussed later in the chapter.

Globalization and the Terms of Trade
Theoretical arguments showing the gains from trade compare a situation in
which a country is open to trade with one in which it is closed. The differences in production technology between a trading partner and the home
country mean that different prices prevail in the two countries before they
open their borders to trade. It is this difference in prices that allows both
countries to benefit from trade. With the advent of trade, a new price for
exchanging products will be reached, somewhere between the countries’ original prices. This new price is known as the terms of trade. Each country gains
from opening when the terms of trade differs from the pre-trade price.
Over time, events in either country could change the terms of trade. Other
things equal, each country would prefer the price it receives for its export
good to increase, just as any merchant would wish to receive more for the
product he sells.

174 | Economic Report of the President

After trade is opened, it is possible that changes in the world economy
could move the terms of trade in directions that benefit one country but not
the other. In this case, both countries would still be better off than they were
prior to trade, but one country would see its gains diminished. Such subsequent price changes could come from changes to the countries’ technologies
or from the discovery of natural resources, such as oil, that lead to changes in
production and trade patterns.
The possibility that a country could lose from global price changes is at the
heart of some recent critiques of globalization. One critique noted, for
example, that as China develops and becomes more similar to the United
States, the United States could be made worse off. There are two problems
with this critique. The typical view of globalization is that it is a phenomenon
marked by increased international economic integration. The critique above,
however, is of a situation in which development in China leads to less trade,
not more. If China and the United States have differences that allow for gains
from trade (for example, differences in technologies and productive capabilities), removing those differences may reduce the amount of trade and thus
reduce the gains from that trade. The worst-case scenario in this situation
would be a complete elimination of trade. This is the opposite of the typical
concern that globalization involves an overly rapid pace of international
economic integration.
The second problem with the critique is that it ignores the ways in which
modern trade differs from Ricardo’s simple model. The advanced nations of
the world have substantially similar technology and factors of production, and
seemingly similar products such as automobiles and electronics are produced
in many countries, with substantial trade back and forth. This is at odds with
the simplest prediction of the Ricardian model, under which trade should
disappear once each country is able to make similar products at comparable
prices. Instead, the world has observed substantially increased trade since the
end of World War II. This reflects the fact that there are gains to intra-industry
trade, in which broadly similar products are traded in both directions between
nations (the United States both imports and exports computer components,
for example). Intra-industry trade reflects the advantages garnered by
consumers and firms from the increased number of varieties of similar products made available by trade, as well as the increased competition and higher
productivity spurred by trade. Given the historical experience that trade flows
have continued to increase between advanced economies even as production
technologies have become more similar, one would expect the potential for
mutually advantageous trade to remain even if China were to develop so
rapidly as to have similar technologies and prices as the United States.

Chapter 8

| 175

The Impact of Trade on Labor Markets
According to standard economic theory, the degree to which an economy
is open to trade affects the mix of jobs within an economy and can cause
dislocation in certain areas or industries, but has little impact on the overall
level of employment. The main influences on total employment are factors
such as the available workforce and the levels of interest rates, taxes, and regulations that govern the labor market. Trade tends to lead a country to
specialize in producing goods and services at which it excels. Trade affects the
mix of jobs because workers and capital would be expected to shift away from
sectors in which they are less productive relative to foreign producers and
toward existing and new sectors. This would be expected to lead to higher
productivity and thus higher wages for workers.
The conclusion that free trade has little effect on the overall number of jobs
is borne out in data on the U.S. economy. If trade were a major determinant
of the Nation’s ability to maintain full employment, measures of the amount
of trade and the unemployment rate would move in tandem, but in fact, they
usually do not. The increase in imports as a percentage of gross domestic
product (GDP) over the past several decades has not led to any significant
trend in the overall unemployment rate (Chart 8-1). Indeed, over the past
decade, the U.S. economy has experienced historically low unemployment,
while exports and imports have grown considerably.

176 | Economic Report of the President

Similar conclusions arise from examination of data on the trade or “current
account” balance (the broadest measure of the difference between exports and
imports of goods, services, and income flows). From 1960 to the third quarter
of 2004, the current account balance moved from a surplus of 0.5 percent of
GDP to a deficit of roughly 5.6 percent of GDP. Yet the average unemployment rate in 2004 was 5.5 percent, the same as the average unemployment
rate in 1960. Over this period, the U.S. economy gained more than
75 million jobs—an increase of roughly 140 percent. Increased trade has
neither inhibited overall job creation nor contributed to an increase in the
overall rate of unemployment.
That factors other than trade are the most important influences on the
labor market is of no consolation to a worker who loses a job because of
competition stemming from international trade. To assist people facing such
dislocation, the Administration has built upon and developed programs to
help workers acquire the skills needed to prosper in new jobs.
The Administration has proposed a reform of the overall workforce training
system to help Americans obtain marketable skills needed to compete for jobs
in emerging and innovative fields. The Administration recognizes that effective workforce training requires the cooperation of the private sector and
community colleges and has worked to nurture these partnerships through
the High Growth Job Training Initiative at the Department of Labor and
through the recently-enacted Community-based Job Training Grants.
In addition, the Administration has proposed the establishment of Personal
Reemployment Accounts, an innovative approach to worker retraining. With
these accounts, qualifying individuals who lose their jobs would receive an
account with funds that can be used for training and other services that best
fit their needs. Individuals who find new employment relatively quickly
would be eligible to keep the balance of their accounts as a cash reemployment bonus. The accounts would thus provide both support to unemployed
workers and an incentive to find new employment.
The Administration has also worked to enhance the long-standing Trade
Adjustment Assistance program, which provides training and income support
to workers directly hurt by import competition. As part of the Trade Act of
2002, eligibility was extended to workers indirectly affected by trade, such as
workers employed by firms that supply goods and services to industries
directly affected by trade competition. Benefits were enhanced to include a
health insurance tax credit and a wage supplement for older workers who
found new jobs that did not pay as well as their previous jobs. This assistance,
which will total $12 billion over 10 years, will ease the adjustment for
displaced workers and help them move into jobs for which their skills are
most in demand.

Chapter 8

| 177

The U.S. Advantage in Services Trade
This section considers the burgeoning trade in services. The performance
of U.S. service workers and firms has been particularly strong. The United
States exports more services than it imports, and this surplus has been
growing in recent years. Moreover, U.S. services exports tend to involve relatively highly-skilled and highly-paid occupations, such as engineering,
financial services, or architectural services. While services trade may not have
been envisioned in the time of Ricardo, the principle of comparative advantage holds. Any move toward economic isolationism would thus threaten the
competitive gains made by U.S. exporters while harming U.S. consumers and
firms that benefit from imports.
One prominent type of services trade is measured in the “business, professional, and technical services” category. This statistical category encompasses
advertising, telecommunications, computer and data processing services, and
accounting and legal services. The United States exports services when a U.S.
firm provides engineering or architectural services to partners in other countries. Annual U.S. exports in this category have grown by almost $25 billion
since 1989, compared to a $10 billion increase in imports over this period
(Chart 8-2). The growing trade surplus in this category is particularly striking
in light of the widening of the overall current account deficit. The existence
of a trade surplus suggests that the United States has a comparative advantage
in the international provision of tradable services.

178 | Economic Report of the President

Ricardo’s theory that countries mutually gain from trade if they each
specialize in producing those items they could make relatively efficiently was
inspired by trade in goods. Given the difficulties of communication and
transportation in the nineteenth century, there would have been little point
in theorizing about trade in services.
In the modern global economy, however, services trade plays an important
role in international commerce and an especially positive one for the United
States. Advances in communication have made possible the increased trade in
services. These developments pose a challenge to industries that did not previously face foreign competition, though.
As noted above, the United States is good at the provision of services.
Expanded access to the broader international marketplace would be expected
only to further strengthen the U.S. advantage. The U.S. advantages in services have fueled job gains both directly in firms that export services and
indirectly in firms that hire more workers in the United States as a result of
the efficiencies they gain through trade. One study of the effect of services
trade in the information technology sector found that it created over 90,000
net new jobs in the United States in 2003 and is expected to create 317,000
net new jobs by 2008. These new hires tend to be in positions requiring
relatively high levels of skills or creativity, such as software development.

Foreign Direct Investment: An Increasingly
Important Part of Trade
While the intellectual foundations behind free trade are unchanged, the
means by which goods are exchanged between countries have changed greatly
since the time of Ricardo. Goods are no longer simply produced in one place
using only that country’s resources and then sent off on ships to be unloaded
at a foreign port. Instead, many of the goods Americans enjoy today—whether
produced in the United States or abroad—are made with components from a
variety of sources.
Production of goods in this fashion is facilitated by foreign direct investment
(FDI). FDI occurs when an individual or firm buys a foreign company or
takes control of a sufficiently large portion of a foreign company (typically
10 percent or more of the target firm’s stock) that it can influence management
decisions. Greenfield FDI occurs when a company builds a plant abroad
from scratch (i.e., turns a “green field” into a factory), though this type of
investment is less common. FDI in turn gives rise to increased trade.
U.S. firms investing or setting up enterprises abroad can increase
opportunities for exporting their goods. Moreover, there is a good deal of
evidence suggesting that increased employment at the foreign subsidiaries of
Chapter 8

| 179

U.S. firms is associated with a corresponding increase in employment in the
U.S. parent company. Similarly, recent research shows that one dollar of
spending on capital investments abroad by U.S. firms is associated with an
additional 3.5 dollars of spending on capital investment at home. The available evidence thus suggests that, on the whole, overseas investment by U.S.
firms goes hand in hand with expansion at home.
Subsidiaries of foreign firms operating in the United States make important
positive contributions to the U.S. economy as well. These firms bring over
technology, techniques, and skills that in turn lead U.S. industries to be more
efficient. U.S. subsidiaries of foreign companies employed 5.4 million U.S.
workers in 2002, nearly 5 percent of total private-sector employment. This is
up from 3.9 million workers in 1992 (4.3 percent of total private employment
at that time).

The Global Supply Chain and FDI
The production of goods today can involve many firms in different
countries performing a variety of distinct functions to bring products to
market. A car made by an American company could include parts made by
firms in the United States, Japan, Canada, and other countries, and it might
be assembled in Canada or in Mexico. Producing this car could involve one
firm extracting and molding the steel for the chassis, another firm designing
and assembling interior components such as the seats and steering wheel, and
a third firm transporting cars to the showroom. Within these steps, the
production process could further involve a mix of domestic and imported
components. Likewise, a car produced by a foreign company could be made in
the United States and include a large share of components made here as well.
Firms invest in other countries for many reasons. One is that by investing
abroad, firms may be able to take advantage of resources that are unique to
the country in which the foreign business is located. Examples could be as
straightforward as the development of a mining project, which by necessity
must be undertaken where the natural resource is located, or the construction
of an aluminum smelter in a country with abundant deposits of bauxite, the
ore from which aluminum can be economically retrieved.
Firms might undertake foreign investment because it can be more cost-effective
to own a supplier rather than be one of the suppliers’ many customers. Once
the goods are produced, the domestic firm can use its distribution networks,
infrastructure, and knowledge about foreign tastes to export into new markets
as well as increase sales in existing markets. Firms might also invest in retailing
operations in other countries in order to exercise control over the sale of their
products. Moreover, some firms invest abroad to avoid the trade barriers and
transportation costs they might face if they produced in only one country for
export to the whole world.
180 | Economic Report of the President

FDI spurs increased trade as firms move goods between parent companies
and their foreign affiliates. Foreign affiliates use the goods from the parent
company as both inputs to production and final goods to be sold through
their distribution networks. In 2002, 35 percent of total U.S. trade in goods
was accounted for by trade within components of firms with operations in
two or more countries. This includes the flow in both directions, between
U.S. companies and their majority-owed subsidiaries abroad, and between
majority-owned U.S. subsidiaries and their foreign parent companies.

How Inward FDI Strengthens Domestic Firms
Foreign direct investment into the United States by foreign firms can
increase the competitiveness of U.S. domestic firms. Studies suggest, for
example, that American auto firms were driven to produce higher-quality
and more fuel-efficient cars in the late 1970s and 1980s when foreign car
manufacturers began producing and selling cars in the United States.
Evidence also shows that foreign direct investment into the United States is
associated with the adoption of new technology, techniques, and skills by
locally-owned companies. The transfer of expertise can include skills in areas
such as operations, marketing, management, and organization; it can be especially important in sectors such as biotechnology in which research and
development activities play a prominent role. Such technology can “spill over”
to domestic customers and suppliers through a number of channels. Examples
would include when workers at a foreign subsidiary leave and find employment with local firms, when domestic customers incorporate the products of
these foreign firms into their supply chains, and when foreign firms provide
their U.S. suppliers with access to information or technology in order to
improve their own products’ quality and reliability. For example, one foreign
auto manufacturer in the United States recently shared with its U.S. steel
suppliers its innovations for producing stronger, rust-resistant steel. One
study estimates that such “spillovers” accounted for about 14 percent of the
productivity growth in U.S. manufacturing firms between 1987 and 1996.

Encouraging FDI
Many factors lead foreign firms to consider the United States when
deciding to invest abroad. These include a large pool of talented workers,
access to deep capital markets, a culture that supports innovation and risktaking, and a stable legal, political, and economic environment. Evidence
shows that countries prone to corruption, political instability, and having
private firms or industries taken over by the government are less likely to
receive foreign direct investment than countries that protect investor and
intellectual property rights. A recent study found that the United States was
Chapter 8

| 181

ranked the second-best country out of 145 in terms of ease of doing business,
just after New Zealand. In comparison, China was ranked the 42nd-best
place and India the 120th.
At home, the United States maintains an open and nondiscriminatory
policy toward investments made by foreign firms. With limited exceptions,
such as for national security reasons, the United States permits foreign investment in all sectors. The United States does not screen investments on size or
the companies’ country of origin, does not restrict FDI to involve establishing
only new facilities, and, with limited exceptions, does not have performance
requirements such as local content requirements or export quotas.

Achievements in Trade Negotiations
The Administration has pushed aggressively to open global markets to
trade. This has been done through multilateral talks under the auspices of the
World Trade Organization (WTO) and through agreements to liberalize trade
between the United States and various partners. The Administration has
worked to ensure that the benefits promised under the agreements are realized
for U.S. consumers, workers, manufacturers, farmers, and service providers.
At the same time, lower trade barriers benefit people in U.S. trading partner
countries. When U.S. trading partners do not fulfill their obligations, the
Administration has sought their compliance through a practical, problemsolving approach. When that fails, however, the Administration has utilized
formal dispute-settlement mechanisms.
This section addresses the progress made in fostering global trade, which
provides mutual advantages to the United States and to all nations. The
section also discusses efforts to make sure that all nations live up to the agreements they have signed. Because China has grown in importance as a U.S.
trading partner, this section begins with a discussion of U.S. trade with this
emerging economy. It then describes efforts to ensure the protection of intellectual property rights. It concludes with a description of progress in the
negotiation of bilateral and multilateral trade agreements.

Trade with China
Prior to China’s accession to the WTO, exports from the People’s Republic
of China were granted access to the U.S. market on substantially similar terms
as exports from members of the WTO. This access, however, depended on an
annual Congressional vote to grant China “Normal Trading Relations” status
(also known as “Most Favored Nation” status). There were some exceptions to
China’s equal access, most notably in textiles and apparel. Because China was
not a member of the WTO, it was not subject to the sort of reciprocal
182 | Economic Report of the President

obligations to lower trade barriers that WTO members undertook in decades
of trade negotiations.
The Administration’s efforts to bring China into the WTO culminated in
China’s December 2001 accession. WTO membership offered China the
stability of Permanent Normal Trade Relations and access to the WTO’s rulesbased dispute-settlement mechanisms, but demanded of China extensive,
far-reaching, and often complex commitments to change its trade regime, at
all levels of government, and open its market to greater competition. China
committed to lower trade barriers in virtually every sector of the economy,
provide national treatment (treat imports on an equal basis with domesticallyproduced goods), improve market access to goods and services imported from
the United States and other WTO members, and protect intellectual property
rights (IPR). In light of the state’s large role in the Chinese economy, China
also agreed to special rules regarding subsidies and the operation of stateowned enterprises. In accepting China as a fellow WTO member, the United
States also secured a number of significant commitments from China that
protect U.S. interests during the period in which China implements its WTO
obligations. The United States in turn agreed to accord China the same
treatment it accords the other 146 members of the WTO.
That treatment includes a gradual liberalization of the market for textiles
and clothing. This is a sector that has been gradually transformed by advances
in technology and transportation, as well as by the opening of this sector
through trade agreements. Much of the world textile and apparel market had
been governed for decades by a global agreement that set bilateral quotas.
Those countries that were founding members of the WTO in the mid-1990s
agreed to liberalize textiles and apparel trade over the ensuing 10 years, a
process that culminated with the elimination of quotas on January 1, 2005.
Since China’s WTO accession, the Administration has worked to secure
access to China’s market for U.S. companies and their workers, farmers, and
service providers, as promised by China’s WTO membership, and to protect
U.S. rights within Chinese markets. Where possible, the Administration has
tried to resolve differences through negotiation. This approach has shown
concrete results; in April 2004, for example, meetings of the Joint
Commission on Commerce and Trade resolved seven potential WTO
disputes involving high-technology products, agriculture, and intellectual
property protection. When successful, this negotiated approach can deliver
more-immediate results than those available through the sometimesprotracted legal procedures of a formal WTO dispute. When this pragmatic
approach has not produced prompt and effective results, however, the
Administration has also pursued dispute resolution under WTO procedures.
It filed the first-ever WTO case against China to address discriminatory tax
treatment of U.S. semiconductors in China. Within four months of the filing,

Chapter 8

| 183

the Chinese government agreed to eliminate the problematic tax program to
address U.S. concerns, resolving the dispute without lengthy litigation.
A central point of discussion with the Chinese has been about the benefits
of moving to a flexible, market-based exchange rate. The U.S. government
and organizations such as the International Monetary Fund (IMF) have
argued that the exchange rate should have greater flexibility. Greater flexibility
in China’s exchange rate would allow for smooth adjustments in international
accounts and would help protect China from the “boom-bust” economic
cycles of the past. Such a change poses a number of economic challenges. The
Department of the Treasury has been actively engaged with the Chinese in
working toward such a transition and has established a technical cooperation
program to address areas the Chinese view as impediments to greater flexibility, leading to three missions in 2004 that covered currency risk
management, banking system best practices, and developing an exchange rate
futures market in China.
Amidst these changes in policy, trade between the United States and China
has been growing rapidly. For goods trade through November 2004, China
ranked as the third-largest trading partner of the United States. For most of
the period since China’s WTO accession, U.S. exports to China have been
growing at a rate faster than its imports from China (from 2002 to 2003, for
example, U.S. goods exports to China grew by 28 percent while imports from
China grew by 22 percent), but this export growth is occurring from a much
smaller base and so the bilateral trade deficit has grown. The growing bilateral
deficit has led to concerns in some circles about China’s rising prominence in
world trade. In fact, the data suggest that the increased imports from China
are largely coming at the expense of imports from other countries in the
Pacific Rim (Chart 8-3). This change is due in large part to China’s role as a
final assembly platform for exports for Asian manufacturing firms. The total
share of imports from the Pacific Rim has fallen from its recent high in the
mid-1990s. This helps to demonstrate why bilateral trade deficits have little
economic significance and why they are not a useful measure of the benefits
of a trading relationship; these bilateral measures can be driven by a reallocation of trade among partners of the sort that is common in a world of
hundreds of trading nations.

Intellectual Property Rights
In 2004, the Administration launched a major initiative to protect intellectual
property rights. This initiative is called STOP! (for Strategy Targeting Organized
Piracy) and is the most comprehensive initiative ever advanced to combat trade
in pirated and counterfeit goods. The initiative is a government-wide effort to
empower American businesses to secure and enforce their intellectual property

184 | Economic Report of the President

rights in overseas markets, stop fakes at our borders, expose international pirates
and counterfeiters, keep global supply chains free of infringing goods, dismantle
criminal enterprises that steal America’s intellectual property, and reach out to
like-minded trading partners and build an international coalition to stop piracy
and counterfeiting worldwide. This initiative builds on the Administration’s
strong existing record of global enforcement and negotiation.
Such efforts are particularly important to the United States, which is a
major producer of innovative goods. Recordings, films, books, and software
are among the most successful U.S. exports. Property rights in general are
vital to the functioning of a market economy (see Chapter 5, Expanding
Individual Choice and Control). The enforcement of intellectual property
rights ensures that creators of innovative products capture the returns to their
efforts. This enforcement is vital as well to provide incentives to encourage
future innovation (see Chapter 7, The Global HIV/AIDS Epidemic). Empirical
studies have shown that improvements in a nation’s intellectual property
protection can lead to increased trade. These studies found the effect to be
particularly strong in goods that were easy to imitate, providing evidence that
theft of intellectual property displaces legitimate imports. One study found
that strengthened patent protection in large developing countries could
increase their imports by almost 10 percent.

Chapter 8

| 185

Trade Liberalization
Tariffs and other barriers to trade in developing countries are still much
higher than those in the United States, so there remains considerable scope for
lowering barriers both to benefit our trading partners and expand market
access for U.S. firms. Imposing barriers to trade means higher prices for
consumers and firms and a lower standard of living.
To dismantle these barriers and make the benefits of free trade available to
U.S. exporters, producers, and consumers, the Administration has pursued
trade agreements on several fronts. After intense diplomacy at meetings in
Geneva in July of last year, the United States achieved international agreement
on a framework for moving forward on the Doha Development Agenda of
WTO trade negotiations. These talks, which were launched in 2001 in Doha,
Qatar, have focused on measures that will especially benefit developing
nations, including the elimination of agricultural export subsidies. The
Administration has also pursued free trade agreements (FTAs) that set
modern rules for commerce, meet high standards of market access for goods,
and break new ground in areas such as services, e-commerce, intellectual
property protection, transparency and the effective enforcement of environmental and labor laws. Agreements were concluded in 2004 with Australia,
Morocco, Bahrain, and with the participants in the Central American Free
Trade Agreement (CAFTA), including Costa Rica, El Salvador, Guatemala,
Honduras, Nicaragua, and the Dominican Republic. At the same time, the
United States continued negotiations with the five nations of the Southern
African Customs Union (Botswana, Lesotho, Namibia, South Africa, and
Swaziland) while launching new negotiations with Thailand, Panama, and the
Andean nations Colombia, Ecuador, and Peru. The President has also
announced to Congress his intention to begin FTA negotiations with the
United Arab Emirates and Oman.
Tariff reduction commitments negotiated in our bilateral FTAs in 2004
will save foreign consumers and businesses from paying higher prices for
imports and would be expected to spur increased productivity and thus higher
incomes in liberalizing countries. When combined with agreements already
negotiated by the Administration, partner countries accounting for almost
$50 billion in 2003 trade have committed to eventually eliminate tariffs on
almost all U.S. exports. Tariffs that averaged as high as 19.6 percent for U.S.
exports will be reduced to zero as a result of these agreements.
Opening markets expands opportunities for U.S. farmers, businesses, and
workers. An example of the benefits of open markets can be seen in the impact
of the recent trade agreement with Chile. Caterpillar Corporation manufactures mining trucks in Decatur, Illinois, that it sells around the world. The
Escondida copper mine in Northern Chile—the largest copper mine in the

186 | Economic Report of the President

world—uses mining vehicles to move more than 350 million tons of material
per year. Before the free trade agreement with Chile went into effect in January,
Caterpillar's mining trucks were subject to tariffs of $60,000 or more. These
mining trucks now enter Chile duty-free, and have become Illinois’ biggest
export. In 2004, Caterpillar tripled its sales to Chile and added nearly 2,700
people to its U.S. payrolls.
The increase in market access for U.S. exports gained through trade diplomacy
is especially noteworthy because the United States enters these negotiations
with trade barriers that are very low. Central American nations, for example,
already had extensive access to the U.S. market through the Caribbean Basin
Initiative. Under the terms of the CAFTA, those countries are now making
reciprocal commitments to allow in U.S. goods and services.
Bilateral FTAs can also strengthen opportunities for progress in regional
and WTO negotiations. In his first term, the President made multilateral
trade negotiations a priority. In the second term, concluding multilateral
trade negotiations held under the auspices of the WTO will be a top priority
for the Administration. Under the President’s leadership, the United States
successfully led the effort to ensure that 2004 was not a “lost year” for the
Doha Development Agenda negotiations. Early in 2004, the United States
mounted an intensive effort to get the Doha negotiations on a practical track
toward success. U.S. negotiators pressed trading partners to narrow differences, establish key frameworks for detailed negotiations, and push forward
to reach an agreement that would foster increased economic growth, development, and opportunity. The diplomatic effort focused on the key market
access areas of agriculture, industrial goods, and services; the effort in 2004
developed frameworks that will be built upon in moving forward with the
wider WTO agenda. At the end of July 2004, negotiations were successfully
put back on track. WTO ministers are scheduled to meet in Hong Kong,
China, at the end of 2005, to chart the final course for the negotiations.
To ensure continued U.S. global leadership on trade, two legislative steps
are necessary. First, Congress needs to reaffirm the United States’ commitment to the WTO in its regular review. Second, Trade Promotion Authority
(TPA) must be renewed. TPA leaves the power to regulate international
commerce in the hands of the Congress. Under TPA, Congress agrees to
accept or reject an accord negotiated by the President without modification.
If TPA is not renewed, it will likely be difficult—if not impossible—to
achieve the kind of comprehensive benefits the Administration has already
negotiated in its free trade agreements to date. At stake are the substantial
gains that would come from a successful conclusion to the Doha talks. These
gains would accrue both to the United States and to all participants in the
global trading system.

Chapter 8

| 187

Conclusion
The United States is the world’s leader in many ways and remains the
leading advocate for pro-growth policies around the world. Connecting the
world’s economies through trade provides economic benefits at home while
offering opportunities to other nations that are embracing economic reforms.
Peace and prosperity go hand in hand, each reinforcing the other. The
President's policies are designed to foster rising living standards at home,
while encouraging other nations to follow our lead.

188 | Economic Report of the President

Appendix A
REPORT TO THE PRESIDENT ON THE ACTIVITIES
OF THE
COUNCIL OF ECONOMIC ADVISERS DURING 2004

LETTER OF TRANSMITTAL

COUNCIL OF ECONOMIC ADVISERS,
Washington, D.C., December 30, 2004.

MR. PRESIDENT:
The Council of Economic Advisers submits this report on its activities
during the calendar year 2004 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,
N. Gregory Mankiw, Chairman
Kristin J. Forbes, Member
Harvey S. Rosen, Member

Appendix A

| 191

Council Members and Their Dates of Service
Name
Edwin G. Nourse ............................
Leon H. Keyserling.........................

John D. Clark .................................
Roy Blough ....................................
Robert C. Turner............................
Arthur 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 Solomon.................................
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 ...........................
Martin N. Baily ..............................
Alicia H. Munnell ...........................
Janet L. Yellen ...............................
Jeffrey A. Frankel...........................
Rebecca M. Blank..........................
Martin N. Baily ..............................
Robert Z. Lawrence........................
Kathryn L. Shaw ............................
R. Glenn Hubbard ..........................
Mark B. McClellan .........................
Randall S. Kroszner .......................
N. Gregory Mankiw ........................
Kristin J. Forbes.............................
Harvey S. Rosen.............................

Position

Oath of office date

Separation 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........................................
Chairman .....................................
Member........................................
Member........................................
Chair ............................................
Member........................................
Member........................................
Chairman .....................................
Member........................................
Member........................................
Chairman .....................................
Member........................................
Member........................................
Chairman .....................................
Member........................................
Member........................................

August 9, 1946.........................
August 9, 1946.........................
November 2, 1949 ....................
May 10, 1950 ...........................
August 9, 1946.........................
May 10, 1950 ...........................
June 29, 1950...........................
September 8, 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............................
June 28, 1995...........................
June 30, 1995...........................
January 29, 1996......................
February 18, 1997 ....................
April 23, 1997...........................
October 22, 1998......................
August 12, 1999.......................
August 12, 1999.......................
May 31, 2000 ...........................
May 11, 2001 ...........................
July 25, 2001............................
November 30, 2001 ..................
May 29, 2003
November 21, 2003
November 21, 2003

November 1, 1949.

192 | Economic Report of the President

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.
April 22, 1995.
June 26, 1994.
February 10, 1997.
August 30, 1996.
August 1, 1997.
August 3, 1999.
March 2, 1999.
July 9, 1999.
January 19, 2001
January 12, 2001
January 19, 2001
February 28, 2003.
November 13, 2002.
July 1, 2003.

Report to the President on the
Activities of the Council of Economic
Advisers During 2004
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 Chairman of the Council
N. Gregory Mankiw continued to chair the Council during 2004. Dr.
Mankiw is on leave from Harvard University, where he is the Allie S. Freed
Professor of Economics. Dr. Mankiw is responsible for communicating the
Council’s views on economic matters to the President through personal discussions and written reports. He represents the Council at Cabinet meetings,
meetings of the National Economic Council, daily White House senior staff
meetings, and other formal and informal meetings. He also travels within the
United States and overseas to present the Administration’s views on the
economy. Dr. Mankiw is the Council’s chief public spokesperson. He directs the
work of the Council and exercises ultimate responsibility for the work of the
professional staff.

The Members of the Council
Kristin J. Forbes and Harvey S. Rosen are Members of the Council of
Economic Advisers. Dr. Forbes is on leave from the Massachusetts Institute of
Technology Sloan School of Management where she is the Mitsubishi Career
Development Chair of International Management and Associate Professor of
International Management. Dr. Rosen is on leave from Princeton University,
where he is the John L. Weinberg Professor of Economics and Business Policy.
Dr. Randall Kroszner was previously a Member of the Council and has
returned to the University of Chicago’s Graduate School of Business where he
is a Professor of Economics, Associate Director of the Stigler Center for the
Study of the Economy and the State, and Research Consultant to the Federal
Reserve Bank of Chicago.

Appendix A

| 193

The Chairman and the Members work as a team on most economic policy
issues. Dr. Mankiw is responsible for the Council’s macroeconomic analysis
including the Administration’s economic forecast. Dr. Forbes’s responsibilities
include international finance and trade issues, with a particular focus on
emerging markets and developing economies. Dr. Rosen’s responsibilities
include policy analysis relating to fiscal policy and microeconomic issues
including labor and financial markets, health care, and regulation.

Macroeconomic Policies
As is its tradition, the Council devoted much time during 2004 to assisting
the President in formulating economic policy objectives and designing
programs to implement them. In this regard, the Chairman kept the President
informed, on a continuing basis, of important macroeconomic developments
and other major policy issues through regular macroeconomic briefings. The
Council prepares for the President, the Vice President, and the White House
senior staff almost daily memoranda that report key economic data and analyze
current economic events. In addition, they prepare weekly discussion and data
memos for the President, Vice President and senior White House staff.
The Council, the Department of the Treasury, and the Office of
Management and Budget (OMB)—the Administration’s economic “troika”—
are responsible for producing the economic forecasts that underlie the
Administration’s budget proposals. The Council, under the leadership of the
Chairman and the Chief Economist, initiates the forecasting process twice
each year. In preparing these forecasts, the Council consults with a variety of
outside sources, including leading private-sector forecasters.
In 2004, the Council took part in discussions on a range of macroeconomic
issues. An important part of the Council’s ongoing work involved monitoring
economic data, including assessing the response of the economy, and the labor
market in particular, to fiscal and monetary policies. Council staff analyzed
economic conditions at the state level, with a particular focus on labor
market developments. The Council also provided analysis relating to the
macroeconomic impact of natural disasters such as hurricanes.
The Council works closely with the Treasury, the Federal Reserve, and other
government agencies in providing analyses to the Administration on these
topics of concern. The Council continued to work closely in 2004 with the
National Economic Council, the Office of Management and Budget, and
other offices within the Executive Office of the President in assessing the
economy and economic policy proposals. The Council participated in the
development and analysis of policies relating to domestic and international tax
reform and reform of Social Security.

194 | Economic Report of the President

The Council continued its efforts to improve the public’s understanding of
economic issues and of the Administration’s economic agenda through regular
briefings with the economic and financial press, frequent discussions with
outside economists, and presentations to outside organizations. The Chairman
and Members continued to give public addresses on economic developments,
with a focus on the role of policies and the implications of increased international economic integration. The Chairman also regularly exchanged views on
the economy with the Chairman and Governors of the Federal Reserve System.
Council staff provided regular assistance with economic data to other offices of
the Executive Office of the President, including the Office of Communications
and the Offices of Speechwriting for the President and Vice President.

International Economic Policies
The Council was involved in a range of international trade issues, including
discussions on trade liberalization at the global, regional, and bilateral levels.
The Council participated in deliberations concerning trade policy in a number
of industries, and provided analysis related to U.S. economic interaction with
China and the impact of trade on the domestic economy. Dr. Forbes and
Council staff participated in dialogues with the Chinese government,
including the National Development and Reform Committee and the Joint
Economic Committee. Council staff participated in the Beijing working
group talks of the Joint Commission on Commerce and Trade in July.
The Council participated in discussions concerning international financial
policy involving relations with both advanced and emerging market economies.
The Council provided extensive analysis of the implications of changes in the
U.S. external position and developments in foreign exchange markets. The
Council participated in the development of U.S. proposals for the G-8 Summit
held at Sea Island, Georgia, which Dr. Forbes attended. Dr. Forbes and Council
staff also participated in sub Cabinet-level discussions with Japan.
The Council is a leading participant in the Organization for Economic
Cooperation and Development (OECD), the principal forum for economic
cooperation among the high-income industrial countries. The Chairman
heads the U.S. delegation to the semiannual meetings of the OECD’s
Economic Policy Committee (EPC) and serves as the EPC Chairman. Dr.
Forbes also participated in meetings of the Economic Policy Committee, as
well as meetings of the OECD’s Working Party 3 on macroeconomic policy
and coordination. Dr. Rosen participated in the OECD’s Working Party 1 on
microeconomic policy and in the annual OECD review of U.S. economic
policy, as did CEA chief economists Andrew Samwick and Donald Marron.
Council members regularly met with representatives of the Council’s counterpart agencies in foreign countries, as well as with foreign trade ministers,
other government officials, and members of the private sector.
Appendix A

| 195

Microeconomic Policies
A wide variety of microeconomic issues received Council attention during
2004. The Council actively participated in the Cabinet-level National
Economic Council, dealing with issues including energy policy, the environment, health care, homeland security, pensions, transportation, technology,
tort reform, and financial markets.
The Council participated in Administration efforts to improve the supervisory
regime for government-sponsored enterprises in the home mortgage system.
The Council also participated in ongoing policy discussions relating to
terrorism risk insurance.
The Council was involved in a variety of issues related to health care. These
included analyses of the sources of rising health care costs, the design and
impact of health savings accounts, and a number of issues related to the
Medicare and Medicaid programs. The Council also participated in discussions related to pharmaceutical products and helped evaluate the impacts of
disease management and information technology in health care.
On labor and education programs, the Council was involved in the
development of the President’s proposal for a temporary worker program, as
well as evaluations of other proposed immigration reforms. The Council
assisted in Administration efforts to review education policies, as well as to
evaluate the effectiveness of the Head Start program. The Council also participated in discussions related to reauthorization of the Workforce Investment
Act, evaluation and reform of job training programs, and consideration of
education and other benefits for Veterans.
The Council worked on a variety of environmental issues in 2004. The
Council played a role in the development of a suite of proposed air quality
rules, including the Clean Air Mercury Rule and the Clean Air Interstate Rule,
which seek to regulate mercury, sulfur dioxide, and nitrogen oxide emissions
from power plants. The Council was involved in the development of regulations concerning fine particles and emissions coming from diesel engines. The
Council was a member of the Interagency Ocean Policy Group and helped to
formulate the Administration’s response to the U.S. Commission on Ocean
Policy’s recommendations for national ocean policy.
Energy policy continued to be an important focus of the Council’s efforts in
2004, with analysis on the impact of oil prices on the economy and the impact
of various policy proposals regarding energy supplies. The Council also played a
role in the analysis of policy for telecommunications, broadband, and spectrum
allocation. The Council participated in discussions concerning Federal prison
industries, the Postal Service, tort reform, and transportation issues, including
the state of the airline industry. Council staff also provided analyses related to
agricultural issues, including the economic impacts of “mad cow” disease.

196 | Economic Report of the President

The Staff of the Council of Economic Advisers
The professional staff of the Council consists of the Chief of Staff, the Senior
Statistician, the Chief Economist, the Director of Macroeconomic Forecasting,
eight senior economists, one economist, four staff economists, and five research
assistants. The professional staff and their areas of concentration at the end of
2004 were:
Chief of Staff
Phillip L. Swagel
Chief Economist
Donald B. Marron

Senior Statistician
Catherine H. Furlong

Director
of
Macroeconomic Forecasting
Steven N. Braun

Senior Economists
Gerald E. Auten .............................. Public Finance
William D. Block............................ International Finance and Development
John C. Driscoll .............................. Macroeconomics and Public Finance
R. Richard Geddes .......................... Regulation and Finance
Joshua Graff Zivin........................... Environment, Health Care, and
Regulation
Philip I. Levy .................................. International Trade
Pia M. Orrenius .............................. Labor, Health Care, and Education
Alexander Raskovich ....................... Regulation, Energy, and Technology
Economist
Anne L. Berry ............................... Finance, Regulation, and Technology
Staff Economists
Carol L. Cohen............................. International Trade and Finance
Maria Damon ............................... Environment and Regulation
Rebecca J. Kalmus ........................ Health Care and Labor
Peter R. Kingston.......................... Macroeconomics and Finance

Appendix A

| 197

Research Assistants
Derek A. Haas .............................. Finance, Regulation, and Technology
Namita K. Kalyan ......................... Macroeconomics
Daniel L. Ramsey.......................... Public Finance
Therese C. Scharlemann ............... Macroeconomics
James W. Soldano ......................... International Finance
Statistical Office
Mrs. Furlong directs the Statistical Office. The Statistical Office maintains
and updates the Council’s statistical information, oversees the publication of
the monthly Economic Indicators and the statistical appendix to the Economic
Report of the President, and verifies statistics in Presidential and Council
memoranda, testimony, and speeches.
Linda A. Reilly.............................. Statistician
Brian A. Amorosi .......................... Program Analyst (Statistical)
Dagmara A. Mocala ...................... Research Assistant
Administrative Office
The Administrative Office provides general support for the Council’s activities.
This includes financial management, human resource management, and travel,
facility, security, information, and telecommunications management support.
Rosemary M. Rogers ..................... Administrative Officer
Brenda Compton .......................... Financial Manager
Office of the Chairman
Alice H. Williams ......................... Executive Assistant to the Chairman
Sandra F. Daigle............................ Executive Assistant to the Chairman
and Assistant to the Chief of Staff and
Chief Economist
Lisa D. Branch.............................. Executive Assistant to Dr. Forbes
Mary E. Jones ............................... Executive Assistant to Dr. Rosen
Staff Support
Sharon K. Thomas ........................ Administrative Support Assistant
Jane Tufts and Barbara Pendergast provided editorial assistance in the
preparation of the 2005 Economic Report of the President.
Scott E. Carrell served as a senior economist for labor and public finance
during the summer of 2004 and then returned to his position on the faculty
of the Air Force Academy. Gerald F. Zukowski and Roger E. Stanley also
served at the Council in 2004 on detail from other government agencies.
198 | Economic Report of the President

John List and Ted Gayer provided consulting services to the Council during
2004.
Student Interns during the year were Sarah E. Anders, Mary B. Anderson,
Christian M. Bonilla, Eric C. Breitenstein, Matthew J. Burton, Deepa
Dhume, Michael M. Furchtgott, Sabah M. Khan, Susan J. Li, Joshua S.
Meltzer, Barbara J. Merry, Amol S. Navathe, Kirsten D. Powers, Brian K.
Smedley, Dagmara K. Tchalakov, and Sean M. Zimmerman. Alexander P.
Ryan joined the staff of the Council in January as a student intern.

Departures
The Council’s senior staff, in most cases, are on leave of absence from
faculty positions at academic institutions or from other government agencies
or research institutions. Chief Economist Andrew Samwick returned to
Dartmouth College, where he is a Professor of Economics and Director of the
Rockefeller Center for Public Policy. The senior economists who resigned
during the year returned to their previous affiliations. They are Karen Dynan
(Federal Reserve Board), Ted Gayer (Georgetown University), Eric Helland
(Claremont McKenna College), David Meyer (Federal Trade Commission),
Mark Showalter (Brigham Young University), Beth Anne Wilson (Federal
Reserve Board), and Alan Viard (Federal Reserve Bank of Dallas).
Staff economists are generally graduate students who spend one year with
the Council and then return to complete their dissertations. Those who
returned to graduate studies in economics in 2004 are: William Congdon
(Princeton University), Brent Neiman (Harvard University), and Matthew
Weinzierl (Harvard University).
Research assistants who resigned during 2004 and went on to further
employment or graduate studies were Christine Dobridge (Deutsche Bank),
Amanda Kowalski (MIT economics), and Julia Stahl (New York University
Law School).
Brandon Schwartz, Information Management Assistant, resigned to pursue
graduate studies.

Appendix A

| 199

Public Information
The Council’s annual Economic Report of the President is an important
vehicle for presenting the Administration’s domestic and international
economic policies. The Report is available on the Internet, where it is accessible
at www.gpoaccess.gov/eop, and for purchase as a bound volume from the
Government Printing Office. The Council also has primary responsibility for
compiling the monthly Economic Indicators, which is issued by the Joint
Economic Committee of the Congress. The Internet address for the Economic
Indicators is www.gpoaccess.gov/indicators. The Council’s home page is
located at www.whitehouse.gov/cea.

200 | Economic Report of the President

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

C O N T E N T S
Page

NATIONAL INCOME OR EXPENDITURE:
B–1.
B–2.
B–3.
B–4.
B–5.
B–6.
B–7.
B–8.
B–9.
B–10.
B–11.
B–12.
B–13.
B–14.
B–15.
B–16.
B–17.
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, 1959–2004 .................................................
Real gross domestic product, 1959–2004 ..........................................
Quantity and price indexes for gross domestic product, and percent changes, 1959–2004 ................................................................
Percent changes in real gross domestic product, 1959–2004 ..........
Contributions to percent change in real gross domestic product,
1959–2004 .......................................................................................
Chain-type quantity indexes for gross domestic product, 1959–
2004 .................................................................................................
Chain-type price indexes for gross domestic product, 1959–2004
Gross domestic product by major type of product, 1959–2004 .......
Real gross domestic product by major type of product, 1959–2004
Gross value added by sector, 1959–2004 ..........................................
Real gross value added by sector, 1959–2004 ..................................
Gross domestic product (GDP) by industry, value added, in current dollars and as a percentage of GDP, 1987–2003 .................
Real gross domestic product by industry, value added, and percent changes, 1987–2003 ................................................................
Gross value added of nonfinancial corporate business, 1959–2004
Gross value added and price, costs, and profits of nonfinancial
corporate business, 1959–2004 ......................................................
Personal consumption expenditures, 1959–2004 .............................
Real personal consumption expenditures, 1990–2004 ....................
Private fixed investment by type, 1959–2004 ..................................
Real private fixed investment by type, 1990–2004 .........................
Government consumption expenditures and gross investment by
type, 1959–2004 ..............................................................................
Real government consumption expenditures and gross investment by type, 1990–2004 ...............................................................
Private inventories and domestic final sales by industry, 1959–
2004 .................................................................................................
Real private inventories and domestic final sales by industry,
1990–2004 .......................................................................................
Foreign transactions in the national income and product accounts, 1959–2004 ..........................................................................
Real exports and imports of goods and services, 1990–2004 ..........
Relation of gross domestic product, gross national product, net
national product, and national income, 1959–2004 .....................
Relation of national income and personal income, 1959–2004 .......
National income by type of income, 1959–2004 ...............................
Sources of personal income, 1959–2004 ...........................................
Disposition of personal income, 1959–2004 .....................................
Total and per capita disposable personal income and personal
consumption expenditures, and per capita gross domestic product, in current and real dollars, 1959–2004 .................................

203

208
210
212
213
214
216
218
220
221
222
223
224
226
228
229
230
231
232
233
234
235
236
237
238
239
240
241
242
244
246

247

Page
B–32.
B–33.

Gross saving and investment, 1959–2004 ........................................
Median money income (in 2003 dollars) and poverty status of
families and persons, by race, selected years, 1989–2003 ...........

248
250

POPULATION, EMPLOYMENT, WAGES, AND PRODUCTIVITY:
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.
B–49.
B–50.

Population by age group, 1929–2004 ................................................
Civilian population and labor force, 1929–2004 ..............................
Civilian employment and unemployment by sex and age, 1959–
2004 .................................................................................................
Civilian employment by demographic characteristic, 1959–2004 ..
Unemployment by demographic characteristic, 1959–2004 ...........
Civilian labor force participation rate and employment/population ratio, 1959–2004 ..................................................................
Civilian labor force participation rate by demographic characteristic, 1965–2004 ......................................................................
Civilian employment/population ratio by demographic characteristic, 1965–2004 ......................................................................
Civilian unemployment rate, 1959–2004 .........................................
Civilian unemployment rate by demographic characteristic,
1965–2004 .......................................................................................
Unemployment by duration and reason, 1959–2004 .......................
Unemployment insurance programs, selected data, 1978–2004 ....
Employees on nonagricultural payrolls, by major industry, 1959–
2004 .................................................................................................
Hours and earnings in private nonagricultural industries, 1959–
2004 .................................................................................................
Employment cost index, private industry, 1984–2004 ....................
Productivity and related data, business sector, 1959–2004 ...........
Changes in productivity and related data, business sector, 1959–
2004 .................................................................................................

251
252
254
255
256
257
258
259
260
261
262
263
264
266
267
268
269

PRODUCTION AND BUSINESS ACTIVITY:
B–51.
B–52.
B–53.
B–54.
B–55.
B–56.
B–57.
B–58.
B–59.

Industrial production indexes, major industry divisions, 1959–
2004 .................................................................................................
Industrial production indexes, market groupings, 1959–2004 .......
Industrial production indexes, selected manufacturing industries,
1967–2004 .......................................................................................
Capacity utilization rates, 1959–2004 ..............................................
New construction activity, 1964–2004 ..............................................
New private housing units started, authorized, and completed,
and houses sold, 1959–2004 ...........................................................
Manufacturing and trade sales and inventories, 1965–2004 .........
Manufacturers’ shipments and inventories, 1965–2004 .................
Manufacturers’ new and unfilled orders, 1965–2004 ......................

270
271
272
273
274
275
276
277
278

PRICES:
B–60.
B–61.
B–62.
B–63.
B–64.

Consumer price indexes for major expenditure classes, 1959–
2004 .................................................................................................
Consumer price indexes for selected expenditure classes, 1959–
2004 .................................................................................................
Consumer price indexes for commodities, services, and special
groups, 1960–2004 ..........................................................................
Changes in special consumer price indexes, 1960–2004 .................
Changes in consumer price indexes for commodities and services,
1929–2004 .......................................................................................

204

279
280
282
283
284

Page
B–65.
B–66.
B–67.
B–68.

Producer price indexes by stage of processing, 1959–2004 .............
Producer price indexes by stage of processing, special groups,
1974–2004 .......................................................................................
Producer price indexes for major commodity groups, 1959–2004
Changes in producer price indexes for finished goods, 1965–2004

285
287
288
290

MONEY STOCK, CREDIT, AND FINANCE:
B–69.
B–70.
B–71.
B–72.
B–73.
B–74.
B–75.
B–76.
B–77.

Money stock and debt measures, 1959–2004 ...................................
Components of money stock measures, 1959–2004 .........................
Aggregate reserves of depository institutions and the monetary
base, 1959–2004 ..............................................................................
Bank credit at all commercial banks, 1959–2004 ............................
Bond yields and interest rates, 1929–2004 ......................................
Credit market borrowing, 1996–2004 ...............................................
Mortgage debt outstanding by type of property and of financing,
1949–2004 .......................................................................................
Mortgage debt outstanding by holder, 1949–2004 ..........................
Consumer credit outstanding, 1955–2004 ........................................

291
292
294
295
296
298
300
301
302

GOVERNMENT FINANCE:
B–78.
B–79.
B–80.
B–81.
B–82.

B–83.

B–84.
B–85.
B–86.
B–87.
B–88.

B–89.

Federal receipts, outlays, surplus or deficit, and debt, fiscal
years, 1939–2006 ............................................................................
Federal receipts, outlays, surplus or deficit, and debt, as percent
of gross domestic product, fiscal years 1934–2006 ......................
Federal receipts and outlays, by major category, and surplus or
deficit, fiscal years 1940–2006 .......................................................
Federal receipts, outlays, surplus or deficit, and debt, fiscal years
2001–2006 .......................................................................................
Federal and State and local government current receipts and expenditures, national income and product accounts (NIPA),
1959–2004 .......................................................................................
Federal and State and local government current receipts and expenditures, national income and product accounts (NIPA), by
major type, 1959–2004 ...................................................................
Federal Government current receipts and expenditures, national
income and product accounts (NIPA), 1959–2004 .......................
State and local government current receipts and expenditures,
national income and product accounts (NIPA), 1959–2004 ........
State and local government revenues and expenditures, selected
fiscal years, 1927–2002 ..................................................................
U.S. Treasury securities outstanding by kind of obligation, 1967–
2004 .................................................................................................
Maturity distribution and average length of marketable interestbearing public debt securities held by private investors, 1967–
2004 .................................................................................................
Estimated ownership of U.S. Treasury securities, 1993–2004 .......

303
304
305
306

307

308
309
310
311
312

313
314

CORPORATE PROFITS AND FINANCE:
B–90.
B–91.
B–92.
B–93.

Corporate profits with inventory valuation and capital consumption adjustments, 1959–2004 .........................................................
Corporate profits by industry, 1959–2004 ........................................
Corporate profits of manufacturing industries, 1959–2004 ............
Sales, profits, and stockholders’ equity, all manufacturing corporations, 1965–2004 .....................................................................

205

315
316
317
318

Page
B–94.
B–95.
B–96.

Relation of profits after taxes to stockholders’ equity and to sales,
all manufacturing corporations, 1955–2004 .................................
Historical stock prices and yields, 1949–2003 .................................
Common stock prices and yields, 2000–2004 ...................................

319
320
321

AGRICULTURE:
B–97.
B–98.
B–99.
B–100.
B–101.
B–102.

Farm income, 1945–2004 ...................................................................
Farm business balance sheet, 1950–2003 ........................................
Farm output and productivity indexes, 1948–2002 .........................
Farm input use, selected inputs, 1948–2004 ...................................
Agricultural price indexes and farm real estate value, 1975–2004
U.S. exports and imports of agricultural commodities, 1945–2004

322
323
324
325
326
327

INTERNATIONAL STATISTICS:
B–103. U.S. international transactions, 1946–2004 .....................................
B–104. U.S. international trade in goods by principal end-use category,
1965–2004 .......................................................................................
B–105. U.S. international trade in goods by area, 1999–2004 ....................
B–106. U.S. international trade in goods on balance of payments (BOP)
and Census basis, and trade in services on BOP basis, 1979–
2004 .................................................................................................
B–107. International investment position of the United States at yearend, 1995–2003 ...............................................................................
B–108. Industrial production and consumer prices, major industrial
countries, 1979–2004 ......................................................................
B–109. Civilian unemployment rate, and hourly compensation, major industrial countries, 1979–2004 .......................................................
B–110. Foreign exchange rates, 1983–2004 ..................................................
B–111. International reserves, selected years, 1962–2004 ..........................
B–112. Growth rates in real gross domestic product, 1986–2004 ...............

206

328
330
331

332
333
334
335
336
337
338

General Notes
Detail in these tables may not add to totals because of rounding.
Because of the formula used for calculating real gross domestic product (GDP),
the chained (2000) dollar estimates for the detailed components do not add to the
chained-dollar value of GDP or to any intermediate aggregate. The Department of
Commerce (Bureau of Economic Analysis) no longer publishes chained-dollar
estimates prior to 1990, except for selected series.
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 through January 31, 2005. In particular, tables containing national income and product accounts (NIPA) estimates reflect revisions released by the Department of Commerce in July 2004.

207

NATIONAL INCOME OR EXPENDITURE
TABLE B–1.—Gross domestic product, 1959–2004
[Billions of 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

Total

Durable
goods

Nondurable
goods

Nonresidential
Services

Total

Total

Total

Structures

Equipment
and
software

Residential

Change
in
private
inventories

1959 ...................

506.6

317.6

42.7

148.5

126.5

78.5

74.6

46.5

18.1

28.4

28.1

3.9

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

...................
...................
...................
...................
...................
...................
...................
...................
...................
...................

526.4
544.7
585.6
617.7
663.6
719.1
787.8
832.6
910.0
984.6

331.7
342.1
363.3
382.7
411.4
443.8
480.9
507.8
558.0
605.2

43.3
41.8
46.9
51.6
56.7
63.3
68.3
70.4
80.8
85.9

152.8
156.6
162.8
168.2
178.6
191.5
208.7
217.1
235.7
253.1

135.6
143.8
153.6
162.9
176.1
189.0
203.8
220.3
241.6
266.1

78.9
78.2
88.1
93.8
102.1
118.2
131.3
128.6
141.2
156.4

75.7
75.2
82.0
88.1
97.2
109.0
117.7
118.7
132.1
147.3

49.4
48.8
53.1
56.0
63.0
74.8
85.4
86.4
93.4
104.7

19.6
19.7
20.8
21.2
23.7
28.3
31.3
31.5
33.6
37.7

29.8
29.1
32.3
34.8
39.2
46.5
54.0
54.9
59.9
67.0

26.3
26.4
29.0
32.1
34.3
34.2
32.3
32.4
38.7
42.6

3.2
3.0
6.1
5.6
4.8
9.2
13.6
9.9
9.1
9.2

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

...................
...................
...................
...................
...................
...................
...................
...................
...................
...................

1,038.5
1,127.1
1,238.3
1,382.7
1,500.0
1,638.3
1,825.3
2,030.9
2,294.7
2,563.3

648.5
701.9
770.6
852.4
933.4
1,034.4
1,151.9
1,278.6
1,428.5
1,592.2

85.0
96.9
110.4
123.5
122.3
133.5
158.9
181.2
201.7
214.4

272.0
285.5
308.0
343.1
384.5
420.7
458.3
497.1
550.2
624.5

291.5
319.5
352.2
385.8
426.6
480.2
534.7
600.2
676.6
753.3

152.4
178.2
207.6
244.5
249.4
230.2
292.0
361.3
438.0
492.9

150.4
169.9
198.5
228.6
235.4
236.5
274.8
339.0
412.2
474.9

109.0
114.1
128.8
153.3
169.5
173.7
192.4
228.7
280.6
333.9

40.3
42.7
47.2
55.0
61.2
61.4
65.9
74.6
93.6
117.7

68.7
71.5
81.7
98.3
108.2
112.4
126.4
154.1
187.0
216.2

41.4
55.8
69.7
75.3
66.0
62.7
82.5
110.3
131.6
141.0

2.0
8.3
9.1
15.9
14.0
−6.3
17.1
22.3
25.8
18.0

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989

...................
...................
...................
...................
...................
...................
...................
...................
...................
...................

2,789.5
3,128.4
3,255.0
3,536.7
3,933.2
4,220.3
4,462.8
4,739.5
5,103.8
5,484.4

1,757.1
1,941.1
2,077.3
2,290.6
2,503.3
2,720.3
2,899.7
3,100.2
3,353.6
3,598.5

214.2
231.3
240.2
280.8
326.5
363.5
403.0
421.7
453.6
471.8

696.1
758.9
787.6
831.2
884.6
928.7
958.4
1,015.3
1,083.5
1,166.7

846.9
950.8
1,049.4
1,178.6
1,292.2
1,428.1
1,538.3
1,663.3
1,816.5
1,960.0

479.3
572.4
517.2
564.3
735.6
736.2
746.5
785.0
821.6
874.9

485.6
542.6
532.1
570.1
670.2
714.4
739.9
757.8
803.1
847.3

362.4
420.0
426.5
417.2
489.6
526.2
519.8
524.1
563.8
607.7

136.2
167.3
177.6
154.3
177.4
194.5
176.5
174.2
182.8
193.7

226.2
252.7
248.9
262.9
312.2
331.7
343.3
349.9
381.0
414.0

123.2
122.6
105.7
152.9
180.6
188.2
220.1
233.7
239.3
239.5

−6.3
29.8
−14.9
−5.8
65.4
21.8
6.6
27.1
18.5
27.7

1990
1991
1992
1993
1994
1995
1996
1997
1998
1999

...................
...................
...................
...................
...................
...................
...................
...................
...................
...................

5,803.1
5,995.9
6,337.7
6,657.4
7,072.2
7,397.7
7,816.9
8,304.3
8,747.0
9,268.4

3,839.9
3,986.1
4,235.3
4,477.9
4,743.3
4,975.8
5,256.8
5,547.4
5,879.5
6,282.5

474.2
453.9
483.6
526.7
582.2
611.6
652.6
692.7
750.2
817.6

1,249.9
1,284.8
1,330.5
1,379.4
1,437.2
1,485.1
1,555.5
1,619.0
1,683.6
1,804.8

2,115.9
2,247.4
2,421.2
2,571.8
2,723.9
2,879.1
3,048.7
3,235.8
3,445.7
3,660.0

861.0
802.9
864.8
953.4
1,097.1
1,144.0
1,240.3
1,389.8
1,509.1
1,625.7

846.4
622.4
803.3
598.2
848.5
612.1
932.5
666.6
1,033.3
731.4
1,112.9
810.0
1,209.5
875.4
1,317.8
968.7
1,438.4 1,052.6
1,558.8 1,133.9

202.9
183.6
172.6
177.2
186.8
207.3
224.6
250.3
275.2
282.2

419.5
414.6
439.6
489.4
544.6
602.8
650.8
718.3
777.3
851.7

224.0
205.1
236.3
266.0
301.9
302.8
334.1
349.1
385.8
424.9

14.5
−.4
16.3
20.8
63.8
31.1
30.8
72.0
70.8
66.9

2000 ...................
2001 ...................
2002 ...................
2003 ...................
2004 p ................

9,817.0
10,128.0
10,487.0
11,004.0
11,728.0

6,739.4
7,055.0
7,376.1
7,760.9
8,231.1

863.3
883.7
916.2
950.7
995.7

1,947.2
2,017.1
2,080.1
2,200.1
2,376.5

3,928.8
4,154.3
4,379.8
4,610.1
4,859.0

1,735.5
1,614.3
1,579.2
1,665.8
1,922.4

1,679.0
1,646.1
1,568.0
1,667.0
1,879.3

1,232.1
1,176.8
1,063.9
1,094.7
1,217.6

313.2
322.6
271.6
261.6
277.0

918.9
854.2
792.4
833.1
940.7

446.9
469.3
504.1
572.3
661.7

56.5
−31.7
11.2
−1.2
43.1

2000: I ................
II ...............
III ..............
IV ..............

9,629.4
9,822.8
9,862.1
9,953.6

6,613.9
6,688.1
6,783.9
6,871.6

876.9
854.2
861.3
860.9

1,894.2
1,938.3
1,965.8
1,990.5

3,842.8
3,895.6
3,956.7
4,020.3

1,672.3
1,781.7
1,749.0
1,738.9

1,642.4
1,685.4
1,690.6
1,697.5

1,193.9
1,236.5
1,247.5
1,250.3

295.2
310.4
321.1
326.0

898.7
926.1
926.5
924.2

448.5
448.8
443.1
447.2

29.9
96.3
58.4
41.4

2001: I ................
II ...............
III ..............
IV ..............

10,021.5
10,128.9
10,135.1
10,226.3

6,955.8
7,017.5
7,058.5
7,188.4

872.1
864.7
865.1
932.8

2,000.0
2,016.6
2,024.2
2,027.5

4,083.7
4,136.2
4,169.1
4,228.0

1,675.3
1,647.7
1,613.0
1,521.4

1,685.2
1,654.7
1,644.8
1,599.6

1,229.6
1,187.1
1,167.2
1,123.2

323.9
325.7
335.8
305.2

905.7
861.4
831.4
818.1

455.6
467.6
477.6
476.3

−9.9
−7.0
−31.8
−78.2

2002: I ................
II ...............
III ..............
IV ..............

10,338.2
10,445.7
10,546.5
10,617.5

7,236.9
7,339.3
7,428.0
7,500.0

903.5
907.5
932.8
920.8

2,046.8
2,077.7
2,081.3
2,114.6

4,286.5
4,354.0
4,413.9
4,464.7

1,568.5
1,577.0
1,581.3
1,589.9

1,577.4
1,563.0
1,562.2
1,569.5

1,091.4
1,061.2
1,055.0
1,048.1

290.0
273.4
262.7
260.1

801.4
787.8
792.3
788.0

486.0
501.8
507.2
521.4

−8.9
14.0
19.1
20.4

2003: I ................
II ...............
III ..............
IV ..............

10,744.6
10,884.0
11,116.7
11,270.9

7,609.8
7,696.3
7,822.5
7,914.9

912.1
946.8
972.7
971.1

2,167.5
2,163.6
2,219.2
2,250.1

4,530.2
4,585.9
4,630.6
4,693.6

1,596.6
1,611.1
1,696.6
1,758.8

1,586.0
1,626.4
1,700.2
1,755.2

1,046.4
1,072.7
1,113.3
1,146.3

253.6
262.3
262.3
268.2

792.8
810.4
851.1
878.1

539.6
553.8
586.9
609.0

10.6
−15.3
−3.7
3.5

2004: I ................
II ...............
III ..............
IV p ...........

11,472.6
11,657.5
11,814.9
11,967.0

8,060.2
8,153.8
8,282.5
8,428.1

976.3
975.5
1,007.0
1,023.9

2,316.6
2,354.6
2,387.2
2,447.6

4,767.3
4,823.8
4,888.2
4,956.5

1,819.7
1,920.7
1,947.0
2,002.2

1,783.5
1,861.7
1,915.4
1,956.6

1,158.8
1,198.5
1,238.5
1,274.7

266.0
275.5
281.2
285.2

892.8
923.1
957.3
989.6

624.6
663.2
677.0
681.9

36.2
59.0
31.6
45.5

See next page for continuation of table.

208

TABLE B–1.—Gross domestic product, 1959–2004—Continued
[Billions of dollars, except as noted; quarterly data at seasonally adjusted annual rates]
Net exports of goods
and services
Year or
quarter

Government consumption expenditures
and gross investment
Federal

Net
exports

Exports

Imports

Total

Total

National
defense

Nondefense

State
and
local

AddenFinal
Gross
dum:
sales of domesGross
domestic
national
tic
purproduct chases 1 product 2

Percent change
from preceding
period
Gross
Gross
domes- domestic
tic
prodpuruct
chases 1

1959 ..........

0.4

22.7

22.3

110.0

65.4

53.8

11.5

44.7

502.7

506.2

509.3

8.4

8.5

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

..........
..........
..........
..........
..........
..........
..........
..........
..........
..........

4.2
4.9
4.1
4.9
6.9
5.6
3.9
3.6
1.4
1.4

27.0
27.6
29.1
31.1
35.0
37.1
40.9
43.5
47.9
51.9

22.8
22.7
25.0
26.1
28.1
31.5
37.1
39.9
46.6
50.5

111.6
119.5
130.1
136.4
143.2
151.5
171.8
192.7
209.4
221.5

64.1
67.9
75.3
76.9
78.5
80.4
92.5
104.8
111.4
113.4

53.4
56.5
61.1
61.0
60.3
60.6
71.7
83.5
89.3
89.5

10.7
11.4
14.2
15.9
18.2
19.8
20.8
21.3
22.1
23.8

47.5
51.6
54.9
59.5
64.8
71.0
79.2
87.9
98.0
108.2

523.2
541.7
579.5
612.1
658.8
709.9
774.2
822.7
900.9
975.4

522.2
539.8
581.5
612.8
656.7
713.5
783.9
829.0
908.6
983.2

529.5
548.2
589.7
622.2
668.5
724.4
792.9
838.0
916.1
990.7

3.9
3.5
7.5
5.5
7.4
8.4
9.5
5.7
9.3
8.2

3.2
3.4
7.7
5.4
7.2
8.6
9.9
5.8
9.6
8.2

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

..........
..........
..........
..........
..........
..........
..........
..........
..........
..........

4.0
.6
−3.4
4.1
−.8
16.0
−1.6
−23.1
−25.4
−22.5

59.7
63.0
70.8
95.3
126.7
138.7
149.5
159.4
186.9
230.1

55.8
62.3
74.2
91.2
127.5
122.7
151.1
182.4
212.3
252.7

233.8
246.5
263.5
281.7
317.9
357.7
383.0
414.1
453.6
500.8

113.5
113.7
119.7
122.5
134.6
149.1
159.7
175.4
190.9
210.6

87.6
84.6
87.0
88.2
95.6
103.9
111.1
120.9
130.5
145.2

25.8
29.1
32.7
34.3
39.0
45.1
48.6
54.5
60.4
65.4

120.3
132.8
143.8
159.2
183.4
208.7
223.3
238.7
262.6
290.2

1,036.5
1,118.9
1,229.2
1,366.8
1,486.0
1,644.6
1,808.2
2,008.6
2,268.9
2,545.3

1,034.6
1,126.5
1,241.7
1,378.6
1,500.8
1,622.4
1,826.9
2,054.0
2,320.1
2,585.9

1,044.9
1,134.7
1,246.8
1,395.3
1,515.5
1,651.3
1,842.1
2,051.2
2,316.3
2,595.3

5.5
8.5
9.9
11.7
8.5
9.2
11.4
11.3
13.0
11.7

5.2
8.9
10.2
11.0
8.9
8.1
12.6
12.4
13.0
11.5

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989

..........
..........
..........
..........
..........
..........
..........
..........
..........
..........

−13.1
−12.5
−20.0
−51.7
−102.7
−115.2
−132.7
−145.2
−110.4
−88.2

280.8
305.2
283.2
277.0
302.4
302.0
320.5
363.9
444.1
503.3

293.8
566.2
317.8
627.5
303.2
680.5
328.6
733.5
405.1
797.0
417.2
879.0
453.3
949.3
509.1
999.5
554.5 1,039.0
591.5 1,099.1

243.8
280.2
310.8
342.9
374.4
412.8
438.6
460.1
462.3
482.2

168.0
196.3
225.9
250.7
281.6
311.2
330.9
350.0
354.9
362.2

75.8
84.0
84.9
92.3
92.8
101.6
107.8
110.0
107.4
120.0

322.4
347.3
369.7
390.5
422.6
466.2
510.7
539.4
576.7
616.9

2,795.8
3,098.6
3,269.9
3,542.4
3,867.8
4,198.4
4,456.3
4,712.3
5,085.3
5,456.7

2,802.6
3,141.0
3,275.0
3,588.3
4,035.9
4,335.5
4,595.6
4,884.7
5,214.2
5,572.5

2,823.7
3,161.4
3,291.5
3,573.8
3,969.5
4,246.8
4,480.6
4,757.4
5,127.4
5,510.6

8.8
12.2
4.0
8.7
11.2
7.3
5.7
6.2
7.7
7.5

8.4
12.1
4.3
9.6
12.5
7.4
6.0
6.3
6.7
6.9

1990
1991
1992
1993
1994
1995
1996
1997
1998
1999

..........
..........
..........
..........
..........
..........
..........
..........
..........
..........

−78.0
−27.5
−33.2
−65.0
−93.6
−91.4
−96.2
−101.6
−159.9
−260.5

552.4
596.8
635.3
655.8
720.9
812.2
868.6
955.3
955.9
991.2

630.3
624.3
668.6
720.9
814.5
903.6
964.8
1,056.9
1,115.9
1,251.7

1,180.2
1,234.4
1,271.0
1,291.2
1,325.5
1,369.2
1,416.0
1,468.7
1,518.3
1,620.8

508.3
527.7
533.9
525.2
519.1
519.2
527.4
530.9
530.4
555.8

374.0
383.2
376.9
362.9
353.7
348.7
354.6
349.6
345.7
360.6

134.3 671.9
144.5 706.7
157.0 737.0
162.4 766.0
165.5 806.3
170.5 850.0
172.8 888.6
181.3 937.8
184.7 987.9
195.2 1,065.0

5,788.5
5,996.3
6,321.4
6,636.6
7,008.4
7,366.5
7,786.1
8,232.3
8,676.2
9,201.5

5,881.1
6,023.4
6,371.0
6,722.4
7,165.8
7,489.0
7,913.1
8,405.9
8,906.9
9,528.9

5,837.9
6,026.3
6,367.4
6,689.3
7,098.4
7,433.4
7,851.9
8,337.3
8,768.3
9,302.2

5.8
3.3
5.7
5.0
6.2
4.6
5.7
6.2
5.3
6.0

5.5
2.4
5.8
5.5
6.6
4.5
5.7
6.2
6.0
7.0

2000 ..........
2001 ..........
2002 ..........
2003 ..........
2004 p ........

−379.5
−367.0
−424.9
−498.1
−609.3

1,096.3
1,032.8
1,005.0
1,046.2
1,170.2

1,475.8
1,399.8
1,429.9
1,544.3
1,779.6

1,721.6
1,825.6
1,956.6
2,075.5
2,183.8

578.8
612.9
680.8
752.2
810.0

370.3
392.6
437.4
496.4
548.1

208.5
220.3
243.4
255.7
261.9

1,142.8
1,212.8
1,275.8
1,323.3
1,373.9

9,760.5
10,159.7
10,475.9
11,005.3
11,684.9

10,196.4
10,495.0
10,911.9
11,502.2
12,337.3

9,855.9
10,171.6
10,514.1
11,059.2
..............

5.9
3.2
3.5
4.9
6.6

7.0
2.9
4.0
5.4
7.3

2000: I .......
II ......
III .....
IV .....

−346.4
−366.9
−400.7
−403.9

1,055.1
1,091.8
1,122.4
1,115.8

1,401.5
1,458.7
1,523.1
1,519.7

1,689.6
1,720.0
1,729.9
1,746.9

565.3
586.6
581.2
582.0

360.9
375.2
371.3
373.8

204.4
211.4
209.9
208.2

1,124.3
1,133.4
1,148.6
1,164.9

9,599.6 9,975.8 9,661.9
9,726.5 10,189.7 9,859.6
9,803.7 10,262.8 9,893.6
9,912.2 10,357.5 10,008.4

4.7
8.3
1.6
3.8

6.6
8.9
2.9
3.7

2001: I .......
II ......
III .....
IV .....

−392.9 1,100.7
−361.7 1,060.5
−361.9 1,003.5
−351.6
966.6

1,493.7
1,422.2
1,365.3
1,318.2

1,783.3
1,825.4
1,825.6
1,868.2

596.2
610.9
614.3
630.1

383.5
388.3
393.0
405.6

212.7
222.6
221.3
224.5

1,187.2
1,214.5
1,211.2
1,238.1

10,031.4
10,136.0
10,166.9
10,304.5

10,414.4
10,490.6
10,497.0
10,577.9

10,060.2
10,173.5
10,151.8
10,300.9

2.8
4.4
.2
3.6

2.2
3.0
.2
3.1

2002: I .......
II ......
III .....
IV .....

−376.3
975.0
−415.4 1,008.1
−431.1 1,023.4
−476.6 1,013.5

1,351.3
1,423.5
1,454.5
1,490.1

1,909.2
1,944.9
1,968.3
2,004.2

654.2
676.6
684.4
708.2

418.5
431.7
438.5
461.0

235.8
244.9
245.9
247.2

1,255.0
1,268.3
1,283.9
1,296.0

10,347.2
10,431.7
10,527.4
10,597.1

10,714.6
10,861.2
10,977.6
11,094.1

10,361.7
10,461.6
10,571.7
10,661.2

4.5
4.2
3.9
2.7

5.3
5.6
4.4
4.3

2003: I .......
II ......
III .....
IV .....

−503.3
−497.6
−488.8
−502.8

1,019.8
1,018.1
1,047.7
1,099.2

1,523.0
1,515.7
1,536.4
1,602.0

2,041.4
2,074.2
2,086.4
2,100.0

723.4
761.1
756.7
767.5

467.4
506.7
498.1
513.6

256.0
254.4
258.7
253.9

1,318.0
1,313.1
1,329.7
1,332.6

10,734.0
10,899.3
11,120.4
11,267.4

11,247.8
11,381.6
11,605.5
11,773.7

10,781.3
10,929.0
11,168.3
11,358.1

4.9
5.3
8.8
5.7

5.7
4.8
8.1
5.9

2004: I .......
II ......
III .....
IV p ...

−546.8
−591.3
−611.8
−687.5

1,134.3
1,167.6
1,189.5
1,189.6

1,681.2
1,758.9
1,801.2
1,877.1

2,139.5
2,174.3
2,197.2
2,224.3

793.3
804.4
817.4
824.8

534.1
541.2
557.0
559.9

259.1
263.2
260.4
264.9

1,346.3
1,369.9
1,379.8
1,399.5

11,436.4
11,598.5
11,783.3
11,921.5

12,019.4
12,248.8
12,426.6
12,654.5

11,546.1
11,693.6
11,853.0
..............

7.4
6.6
5.5
5.3

8.6
7.9
5.9
7.5

1 Gross

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

209

TABLE B–2.—Real gross domestic product, 1959–2004
[Billions of chained (2000) 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

Total

Durable
goods

Nondurable
goods

Nonresidential
Services

Total

Total

Total

Structures

Equipment
and
software

Residential

Change
in
private
inventories

1959 ...............

2,441.3

1,554.6 .............. ................ ..............

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
1994
1995
1996
1997
1998
1999

...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
..............

2,501.8
2,560.0
2,715.2
2,834.0
2,998.6
3,191.1
3,399.1
3,484.6
3,652.7
3,765.4
3,771.9
3,898.6
4,105.0
4,341.5
4,319.6
4,311.2
4,540.9
4,750.5
5,015.0
5,173.4
5,161.7
5,291.7
5,189.3
5,423.8
5,813.6
6,053.7
6,263.6
6,475.1
6,742.7
6,981.4
7,112.5
7,100.5
7,336.6
7,532.7
7,835.5
8,031.7
8,328.9
8,703.5
9,066.9
9,470.3

1,597.4
1,630.3
1,711.1
1,781.6
1,888.4
2,007.7
2,121.8
2,185.0
2,310.5
2,396.4
2,451.9
2,545.5
2,701.3
2,833.8
2,812.3
2,876.9
3,035.5
3,164.1
3,303.1
3,383.4
3,374.1
3,422.2
3,470.3
3,668.6
3,863.3
4,064.0
4,228.9
4,369.8
4,546.9
4,675.0
4,770.3
4,778.4
4,934.8
5,099.8
5,290.7
5,433.5
5,619.4
5,831.8
6,125.8
6,438.6

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
453.5
427.9
453.0
488.4
529.4
552.6
595.9
646.9
720.3
804.6

................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
1,484.0
1,480.5
1,510.1
1,550.4
1,603.9
1,638.6
1,680.4
1,725.3
1,794.4
1,876.6

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
2,851.7
2,900.0
3,000.8
3,085.7
3,176.6
3,259.9
3,356.0
3,468.0
3,615.0
3,758.0

266.7 .............. .............. .............. .............. ............ ..............
266.6
264.9
298.4
318.5
344.7
393.1
427.7
408.1
431.9
457.1
427.1
475.7
532.1
594.4
550.6
453.1
544.7
627.0
702.6
725.0
645.3
704.9
606.0
662.5
857.7
849.7
843.9
870.0
890.5
926.2
895.1
822.2
889.0
968.3
1,099.6
1,134.0
1,234.3
1,387.7
1,524.1
1,642.6

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
886.6
829.1
878.3
953.5
1,042.3
1,109.6
1,209.2
1,320.6
1,455.0
1,576.3

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
595.1
563.2
581.3
631.9
689.9
762.5
833.6
934.2
1,037.8
1,133.3

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
275.2
244.6
229.9
228.3
232.3
247.1
261.1
280.1
294.5
293.2

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
355.0
345.9
371.1
417.4
467.2
523.1
578.7
658.3
745.6
840.2

............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
298.9
270.2
307.6
332.7
364.8
353.1
381.3
388.6
418.3
443.6

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
15.4
−.5
16.5
20.6
63.6
29.9
28.7
71.2
72.6
68.9

2000 ...............
2001 ...............
2002 ...............
2003 ...............
2004 p ............

9,817.0
9,890.7
10,074.8
10,381.3
10,837.2

6,739.4
6,910.4
7,123.4
7,355.6
7,634.7

863.3
900.7
959.6
1,030.6
1,101.3

1,947.2
1,986.7
2,037.4
2,112.4
2,208.3

3,928.8
4,023.2
4,128.6
4,220.3
4,339.0

1,735.5
1,598.4
1,560.7
1,628.8
1,839.1

1,679.0
1,629.4
1,548.9
1,627.3
1,790.4

1,232.1
1,180.5
1,075.6
1,110.8
1,225.6

313.2
306.1
251.6
237.4
239.7

918.9
874.2
826.5
879.2
996.6

446.9
448.5
470.0
511.2
559.6

56.5
−31.7
11.7
−.8
45.3

2000: I ............
II ..........
III .........
IV .........
2001: I ............
II ..........
III .........
IV .........
2002: I ............
II ..........
III .........
IV .........
2003: I ............
II ..........
III .........
IV .........
2004: I ............
II ..........
III .........
IV p .......

9,695.6
9,847.9
9,836.6
9,887.7
9,875.6
9,905.9
9,871.1
9,910.0
9,993.5
10,052.6
10,117.3
10,135.9
10,184.4
10,287.4
10,472.8
10,580.7
10,697.5
10,784.7
10,891.0
10,975.7

6,661.3
6,703.3
6,768.0
6,825.0
6,853.1
6,870.3
6,900.5
7,017.6
7,049.7
7,099.2
7,149.9
7,194.6
7,242.2
7,311.4
7,401.7
7,466.8
7,543.0
7,572.4
7,667.8
7,755.4

872.8
851.3
863.8
865.4
879.5
878.9
885.6
958.7
937.8
947.8
979.3
973.4
973.2
1,020.0
1,059.6
1,069.7
1,075.5
1,074.7
1,118.3
1,136.6

1,917.2
1,944.0
1,955.0
1,972.7
1,975.2
1,974.7
1,986.5
2,010.3
2,029.3
2,033.2
2,030.2
2,056.8
2,082.0
2,090.1
2,125.3
2,152.0
2,187.3
2,188.0
2,213.2
2,244.7

3,871.1
3,908.2
3,949.3
3,986.8
3,997.9
4,016.0
4,027.8
4,051.2
4,084.1
4,119.7
4,143.8
4,166.9
4,188.7
4,207.7
4,227.9
4,256.7
4,291.7
4,320.0
4,352.4
4,391.8

1,678.0
1,788.6
1,742.6
1,732.7
1,670.3
1,637.4
1,592.6
1,493.4
1,552.5
1,553.7
1,569.2
1,567.3
1,564.0
1,577.6
1,659.4
1,714.1
1,764.5
1,842.9
1,853.9
1,895.1

1,651.1
1,689.1
1,686.4
1,689.4
1,678.2
1,640.5
1,621.9
1,577.0
1,559.6
1,545.9
1,546.6
1,543.5
1,552.7
1,593.4
1,660.6
1,702.7
1,721.4
1,778.3
1,816.1
1,845.7

1,196.7
1,238.6
1,245.2
1,247.9
1,234.4
1,190.2
1,169.3
1,128.2
1,099.8
1,072.4
1,069.5
1,060.9
1,060.5
1,090.6
1,131.1
1,161.0
1,173.0
1,207.9
1,245.3
1,276.3

299.9
312.5
319.7
320.6
313.8
310.6
315.1
284.9
270.7
253.9
243.0
238.9
230.7
238.7
237.9
242.4
237.7
241.7
241.0
238.5

896.7
926.0
925.5
927.3
920.8
879.2
852.9
843.8
830.1
820.6
829.8
825.5
834.6
856.7
899.7
925.6
943.7
975.5
1,015.6
1,051.5

454.5
450.4
441.2
441.6
444.0
450.1
452.1
447.8
457.8
470.3
473.6
478.5
487.3
497.9
523.8
535.9
542.5
563.6
565.9
566.3

26.9
99.3
56.2
43.5
−7.8
−2.5
−29.9
−86.7
−7.4
7.9
22.7
23.8
9.6
−17.6
−3.5
8.6
40.0
61.1
34.5
45.8

See next page for continuation of table.

210

TABLE B–2.—Real gross domestic product, 1959–2004—Continued
[Billions of chained (2000) dollars, except as noted; quarterly data at seasonally adjusted annual rates]
Net exports of goods
and services
Year or
quarter

Government consumption expenditures
and gross investment
Federal

Net
exports

Exports Imports

Total

Total

National
defense

Nondefense

State
and
local

Final
sales of
domestic
product

Gross
domestic
purchases 1

Addendum:
Gross
national
product 2

Percent change
from preceding
period
Gross
Gross
domes- domestic
tic
prodpuruct
chases 1

1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............

77.2
90.6
91.1
95.7
102.5
114.6
117.8
126.0
128.9
139.0
145.7

101.9
714.3 ............ ..............
103.3
715.4 ............ ..............
102.6
751.3 ............ ..............
114.3
797.6 ............ ..............
117.3
818.1 ............ ..............
123.6
836.1 ............ ..............
136.7
861.3 ............ ..............
157.1
937.1 ............ ..............
168.5 1,008.9 ............ ..............
193.6 1,040.5 ............ ..............
204.6 1,038.0 ............ ..............

............
............
............
............
............
............
............
............
............
............
............

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............

2,442.7
2,506.8
2,566.8
2,708.5
2,830.3
2,999.9
3,173.8
3,364.8
3,467.6
3,640.3
3,753.7

2,485.9
2,529.6
2,587.6
2,751.4
2,866.0
3,023.2
3,228.6
3,450.3
3,545.1
3,727.5
3,844.1

2,457.4
2,519.4
2,579.3
2,736.9
2,857.2
3,023.6
3,217.3
3,423.7
3,510.1
3,680.0
3,792.0

7.1
2.5
2.3
6.1
4.4
5.8
6.4
6.5
2.5
4.8
3.1

7.1
1.8
2.3
6.3
4.2
5.5
6.8
6.9
2.7
5.1
3.1

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

.........
.........
.........
.........
.........
.........
.........
.........
.........
.........

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............

161.4
164.1
176.5
209.7
226.3
224.9
234.7
240.3
265.7
292.0

213.4
224.7
250.0
261.6
255.7
227.3
271.7
301.4
327.6
333.0

1,012.9
990.8
983.5
980.0
1,004.7
1,027.4
1,031.9
1,043.3
1,074.0
1,094.1

............
............
............
............
............
............
............
............
............
............

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............

............
............
............
............
............
............
............
............
............
............

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............

3,787.7
3,893.4
4,098.6
4,315.9
4,305.5
4,352.5
4,522.3
4,721.6
4,981.6
5,161.2

3,837.4
3,974.2
4,192.8
4,399.1
4,343.8
4,297.0
4,575.0
4,818.5
5,081.5
5,206.8

3,798.2
3,927.8
4,136.2
4,383.6
4,367.5
4,348.4
4,585.3
4,800.3
5,064.4
5,240.1

.2
3.4
5.3
5.8
−.5
−.2
5.3
4.6
5.6
3.2

−.2
3.6
5.5
4.9
−1.3
−1.1
6.5
5.3
5.5
2.5

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989

.........
.........
.........
.........
.........
.........
.........
.........
.........
.........

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............

323.5
327.4
302.4
294.6
318.7
328.3
353.7
391.8
454.6
506.8

310.9
319.1
315.0
354.8
441.1
469.8
510.0
540.2
561.4
586.0

1,115.4
1,125.6
1,145.4
1,187.3
1,227.0
1,312.5
1,392.5
1,426.7
1,445.1
1,482.5

............
............
............
............
............
............
............
............
............
............

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............

............
............
............
............
............
............
............
............
............
............

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............

5,196.7
5,265.1
5,233.4
5,454.0
5,739.2
6,042.1
6,271.8
6,457.2
6,734.5
6,962.2

5,108.9
5,244.7
5,175.1
5,477.6
5,951.6
6,215.8
6,443.6
6,644.1
6,857.9
7,060.8

5,227.6
5,349.7
5,249.7
5,482.5
5,869.3
6,093.4
6,290.6
6,500.9
6,775.2
7,015.4

−.2
2.5
−1.9
4.5
7.2
4.1
3.5
3.4
4.1
3.5

−1.9
2.7
−1.3
5.8
8.7
4.4
3.7
3.1
3.2
3.0

1990
1991
1992
1993
1994
1995
1996
1997
1998
1999

.........
.........
.........
.........
.........
.........
.........
.........
.........
.........

−54.7
552.5
607.1 1,530.0
−14.6
589.1
603.7 1,547.2
−15.9
629.7
645.6 1,555.3
−52.1
650.0
702.1 1,541.1
−79.4
706.5
785.9 1,541.3
−71.0
778.2
849.1 1,549.7
−79.6
843.4
923.0 1,564.9
−104.6
943.7 1,048.3 1,594.0
−203.7
966.5 1,170.3 1,624.4
−296.2 1,008.2 1,304.4 1,686.9

659.1
658.0
646.6
619.6
596.4
580.3
573.5
567.6
561.2
573.7

479.4
474.2
450.7
425.3
404.6
389.2
383.8
373.0
365.3
372.2

178.6
868.4
182.8
886.8
195.4
906.5
194.1
919.5
191.7
943.3
191.0
968.3
189.6
990.5
194.5 1,025.9
195.9 1,063.0
201.5 1,113.2

7,108.5
7,115.0
7,331.1
7,522.3
7,777.8
8,010.2
8,306.5
8,636.6
8,997.6
9,404.0

7,161.6
7,101.2
7,338.9
7,577.2
7,911.3
8,098.4
8,405.7
8,807.6
9,272.5
9,767.7

7,155.2
7,136.8
7,371.8
7,568.6
7,864.2
8,069.8
8,365.3
8,737.5
9,088.7
9,504.7

1.9
−.2
3.3
2.7
4.0
2.5
3.7
4.5
4.2
4.5

1.4
−.8
3.3
3.2
4.4
2.4
3.8
4.8
5.3
5.3

2000 .........
2001 .........
2002 .........
2003 .........
2004 p .......

−379.5
−399.1
−472.1
−518.5
−586.4

1,096.3
1,036.7
1,012.3
1,031.8
1,115.3

1,475.8
1,435.8
1,484.4
1,550.3
1,701.7

1,721.6
1,780.3
1,857.9
1,909.4
1,946.7

578.8
601.4
646.6
689.6
721.9

370.3
384.9
414.6
451.8
485.1

208.5
216.5
232.0
237.6
236.4

1,142.8
1,179.0
1,211.4
1,219.8
1,224.7

9,760.5
9,920.9
10,063.2
10,379.9
10,790.2

10,196.4
9,855.9
10,290.1
9,933.6
10,544.6 10,101.7
10,895.7 10,433.9
11,416.8 ................

3.7
.8
1.9
3.0
4.4

4.4
.9
2.5
3.3
4.8

2000: I ......
II .....
III ....
IV ...

−350.6
−374.5
−395.6
−397.2

1,060.9
1,092.0
1,120.0
1,112.3

1,411.5
1,466.5
1,515.6
1,509.5

1,707.3
1,730.5
1,721.5
1,727.1

568.2
591.2
578.6
577.2

362.6
377.1
369.9
371.5

205.6
214.0
208.7
205.6

1,139.2
1,139.3
1,142.9
1,149.9

9,668.8
9,748.4
9,780.4
9,844.3

10,046.5
10,222.4
10,232.1
10,284.7

9,729.0
9,885.3
9,867.8
9,941.6

1.0
6.4
−.5
2.1

2.5
7.2
.4
2.1

2001: I ......
II .....
III ...
IV ...

−398.2 1,097.2 1,495.4 1,749.6
−385.2 1,060.6 1,445.8 1,783.0
−398.4 1,008.7 1,407.1 1,776.1
−414.5
980.3 1,394.9 1,812.7

588.5
601.4
601.5
614.2

377.9
381.9
384.1
395.6

210.6
219.5
217.3
218.6

1,161.1
1,181.6
1,174.6
1,198.5

9,883.2
9,908.7
9,899.9
9,992.3

10,273.2
10,291.3
10,270.1
10,325.6

9,913.6
9,949.8
9,887.7
9,983.1

−.5
1.2
−1.4
1.6

−.4
.7
−.8
2.2

2002: I ......
II .....
III ...
IV ...

−444.9
991.6 1,436.5 1,833.5
−458.1 1,017.8 1,475.9 1,853.4
−469.8 1,025.5 1,495.3 1,863.1
−515.4 1,014.5 1,529.8 1,881.6

626.4
645.5
650.1
664.5

401.3
412.3
415.8
429.2

225.2
233.2
234.3
235.3

1,207.2
1,208.0
1,213.1
1,217.3

10,000.4
10,044.9
10,095.2
10,112.5

10,437.7
10,508.9
10,584.8
10,646.7

10,017.2
10,068.9
10,142.4
10,178.4

3.4
2.4
2.6
.7

4.4
2.8
2.9
2.4

2003: I ......
II .....
III ...
IV ...

−511.7
−525.2
−508.7
−528.3

1,010.6
1,006.5
1,033.8
1,076.2

1,522.3
1,531.7
1,542.5
1,604.5

1,882.5
1,915.3
1,916.0
1,923.7

665.0
699.0
693.1
701.2

426.2
462.3
453.1
465.7

238.8
236.5
239.9
235.2

1,217.7
1,216.3
1,222.9
1,222.5

10,173.3
10,302.5
10,473.9
10,569.6

10,692.0
10,808.1
10,978.3
11,104.3

10,220.3
10,330.8
10,521.7
10,663.3

1.9
4.1
7.4
4.2

1.7
4.4
6.4
4.7

2004: I ......
II .....
III ...
IV p ..

−550.1
−580.3
−583.2
−631.9

1,095.4
1,114.8
1,131.1
1,120.0

1,645.5
1,695.1
1,714.3
1,751.9

1,935.8
1,946.5
1,949.9
1,954.5

713.3
718.1
726.6
729.5

477.6
479.9
491.5
491.5

235.4
237.9
234.7
237.6

1,222.4
1,228.3
1,223.2
1,224.9

10,655.8
10,722.3
10,854.7
10,928.1

11,241.9 10,766.7
11,358.1 10,818.7
11,467.4 10,926.5
11,599.6 ................

4.5
3.3
4.0
3.1

5.0
4.2
3.9
4.7

1 Gross
2 GDP

domestic product (GDP) less exports of goods and services plus imports of goods and services.
plus net income receipts from rest of the world.

Source: Department of Commerce, Bureau of Economic Analysis.

211

TABLE B–3.—Quantity and price indexes for gross domestic product, and percent changes, 1959–2004
[Quarterly data are seasonally adjusted]
Gross domestic product (GDP)
Index numbers, 2000=100
Year or quarter

Real GDP
(chain-type
quantity
index)

GDP
chain-type
price
index

1959 ............................................................

24.868

20.754

20.751

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................

25.484
26.077
27.658
28.868
30.545
32.506
34.625
35.496
37.208
38.356

21.044
21.281
21.572
21.801
22.134
22.538
23.180
23.897
24.916
26.153

21.041
21.278
21.569
21.798
22.131
22.535
23.176
23.893
24.913
26.149

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................

38.422
39.713
41.815
44.224
44.001
43.916
46.256
48.391
51.085
52.699

27.538
28.916
30.171
31.854
34.721
38.007
40.202
42.758
45.762
49.553

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989

............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................

52.579
53.904
52.860
55.249
59.220
61.666
63.804
65.958
68.684
71.116

1990
1991
1992
1993
1994
1995
1996
1997
1998
1999

............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................
............................................................

1

Real GDP
(chain-type
quantity
index)

GDP
chain-type
price
index

8.4

7.1

1.2

1.2

3.9
3.5
7.5
5.5
7.4
8.4
9.5
5.7
9.3
8.2

2.5
2.3
6.1
4.4
5.8
6.4
6.5
2.5
4.8
3.1

1.4
1.1
1.4
1.1
1.5
1.8
2.8
3.1
4.3
5.0

1.4
1.1
1.4
1.1
1.5
1.8
2.8
3.1
4.3
5.0

27.534
28.911
30.166
31.849
34.725
38.002
40.196
42.752
45.757
49.548

5.5
8.5
9.9
11.7
8.5
9.2
11.4
11.3
13.0
11.7

.2
3.4
5.3
5.8
−.5
−.2
5.3
4.6
5.6
3.2

5.3
5.0
4.3
5.6
9.0
9.5
5.8
6.4
7.0
8.3

5.3
5.0
4.3
5.6
9.0
9.4
5.8
6.4
7.0
8.3

54.062
59.128
62.738
65.214
67.664
69.724
71.269
73.204
75.706
78.569

54.043
59.119
62.726
65.207
67.655
69.713
71.250
73.196
75.694
78.556

8.8
12.2
4.0
8.7
11.2
7.3
5.7
6.2
7.7
7.5

−.2
2.5
−1.9
4.5
7.2
4.1
3.5
3.4
4.1
3.5

9.1
9.4
6.1
3.9
3.8
3.0
2.2
2.7
3.4
3.8

9.1
9.4
6.1
4.0
3.8
3.0
2.2
2.7
3.4
3.8

72.451
72.329
74.734
76.731
79.816
81.814
84.842
88.658
92.359
96.469

81.614
84.457
86.402
88.390
90.265
92.115
93.859
95.415
96.475
97.868

81.590
84.444
86.385
88.381
90.259
92.106
93.852
95.414
96.472
97.868

5.8
3.3
5.7
5.0
6.2
4.6
5.7
6.2
5.3
6.0

1.9
−.2
3.3
2.7
4.0
2.5
3.7
4.5
4.2
4.5

3.9
3.5
2.3
2.3
2.1
2.0
1.9
1.7
1.1
1.4

3.9
3.5
2.3
2.3
2.1
2.0
1.9
1.7
1.1
1.4

2000 ............................................................
2001 ............................................................
2002 ............................................................
2003 ............................................................
2004 p ..........................................................

100.000
100.751
102.626
105.749
110.393

100.000
102.402
104.097
106.003
108.281

100.000
102.399
104.092
105.998
108.220

5.9
3.2
3.5
4.9
6.6

3.7
.8
1.9
3.0
4.4

2.2
2.4
1.7
1.8
2.1

2.2
2.4
1.7
1.8
2.1

2000: I ..........................................................
II ........................................................
III .......................................................
IV .......................................................

98.764
100.315
100.200
100.721

99.292
99.780
100.241
100.687

99.317
99.745
100.259
100.666

4.7
8.3
1.6
3.8

1.0
6.4
−.5
2.1

3.4
2.0
1.9
1.8

3.6
1.7
2.1
1.6

2001: I ..........................................................
II ........................................................
III .......................................................
IV .......................................................

100.597
100.906
100.551
100.948

101.507
102.290
102.690
103.122

101.478
102.252
102.675
103.191

2.8
4.4
.2
3.6

−.5
1.2
−1.4
1.6

3.3
3.1
1.6
1.7

3.3
3.1
1.7
2.0

2002: I ..........................................................
II ........................................................
III .......................................................
IV .......................................................

101.798
102.400
103.059
103.249

103.470
103.853
104.280
104.786

103.450
103.911
104.243
104.752

4.5
4.2
3.9
2.7

3.4
2.4
2.6
.7

1.4
1.5
1.7
2.0

1.0
1.8
1.3
2.0

2003: I ..........................................................
II ........................................................
III .......................................................
IV .......................................................

103.743
104.792
106.681
107.780

105.490
105.780
106.158
106.586

105.500
105.799
106.148
106.523

4.9
5.3
8.8
5.7

1.9
4.1
7.4
4.2

2.7
1.1
1.4
1.6

2.9
1.1
1.3
1.4

2004: I ..........................................................
II ........................................................
III .......................................................
IV p .....................................................

108.969
109.858
110.941
111.803

107.314
108.169
108.551
109.091

107.246
108.093
108.482
109.033

7.4
6.6
5.5
5.3

4.5
3.3
4.0
3.1

2.8
3.2
1.4
2.0

2.7
3.2
1.4
2.0

1 Quarterly

percent changes are at annual rates.

Source: Department of Commerce, Bureau of Economic Analysis.

212

GDP
implicit
price
deflator

Percent change from preceding period
GDP
(current
dollars)

GDP
implicit
price
deflator

TABLE B–4.—Percent changes in real gross domestic product, 1959–2004
[Percent change from preceding period; quarterly data at seasonally adjusted annual rates]
Personal consumption
expenditures
Year or
quarter

Gross
domestic
product

Exports and imports of goods
and services

Government consumption expenditures and
gross investment

Residential
fixed

Exports

Imports

Total

Gross private domestic
investment
Nonresidential fixed

Total

Durable
goods

Nondurable
goods

Services

Total

Structures

Equipment
and
software

Federal

State
and
local

1959 ............

7.1

5.6

12.1

4.1

5.3

8.0

2.4

11.9

25.4

10.3

10.5

3.4

3.1

3.8

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

............
............
............
............
............
............
............
............
............
............

2.5
2.3
6.1
4.4
5.8
6.4
6.5
2.5
4.8
3.1

2.8
2.1
5.0
4.1
6.0
6.3
5.7
3.0
5.7
3.7

2.0
−3.8
11.7
9.7
9.3
12.7
8.4
1.6
11.0
3.5

1.5
1.8
3.1
2.1
4.9
5.3
5.5
1.6
4.6
2.7

4.5
4.2
5.0
4.6
6.1
5.3
5.0
4.9
5.2
4.8

5.7
−.6
8.7
5.6
11.9
17.4
12.5
−1.4
4.5
7.6

7.9
1.4
4.5
1.1
10.4
15.9
6.8
−2.5
1.5
5.4

4.2
−1.9
11.6
8.4
12.8
18.3
16.0
−.7
6.2
8.8

−7.1
.3
9.6
11.8
5.8
−2.9
−8.9
−3.1
13.6
3.0

17.4
.5
5.1
7.1
11.8
2.8
6.9
2.3
7.9
4.8

1.3
−.7
11.3
2.7
5.3
10.6
14.9
7.3
14.9
5.7

.2
5.0
6.2
2.6
2.2
3.0
8.8
7.7
3.1
−.2

−2.7
4.2
8.5
.1
−1.3
.0
11.0
9.9
.8
−3.4

4.4
6.2
3.1
6.0
6.8
6.7
6.3
5.0
5.9
3.4

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

............
............
............
............
............
............
............
............
............
............

.2
3.4
5.3
5.8
−.5
−.2
5.3
4.6
5.6
3.2

2.3
3.8
6.1
4.9
−.8
2.3
5.5
4.2
4.4
2.4

−3.2
10.0
12.7
10.3
−6.9
.0
12.8
9.3
5.3
−.3

2.4
1.8
4.4
3.3
−2.0
1.5
4.9
2.4
3.7
2.7

4.0
3.9
5.7
4.7
2.3
3.7
4.1
4.3
4.7
3.1

−.5
.0
9.2
14.6
.8
−9.9
4.9
11.3
15.0
10.1

.3
−1.6
3.1
8.2
−2.1
−10.5
2.4
4.1
14.4
12.7

−1.0
1.0
12.9
18.3
2.6
−9.5
6.2
15.1
15.2
8.7

−6.0
27.4
17.8
−.6
−20.6
−13.0
23.6
21.5
6.3
−3.7

10.7
1.7
7.5
18.9
7.9
−.6
4.4
2.4
10.5
9.9

4.3
5.3
11.3
4.6
−2.3
−11.1
19.5
10.9
8.7
1.7

−2.4
−2.2
−.7
−.4
2.5
2.3
.4
1.1
2.9
1.9

−7.4
−7.7
−4.1
−4.2
.9
.3
.0
2.1
2.5
2.4

2.8
3.1
2.2
2.8
3.8
3.7
.7
.4
3.3
1.5

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989

............
............
............
............
............
............
............
............
............
............

−.2
2.5
−1.9
4.5
7.2
4.1
3.5
3.4
4.1
3.5

−.3
1.4
1.4
5.7
5.3
5.2
4.1
3.3
4.1
2.8

−7.8
1.2
−.1
14.6
14.6
10.1
9.7
1.7
6.0
2.2

−.2
1.2
1.0
3.3
4.0
2.7
3.6
2.4
3.3
2.8

1.8
1.7
2.1
5.5
4.1
5.6
2.9
4.3
4.0
3.0

−.3
5.7
−3.8
−1.3
17.7
6.6
−2.9
−.1
5.2
5.6

5.8
8.0
−1.7
−10.8
14.0
7.1
−11.0
−2.9
.6
2.0

−3.6
4.3
−5.2
5.4
19.8
6.4
1.9
1.4
7.5
7.3

−21.2
−8.0
−18.2
41.4
14.8
1.6
12.3
2.0
−1.0
−3.0

10.8
1.2
−7.6
−2.6
8.2
3.0
7.7
10.8
16.0
11.5

−6.6
2.6
−1.3
12.6
24.3
6.5
8.6
5.9
3.9
4.4

2.0
.9
1.8
3.7
3.3
7.0
6.1
2.5
1.3
2.6

4.7
4.8
3.9
6.6
3.1
7.8
5.7
3.6
−1.6
1.5

−.1
−2.0
.1
1.2
3.6
6.2
6.4
1.5
3.7
3.4

1990
1991
1992
1993
1994
1995
1996
1997
1998
1999

............
............
............
............
............
............
............
............
............
............

1.9
−.2
3.3
2.7
4.0
2.5
3.7
4.5
4.2
4.5

2.0
.2
3.3
3.3
3.7
2.7
3.4
3.8
5.0
5.1

−.3
−5.6
5.9
7.8
8.4
4.4
7.8
8.6
11.3
11.7

1.6
−.2
2.0
2.7
3.5
2.2
2.6
2.7
4.0
4.6

2.9
1.7
3.5
2.8
2.9
2.6
2.9
3.3
4.2
4.0

.5
−5.4
3.2
8.7
9.2
10.5
9.3
12.1
11.1
9.2

1.5
−11.1
−6.0
−.7
1.8
6.4
5.6
7.3
5.1
−.4

.0
−2.6
7.3
12.5
11.9
12.0
10.6
13.8
13.3
12.7

−8.6
−9.6
13.8
8.2
9.6
−3.2
8.0
1.9
7.6
6.0

9.0
6.6
6.9
3.2
8.7
10.1
8.4
11.9
2.4
4.3

3.6
−.6
7.0
8.8
11.9
8.0
8.7
13.6
11.6
11.5

3.2
1.1
.5
−.9
.0
.5
1.0
1.9
1.9
3.9

2.0
−.2
−1.7
−4.2
−3.7
−2.7
−1.2
−1.0
−1.1
2.2

4.1
2.1
2.2
1.4
2.6
2.6
2.3
3.6
3.6
4.7

2000 ............
2001 ............
2002 ............
2003 ............
2004 p ..........

3.7
.8
1.9
3.0
4.4

4.7
2.5
3.1
3.3
3.8

7.3
4.3
6.5
7.4
6.9

3.8
2.0
2.6
3.7
4.5

4.5
2.4
2.6
2.2
2.8

8.7
−4.2
−8.9
3.3
10.3

6.8
−2.3
−17.8
−5.6
1.0

9.4
−4.9
−5.5
6.4
13.4

.8
.4
4.8
8.8
9.5

8.7
−5.4
−2.3
1.9
8.1

13.1
−2.7
3.4
4.4
9.8

2.1
3.4
4.4
2.8
2.0

.9
3.9
7.5
6.6
4.7

2.7
3.2
2.8
.7
.4

2000: I .........
II ........
III ......
IV .......

1.0
6.4
−.5
2.1

6.5
2.5
3.9
3.4

24.4
−9.5
6.0
.7

.3
5.7
2.3
3.7

6.0
3.9
4.3
3.9

14.3
14.8
2.2
.9

7.0
18.0
9.6
1.2

16.9
13.7
−.2
.8

4.1
−3.5
−8.0
.4

6.6
12.3
10.7
−2.7

16.7
16.5
14.1
−1.6

−3.0
5.5
−2.1
1.3

−13.9
17.2
−8.2
−1.0

3.2
.1
1.3
2.5

2001: I .........
II ........
III .......
IV .......

−.5
1.2
−1.4
1.6

1.7
1.0
1.8
7.0

6.7
−.3
3.1
37.4

.5
−.1
2.4
4.9

1.1
1.8
1.2
2.3

−4.2
−13.6
−6.8
−13.3

−8.3
−4.0
6.0
−33.2

−2.8
−16.9
−11.4
−4.2

2.2
5.6
1.8
−3.7

−5.3
−12.7
−18.2
−10.8

−3.7
−12.6
−10.3
−3.4

5.3
7.9
−1.5
8.5

8.1
9.1
.0
8.8

4.0
7.2
−2.3
8.4

2002: I .........
II ........
III .......
IV .......

3.4
2.4
2.6
.7

1.8
2.8
2.9
2.5

−8.5
4.4
14.0
−2.4

3.8
.8
−.6
5.3

3.3
3.5
2.4
2.2

−9.7
−9.6
−1.1
−3.2

−18.5
−22.6
−16.0
−6.6

−6.3
−4.5
4.6
−2.0

9.3
11.3
2.8
4.2

4.7
11.0
3.1
−4.2

12.5
11.4
5.4
9.6

4.7
4.4
2.1
4.0

8.2
12.8
2.9
9.1

2.9
.3
1.7
1.4

2003: I .........
II ........
III .......
IV .......

1.9
4.1
7.4
4.2

2.7
3.9
5.0
3.6

−.1
20.6
16.5
3.9

5.0
1.6
6.9
5.1

2.1
1.8
1.9
2.8

−.1
11.8
15.7
11.0

−13.0
14.5
−1.3
7.9

4.5
11.0
21.7
12.0

7.5
9.1
22.4
9.6

−1.5
−1.6
11.3
17.5

−2.0
2.5
2.8
17.1

.2
7.2
.1
1.6

.3
22.1
−3.3
4.8

.1
−.4
2.2
−.1

2004: I .........
II ........
III .......
IV p .....

4.5
3.3
4.0
3.1

4.1
1.6
5.1
4.6

2.2
−.3
17.2
6.7

6.7
.1
4.7
5.8

3.3
2.7
3.0
3.7

4.2
12.5
13.0
10.3

−7.6
6.9
−1.1
−4.1

8.0
14.2
17.5
14.9

5.0
16.5
1.6
.3

7.3
7.3
6.0
−3.9

10.6
12.6
4.6
9.1

2.5
2.2
.7
.9

7.1
2.7
4.8
1.6

.0
1.9
−1.7
.6

Note.—Percent changes based on unrounded data.
Source: Department of Commerce, Bureau of Economic Analysis.

213

TABLE B–5.—Contributions to percent change in real gross domestic product, 1959–2004
[Percentage points, except as noted; quarterly data at seasonally adjusted annual rates]
Personal consumption expenditures

Year or
quarter

Gross
domestic
product
(percent
change)

Gross private domestic investment
Fixed investment

Total

NonDurable durable
goods goods

Nonresidential
Services

Total

Total

Total

Structures

Equipment
and
software

Change
in
priResivate
dential inventories

1959 .......................................

7.1

3.55

0.97

1.25

1.33

2.80

1.94

0.73

0.09

0.64

1.21

0.86

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

.......................................
.......................................
.......................................
.......................................
.......................................
.......................................
.......................................
.......................................
.......................................
.......................................

2.5
2.3
6.1
4.4
5.8
6.4
6.5
2.5
4.8
3.1

1.73
1.30
3.11
2.56
3.71
3.91
3.50
1.81
3.50
2.27

.17
−.31
.89
.77
.77
1.07
.73
.13
.93
.31

.44
.53
.90
.59
1.33
1.43
1.46
.42
1.19
.69

1.12
1.08
1.31
1.20
1.61
1.42
1.31
1.26
1.38
1.28

.00
−.10
1.81
1.00
1.25
2.16
1.44
−.76
.90
.90

.13
−.04
1.24
1.08
1.37
1.50
.87
−.28
1.00
.90

.52
−.06
.78
.50
1.07
1.65
1.29
−.15
.46
.78

.28
.05
.16
.04
.36
.57
.27
−.10
.06
.20

.24
−.11
.61
.46
.71
1.07
1.02
−.05
.41
.58

−.39
.01
.46
.58
.30
−.15
−.43
−.13
.53
.13

−.13
−.05
.57
−.08
−.13
.66
.58
−.49
−.10
.00

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

.......................................
.......................................
.......................................
.......................................
.......................................
.......................................
.......................................
.......................................
.......................................
.......................................

.2
3.4
5.3
5.8
−.5
−.2
5.3
4.6
5.6
3.2

1.42
2.38
3.80
3.05
−.47
1.42
3.48
2.68
2.76
1.52

−.28
.81
1.07
.90
−.61
.00
1.04
.80
.47
−.03

.61
.47
1.11
.82
−.51
.37
1.24
.60
.91
.65

1.08
1.09
1.61
1.33
.65
1.05
1.19
1.27
1.38
.90

−1.04
1.67
1.87
1.96
−1.30
−2.98
2.84
2.43
2.16
.61

−.31
1.10
1.81
1.46
−1.04
−1.71
1.42
2.18
2.04
1.02

−.06
.00
.92
1.50
.09
−1.14
.52
1.19
1.69
1.23

.01
−.06
.12
.31
−.09
−.43
.09
.15
.54
.52

−.07
.07
.81
1.19
.18
−.70
.43
1.04
1.15
.71

−.26
1.10
.89
−.04
−1.13
−.57
.90
.99
.35
−.21

−.73
.58
.06
.50
−.27
−1.27
1.41
.25
.12
−.41

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989

.......................................
.......................................
.......................................
.......................................
.......................................
.......................................
.......................................
.......................................
.......................................
.......................................

−.2
2.5
−1.9
4.5
7.2
4.1
3.5
3.4
4.1
3.5

−.17
.90
.87
3.65
3.44
3.31
2.62
2.17
2.66
1.86

−.65
.09
.00
1.07
1.15
.83
.83
.16
.53
.19

−.04
.29
.23
.80
.93
.61
.78
.52
.70
.59

.52
.51
.65
1.79
1.36
1.87
1.01
1.50
1.43
1.07

−2.12
1.59
−2.55
1.45
4.63
−.17
−.12
.51
.39
.64

−1.21
.39
−1.22
1.17
2.68
.89
.20
.09
.52
.47

−.04
.74
−.51
−.16
2.05
.82
−.36
−.01
.57
.61

.27
.40
−.09
−.57
.60
.32
−.50
−.11
.02
.07

−.30
.34
−.42
.41
1.44
.50
.15
.10
.55
.54

−1.17
−.35
−.71
1.33
.64
.07
.55
.10
−.05
−.14

−.91
1.20
−1.34
.29
1.95
−1.06
−.32
.42
−.14
.17

1990
1991
1992
1993
1994
1995
1996
1997
1998
1999

.......................................
.......................................
.......................................
.......................................
.......................................
.......................................
.......................................
.......................................
.......................................
......................................

1.9
−.2
3.3
2.7
4.0
2.5
3.7
4.5
4.2
4.5

1.34
.11
2.18
2.23
2.52
1.81
2.31
2.54
3.36
3.44

−.02
−.46
.44
.59
.66
.36
.64
.70
.93
.99

.33
−.05
.43
.56
.71
.44
.51
.53
.78
.89

1.03
.62
1.31
1.09
1.14
1.01
1.15
1.31
1.66
1.56

−.53
−1.20
1.07
1.21
1.93
.48
1.35
1.95
1.63
1.33

−.32
−.94
.79
1.14
1.30
.94
1.34
1.42
1.60
1.36

.05
−.57
.32
.83
.91
1.08
1.01
1.33
1.28
1.09

.05
−.39
−.18
−.02
.05
.17
.16
.21
.16
−.01

.00
−.18
.50
.85
.87
.91
.85
1.12
1.12
1.11

−.37
−.37
.47
.31
.39
−.14
.33
.08
.32
.27

−.21
−.26
.29
.07
.63
−.46
.02
.54
.03
−.03

2000 ......................................
2001 ......................................
2002 ......................................
2003 ......................................
2004 p ....................................

3.7
.8
1.9
3.0
4.4

3.17
1.74
2.14
2.29
2.67

.63
.37
.56
.63
.58

.74
.40
.51
.73
.91

1.80
.97
1.08
.93
1.18

.99
−1.39
−.37
.66
1.96

1.09
−.50
−.80
.76
1.52

1.06
−.52
−1.02
.33
1.02

.21
−.07
−.57
−.15
.02

.85
−.44
−.45
.48
1.00

.03
.02
.22
.43
.50

−.10
−.88
.42
−.10
.44

2000: I ....................................
II ..................................
III .................................
IV .................................

1.0
6.4
−.5
2.1

4.38
1.78
2.62
2.29

1.96
−.89
.50
.06

.06
1.11
.44
.72

2.36
1.55
1.67
1.51

−1.30
4.65
−1.84
−.36

1.83
1.60
−.10
.13

1.64
1.76
.28
.11

.21
.53
.29
.04

1.44
1.23
−.02
.07

.19
−.16
−.38
.02

−3.13
3.05
−1.74
−.49

2001: I ....................................
II ..................................
III .................................
IV .................................

−.5
1.2
−1.4
1.6

1.07
.67
1.20
4.71

.55
−.03
.26
2.81

.09
−.03
.47
.95

.43
.73
.47
.95

−2.44
−1.28
−1.76
−3.95

−.43
−1.51
−.75
−1.81

−.52
−1.76
−.83
−1.63

−.29
−.14
.19
−1.27

−.24
−1.62
−1.02
−.35

.10
.25
.08
−.18

−2.01
.23
−1.02
−2.14

2002: I ....................................
II ..................................
III .................................
IV .................................

3.4
2.4
2.6
.7

1.32
1.98
2.02
1.74

−.79
.37
1.16
−.21

.76
.15
−.12
1.03

1.36
1.46
.98
.93

2.34
.05
.61
−.06

−.71
−.55
.02
−.13

−1.13
−1.06
−.12
−.33

−.59
−.70
−.45
−.17

−.53
−.36
.33
−.16

.42
.51
.13
.20

3.05
.60
.59
.07

2003: I ....................................
II ..................................
III .................................
IV .................................

1.9
4.1
7.4
4.2

1.84
2.72
3.58
2.50

−.01
1.64
1.38
.33

.97
.31
1.38
1.01

.87
.77
.83
1.15

−.10
.54
3.16
2.04

.35
1.55
2.59
1.57

−.01
1.10
1.50
1.07

−.33
.32
−.03
.18

.32
.78
1.53
.89

.36
.44
1.09
.50

−.45
−1.01
.57
.47

2004: I ....................................
II ..................................
III .................................
IV p ...............................

4.5
3.3
4.0
3.1

2.90
1.10
3.57
3.22

.19
−.02
1.37
.56

1.33
.03
.94
1.16

1.39
1.10
1.26
1.50

1.86
2.85
.40
1.48

.69
2.07
1.37
1.06

.42
1.21
1.27
1.05

−.19
.16
−.03
−.10

.61
1.05
1.30
1.15

.27
.86
.09
.01

1.17
.78
−.97
.42

See next page for continuation of table.

214

TABLE B–5.—Contributions to percent change in real gross domestic product, 1959–2004—Continued
[Percentage points, except as noted; quarterly data at seasonally adjusted annual rates]
Net exports of
goods and services
Year or
quarter

Exports
Net
exports

Total

Goods

Government consumption expenditures
and gross investment
Imports

Services

Total

Goods

Federal
Services

Total

Total

NaNontional
defense defense

State
and
local

1959 .......................................

0.00

0.45

−0.02

0.48

−0.45

−0.48

0.03

0.76

0.42

−0.23

0.65

0.34

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

.......................................
.......................................
.......................................
.......................................
.......................................
.......................................
.......................................
.......................................
.......................................
.......................................

.72
.06
−.21
.24
.36
−.30
−.29
−.22
−.30
−.04

.78
.03
.25
.35
.59
.15
.36
.12
.41
.25

.76
.02
.17
.29
.52
.02
.27
.02
.30
.20

.02
.01
.08
.06
.07
.13
.09
.10
.10
.05

−.06
.03
−.47
−.12
−.23
−.45
−.65
−.34
−.70
−.29

.05
.00
−.40
−.12
−.19
−.41
−.49
−.17
−.68
−.20

−.11
.02
−.07
.00
−.04
−.04
−.16
−.16
−.03
−.09

.03
1.07
1.36
.58
.49
.65
1.87
1.68
.73
−.06

−.35
.51
1.07
.01
−.17
.00
1.24
1.17
.10
−.42

−.17
.45
.63
−.25
−.40
−.19
1.21
1.19
.16
−.49

−.18
.06
.44
.26
.23
.19
.03
−.02
−.06
.06

.39
.56
.29
.57
.65
.66
.63
.51
.63
.37

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

.......................................
.......................................
.......................................
.......................................
.......................................
.......................................
.......................................
.......................................
.......................................
.......................................

.34
−.19
−.21
.82
.75
.89
−1.08
−.72
.05
.66

.56
.10
.42
1.12
.58
−.05
.37
.20
.82
.82

.44
−.02
.43
1.01
.46
−.16
.31
.08
.68
.77

.12
.11
−.01
.11
.12
.10
.05
.11
.15
.06

−.22
−.29
−.63
−.29
.18
.94
−1.45
−.92
−.78
−.16

−.15
−.33
−.57
−.34
.17
.87
−1.35
−.84
−.67
−.14

−.07
.04
−.06
.05
.00
.07
−.10
−.07
−.11
−.02

−.55
−.50
−.16
−.08
.52
.48
.10
.23
.60
.37

−.86
−.85
−.42
−.41
.08
.03
.00
.19
.22
.20

−.83
−.97
−.61
−.39
−.05
−.06
−.02
.07
.05
.17

−.03
.12
.18
−.02
.13
.09
.03
.12
.16
.03

.31
.36
.26
.33
.44
.45
.09
.04
.38
.17

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989

.......................................
.......................................
.......................................
.......................................
.......................................
.......................................
.......................................
.......................................
.......................................
.......................................

1.68
−.15
−.60
−1.35
−1.58
−.42
−.30
.17
.82
.52

.97
.12
−.73
−.22
.63
.23
.54
.78
1.24
.99

.86
−.09
−.67
−.19
.46
.20
.26
.56
1.04
.75

.11
.21
−.06
−.03
.17
.02
.28
.21
.20
.24

.71
−.27
.12
−1.13
−2.21
−.65
−.84
−.61
−.42
−.47

.67
−.18
.20
−1.00
−1.83
−.52
−.82
−.39
−.36
−.38

.04
−.09
−.08
−.13
−.39
−.13
−.02
−.22
−.07
−.10

.38
.19
.35
.77
.70
1.41
1.27
.52
.27
.52

.39
.42
.35
.63
.30
.74
.55
.36
−.15
.14

.25
.38
.48
.50
.35
.60
.47
.35
−.03
−.03

.14
.04
−.13
.13
−.05
.14
.08
.01
−.12
.17

−.01
−.23
.01
.13
.40
.67
.71
.17
.42
.39

1990
1991
1992
1993
1994
1995
1996
1997
1998
1999

.......................................
.......................................
.......................................
.......................................
.......................................
.......................................
.......................................
.......................................
.......................................
.......................................

.43
.69
−.04
−.59
−.43
.11
−.14
−.34
−1.16
−.99

.81
.63
.68
.32
.85
1.04
.91
1.30
.27
.47

.56
.46
.52
.23
.67
.85
.68
1.11
.18
.29

.26
.16
.16
.09
.18
.19
.22
.19
.09
.18

−.39
.06
−.72
−.91
−1.29
−.93
−1.05
−1.64
−1.43
−1.46

−.26
.01
−.77
−.85
−1.18
−.87
−.94
−1.45
−1.20
−1.31

−.13
.05
.05
−.06
−.11
−.06
−.11
−.19
−.23
−.15

.64
.23
.11
−.18
.00
.10
.18
.34
.34
.67

.18
−.02
−.15
−.35
−.30
−.20
−.08
−.07
−.07
.14

.00
−.07
−.32
−.33
−.27
−.19
−.07
−.13
−.09
.08

.18
.06
.17
−.02
−.03
−.01
−.02
.06
.02
.06

.46
.24
.26
.17
.30
.30
.26
.41
.41
.54

2000 .......................................
2001 .......................................
2002 .......................................
2003 .......................................
2004 p .....................................

−.86
−.20
−.70
−.43
−.61

.93
−.60
−.24
.18
.77

.84
−.48
−.29
.14
.54

.09
−.12
.05
.04
.23

−1.79
.40
−.46
−.61
−1.38

−1.55
.39
−.42
−.54
−1.25

−.25
.01
−.04
−.07
−.14

.36
.60
.79
.52
.37

.05
.23
.46
.43
.32

−.02
.15
.30
.38
.33

.07
.08
.16
.06
−.01

.31
.37
.33
.09
.05

2000: I ....................................
II ...................................
III ..................................
IV ..................................

−1.53
−.98
−.87
−.07

.70
1.30
1.14
−.31

.65
1.03
1.36
−.45

.05
.26
−.22
.14

−2.23
−2.27
−2.01
.24

−1.79
−2.03
−1.70
.19

−.44
−.24
−.32
.04

−.56
.96
−.37
.22

−.93
.96
−.51
−.07

−.92
.61
−.29
.06

−.01
.35
−.22
−.13

.36
.01
.15
.29

2001: I ....................................
II ...................................
III ..................................
IV ..................................

−.04
.49
−.56
−.66

−.59
−1.45
−2.04
−1.11

−.43
−1.43
−1.60
−.63

−.16
−.02
−.44
−.48

.56
1.94
1.48
.45

.43
2.23
1.02
.21

.12
−.28
.47
.25

.92
1.35
−.28
1.48

.46
.52
.00
.51

.25
.16
.09
.46

.20
.36
−.09
.05

.46
.83
−.28
.97

2002: I ....................................
II ...................................
III ..................................
IV ..................................

−1.10
−.46
−.43
−1.69

.43
.99
.29
−.42

−.13
.87
.19
−.72

.56
.13
.10
.30

−1.53
−1.45
−.72
−1.27

−1.04
−1.59
−.65
−.91

−.49
.14
−.06
−.36

.85
.81
.40
.75

.49
.78
.19
.58

.23
.45
.14
.54

.27
.33
.05
.04

.36
.03
.21
.17

2003: I ....................................
II ...................................
III ..................................
IV ..................................

.14
−.50
.64
−.66

−.15
−.15
1.02
1.55

.25
−.06
.64
1.00

−.40
−.10
.39
.56

.29
−.34
−.39
−2.22

.22
−.58
.00
−1.96

.06
.24
−.39
−.26

.05
1.35
.03
.31

.04
1.40
−.23
.33

−.11
1.49
−.36
.50

.15
−.09
.13
−.18

.02
−.05
.26
−.02

2004: I ....................................
II ...................................
III ..................................
IV p ................................

−.76
−1.06
−.10
−1.73

.70
.70
.59
−.40

.60
.41
.64
−.50

.10
.30
−.06
.10

−1.46
−1.77
−.69
−1.34

−1.43
−1.52
−.62
−1.49

−.03
−.25
−.07
.15

.48
.41
.13
.18

.48
.18
.33
.11

.47
.09
.45
.00

.00
.10
−.12
.11

.00
.23
−.20
.07

Source: Department of Commerce, Bureau of Economic Analysis.

215

TABLE B–6.—Chain-type quantity indexes for gross domestic product, 1959–2004
[Index numbers, 2000=100; quarterly data seasonally adjusted]
Personal consumption expenditures

Gross private domestic investment
Fixed investment

Year or
quarter

Gross
domestic
product

Total

Durable
goods

Nonresidential

Nondurable
goods

Services

Total

Total

Total

Structures

Equipment
and
software

Residential

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 ........................
1994 ........................
1995 ........................
1996 ........................
1997 .......................
1998 ........................
1999 .......................
2000 .......................
2001 .......................
2002 .......................
2003 .......................
2004 p ......................
2000: I .....................
II ....................
III ...................
IV ...................

24.868
25.484
26.077
27.658
28.868
30.545
32.506
34.625
35.496
37.208
38.356
38.422
39.713
41.815
44.224
44.001
43.916
46.256
48.391
51.085
52.699
52.579
53.904
52.860
55.249
59.220
61.666
63.804
65.958
68.684
71.116
72.451
72.329
74.734
76.731
79.816
81.814
84.842
88.658
92.359
96.469
100.000
100.751
102.626
105.749
110.393
98.764
100.315
100.200
100.721

23.067
23.702
24.191
25.389
26.436
28.020
29.791
31,484
32.422
34.284
35.558
36.381
37.770
40.082
42.048
41.729
42.688
45.041
46.950
49.012
50.204
50.065
50.779
51.493
54.436
57.325
60.303
62.749
64.840
67.468
69.369
70.782
70.903
73.224
75.672
78.504
80.623
83.382
86.533
90.896
95.537
100.000
102.537
105.698
109.143
113.284
98.841
99.465
100.424
101.270

10.822
11.041
10.622
11.865
13.017
14.222
16.025
17.377
17.648
19.594
20.289
19.631
21.593
24.336
26.849
25.001
24.996
28.187
30.809
32.435
32.325
29.788
30.149
30.128
34.535
39.577
43.577
47.785
48.616
51.549
52.686
52.532
49.564
52.470
56.577
61.321
64.011
69.025
74.935
83.432
93.192
100.000
104.327
111.150
119.378
127.559
101.097
98.609
100.056
100.238

33.491
33.994
34.621
35.710
36.463
38.248
40.277
42.487
43.157
45.126
46.326
47.436
48.294
50.422
52.068
51.020
51.771
54.301
55.609
57.687
59.226
59.137
59.839
60.409
62.417
64.898
66.665
69.060
70.715
73.016
75.044
76.209
76.033
77.553
79.619
82.369
84.152
86.300
88.605
92.154
96.374
100.000
102.027
104.630
108.481
113.408
98.458
99.835
100.398
101.309

20.794
21.720
22.626
23.747
24.830
26.345
27.749
29.129
30.552
32.148
33.691
35.038
36.400
38.469
40.274
41.216
42.743
44.475
46.392
48.558
50.044
50.921
51.773
52.865
55.760
58.026
61.303
63.111
65.843
68.506
70.555
72.583
73.812
76.379
78.540
80.854
82.973
85.420
88.270
92.011
95.652
100.000
102.403
105.085
107.418
110.440
98.530
99.474
100.521
101.475

15.367
15.362
15.261
17.197
18.351
19.863
22.650
24.644
23.517
24.887
26.338
24.608
27.413
30.658
34.249
31.729
26.111
31.387
36.130
40.486
41.776
37.182
40.615
34.918
38.172
49.420
48.963
48.629
50.130
51.309
53.369
51.574
47.378
51.223
55.795
63.358
65.340
71.123
79.961
87.821
94.647
100.000
92.103
89.928
93.852
105.972
96.691
103.060
100.411
99.838

15.736
15.870
15.820
17.248
18.584
20.378
22.459
23.745
23.306
24.935
26.486
25.931
27.894
31.246
34.101
31.971
28.541
31.356
35.863
40.205
42.473
39.708
40.591
37.737
40.491
47.331
49.823
50.403
50.682
52.352
53.928
52.803
49.379
52.312
56.788
62.079
66.090
72.018
78.657
86.657
93.884
100.000
97.047
92.253
96.924
106.636
98.339
100.600
100.443
100.619

10.760
11.371
11.299
12.284
12.966
14.504
17.031
19.160
18.900
19.746
21.246
21.134
21.135
23.072
26.429
26.653
24.022
25.200
28.045
32.243
35.489
35.388
37.398
35.981
35.518
41.788
44.561
43.287
43.259
45.520
48.063
48.302
45.712
47.179
51.287
55.999
61.885
67.661
75.820
84.232
91.980
100.000
95.817
87.302
90.157
99.477
97.126
100.526
101.066
101.282

36.530
39.433
39.966
41.775
42.239
46.626
54.058
57.751
56.284
57.102
60.189
60.364
59.370
61.201
66.200
64.785
57.984
59.390
61.841
70.769
79.731
84.350
91.074
89.528
79.865
91.016
97.502
86.817
84.340
84.885
86.583
87.867
78.091
73.423
72.891
74.180
78.903
83.354
89.432
94.019
93.619
100.000
97.737
80.346
75.810
76.541
95.744
99.785
102.088
102.383

6.065
6.322
6.200
6.917
7.500
8.457
10.007
11.609
11.532
12.250
13.334
13.201
13.332
15.052
17.812
18.268
16.529
17.562
20.208
23.284
25.318
24.407
25.445
24.122
25.420
30.462
32.397
33.011
33.463
35.987
38.624
38.636
37.643
40.387
45.428
50.846
56.930
62.981
71.641
81.137
91.437
100.000
95.136
89.947
95.679
108.454
97.587
100.778
100.723
100.912

37.820
35.129
35.227
38.604
43.154
45.662
44.329
40.362
39.092
44.421
45.733
42.998
54.789
64.526
64.112
50.877
44.271
54.698
66.440
70.623
68.032
53.636
49.336
40.378
57.093
65.566
66.604
74.776
76.269
75.496
73.204
66.887
60.460
68.825
74.446
81.621
79.005
85.331
86.947
93.597
99.254
100.000
100.357
105.178
114.392
125.214
101.689
100.786
98.718
98.807

2001: I .....................
II ....................
III ...................
IV ...................
2002: I .....................
II ....................
III ...................
IV ...................
2003: I .....................
II ....................
III ...................
IV ...................
2004: I .....................
II ....................
III ...................
IV p .................

100.597
100.906
100.551
100.948
101.798
102.400
103.059
103.249
103.743
104.792
106.681
107.780
108.969
109.858
110.941
111.803

101.687
101.942
102.391
104.128
104.604
105.339
106.092
106.755
107.461
108.488
109.828
110.794
111.925
112.360
113.776
115.076

101.877
101.802
102.576
111.051
108.624
109.789
113.433
112.755
112.731
118.146
122.733
123.902
124.572
124.482
129.529
131.653

101.438
101.409
102.018
103.242
104.217
104.416
104.261
105.626
106.923
107.338
109.145
110.517
112.331
112.367
113.659
115.275

101.758
102.218
102.519
103.114
103.951
104.859
105.472
106.060
106.615
107.099
107.613
108.346
109.237
109.955
110.782
111.784

96.245
94.350
91.768
86.051
89.458
89.524
90.418
90.311
90.119
90.902
95.616
98.771
101.672
106.191
106.823
109.199

99.953
97.709
96.603
93.924
92.891
92.072
92.117
91.932
92.479
94.902
98.904
101.412
102.529
105.913
108.170
109.932

100.192
96.600
94.908
91.569
89.263
87.037
86.805
86.103
86.075
88.518
91.802
94.235
95.204
98.041
101.075
103.588

100.191
99.168
100.621
90.968
86.440
81.065
77.601
76.279
73.674
76.203
75.955
77.406
75.886
77.171
76.958
76.149

100.210
95.683
92.820
91.831
90.340
89.301
90.304
89.842
90.829
93.235
97.917
100.735
102.699
106.157
110.524
114.436

99.342
100.714
101.166
100.206
102.448
105.228
105.967
107.071
109.032
111.420
117.201
119.916
121.400
126.122
126.628
126.708

See next page for continuation of table.

216

TABLE B–6.—Chain-type quantity indexes for gross domestic product, 1959–2004—Continued
[Index numbers, 2000=100; quarterly data seasonally adjusted]
Exports of goods and
services
Year or
quarter

Imports of goods and
services

Government consumption expenditures
and gross investment
Federal
Total

National
defense

Nondefense

State
and
local

41.489
41.553
43.639
46.329
47.522
48.563
50.028
54.430
58.604
60.436
60.290
58.833
57.553
57.128
56.926
58.360
59.675
59.940
60.598
62.383
63.549
64.790
65.381
66.530
68.964
71.273
76.240
80.885
82.873
83.940
86.110
88.869
89.872
90.342
89.513
89.525
90.015
90.896
92.588
94.354
97.987
100.000
103.412
107.918
110.906
113.073
99.169
100.517
99.995
100.318
101.628
103.567
103.164
105.289

68.666
66.779
69.564
75.492
75.540
74.530
74.508
82.737
90.960
91.681
88.525
81.997
75.686
72.574
69.519
70.134
70.360
70.388
71.880
73.681
75.465
79.043
82.818
86.018
91.726
94.550
101.957
107.754
111.674
109.898
111.594
113.873
113.679
111.713
107.056
103.050
100.254
99.091
98.066
96.970
99.122
100.000
103.908
111.725
119.140
124.724
98.169
102.139
99.970
99.722
101.679
103.910
103.920
106.124

89.447
87.977
91.851
97.412
95.085
91.304
89.403
102.205
115.571
117.416
111.604
101.477
89.980
82.921
78.322
77.714
76.977
76.706
77.597
78.259
80.648
84.160
89.486
96.244
103.158
108.186
117.355
124.871
130.779
130.161
129.518
129.472
128.050
121.708
114.860
109.259
105.093
103.648
100.733
98.650
100.515
100.000
103.936
111.972
122.014
131.002
97.925
101.841
99.901
100.334
102.041
103.132
103.734
106.838

33.305
30.672
31.599
38.144
42.217
45.880
48.995
49.501
49.059
47.912
49.186
48.674
50.961
54.551
54.213
57.023
58.965
59.523
62.089
65.947
66.640
70.373
71.310
67.888
71.398
70.035
74.169
76.764
76.984
73.037
79.075
85.651
87.700
93.749
93.087
91.957
91.613
90.955
93.320
93.985
96.646
100.000
103.859
111.284
113.972
113.388
98.601
102.669
100.091
98.639
101.033
105.298
104.250
104.852

26.999
28.182
29.918
30.839
32.696
34.913
37.252
39.590
41.589
44.048
45.534
46.797
48.232
49.291
50.694
52.603
54.536
54.937
55.137
56.938
57.775
57.736
56.577
56.607
57.268
59.322
63.003
67.064
68.041
70.582
72.994
75.991
77.600
79.318
80.459
82.543
84.728
86.668
89.770
93.014
97.409
100.000
103.162
105.999
106.739
107.166
99.679
99.696
100.007
100.618
101.601
103.394
102.784
104.869

106.502
107.658
108.221
109.292
109.346
111.251
111.290
111.738
112.443
113.062
113.259
113.527

108.235
111.535
112.326
114.804
114.891
120.765
119.751
121.154
123.249
124.068
125.539
126.038

108.358
111.349
112.289
115.894
115.090
124.835
122.368
125.765
128.984
129.582
132.723
132.721

108.017
111.866
112.400
112.853
114.569
113.432
115.050
112.840
112.900
114.117
112.563
113.972

105.631
105.701
106.152
106.514
106.551
106.432
107.006
106.968
106.965
107.482
107.033
107.185

Total

Goods

Services

Total

Goods

Services

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 ........................
1994 ........................
1995 ........................
1996 ........................
1997 ........................
1998 ........................
1999 .......................
2000 .......................
2001 .......................
2002 .......................
2003 .......................
2004 p ......................
2000: I .....................
II ....................
III ...................
IV ...................
2001: I .....................
II ....................
III ...................
IV ...................

7.043
8.266
8.309
8.729
9.353
10.454
10.747
11.492
11.757
12.681
13.294
14.723
14.973
16.096
19.131
20.643
20.512
21.408
21.923
24.234
26.637
29.506
29.868
27.586
26.875
29.068
29.951
32.259
35.742
41.469
46.233
50.394
53.736
57.439
59.291
64.447
70.982
76.930
86.082
88.164
91.969
100.000
94.565
92.343
94.116
101.737
96.770
99.608
102.163
101.458
100.083
96.748
92.009
89.422

6.198
7.651
7.689
8.031
8.662
9.849
9.901
10.589
10.638
11.481
12.082
13.460
13.408
14.849
18.259
19.709
19.252
20.165
20.429
22.712
25.396
28.422
28.114
25.573
24.838
26.801
27.790
29.217
32.456
38.572
43.172
46.810
50.042
53.785
55.534
60.937
68.070
74.086
84.717
86.614
89.907
100.000
93.871
90.068
92.018
99.578
95.861
99.017
103.270
101.852
100.442
95.838
90.635
88.568

9.641
9.797
9.857
10.535
11.070
11.733
12.926
13.814
14.905
16.049
16.646
18.128
19.527
19.404
20.775
22.396
23.773
24.476
26.055
28.234
29.103
30.919
34.211
33.263
32.710
35.627
36.051
41.325
45.502
49.616
54.723
60.480
64.082
67.590
69.726
74.097
78.793
84.483
89.509
92.077
97.207
100.000
96.302
97.989
99.330
107.097
99.055
101.092
99.384
100.469
99.189
99.021
95.437
91.559

6.908
7.000
6.953
7.742
7.951
8.374
9.265
10.642
11.417
13.118
13.866
14.457
15.229
16.943
17.729
17.327
15.402
18.413
20.426
22.196
22.565
21.066
21.620
21.348
24.041
29.893
31.833
34.561
36.602
38.039
39.706
41.139
40.905
43.748
47.576
53.256
57.539
62.544
71.037
79.299
88.391
100.000
97.291
100.585
105.048
115.311
95.643
99.371
102.700
102.286
101.330
97.972
95.345
94.518

5.403
5.314
5.307
6.092
6.339
6.757
7.714
8.930
9.400
11.342
11.963
12.432
13.474
15.307
16.388
15.932
13.924
17.073
19.153
20.871
21.229
19.653
20.058
19.544
22.210
27.584
29.310
32.314
33.812
35.181
36.686
37.770
37.741
41.263
45.423
51.466
56.104
61.337
70.172
78.364
88.078
100.000
96.833
100.408
105.131
116.284
95.465
99.427
102.756
102.352
101.459
96.882
94.729
94.262

15.462
16.669
16.385
17.150
17.137
17.579
18.096
20.395
22.887
23.298
24.767
26.059
25.317
26.390
25.500
25.472
24.367
26.049
27.347
29.297
29.700
29.037
30.711
32.346
34.958
43.724
47.050
47.638
53.205
55.010
57.678
61.430
59.849
58.321
60.026
63.421
65.492
69.094
75.600
84.222
90.038
100.000
99.706
101.571
104.753
110.726
96.598
99.076
102.402
101.924
100.624
103.689
98.591
95.921

2002: I .....................
II ....................
III ...................
IV ...................
2003: I .....................
II ....................
III ...................
IV ...................
2004: I .....................
II ....................
III ...................
IV p .................

90.449
92.841
93.545
92.536
92.182
91.813
94.300
98.170
99.924
101.690
103.176
102.159

88.147
91.081
91.733
89.310
90.183
90.005
92.190
95.694
97.810
99.242
101.526
99.734

96.163
97.219
98.053
100.520
97.154
96.314
99.543
104.310
105.173
107.765
107.275
108.175

97.340
100.011
101.325
103.665
103.151
103.792
104.522
108.725
111.504
114.862
116.167
118.711

96.560
100.059
101.496
103.517
103.039
104.329
104.331
108.824
112.116
115.593
117.005
120.421

101.360
99.863
100.562
104.500
103.826
101.283
105.543
108.360
108.675
111.458
112.241
110.531

Source: Department of Commerce, Bureau of Economic Analysis.

217

TABLE B–7.—Chain-type price indexes for gross domestic product, 1959–2004
[Index numbers, 2000=100, except as noted; quarterly data seasonally adjusted]
Personal consumption expenditures

Gross private domestic investment
Fixed investment

Year or
quarter

Gross
domestic
product

Total

Durable
goods

Nondurable
goods

Nonresidential
Services

Total

Total

Total

Structures

Equipment
and
software

Residential

1959 ..............

20.754

20.432

45.662

22.765

15.485

29.474

28.262

35.114

15.923

50.882

16.630

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............

21.044
21.281
21.572
21.801
22.134
22.538
23.180
23.897
24.916
26.153

20.767
20.985
21.232
21.479
21.786
22.103
22.662
23.237
24.151
25.255

45.444
45.551
45.755
45.915
46.142
45.721
45.517
46.228
47.749
49.067

23.089
23.227
23.412
23.683
23.986
24.423
25.232
25.830
26.820
28.062

15.887
16.173
16.466
16.701
17.016
17.334
17.810
18.349
19.128
20.106

29.619
29.538
29.558
29.467
29.634
30.107
30.726
31.538
32.714
34.264

28.414
28.325
28.346
28.267
28.440
28.926
29.536
30.364
31.582
33.140

35.275
35.076
35.087
35.088
35.268
35.672
36.206
37.129
38.431
40.018

15.904
15.810
15.941
16.085
16.316
16.791
17.398
17.943
18.835
20.074

51.305
51.025
50.774
50.495
50.474
50.520
50.654
51.776
53.167
54.645

16.743
16.769
16.795
16.663
16.796
17.272
17.899
18.521
19.504
20.853

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............

27.538
28.916
30.171
31.854
34.721
38.007
40.202
42.758
45.762
49.553

26.448
27.574
28.528
30.081
33.191
35.955
37.948
40.410
43.248
47.059

50.148
51.975
52.531
53.301
56.676
61.844
65.278
68.129
72.038
76.830

29.446
30.359
31.373
33.838
38.702
41.735
43.346
45.911
48.985
54.148

21.175
22.340
23.304
24.381
26.345
28.595
30.603
32.933
35.464
38.316

35.713
37.493
39.062
41.172
45.263
50.847
53.654
57.677
62.381
68.027

34.565
36.306
37.865
39.958
43.890
49.384
52.244
56.342
61.101
66.642

41.908
43.880
45.367
47.115
51.658
58.763
62.018
66.258
70.695
76.440

21.390
23.040
24.704
26.619
30.295
33.911
35.571
38.651
42.382
47.313

56.657
58.340
59.044
60.047
64.474
74.001
78.355
83.011
87.391
92.932

21.526
22.775
24.158
26.297
29.011
31.706
33.743
37.147
41.696
46.374

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............

54.062
59.128
62.738
65.214
67.664
69.724
71.269
73.204
75.706
78.569

52.078
56.720
59.859
62.436
64.795
66.936
68.569
70.947
73.755
76.972

83.277
88.879
92.358
94.181
95.550
96.620
97.685
100.465
101.921
103.717

60.449
65.130
66.955
68.386
70.004
71.543
71.273
73.731
76.206
79.842

42.332
46.746
50.528
53.799
56.680
59.295
62.040
64.299
67.493
70.708

74.424
81.278
85.455
85.237
85.845
86.720
88.599
90.289
92.354
94.559

72.887
79.670
84.047
83.912
84.399
85.457
87.501
89.118
91.431
93.641

83.198
91.245
96.295
95.432
95.195
95.936
97.566
98.435
100.625
102.731

51.740
58.880
63.566
61.939
62.468
63.940
65.168
66.199
69.016
71.707

100.868
108.077
112.293
112.530
111.547
111.413
113.178
113.796
115.216
116.657

51.394
55.587
58.564
59.908
61.630
63.219
65.868
68.561
70.928
73.211

1990
1991
1992
1993
1994
1995
1996
1997
1998
1999

..............
..............
..............
..............
..............
..............
..............
..............
..............
.............

81.614
84.457
86.402
88.390
90.265
92.115
93.859
95.415
96.475
97.868

80.498
83.419
85.824
87.804
89.654
91.577
93.547
95.124
95.978
97.575

104.561
106.080
106.756
107.840
109.978
110.672
109.507
107.068
104.152
101.626

84.226
86.779
88.105
88.973
89.605
90.629
92.567
93.835
93.821
96.173

74.197
77.497
80.684
83.345
85.748
88.320
90.844
93.305
95.319
97.393

96.379
97.749
97.395
98.521
99.813
100.941
100.520
100.157
99.035
98.972

95.542
96.960
96.670
97.805
99.133
100.292
100.028
99.785
98.861
98.888

104.695
106.314
105.411
105.487
106.008
106.239
105.011
103.696
101.421
100.057

74.015
75.355
75.330
77.602
80.388
83.879
86.045
89.381
93.474
96.257

118.168
119.854
118.444
117.243
116.572
115.224
112.451
109.120
104.259
101.366

74.930
75.912
76.836
79.941
82.754
85.769
87.610
89.843
92.239
95.780

2000 .............
2001 .............
2002 .............
2003 .............
2004 p ...........

100.000
102.402
104.097
106.003
108.281

100.000
102.094
103.548
105.511
107.810

100.000
98.114
95.475
92.244
90.380

100.000
101.531
102.097
104.154
107.612

100.000
103.257
106.083
109.237
111.982

100.000
101.013
101.221
102.304
104.882

100.000
101.023
101.232
102.435
104.958

100.000
99.683
98.909
98.546
99.336

100.000
105.403
107.908
110.176
115.543

100.000
97.708
95.868
94.754
94.400

100.000
104.633
107.246
111.951
118.258

2000: I ...........
II .........
III ........
IV ........

99.292
99.780
100.241
100.687

99.296
99.777
100.239
100.687

100.471
100.337
99.715
99.477

98.816
99.717
100.562
100.905

99.276
99.685
100.194
100.845

99.496
99.788
100.253
100.463

99.481
99.788
100.252
100.479

99.772
99.841
100.191
100.195

98.482
99.366
100.455
101.697

100.212
100.005
100.102
99.681

98.683
99.635
100.418
101.263

2001: I ...........
II .........
III ........
IV ........

101.507
102.290
102.690
103.122

101.502
102.146
102.291
102.437

99.137
98.369
97.669
97.279

101.256
102.121
101.895
100.852

102.149
102.997
103.512
104.368

100.454
100.839
101.355
101.405

100.410
100.856
101.399
101.427

99.605
99.743
99.818
99.564

103.196
104.835
106.512
107.069

98.376
97.996
97.497
96.964

102.628
103.889
105.639
106.377

2002: I ...........
II .........
III ........
IV ........

103.470
103.853
104.280
104.786

102.660
103.386
103.894
104.250

96.343
95.743
95.244
94.570

100.861
102.193
102.520
102.814

104.963
105.693
106.524
107.153

101.142
101.106
100.992
101.644

101.136
101.101
101.008
101.685

99.240
98.957
98.642
98.798

107.075
107.638
108.061
108.858

96.547
96.004
95.474
95.447

106.165
106.711
107.125
108.981

2003: I ...........
II .........
III ........
IV ........

105.490
105.780
106.158
106.586

105.080
105.269
105.689
106.005

93.688
92.787
91.757
90.747

104.108
103.520
104.423
104.564

108.158
108.993
109.529
110.266

102.001
101.969
102.276
102.968

102.154
102.085
102.401
103.101

98.668
98.354
98.431
98.729

109.911
109.906
110.255
110.633

94.981
94.585
94.588
94.862

110.780
111.253
112.097
113.675

2004: I ...........
II .........
III ........
IV p ......

107.314
108.169
108.551
109.091

106.860
107.683
108.021
108.677

90.741
90.725
90.008
90.047

105.914
107.616
107.869
109.048

111.085
111.667
112.314
112.861

103.514
104.644
105.405
105.966

103.618
104.709
105.482
106.024

98.793
99.220
99.449
99.880

111.926
113.984
116.677
119.585

94.611
94.626
94.256
94.107

115.179
117.710
119.674
120.470

See next page for continuation of table,

218

TABLE B–7.—Chain-type price indexes for gross domestic product, 1959–2004—Continued
[Index numbers, 2000=100, except as noted; quarterly data seasonally adjusted]

Year or
quarter

Exports and
imports
of goods and
services
Exports Imports

Government consumption expenditures
and gross investment
Federal
Total

Total

National Nondefense defense

State
and
local

Final
sales of
domestic
product

Gross domestic
purchases 1

Total

Percent change 2

Gross domestic
purchases 1
Gross
Less
food and domestic
Less
energy product Total food and
energy

1959 ................

29.433

21.901

15.404

16.450

16.257

16.591

14.475

20.581

20.365 ..............

1.2

1.2 ..............

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

................
................
................
................
................
................
................
................
................
................

29.846
30.300
30.375
30.307
30.556
31.529
32.481
33.725
34.461
35.627

22.110
22.110
21.849
22.273
22.743
23.059
23.596
23.688
24.048
24.675

15.597
15.909
16.314
16.669
17.132
17.588
18.330
19.099
20.128
21.341

16.590
16.871
17.228
17.597
18.191
18.658
19.330
19.913
20.995
22.130

16.383
16.619
16.940
17.320
17.822
18.314
18.950
19.518
20.539
21.664

16.798
17.296
17.808
18.116
19.036
19.408
20.190
20.815
22.116
23.251

14.738
15.093
15.564
15.911
16.234
16.685
17.507
18.488
19.475
20.780

20.872
21.108
21.398
21.629
21.963
22.368
23.010
23.729
24.752
25.988

20.646
20.865
21.139
21.385
21.725
22.102
22.724
23.389
24.380
25.580

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............

1.4
1.1
1.4
1.1
1.5
1.8
2.8
3.1
4.3
5.0

1.4
1.1
1.3
1.2
1.6
1.7
2.8
2.9
4.2
4.9

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

................
................
................
................
................
................
................
................
................
................

36.993
38.358
40.146
45.425
55.965
61.682
63.707
66.302
70.342
78.808

26.135
27.739
29.682
34.841
49.847
53.997
55.622
60.523
64.798
75.879

23.079
24.875
26.788
28.743
31.646
34.824
37.118
39.694
42.235
45.775

23.915
25.957
28.495
30.449
33.162
36.615
39.217
42.180
44.785
48.231

23.321
25.387
28.319
30.396
33.217
36.460
39.117
42.079
45.035
48.628

25.478
27.400
28.780
30.394
32.819
36.746
39.209
42.152
43.983
47.099

22.488
24.087
25.524
27.477
30.500
33.481
35.563
37.872
40.359
43.944

27.369
28.741
29.994
31.673
34.517
37.789
39.987
42.546
45.551
49.322

26.964
28.351
29.619
31.343
34.546
37.761
39.938
42.634
45.663
49.669

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............

5.3
5.0
4.3
5.6
9.0
9.5
5.8
6.4
7.0
8.3

5.4
5.1
4.5
5.8
10.2
9.3
5.8
6.8
7.1
8.8

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989

................
................
................
................
................
................
................
................
................
................

86.801 94.513
93.217 99.594
93.645 96.235
94.015 92.629
94.887 91.829
91.983 88.813
90.639 88.871
92.874 94.251
97.687 98.774
99.310 100.944

50.761
55.752
59.414
61.778
64.955
66.970
68.175
70.056
71.899
74.139

53.299
58.476
62.446
64.612
68.426
69.974
70.352
71.200
72.704
74.677

53.908
59.229
63.392
65.617
70.290
71.621
71.554
72.281
73.631
75.528

51.683
56.516
60.020
62.038
63.577
65.740
67.395
68.616
70.609
72.826

48.858
53.709
57.140
59.666
62.336
64.739
66.624
69.361
71.485
73.940

53.806
58.859
62.489
64.958
67.399
69.494
71.060
72.985
75.519
78.383

54.876 ..............
59.896 ..............
63.296 62.221
65.515 64.685
67.822 67.106
69.760 69.232
71.338 71.474
73.527 73.716
76.043 76.429
78.934 79.151

9.1
9.4
6.1
3.9
3.8
3.0
2.2
2.7
3.4
3.8

10.5 ..............
9.1 ..............
5.7 ..............
3.5
4.0
3.5
3.7
2.9
3.2
2.3
3.2
3.1
3.1
3.4
3.7
3.8
3.6

1990
1991
1992
1993
1994
1995
1996
1997
1998
1999

................
................
................
................
................
................
................
................
................
................

77.139
79.787
81.719
83.789
86.002
88.358
90.491
92.139
93.469
96.079

77.142
80.232
82.602
84.788
87.061
89.503
91.982
93.533
94.511
96.884

78.010
80.821
83.628
85.313
87.412
89.598
92.379
93.716
94.643
96.886

75.260
79.100
80.411
83.728
86.375
89.351
91.216
93.192
94.268
96.880

77.357
79.681
81.300
83.294
85.472
87.778
89.709
91.414
92.934
95.667

81.440
84.286
86.237
88.226
90.108
91.965
93.736
95.320
96.428
97.847

82.144
84.836
86.828
88.730
90.583
92.483
94.145
95.440
96.060
97.556

82.109
84.942
87.169
89.211
91.213
93.176
94.616
95.865
96.797
98.165

3.9
3.5
2.3
2.3
2.1
2.0
1.9
1.7
1.1
1.4

4.1
3.3
2.3
2.2
2.1
2.1
1.8
1.4
.6
1.6

3.7
3.5
2.6
2.3
2.2
2.2
1.5
1.3
1.0
1.4

2000 ................
2001 ................
2002 ................
2003 ................
2004 p .............

100.000 100.000 100.000 100.000 100.000 100.000
99.624 97.497 102.544 101.907 102.002 101.739
99.275 96.326 105.313 105.288 105.488 104.932
101.395 99.615 108.702 109.081 109.875 107.631
104.929 104.533 112.178 112.193 112.961 110.790

100.000
102.868
105.317
108.485
112.177

100.000
102.406
104.100
106.025
108.292

100.000
101.994
103.489
105.571
108.118

100.000
101.882
103.680
105.299
107.314

2.2
2.4
1.7
1.8
2.1

2.5
2.0
1.5
2.0
2.4

1.9
1.9
1.8
1.6
1.9

2000: I .............
II ...........
III ..........
IV ..........

99.461 99.321 98.970 99.489 99.527 99.421 98.707 99.288 99.275 99.466
99.989 99.487 99.395 99.223 99.482 98.765 99.483 99.779 99.714 99.793
100.223 100.506 100.486 100.449 100.377 100.576 100.504 100.241 100.283 100.191
100.327 100.686 101.149 100.838 100.614 101.238 101.306 100.691 100.727 100.549

3.4
2.0
1.9
1.8

3.8
1.8
2.3
1.8

2.9
1.3
1.6
1.4

2001: I .............
II ...........
III ..........
IV ..........

100.345
100.017
99.512
98.623

99.926
98.416
97.089
94.556

101.929
102.384
102.792
103.072

101.309
101.587
102.143
102.589

101.489
101.677
102.314
102.528

100.984
101.426
101.841
102.703

102.245
102.789
103.121
103.315

101.503
102.296
102.700
103.127

101.403
101.974
102.223
102.378

101.127
101.628
102.093
102.679

3.3
3.1
1.6
1.7

2.7
2.3
1.0
.6

2.3
2.0
1.8
2.3

2002: I .............
II ...........
III ..........
IV ..........

98.337
99.057
99.798
99.906

94.108
96.482
97.296
97.416

104.134
104.943
105.651
106.523

104.446
104.820
105.285
106.601

104.309
104.726
105.476
107.442

104.698
104.993
104.947
105.089

103.965
105.000
105.836
106.468

103.469
103.853
104.284
104.794

102.673
103.298
103.747
104.237

103.053
103.479
103.889
104.298

1.4
1.5
1.7
2.0

1.2
2.5
1.8
1.9

1.5
1.7
1.6
1.6

2003: I .............
II ...........
III ..........
IV ..........

100.920 100.059 108.445 108.804 109.692
101.160 98.959 108.299 108.892 109.616
101.355 99.606 108.898 109.181 109.917
102.146 99.837 109.167 109.447 110.278

107.192
107.577
107.838
107.917

108.237
107.959
108.736
109.007

105.516
105.799
106.179
106.608

105.190
105.287
105.721
106.086

104.861
105.111
105.414
105.809

2.7
1.1
1.4
1.6

3.7
.4
1.7
1.4

2.2
1.0
1.2
1.5

2004: I .............
II ...........
III ..........
IV p ........

103.565
104.746
105.175
106.232

110.095
110.613
110.970
111.484

110.131
111.524
112.802
114.253

107.332
108.178
108.561
109.097

106.980
107.913
108.429
109.149

106.461
107.128
107.579
108.088

2.8
3.2
1.4
2.0

3.4
3.5
1.9
2.7

2.5
2.5
1.7
1.9

99.982
101.313
100.892
100.898
102.033
104.376
102.988
101.232
98.905
98.313

103.826
103.420
103.552
102.671
103.634
106.412
104.529
100.816
95.353
95.960

102.163
103.760
105.066
107.142

110.522
111.703
112.682
113.804

111.203
112.020
112.491
113.059

111.825
112.790
113.317
113.912

1 Gross

domestic product (GDP) less exports of goods and services plus imports of goods and services.
2 Quarterly percent changes are at annual rates.
Source: Department of Commerce. Bureau of Economic Analysis.

219

TABLE B–8.—Gross domestic product by major type of product, 1959–2004
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Goods

Year or
quarter

Change
Final
in
Gross
sales of
pridomestic domesvate
product
tic
product inventories

Total

Total

Final
sales

Durable goods
Change
in
private
inventories

Final
sales

Change
in
private
inventories 1

Nondurable goods

Final
sales

Change
in
private
inventories 1

Services 2

Structures

1959 ............................

506.6

502.7

3.9

237.6

233.6

3.9

86.3

2.9

147.3

1.1

206.5

62.5

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

............................
............................
............................
............................
............................
............................
............................
............................
............................
............................

526.4
544.7
585.6
617.7
663.6
719.1
787.8
832.6
910.0
984.6

523.2
541.7
579.5
612.1
658.8
709.9
774.2
822.7
900.9
975.4

3.2
3.0
6.1
5.6
4.8
9.2
13.6
9.9
9.1
9.2

246.6
250.1
268.1
280.1
300.9
329.4
364.5
373.9
402.6
432.0

243.4
247.2
262.0
274.5
296.0
320.2
350.9
364.0
393.6
422.8

3.2
3.0
6.1
5.6
4.8
9.2
13.6
9.9
9.1
9.2

90.2
90.2
99.4
106.0
116.4
128.4
142.0
146.4
158.7
171.1

1.7
−.1
3.4
2.6
3.8
6.2
10.0
4.8
4.5
6.0

153.2
157.0
162.6
168.5
179.7
191.8
208.9
217.6
234.8
251.7

1.6
3.0
2.7
3.0
1.0
3.0
3.6
5.0
4.5
3.2

217.9
231.0
249.7
265.0
284.3
305.0
335.3
369.1
407.4
444.4

61.9
63.6
67.8
72.7
78.4
84.7
88.0
89.6
100.0
108.3

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

............................
............................
............................
............................
............................
............................
............................
............................
............................
............................

1,038.5
1,127.1
1,238.3
1,382.7
1,500.0
1,638.3
1,825.3
2,030.9
2,294.7
2,563.3

1,036.5
1,118.9
1,229.2
1,366.8
1,486.0
1,644.6
1,808.2
2,008.6
2,268.9
2,545.3

2.0
8.3
9.1
15.9
14.0
−6.3
17.1
22.3
25.8
18.0

446.9 444.9
472.9 464.7
516.6 507.5
597.1 581.2
643.3 629.3
691.4 697.7
777.5 760.4
851.5 829.1
961.0 935.2
1,078.1 1,060.1

2.0
8.3
9.1
15.9
14.0
−6.3
17.1
22.3
25.8
18.0

173.6
181.1
202.4
236.6
254.5
284.5
321.2
363.8
413.2
472.0

−.2
2.9
6.4
13.0
10.9
−7.5
10.8
9.5
18.2
12.8

271.3
283.6
305.1
344.6
374.8
413.2
439.2
465.3
522.0
588.1

2.2
5.3
2.7
2.9
3.1
1.2
6.3
12.8
7.6
5.2

481.9
525.8
574.8
622.7
691.0
780.2
856.6
952.7
1,059.7
1,171.9

109.7
128.4
146.9
162.9
165.6
166.7
191.2
226.8
273.9
313.3

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989

............................
............................
............................
............................
............................
............................
............................
............................
............................
............................

2,789.5
3,128.4
3,255.0
3,536.7
3,933.2
4,220.3
4,462.8
4,739.5
5,103.8
5,484.4

2,795.8
3,098.6
3,269.9
3,542.4
3,867.8
4,198.4
4,456.3
4,712.3
5,085.3
5,456.7

−6.3
29.8
−14.9
−5.8
65.4
21.8
6.6
27.1
18.5
27.7

1,145.7
1,288.2
1,277.3
1,365.0
1,549.6
1,607.4
1,657.0
1,751.3
1,903.4
2,066.6

1,152.0
1,258.3
1,292.2
1,370.8
1,484.2
1,585.6
1,650.5
1,724.2
1,884.9
2,038.9

−6.3
29.8
−14.9
−5.8
65.4
21.8
6.6
27.1
18.5
27.7

500.1
542.2
539.7
578.1
650.2
711.0
739.9
764.9
841.8
917.1

−2.3
7.3
−16.0
2.5
41.4
4.4
−1.9
22.9
22.7
20.0

651.9
716.1
752.5
792.7
834.0
874.6
910.6
959.3
1,043.1
1,121.9

−4.0
22.5
1.1
−8.2
24.0
17.4
8.4
4.2
−4.3
7.7

1,322.5
1,487.7
1,633.2
1,802.9
1,957.8
2,154.1
2,325.7
2,490.5
2,685.3
2,888.7

321.3
352.6
344.5
368.7
425.8
458.7
480.1
497.6
515.0
529.0

1990
1991
1992
1993
1994
1995
1996
1997
1998
1999

............................
............................
............................
............................
............................
............................
............................
............................
............................
............................

5,803.1
5,995.9
6,337.7
6,657.4
7,072.2
7,397.7
7,816.9
8,304.3
8,747.0
9,268.4

5,788.5
5,996.3
6,321.4
6,636.6
7,008.4
7,366.5
7,786.1
8,232.3
8,676.2
9,201.5

14.5
−.4
16.3
20.8
63.8
31.1
30.8
72.0
70.8
66.9

2,155.8
2,184.7
2,282.3
2,387.8
2,563.8
2,661.1
2,807.0
3,007.7
3,143.4
3,311.3

2,141.3
2,185.1
2,266.0
2,367.0
2,500.0
2,630.0
2,776.3
2,935.7
3,072.6
3,244.4

14.5
−.4
16.3
20.8
63.8
31.1
30.8
72.0
70.8
66.9

950.2
944.1
986.1
1,047.9
1,125.0
1,202.2
1,298.0
1,409.1
1,487.8
1,576.5

7.7
−13.6
−3.0
17.1
35.7
33.6
19.1
39.9
42.8
40.0

1,191.1
1,241.0
1,279.8
1,319.1
1,375.0
1,427.8
1,478.3
1,526.6
1,584.8
1,667.9

6.8
13.2
19.3
3.7
28.1
−2.4
11.7
32.1
28.0
26.9

3,113.7
3,311.3
3,532.7
3,711.7
3,901.2
4,098.4
4,312.7
4,548.4
4,789.8
5,081.8

533.5
499.9
522.7
557.8
607.3
638.1
697.1
748.2
813.8
875.3

2000 ............................
2001 ............................
2002 ............................
2003 ............................
2004 p ..........................

9,817.0
10,128.0
10,487.0
11,004.0
11,728.0

9,760.5
10,159.7
10,475.9
11,005.3
11,684.9

56.5
−31.7
11.2
−1.2
43.1

3,449.3
3,412.6
3,439.5
3,564.5
3,833.5

3,392.8
3,444.3
3,428.4
3,565.7
3,790.4

56.5
−31.7
11.2
−1.2
43.1

1,653.3
1,630.3
1,557.7
1,618.2
1,719.6

36.1
−41.8
13.2
.6
29.8

1,739.5
1,814.0
1,870.7
1,947.5
2,070.9

20.4
10.0
−2.0
−1.8
13.3

5,425.6
942.1
5,725.6
989.8
6,056.8
990.7
6,384.7 1,054.8
6,727.4 1,167.1

2000: I .........................
II ........................
III .......................
IV .......................

9,629.4
9,822.8
9,862.1
9,953.6

9,599.6
9,726.5
9,803.7
9,912.2

29.9
96.3
58.4
41.4

3,392.9
3,486.1
3,461.0
3,457.4

3,363.1
3,389.8
3,402.6
3,416.0

29.9
96.3
58.4
41.4

1,651.8
1,654.9
1,656.2
1,650.5

18.0
67.1
29.3
29.8

1,711.3
1,734.9
1,746.4
1,765.5

11.9
29.2
29.1
11.6

5,310.5
5,397.4
5,454.8
5,539.6

2001: I .........................
II ........................
III .......................
IV .......................

10,021.5
10,128.9
10,135.1
10,226.3

10,031.4
10,136.0
10,166.9
10,304.5

−9.9
−7.0
−31.8
−78.2

3,420.5
3,432.4
3,385.1
3,412.2

3,430.4
3,439.5
3,416.9
3,490.4

−9.9
−7.0
−31.8
−78.2

1,663.2
1,631.8
1,587.7
1,638.6

−23.7
−24.1
−39.4
−79.8

1,767.2
1,807.7
1,829.2
1,851.8

13.8
17.1
7.6
1.6

5,630.5
970.6
5,697.5
999.0
5,747.6 1,002.4
5,826.7
987.4

2002: I .........................
II ........................
III ......................
IV ......................

10,338.2
10,445.7
10,546.5
10,617.5

10,347.2
10,431.7
10,527.4
10,597.1

−8.9
14.0
19.1
20.4

3,429.6
3,436.0
3,460.9
3,431.7

3,438.6
3,422.0
3,441.8
3,411.2

−8.9
14.0
19.1
20.4

1,567.3
1,548.9
1,576.3
1,538.4

−6.5
6.9
13.3
39.0

1,871.3
1,873.0
1,865.5
1,872.8

−2.5
7.1
5.8
−18.6

5,918.5
6,022.2
6,099.9
6,186.5

990.1
987.5
985.7
999.4

2003: I .........................
II ........................
III ......................
IV ......................

10,744.6
10,884.0
11,116.7
11,270.9

10,734.0
10,899.3
11,120.4
11,267.4

10.6
−15.3
−3.7
3.5

3,455.4
3,491.4
3,632.3
3,679.0

3,444.8
3,506.7
3,636.0
3,675.4

10.6
−15.3
−3.7
3.5

1,542.5
1,590.9
1,665.3
1,674.2

15.6
−15.1
−13.2
14.9

1,902.3
1,915.8
1,970.8
2,001.3

−5.0
−.3
9.5
−11.4

6,276.5
6,358.6
6,410.3
6,493.6

1,012.7
1,034.0
1,074.1
1,098.4

2004: I .........................
II ........................
III .......................
IV p .....................

11,472.6
11,657.5
11,814.9
11,967.0

11,436.4
11,598.5
11,783.3
11,921.5

36.2
59.0
31.6
45.5

3,759.7
3,804.0
3,859.1
3,911.3

3,723.4
3,745.0
3,827.6
3,865.8

36.2
59.0
31.6
45.5

1,687.2
1,679.8
1,744.4
1,767.0

31.2
47.4
16.1
24.6

2,036.2
2,065.3
2,083.2
2,098.7

5.0
11.6
15.5
21.0

6,600.3
6,682.5
6,768.5
6,858.3

1,112.6
1,171.0
1,187.2
1,197.5

926.0
939.4
946.3
956.6

1 Estimates for durable and nondurable goods for 1996 and earlier periods are based on the Standard Industrial Classification (SIC); later
estimates are based on the North American Industry Classification System (NAICS).
2 Includes government consumption expenditures, which are for services (such as education and national defense) produced by government.
In current dollars, these services are valued at their cost of production.

Source: Department of Commerce, Bureau of Economic Analysis.

220

TABLE B–9.—Real gross domestic product by major type of product, 1959–2004
[Billions of chained (2000) dollars; quarterly data at seasonally adjusted annual rates]
Goods

Year or
quarter

Change
Final
in
Gross
sales of
pridomestic domesvate
product
tic
product inventories

Total

Final
sales

Total

Durable goods
Change
in
private
inventories

Final
sales

Change
in
private
inventories 1

Nondurable goods

Final
sales

Change
in
private
inventories 1

700.7 .............. ............ .............. ............ .............. ............

Services 2

Structures

1959 ........................

2,441.3

2,442.7

12.3

1,391.1

392.8

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

........................
........................
........................
........................
........................
........................
........................
........................
........................
........................

2,501.8
2,560.0
2,715.2
2,834.0
2,998.6
3,191.1
3,399.1
3,484.6
3,652.7
3,765.4

2,506.8
2,566.8
2,708.5
2,830.3
2,999.9
3,173.8
3,364.8
3,467.6
3,640.3
3,753.7

10.4
9.4
19.5
18.0
15.4
29.3
42.1
30.3
27.4
27.0

721.1
726.7
773.8
803.4
856.4
927.3
1,005.2
1,006.4
1,047.9
1,082.2

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............

............
............
............
............
............
............
............
............
............
............

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............

............
............
............
............
............
............
............
............
............
............

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............

............
............
............
............
............
............
............
............
............
............

1,433.0
1,489.4
1,574.3
1,642.4
1,720.1
1,803.6
1,916.7
2,034.8
2,140.4
2,212.2

389.1
399.9
422.8
451.3
481.7
505.8
506.4
499.0
529.7
536.5

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

........................
........................
........................
........................
........................
........................
........................
........................
........................
........................

3,771.9
3,898.6
4,105.0
4,341.5
4,319.6
4,311.2
4,540.9
4,750.5
5,015.0
5,173.4

3,787.7
3,893.4
4,098.6
4,315.9
4,305.5
4,352.5
4,522.3
4,721.6
4,981.6
5,161.2

5.0
22.3
23.1
35.0
25.9
−11.3
30.7
38.5
41.1
25.1

1,076.3
1,105.7
1,180.5
1,299.5
1,288.1
1,263.7
1,359.8
1,423.2
1,515.6
1,577.9

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............

............
............
............
............
............
............
............
............
............
............

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............

............
............
............
............
............
............
............
............
............
............

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............

............
............
............
............
............
............
............
............
............
............

2,255.4
2,313.6
2,393.7
2,461.3
2,522.8
2,612.1
2,676.9
2,770.5
2,874.9
2,943.3

513.4
561.0
602.7
615.6
551.8
501.7
548.7
600.6
658.3
677.0

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989

........................
........................
........................
........................
........................
........................
........................
........................
........................
........................

5,161.7
5,291.7
5,189.3
5,423.8
5,813.6
6,053.7
6,263.6
6,475.1
6,742.7
6,981.4

5,196.7
5,265.1
5,233.4
5,454.0
5,739.2
6,042.1
6,271.8
6,457.2
6,734.5
6,962.2

−8.0
34.9
−17.5
−6.4
71.3
23.7
8.3
30.3
20.3
28.3

1,567.1
1,634.5
1,559.7
1,625.4
1,810.9
1,851.3
1,906.0
1,984.9
2,108.9
2,223.3

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............

............
............
............
............
............
............
............
............
............
............

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............

............
............
............
............
............
............
............
............
............
............

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............

............
............
............
............
............
............
............
............
............
............

3,004.2
3,062.5
3,120.0
3,251.0
3,341.1
3,520.8
3,671.0
3,797.3
3,930.9
4,049.5

627.8
619.2
566.1
607.1
689.2
725.1
735.9
739.2
737.9
732.8

1990
1991
1992
1993
1994
1995
1996
1997
1998
1999

........................
........................
........................
........................
........................
........................
........................
........................
........................
........................

7,112.5
7,100.5
7,336.6
7,532.7
7,835.5
8,031.7
8,328.9
8,703.5
9,066.9
9,470.3

7,108.5
7,115.0
7,331.1
7,522.3
7,777.8
8,010.2
8,306.5
8,636.6
8,997.6
9,404.0

15.4
−.5
16.5
20.6
63.6
29.9
28.7
71.2
72.6
68.9

2,252.7
2,221.5
2,307.8
2,394.8
2,550.6
2,639.0
2,772.4
2,971.3
3,132.7
3,312.6

2,244.3
2,228.9
2,297.7
2,380.3
2,493.9
2,614.9
2,747.4
2,904.6
3,063.7
3,246.4

15.4
−.5
16.5
20.6
63.6
29.9
28.7
71.2
72.6
68.9

872.8
852.7
894.7
949.8
1,016.4
1,096.9
1,193.8
1,317.4
1,431.8
1,554.3

7.2
−13.6
−3.0
16.4
33.4
31.0
17.8
38.5
42.4
40.4

1,402.1
1,410.3
1,434.3
1,457.7
1,501.4
1,536.9
1,566.5
1,593.4
1,634.2
1,692.6

3.5
6.1
8.7
1.5
12.6
−1.2
4.5
32.4
29.8
28.1

4,170.0
4,251.2
4,373.7
4,457.5
4,558.3
4,654.7
4,765.6
4,901.1
5,057.5
5,245.1

718.3
662.8
688.3
709.3
746.0
753.5
803.1
835.7
879.1
913.0

2000 ........................ 9,817.0 9,760.5
2001 ........................ 9,890.7 9,920.9
2002 ........................ 10,074.8 10,063.2
2003 ........................ 10,381.3 10,379.9
2004 p ...................... 10,837.2 10,790.2

56.5
−31.7
11.7
−.8
45.3

3,449.3
3,390.9
3,432.8
3,581.8
3,843.1

3,392.8
3,421.9
3,420.8
3,580.3
3,792.8

56.5
−31.7
11.7
−.8
45.3

1,653.3
1,655.6
1,612.1
1,718.6
1,861.0

36.1
−42.4
13.4
.4
29.3

1,739.5
1,766.1
1,806.1
1,861.6
1,936.1

20.4
10.3
−1.5
−1.1
16.8

5,425.6
5,553.2
5,718.0
5,850.9
6,006.7

942.1
945.6
922.8
950.4
999.1

2000: I .....................
II ....................
III ...................
IV ..................

9,695.6
9,847.9
9,836.6
9,887.7

9,668.8
9,748.4
9,780.4
9,844.3

26.9
99.3
56.2
43.5

3,399.3
3,484.9
3,455.7
3,457.5

3,372.3
3,385.6
3,399.5
3,414.1

26.9
99.3
56.2
43.5

1,648.8
1,654.4
1,656.9
1,653.2

18.0
67.2
29.2
29.8

1,723.4
1,731.2
1,742.6
1,761.0

8.9
32.0
27.0
13.8

5,356.6
5,419.3
5,439.1
5,487.3

939.9
943.6
941.9
942.8

2001: I .....................
II ....................
III ..................
IV ..................

9,875.6
9,905.9
9,871.1
9,910.0

9,883.2
9,908.7
9,899.9
9,992.3

−7.8
−2.5
−29.9
−86.7

3,417.7
3,406.8
3,358.7
3,380.2

3,425.6
3,409.8
3,388.1
3,464.2

−7.8
−2.5
−29.9
−86.7

1,680.6
1,653.9
1,615.8
1,672.1

−23.9
−24.4
−40.0
−81.5

1,745.5
1,756.0
1,771.1
1,791.9

15.7
21.4
9.6
−5.4

5,513.5
5,538.1
5,561.2
5,600.1

943.9
960.1
949.6
928.9

2002: I .....................
II ....................
III ..................
IV ..................

9,993.5
10,052.6
10,117.3
10,135.9

10,000.4
10,044.9
10,095.2
10,112.5

−7.4
7.9
22.7
23.8

3,414.4
3,422.0
3,461.4
3,433.3

3,421.4
3,414.1
3,438.5
3,409.2

−7.4
7.9
22.7
23.8

1,607.7
1,600.4
1,637.8
1,602.6

−6.7
7.0
13.5
39.7

1,810.9
1,810.6
1,799.3
1,803.5

−.8
.8
9.2
−15.0

5,647.5
5,706.2
5,737.9
5,780.2

930.9
923.1
917.6
919.5

2003: I .....................
II ....................
III ...................
IV ..................

10,184.4
10,287.4
10,472.8
10,580.7

10,173.3
10,302.5
10,473.9
10,569.6

9.6
−17.6
−3.5
8.6

3,470.0
3,504.7
3,650.2
3,702.2

3,458.5
3,521.0
3,651.5
3,690.4

9.6
−17.6
−3.5
8.6

1,618.7
1,682.4
1,776.6
1,796.8

15.7
−15.4
−13.5
14.9

1,836.0
1,837.6
1,877.0
1,895.9

−5.5
−2.7
9.2
−5.5

5,793.2
5,844.8
5,860.6
5,905.0

919.6
935.8
966.8
979.6

2004: I .....................
II ....................
III ...................
IVp .................

10,697.5
10,784.7
10,891.0
10,975.7

10,655.8
10,722.3
10,854.7
10,928.1

40.0
61.1
34.5
45.8

3,776.2
3,799.2
3,875.9
3,921.0

3,731.7
3,732.2
3,837.3
3,870.1

40.0
61.1
34.5
45.8

1,817.5
1,812.6
1,894.7
1,919.3

31.3
46.8
15.6
23.7

1,916.5
1,921.3
1,948.5
1,957.9

9.8
16.1
18.9
22.3

5,949.5 981.3
5,982.7 1,011.0
6,023.6 1,004.7
6,071.1
999.4

1 Estimates for durable and nondurable goods for 1996 and earlier periods are based on the Standard Industrial Classification (SIC); later
estimates are based on the North American Industry Classification System (NAICS).
2 Includes government consumption expenditures, which are for services (such as education and national defense) produced by government.
In current dollars, these services are valued at their cost of production.

Source: Department of Commerce, Bureau of Economic Analysis.

221

TABLE B–10.—Gross value added by sector, 1959–2004
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Households and institutions

Business 1
Year or
quarter

Gross
domestic
product

Total

Nonfarm 1

Farm

Total

Households

Nonprofit
institutions
serving
households 2

General government 3

Total

Federal

State
and
local

Addendum:
Gross
housing
value
added

1959 ....................................

506.6

408.2

390.9

17.3

40.1

29.8

10.3

58.3

31.9

26.5

36.9

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

....................................
....................................
....................................
....................................
....................................
....................................
....................................
....................................
....................................
....................................

526.4
544.7
585.6
617.7
663.6
719.1
787.8
832.6
910.0
984.6

420.4
432.0
464.5
488.7
525.6
571.4
625.1
654.5
714.5
770.3

402.3
413.7
446.1
470.2
508.2
551.5
604.3
634.4
694.0
747.5

18.2
18.3
18.4
18.5
17.3
19.9
20.8
20.1
20.5
22.8

43.9
46.7
50.4
53.6
56.9
61.0
65.8
70.9
76.5
84.3

32.3
34.3
36.7
38.8
40.8
43.3
45.9
48.8
51.6
55.6

11.7
12.4
13.6
14.8
16.1
17.7
19.9
22.1
25.0
28.7

62.0
66.0
70.7
75.5
81.1
86.7
96.9
107.2
119.0
130.0

33.1
34.4
36.5
38.4
40.7
42.4
47.3
51.7
56.4
60.0

28.9
31.6
34.2
37.1
40.4
44.2
49.6
55.5
62.5
70.0

39.9
42.8
46.0
48.9
51.6
54.9
58.2
62.1
65.9
71.3

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

....................................
....................................
....................................
....................................
....................................
....................................
....................................
....................................
....................................
....................................

1,038.5
1,127.1
1,238.3
1,382.7
1,500.0
1,638.3
1,825.3
2,030.9
2,294.7
2,563.3

803.6
869.9
959.0
1,079.4
1,166.9
1,268.5
1,423.7
1,593.5
1,813.4
2,032.9

779.9
844.5
929.4
1,032.7
1,122.6
1,222.8
1,380.7
1,549.9
1,762.7
1,972.8

23.7
25.4
29.7
46.8
44.2
45.6
43.0
43.5
50.7
60.1

91.4
100.9
109.9
120.0
131.7
145.4
158.1
172.8
193.8
217.4

59.4
65.1
70.3
76.0
82.5
90.3
98.1
107.3
120.4
135.0

32.0
35.7
39.5
44.0
49.2
55.1
60.0
65.6
73.4
82.5

143.6
156.4
169.4
183.3
201.4
224.5
243.5
264.6
287.5
313.0

64.1
67.8
71.6
74.0
79.6
87.3
93.8
102.1
109.7
117.6

79.5
88.6
97.9
109.3
121.8
137.1
149.7
162.6
177.8
195.4

76.7
83.9
91.1
98.3
106.8
117.2
126.6
140.3
155.2
172.5

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989

....................................
....................................
....................................
....................................
....................................
....................................
....................................
....................................
....................................
....................................

2,789.5
3,128.4
3,255.0
3,536.7
3,933.2
4,220.3
4,462.8
4,739.5
5,103.8
5,484.4

2,191.1
2,459.4
2,520.7
2,747.2
3,071.8
3,290.8
3,468.8
3,669.9
3,948.6
4,243.2

2,139.7
2,394.5
2,460.3
2,702.3
3,007.7
3,227.4
3,409.4
3,608.4
3,887.2
4,169.7

51.4
65.0
60.4
44.9
64.2
63.4
59.4
61.6
61.3
73.6

249.9
283.7
315.3
344.0
376.2
406.0
438.0
478.4
525.1
569.6

155.5
176.8
195.7
211.7
230.2
249.6
267.4
287.6
312.8
337.0

94.4
106.9
119.6
132.4
146.0
156.4
170.6
190.8
212.4
232.6

348.6
385.3
419.0
445.4
485.2
523.5
556.1
591.2
630.1
671.5

131.3
147.4
161.3
171.3
192.1
205.1
212.6
223.4
234.9
246.6

217.3
237.9
257.7
274.1
293.1
318.4
343.5
367.8
395.2
424.9

199.4
228.4
255.4
277.4
301.1
332.9
359.5
385.5
415.5
443.8

1990
1991
1992
1993
1994
1995
1996
1997
1998
1999

....................................
....................................
....................................
....................................
....................................
....................................
....................................
...................................
....................................
....................................

5,803.1
5,995.9
6,337.7
6,657.4
7,072.2
7,397.7
7,816.9
8,304.3
8,747.0
9,268.4

4,462.6
4,569.3
4,840.4
5,096.2
5,444.0
5,700.6
6,056.7
6,471.9
6,827.1
7,243.4

4,386.0
4,499.5
4,761.7
5,025.6
5,362.4
5,632.0
5,966.0
6,383.8
6,748.2
7,174.7

76.6
69.9
78.7
70.6
81.6
68.5
90.7
88.1
78.9
68.8

618.9
660.7
697.9
732.0
771.3
815.5
852.2
895.8
949.7
1,012.3

362.9
383.4
397.2
413.7
439.5
463.3
484.7
509.6
538.0
576.4

256.0
277.3
300.7
318.3
331.7
352.1
367.5
386.2
411.7
435.9

721.6
765.9
799.4
829.3
857.0
881.6
908.0
936.7
970.3
1,012.7

258.9
275.0
282.1
286.3
286.2
284.7
288.6
290.9
293.1
300.9

462.6
490.9
517.3
543.0
570.7
596.9
619.3
645.8
677.2
711.8

478.1
508.5
531.0
549.1
582.0
613.3
638.0
667.7
700.2
747.8

2000 ....................................
2001 ....................................
2002 ....................................
2003 ....................................
2004 p ..................................

9,817.0
10,128.0
10,487.0
11,004.0
11,728.0

7,666.7
7,841.2
8,057.1
8,472.3
9,053.6

7,595.1
7,768.0
7,986.3
8,387.5
8,966.6

71.5
73.1
70.8
84.8
87.0

1,080.7
1,160.4
1,235.2
1,276.5
1,367.9

615.6
662.0
704.4
717.0
778.4

465.1
498.4
530.7
559.5
589.5

1,069.6
1,126.4
1,194.8
1,255.3
1,306.5

315.4
325.7
350.4
378.4
393.7

754.2
800.8
844.3
876.9
912.8

794.3
849.8
905.7
912.0
978.2

2000: I .................................
II ................................
III ...............................
IV ...............................

9,629.4
9,822.8
9,862.1
9,953.6

7,517.6
7,688.0
7,698.3
7,762.7

7,446.1
7,615.2
7,626.2
7,693.2

71.6
72.9
72.2
69.5

1,059.1
1,069.4
1,087.9
1,106.5

604.3
609.0
618.7
630.6

454.8
460.4
469.2
475.8

1,052.7
1,065.4
1,075.9
1,084.4

312.8
316.8
316.4
315.5

739.9
748.6
759.5
768.9

780.4
786.1
798.1
812.6

2001: I .................................
II ................................
III ..............................
IV ...............................

10,021.5
10,128.9
10,135.1
10,226.3

7,791.7
7,865.2
7,823.8
7,883.9

7,719.7
7,795.6
7,752.6
7,804.3

72.0
69.6
71.3
79.6

1,128.4
1,146.6
1,176.2
1,190.3

639.5
651.4
674.8
682.4

489.0
495.2
501.4
508.0

1,101.4
1,117.1
1,135.1
1,152.1

321.1
323.8
327.4
330.4

780.3
793.4
807.8
821.6

822.0
836.2
865.0
876.1

2002: I .................................
II ................................
III ..............................
IV ...............................

10,338.2
10,445.7
10,546.5
10,617.5

7,946.8
8,017.3
8,105.6
8,158.7

7,876.1
7,944.5
8,034.9
8,089.7

70.8
72.8
70.7
69.0

1,216.7
1,240.6
1,241.1
1,242.2

697.6
713.4
705.5
701.1

519.1
527.2
535.6
541.1

1,174.7
1,187.8
1,199.8
1,216.6

345.1
348.2
350.2
358.2

829.6
839.7
849.6
858.4

897.2
917.2
907.5
901.1

2003: I .................................
II ................................
III ...............................
IV ...............................

10,744.6
10,884.0
11,116.7
11,270.9

8,247.4
8,377.1
8,579.3
8,685.4

8,174.9
8,290.3
8,491.1
8,593.7

72.5
86.8
88.2
91.7

1,257.3
1,256.8
1,276.0
1,315.8

708.5
701.3
713.9
744.3

548.8
555.4
562.1
571.5

1,239.9
1,250.1
1,261.4
1,269.7

374.6
378.8
379.9
380.2

865.3
871.3
881.4
889.4

906.2
895.1
906.0
940.6

2004: I .................................
II ................................
III ...............................
IV p ............................

11,472.6
11,657.5
11,814.9
11,967.0

8,843.3
9,000.7
9,125.2
9,245.1

8,757.8
8,911.8
9,044.6
9,152.2

85.5
88.9
80.6
92.9

1,338.8
1,357.4
1,378.0
1,397.4

759.7
772.9
784.8
796.3

579.1
584.4
593.3
601.1

1,290.5
1,299.4
1,311.6
1,324.5

391.8
392.0
393.7
397.3

898.7
907.4
917.9
927.2

957.5
972.0
985.2
998.0

1 Gross domestic business product equals gross domestic product excluding gross value added of households and institutions and of general government. Nonfarm product equals gross domestic business value added excluding gross farm value added.
2 Equals compensation of employees of nonprofit institutions, the rental value of nonresidential fixed assets owned and used by nonprofit
institutions serving households, and rental income of persons for tenant-occupied housing owned by nonprofit institutions.
3 Equals compensation of general government employees plus general government consumption of fixed capital.
Source: Department of Commerce, Bureau of Economic Analysis.

222

TABLE B–11.—Real gross value added by sector, 1959–2004
[Billions of chained (2000) dollars; quarterly data at seasonally adjusted annual rates]
Households and institutions

Business 1
Year or
quarter

Gross
domestic
product

Total

Nonfarm 1

Farm

Total

Households

Nonprofit
institutions
serving
households 2

General government 3

Total

Federal

State
and
local

Addendum:
Gross
housing
value
added

1959 ................................

2,441.3

1,716.0

1,684.1

21.2

261.7

161.6

97.8

514.5

279.4

236.7

195.0

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

................................
................................
................................
................................
................................
................................
................................
................................
................................
................................

2,501.8
2,560.0
2,715.2
2,834.0
2,998.6
3,191.1
3,399.1
3,484.6
3,652.7
3,765.4

1,748.8
1,782.8
1,897.7
1,985.4
2,111.7
2,260.6
2,413.6
2,459.5
2,581.7
2,660.3

1,713.5
1,747.8
1,867.0
1,954.3
2,086.0
2,233.5
2,393.2
2,434.1
2,561.5
2,639.1

22.4
22.6
22.1
22.8
22.1
23.5
22.7
24.5
23.6
24.5

279.6
291.5
307.7
320.4
333.7
350.2
366.3
381.6
400.4
417.8

171.4
179.6
189.8
197.7
205.7
215.2
224.0
233.1
239.3
249.1

106.6
109.6
115.4
120.0
125.4
132.6
140.2
146.5
161.0
168.8

532.2
550.9
572.5
589.5
609.7
630.3
669.7
705.2
732.7
751.3

284.6
290.5
302.5
305.2
308.2
310.4
330.7
352.2
358.1
359.0

249.3
262.1
271.8
285.9
303.1
321.5
340.6
354.9
376.2
393.4

207.3
219.2
232.8
244.3
255.4
268.9
281.0
294.0
304.6
318.7

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

................................
................................
................................
................................
................................
................................
................................
................................
................................
................................

3,771.9
3,898.6
4,105.0
4,341.5
4,319.6
4,311.2
4,540.9
4,750.5
5,015.0
5,173.4

2,659.3
2,761.5
2,939.8
3,145.0
3,101.3
3,071.2
3,272.9
3,456.2
3,673.3
3,796.7

2,636.0
2,736.2
2,918.4
3,131.5
3,089.1
3,037.5
3,249.1
3,431.1
3,656.8
3,774.2

25.1
26.4
26.4
26.2
25.6
30.5
29.1
30.7
29.6
32.2

425.0
443.0
460.7
476.3
493.9
513.7
521.5
528.3
552.4
576.7

254.7
266.5
277.7
287.5
299.9
308.0
313.3
316.2
335.1
350.4

170.0
176.1
182.4
188.2
193.1
205.2
207.5
211.6
216.3
225.3

754.1
755.3
753.8
757.2
772.6
785.1
791.8
800.1
815.5
824.2

343.6
327.8
311.8
300.1
299.2
297.5
297.9
298.8
302.5
302.3

410.8
427.5
442.3
457.8
474.4
488.9
495.3
502.9
514.6
523.7

328.9
343.8
360.1
373.0
390.7
402.7
408.3
418.3
436.8
453.9

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989

................................
................................
................................
................................
................................
................................
................................
................................
................................
................................

5,161.7
5,291.7
5,189.3
5,423.8
5,813.6
6,053.7
6,263.6
6,475.1
6,742.7
6,981.4

3,756.1
3,859.5
3,743.1
3,944.3
4,286.3
4,484.5
4,652.0
4,815.5
5,023.0
5,206.6

3,736.1
3,814.7
3,691.9
3,932.8
4,254.3
4,434.2
4,606.2
4,769.8
4,987.7
5,162.3

31.1
41.0
43.1
26.9
37.2
46.7
44.9
45.5
40.9
46.4

606.9
626.5
647.2
665.9
687.8
700.1
718.5
745.7
780.6
812.3

372.9
384.7
391.8
399.4
413.3
423.2
428.7
440.3
457.1
471.5

232.8
240.5
254.4
265.7
273.6
275.9
289.1
304.8
323.1
340.6

836.0
840.6
849.2
854.6
865.2
890.0
911.9
931.8
956.0
978.8

307.0
311.7
316.8
324.2
331.5
341.0
347.0
356.1
360.5
364.9

530.8
530.6
534.0
531.8
535.0
550.3
566.3
577.2
596.9
615.3

481.9
501.0
514.7
526.2
543.0
564.4
574.9
588.8
606.2
620.3

1990
1991
1992
1993
1994
1995
1996
1997
1998
1999

................................
................................
................................
................................
................................
................................
................................
................................
................................
...............................

7,112.5
7,100.5
7,336.6
7,532.7
7,835.5
8,031.7
8,328.9
8,703.5
9,066.9
9,470.3

5,287.0
5,245.4
5,456.5
5,625.9
5,905.3
6,076.8
6,356.0
6,693.8
7,017.1
7,376.8

5,237.9
5,194.7
5,395.2
5,576.0
5,841.4
6,030.2
6,300.4
6,627.2
6,955.3
7,314.2

49.3
50.0
57.5
50.6
60.9
49.6
56.1
64.4
61.6
62.9

841.2
865.3
882.6
904.8
923.1
945.1
957.8
983.5
1,010.4
1,042.3

483.2
497.8
502.6
507.9
524.7
534.3
540.8
554.0
563.8
590.7

357.9
367.5
379.9
396.9
398.4
410.8
417.0
429.5
446.9
451.6

1,003.9
1,014.3
1,017.7
1,019.8
1,019.9
1,020.6
1,022.1
1,030.0
1,041.0
1,051.4

371.6
373.8
366.0
358.9
347.2
334.1
325.0
318.8
315.2
312.7

633.6
641.7
652.6
661.6
673.1
686.5
697.2
711.2
725.8
738.7

635.7
657.2
666.2
669.9
690.8
705.7
712.1
726.5
735.5
767.2

2000 ...............................
2001 ...............................
2002 ................................
2003 ................................
2004 p .............................

9,817.0
9,890.7
10,074.8
10,381.3
10,837.2

7,666.7
7,691.0
7,831.0
8,132.1
8,544.6

7,595.1
7,625.7
7,761.3
8,059.6
8,483.1

71.5
65.6
69.9
72.7
65.5

1,080.7
1,110.0
1,135.8
1,132.5
1,170.4

615.6
634.8
649.7
644.0
674.5

465.1
475.1
486.0
488.5
496.0

1,069.6
1,089.3
1,107.4
1,120.1
1,129.9

315.4
317.0
323.2
331.7
334.5

754.2
772.3
784.3
788.3
795.3

794.3
815.1
836.4
821.0
849.3

2000: I .............................
II ............................
III ...........................
IV ..........................

9,695.6
9,847.9
9,836.6
9,887.7

7,561.7
7,699.1
7,683.8
7,722.1

7,490.6
7,626.9
7,610.6
7,652.5

71.3
72.2
73.1
69.5

1,070.9
1,075.7
1,083.2
1,093.0

608.9
610.9
617.8
625.0

462.0
464.8
465.4
468.0

1,063.0
1,073.0
1,069.7
1,072.7

313.9
320.3
314.5
312.8

749.1
752.7
755.2
759.8

787.1
789.1
796.6
804.4

2001: I .............................
II ............................
III ..........................
IV ..........................

9,875.6
9,905.9
9,871.1
9,910.0

7,700.0
7,716.3
7,656.7
7,691.0

7,630.6
7,653.6
7,598.0
7,620.4

69.3
63.1
59.6
70.4

1,096.7
1,102.5
1,120.0
1,120.7

626.2
629.1
642.9
641.2

470.5
473.5
477.1
479.5

1,079.0
1,087.0
1,093.6
1,097.6

315.9
317.4
317.9
316.9

763.1
769.6
775.7
780.7

804.7
807.5
824.4
823.7

2002: I .............................
II ............................
III ..........................
IV ..........................

9,993.5
10,052.6
10,117.3
10,135.9

7,757.8
7,799.1
7,872.0
7,895.2

7,695.9
7,728.2
7,797.0
7,824.1

62.2
71.0
75.2
71.2

1,132.4
1,145.9
1,135.8
1,129.0

650.5
660.1
647.5
640.9

482.0
485.8
488.3
488.1

1,102.3
1,106.3
1,109.3
1,111.9

320.3
322.5
324.5
325.3

781.9
783.8
784.8
786.6

836.9
849.5
834.3
825.0

2003: I .............................
II ............................
III ..........................
IV ..........................

10,184.4
10,287.4
10,472.8
10,580.7

7,938.8
8,048.3
8,228.4
8,312.8

7,870.0
7,971.8
8,151.9
8,244.5

68.6
76.2
76.3
69.7

1,130.0
1,121.8
1,128.6
1,149.6

642.3
634.7
640.6
658.2

487.7
487.0
487.9
491.5

1,116.3
1,119.8
1,120.9
1,123.2

329.5
332.3
332.6
332.3

786.7
787.3
788.2
790.8

824.6
812.1
814.3
832.9

2004: I .............................
II ...........................
III ..........................
IV p ........................

10,697.5
10,784.7
10,891.0
10,975.7

8,420.0
8,500.0
8,594.0
8,664.4

8,360.5
8,446.2
8,533.8
8,592.0

63.4
59.7
64.5
74.4

1,158.0
1,165.9
1,174.5
1,183.0

665.2
671.2
677.4
684.2

492.9
494.9
497.3
499.1

1,125.7
1,126.1
1,130.9
1,136.9

333.8
333.3
334.3
336.5

791.8
792.7
796.5
800.3

840.1
845.9
852.2
858.9

1 Gross domestic business product equals gross domestic product excluding gross value added of households and institutions and of general government. Nonfarm product equals gross domestic business value added excluding gross farm value added.
2 Equals compensation of employees of nonprofit institutions, the rental value of nonresidential fixed assets owned and used by nonprofit
institutions serving households, and rental income of persons for tenant-occupied housing owned by nonprofit institutions.
3 Equals compensation of general government employees plus general government consumption of fixed capital.
Source: Department of Commerce, Bureau of Economic Analysis.

223

TABLE B–12.—Gross domestic product (GDP) by industry, value added, in current dollars and as a
percentage of GDP, 1987–2003
[Billions of dollars; except as noted]
Private industries

Year

Gross
domestic
product

Total
private
industries

Agriculture,
forestry,
fishing,
and
hunting

Manufacturing
Mining

Construction

Total
manufacturing

Durable
goods

Nondurable
goods

Utilities

Wholesale
trade

Retail
trade

Value added
1987 ........................
1988 ........................
1989 ........................

4,739.5
5,103.8
5,484.4

4,080.4
4,399.1
4,732.3

79.8
80.2
92.8

71.5
71.4
76.0

218.2
232.7
244.8

811.3
876.9
927.3

483.8
519.0
543.2

327.5
357.9
384.1

123.0
122.8
135.9

285.3
318.1
337.4

349.9
366.0
389.0

1990
1991
1992
1993
1994
1995
1996
1997
1998
1999

........................
........................
........................
........................
........................
........................
........................
........................
........................
........................

5,803.1
5,995.9
6,337.7
6,657.4
7,072.2
7,397.7
7,816.9
8,304.3
8,747.0
9,268.4

4,997.8
5,138.7
5,440.4
5,729.3
6,110.5
6,407.2
6,795.2
7,247.5
7,652.5
8,127.2

96.7
89.2
99.6
93.1
105.6
93.1
113.8
110.7
102.4
93.8

84.9
76.0
71.3
72.1
73.6
74.1
87.5
92.6
74.8
85.4

248.5
230.2
232.5
248.3
274.4
287.0
311.7
337.6
374.4
406.6

947.4
957.5
996.7
1,039.9
1,118.8
1,177.3
1,209.4
1,279.8
1,343.9
1,373.1

542.7
540.9
562.8
593.1
647.7
677.2
706.5
755.5
806.9
820.4

404.7
416.6
433.8
446.8
471.1
500.0
502.9
524.3
537.0
552.7

142.9
152.5
157.4
165.3
174.6
181.5
183.3
179.6
180.8
185.4

347.7
360.5
378.9
401.2
442.7
457.0
489.1
521.2
542.9
577.7

398.8
405.5
430.0
458.0
493.3
514.9
543.8
574.2
598.6
635.5

2000
2001
2002
2003

........................
........................
........................
........................

9,817.0
10,128.0
10,487.0
11,004.0

8,614.3
8,869.7
9,154.1
9,604.2

98.0
97.9
96.9
113.9

121.3
118.7
104.9
130.3

435.9
469.5
479.1
501.3

1,426.2
1,341.3
1,347.2
1,402.3

865.3
778.9
771.9
798.0

560.9
562.5
575.3
604.4

189.3
202.3
210.7
222.2

591.7
607.1
624.9
645.4

662.4
691.6
744.3
770.5

Percent

Industry value added as a percentage of GDP (percent)

1987 ........................
1988 ........................
1989 ........................

100.0
100.0
100.0

86.1
86.2
86.3

1.7
1.6
1.7

1.5
1.4
1.4

4.6
4.6
4.5

17.1
17.2
16.9

10.2
10.2
9.9

6.9
7.0
7.0

2.6
2.4
2.5

6.0
6.2
6.2

7.4
7.2
7.1

1990
1991
1992
1993
1994
1995
1996
1997
1998
1999

........................
........................
........................
........................
........................
........................
........................
........................
........................
........................

100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0

86.1
85.7
85.8
86.1
86.4
86.6
86.9
87.3
87.5
87.7

1.7
1.5
1.6
1.4
1.5
1.3
1.5
1.3
1.2
1.0

1.5
1.3
1.1
1.1
1.0
1.0
1.1
1.1
.9
.9

4.3
3.8
3.7
3.7
3.9
3.9
4.0
4.1
4.3
4.4

16.3
16.0
15.7
15.6
15.8
15.9
15.5
15.4
15.4
14.8

9.4
9.0
8.9
8.9
9.2
9.2
9.0
9.1
9.2
8.9

7.0
6.9
6.8
6.7
6.7
6.8
6.4
6.3
6.1
6.0

2.5
2.5
2.5
2.5
2.5
2.5
2.3
2.2
2.1
2.0

6.0
6.0
6.0
6.0
6.3
6.2
6.3
6.3
6.2
6.2

6.9
6.8
6.8
6.9
7.0
7.0
7.0
6.9
6.8
6.9

2000
2001
2002
2003

........................
........................
........................
........................

100.0
100.0
100.0
100.0

87.7
87.6
87.3
87.3

1.0
1.0
.9
1.0

1.2
1.2
1.0
1.2

4.4
4.6
4.6
4.6

14.5
13.2
12.8
12.7

8.8
7.7
7.4
7.3

5.7
5.6
5.5
5.5

1.9
2.0
2.0
2.0

6.0
6.0
6.0
5.9

6.7
6.8
7.1
7.0

1 Consists

of agriculture, forestry, fishing, and hunting; mining; construction; and manufacturing.
2 Consists of utilities; wholesale trade; retail trade; transportation and warehousing; information; finance, insurance, real estate, rental, and
leasing; professional and business services; educational services, health care, and social assistance; arts, entertainment, recreation, accommodation, and food services; and other services, except government.
Note.—Value added is the contribution of each private industry and of government to gross domestic product. Value added is equal to an
industry’s gross output minus its intermediate inputs. Current-dollar value added is calculated as the sum of distributions by an industry to
its labor and capital which are derived from the components of gross domestic income.
See next page for continuation of table.

224

TABLE B–12.—Gross domestic product (GDP) by industry, value added, in current dollars and as a
percentage of GDP, 1987–2003—continued
[Billions of dollars; except as noted]
Private industries—continued

Year

Transportation
and
warehousing

Information

Finance,
insurance,
real
estate,
rental,
and
leasing

Arts,
EducaProentertional
fes- services, tainment, Other
sionrecrea- services, Governal and health
tion,
ment
care,
except
busiaccom- governand modation,
ness
social
ment
servand
assisices
food
tance services

Private Private
goods- servicesproduc- producing
ing
indusindustries 1
tries 2

Value added
1987 .........................................................
1988 .........................................................
1989 .........................................................

151.1
161.1
164.1

185.0
194.0
210.4

1990
1991
1992
1993
1994
1995
1996
1997
1998
1999

.........................................................
.........................................................
.........................................................
.........................................................
.........................................................
.........................................................
.........................................................
.........................................................
.........................................................
.........................................................

169.4
178.2
186.6
201.0
218.0
226.3
235.2
253.7
273.7
287.4

2000
2001
2002
2003

.........................................................
.........................................................
.........................................................
.........................................................

840.3
910.1
975.4

414.1
466.3
518.0

286.5
309.1
347.0

152.1
165.9
180.2

112.3
124.4
133.9

659.1
704.7
752.0

1,180.8
1,261.3
1,341.0

2,899.5
3,137.8
3,391.4

225.1
235.2
250.9
272.6
294.0
307.6
335.7
347.8
381.6
439.3

1,042.1
569.8
1,103.6
579.3
1,177.4
626.7
1,241.5
659.1
1,297.8
698.4
1,383.0
743.1
1,470.7
810.1
1,593.3
896.5
1,684.6
976.2
1,798.4 1,064.5

386.7
424.8
463.5
488.0
511.1
533.3
552.5
573.1
601.5
634.5

195.2
202.2
216.2
225.5
235.0
248.3
264.4
289.8
306.0
327.8

142.6
144.2
153.0
163.7
173.2
180.9
188.1
197.4
211.1
217.8

805.3
857.2
897.3
928.1
961.8
990.4
1,021.6
1,056.8
1,094.5
1,141.2

1,377.4
1,352.8
1,400.0
1,453.4
1,572.4
1,631.4
1,722.4
1,820.8
1,895.4
1,958.9

3,620.4
3,785.9
4,040.5
4,275.9
4,538.0
4,775.8
5,072.8
5,426.8
5,757.1
6,168.3

301.6
296.9
304.4
319.3

458.3
476.9
470.0
493.8

1,931.0
2,059.2
2,148.2
2,250.3

678.4
739.3
799.0
851.2

350.1
361.5
382.3
396.4

229.1
241.5
252.1
263.0

1,202.7
1,258.3
1,332.9
1,399.9

2,081.5
2,027.5
2,028.1
2,147.8

6,532.8
6,842.2
7,126.0
7,456.3

1987 .........................................................
1988 .........................................................
1989 .........................................................

3.2
3.2
3.0

3.9
3.8
3.8

17.7
17.8
17.8

8.7
9.1
9.4

6.0
6.1
6.3

3.2
3.3
3.3

2.4
2.4
2.4

13.9
13.8
13.7

24.9
24.7
24.5

61.2
61.5
61.8

1990
1991
1992
1993
1994
1995
1996
1997
1998
1999

.........................................................
.........................................................
.........................................................
.........................................................
.........................................................
.........................................................
.........................................................
.........................................................
.........................................................
.........................................................

2.9
3.0
2.9
3.0
3.1
3.1
3.0
3.1
3.1
3.1

3.9
3.9
4.0
4.1
4.2
4.2
4.3
4.2
4.4
4.7

18.0
18.4
18.6
18.6
18.4
18.7
18.8
19.2
19.3
19.4

9.8
9.7
9.9
9.9
9.9
10.0
10.4
10.8
11.2
11.5

6.7
7.1
7.3
7.3
7.2
7.2
7.1
6.9
6.9
6.8

3.4
3.4
3.4
3.4
3.3
3.4
3.4
3.5
3.5
3.5

2.5
2.4
2.4
2.5
2.4
2.4
2.4
2.4
2.4
2.3

13.9
14.3
14.2
13.9
13.6
13.4
13.1
12.7
12.5
12.3

23.7
22.6
22.1
21.8
22.2
22.1
22.0
21.9
21.7
21.1

62.4
63.1
63.8
64.2
64.2
64.6
64.9
65.3
65.8
66.6

2000
2001
2002
2003

.........................................................
.........................................................
.........................................................
.........................................................

3.1
2.9
2.9
2.9

4.7
4.7
4.5
4.5

19.7
20.3
20.5
20.4

11.6
11.5
11.3
11.3

6.9
7.3
7.6
7.7

3.6
3.6
3.6
3.6

2.3
2.4
2.4
2.4

12.3
12.4
12.7
12.7

21.2
20.0
19.3
19.5

66.5
67.6
68.0
67.8

1,140.8
1,165.9
1,190.0
1,244.3

Industry value added as a percentage of GDP (percent)

Note (cont’d).—Value added industry data shown in Tables B–12 and B–13 are based on the 1997 North American Industry Classification
System (NAICS). GDP by industry data based on the Standard Industrial Classification (SIC) have been updated in line with the national income and product accounts (NIPA) benchmark revisions released in December 2003. Revised SIC-based estimates are available from the Department of Commerce, Bureau of Economic Analysis, for current-dollar value added by industry for 1947–97 and for real value added for
1977–97.
For further details, see Survey of Current Business, November 2004.
Source: Department of Commerce, Bureau of Economic Analysis.

225

TABLE B–13.—Real gross domestic product by industry, value added, and percent changes, 1987–2003
Private industries

Year

Gross
domestic
product

Total
private
industries

Agriculture,
forestry,
fishing,
and
hunting

Manufacturing
Mining

Construction

Total
manufacturing

Durable
goods

Nondurable
goods

Utilities

Wholesale
trade

Retail
trade

Chain-type quantity indexes for value added (2000=100)
1987 ........................
1988 ........................
1989 ........................

65.958
68.684
71.116

63.367
66.299
68.710

71.483
64.678
71.099

91.661
99.992
97.072

82.448
85.435
87.646

60.746
64.212
65.033

48.859
52.843
53.696

83.572
85.425
86.109

72.315
70.613
79.002

53.070
56.444
58.603

52.138
56.545
58.838

1990
1991
1992
1993
1994
1995
1996
1997
1998
1999

........................
........................
........................
........................
........................
........................
........................
........................
........................
........................

72.451
72.329
74.734
76.731
79.816
81.814
84.842
88.658
92.359
96.469

69.905
69.779
72.363
74.291
77.765
79.722
83.179
87.362
91.662
96.183

74.689
75.398
83.114
72.838
84.616
73.099
80.041
88.315
86.287
89.163

96.157
97.638
95.694
97.020
105.327
105.681
98.850
102.463
101.682
104.300

86.543
79.137
80.026
82.010
86.586
86.312
90.694
93.267
97.087
99.411

64.299
63.412
65.508
68.255
73.496
76.819
79.682
84.518
90.181
94.104

52.963
51.496
52.742
55.173
60.173
65.218
69.120
75.335
84.355
89.627

85.419
85.835
89.669
92.943
98.369
97.783
98.443
100.438
99.762
101.298

84.447
85.285
85.362
85.814
89.518
93.835
95.405
91.161
90.481
94.672

57.318
59.387
65.037
67.135
71.346
70.800
77.261
85.648
95.431
100.412

59.794
59.483
62.960
65.351
69.806
72.974
79.407
86.039
90.399
95.686

2000
2001
2002
2003

........................
........................
........................
........................

100.000
100.751
102.626
105.749

100.000
100.908
102.755
105.906

100.000
93.661
100.049
105.598

100.000
94.715
92.675
86.209

100.000
100.163
97.529
97.279

100.000
94.436
96.634
100.966

100.000
94.031
95.260
101.067

100.000
95.034
98.584
100.929

100.000
95.081
100.763
106.737

100.000
107.003
108.679
106.640

100.000
106.970
112.683
119.014

1988 ........................
1989 ........................

4.1
3.5

4.6
3.6

−9.5
9.9

9.1
−2.9

3.6
2.6

5.7
1.3

8.2
1.6

2.2
.8

−2.4
11.9

6.4
3.8

8.5
4.1

1990
1991
1992
1993
1994
1995
1996
1997
1998
1999

........................
........................
........................
........................
........................
........................
........................
........................
........................
........................

1.9
−.2
3.3
2.7
4.0
2.5
3.7
4.5
4.2
4.5

1.7
−.2
3.7
2.7
4.7
2.5
4.3
5.0
4.9
4.9

5.0
1.0
10.2
−12.4
16.2
−13.6
9.5
10.3
−2.3
3.3

−.9
1.5
−2.0
1.4
8.6
.3
−6.5
3.7
−.8
2.6

−1.3
−8.6
1.1
2.5
5.6
−.3
5.1
2.8
4.1
2.4

−1.1
−1.4
3.3
4.2
7.7
4.5
3.7
6.1
6.7
4.3

−1.4
−2.8
2.4
4.6
9.1
8.4
6.0
9.0
12.0
6.2

−.8
.5
4.5
3.7
5.8
−.6
.7
2.0
−.7
1.5

6.9
1.0
.1
.5
4.3
4.8
1.7
−4.4
−.7
4.6

−2.2
3.6
9.5
3.2
6.3
−.8
9.1
10.9
11.4
5.2

1.6
−.5
5.8
3.8
6.8
4.5
8.8
8.4
5.1
5.8

2000
2001
2002
2003

........................
........................
........................
........................

3.7
.8
1.9
3.0

4.0
.9
1.8
3.1

12.2
−6.3
6.8
5.5

−4.1
−5.3
−2.2
−7.0

.6
.2
−2.6
−.3

6.3
−5.6
2.3
4.5

11.6
−6.0
1.3
6.1

−1.3
−5.0
3.7
2.4

5.6
−4.9
6.0
5.9

−.4
7.0
1.6
−1.9

4.5
7.0
5.3
5.6

Percent change from year earlier

1 Consists

of agriculture, forestry, fishing, and hunting; mining; construction; and manufacturing.
2 Consists of utilities; wholesale trade; retail trade; transportation and warehousing; information; finance, insurance, real estate, rental, and
leasing; professional and business services; educational services, health care, and social assistance; arts, entertainment, recreation, accommodation, and food services; and other services, except government.
See next page for continuation of table.

226

TABLE B–13.—Real gross domestic product by industry, value added, and percent changes, 1987–
2003—continued
Private industries—continued

Year

Transpor
tation
and
warehousing

Information

Finance,
insurance,
real
estate,
rental,
and
leasing

Professional and
business
services

Arts,
Educaentertional tainment,
services, recreaOther
health
services,
tion,
care,
except
accom- governand
social modation, ment
and
assisfood
tance
services

Government

Private
goodsproducing
industries 1

Private
servicesproducing
industries 2

Chain-type quantity indexes for value added (2000=100)
1987 ..........................................
1988 ..........................................
1989 ..........................................

55.690
57.990
59.507

45.764
47.649
51.150

65.941
68.652
70.359

60.050
64.420
68.787

80.273
80.570
84.002

68.742
71.515
73.872

84.221
89.044
92.188

86.753
88.812
90.984

66.173
69.104
70.366

62.256
65.186
68.033

1990
1991
1992
1993
1994
1995
1996
1997
1998
1999

..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................

62.281
65.060
68.758
71.988
77.827
80.473
84.585
88.373
91.454
95.301

53.420
54.441
57.568
61.445
65.223
67.996
72.714
74.559
82.252
95.467

71.877
73.051
74.863
76.931
78.506
80.732
82.893
86.786
90.201
94.994

72.073
69.786
72.008
73.224
75.430
77.382
82.053
87.432
91.976
96.898

87.047
89.285
91.728
92.199
92.413
93.503
94.144
94.809
95.603
97.304

76.063
74.232
77.250
78.787
80.604
83.542
86.796
90.310
93.446
96.836

94.369
91.258
92.502
95.195
98.624
99.714
99.072
99.291
101.871
100.236

93.215
93.658
94.134
94.055
94.407
94.250
94.768
95.864
96.923
98.009

69.858
68.214
70.330
72.128
77.818
79.572
82.596
87.229
91.878
95.402

69.877
70.319
73.074
75.047
77.745
79.773
83.377
87.407
91.591
96.434

2000
2001
2002
2003

..........................................
..........................................
..........................................
..........................................

100.000
97.354
99.178
104.183

100.000
104.034
103.746
109.630

100.000
103.858
105.301
108.684

100.000
99.346
100.616
104.137

100.000
103.186
107.102
110.071

100.000
99.292
101.124
103.065

100.000
98.337
97.525
97.996

100.000
100.794
102.303
103.709

100.000
95.654
96.726
99.400

100.000
102.584
104.671
107.974

1988 ..........................................
1989 ..........................................

4.1
2.6

4.1
7.3

4.1
2.5

7.3
6.8

0.4
4.3

4.0
3.3

5.7
3.5

2.4
2.4

4.4
1.8

4.7
4.4

1990
1991
1992
1993
1994
1995
1996
1997
1998
1999

..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................

4.7
4.5
5.7
4.7
8.1
3.4
5.1
4.5
3.5
4.2

4.4
1.9
5.7
6.7
6.1
4.3
6.9
2.5
10.3
16.1

2.2
1.6
2.5
2.8
2.0
2.8
2.7
4.7
3.9
5.3

4.8
−3.2
3.2
1.7
3.0
2.6
6.0
6.6
5.2
5.4

3.6
2.6
2.7
.5
.2
1.2
.7
.7
.8
1.8

3.0
−2.4
4.1
2.0
2.3
3.6
3.9
4.0
3.5
3.6

2.4
−3.3
1.4
2.9
3.6
1.1
−.6
.2
2.6
−1.6

2.5
.5
.5
−.1
.4
−.2
.5
1.2
1.1
1.1

−.7
−2.4
3.1
2.6
7.9
2.3
3.8
5.6
5.3
3.8

2.7
.6
3.9
2.7
3.6
2.6
4.5
4.8
4.8
5.3

2000
2001
2002
2003

..........................................
..........................................
..........................................
..........................................

4.9
−2.6
1.9
5.0

4.7
4.0
−.3
5.7

5.3
3.9
1.4
3.2

3.2
−.7
1.3
3.5

2.8
3.2
3.8
2.8

3.3
−.7
1.8
1.9

−.2
−1.7
−.8
.5

2.0
.8
1.5
1.4

4.8
−4.3
1.1
2.8

3.7
2.6
2.0
3.2

Percent change from year earlier

Note.—Data are based on the 1997 North American Industry Classification System (NAICS).
See Note, Table B–12.
Source: Department of Commerce, Bureau of Economic Analysis.

227

TABLE B–14.—Gross value added of nonfinancial corporate business, 1959–2004
[Billions of dollars; quarterly data at seasonally adjusted annual rates]

Year or
quarter

Gross
value
added
of
nonfinancial
corporate
business 1

1959 ..................
266.0
1960 ..................
276.4
1961 ..................
283.7
1962 ..................
309.8
1963 ..................
329.9
1964 ..................
356.1
1965 ..................
391.2
1966 ..................
429.0
1967 ..................
451.2
1968 ..................
497.8
1969 ..................
540.5
1970 ..................
558.3
1971 ..................
603.0
1972 ..................
669.5
1973 ..................
750.8
1974 ..................
809.8
1975 ..................
876.7
1976 ..................
989.7
1977 .................. 1,119.4
1978 .................. 1,272.9
1979 .................. 1,415.9
1980 .................. 1,537.1
1981 .................. 1,746.0
1982 .................. 1,806.2
1983 .................. 1,933.0
1984 .................. 2,167.5
1985 .................. 2,302.0
1986 .................. 2,387.5
1987 .................. 2,557.1
1988 .................. 2,771.6
1989 .................. 2,912.3
1990 .................. 3,041.5
1991 .................. 3,099.7
1992 .................. 3,236.0
1993 .................. 3,397.8
1994 .................. 3,669.5
1995 .................. 3,879.5
1996 .................. 4,109.5
1997 .................. 4,401.8
1998 .................. 4,655.0
1999 .................. 4,950.8
2000 .................. 5,272.2
2001 .................. 5,293.5
2002 .................. 5,377.7
2003 .................. 5,606.8
2004 p ................ ..............
2000: I ................ 5,196.5
II .............. 5,252.7
III ............. 5,316.9
IV ............. 5,322.4
2001: I ................ 5,315.8
II .............. 5,321.3
III ............. 5,279.1
IV ............. 5,257.7
2002: I ................ 5,309.6
II .............. 5,375.6
III ............. 5,392.8
IV ............. 5,432.9
2003: I ................ 5,443.0
II .............. 5,547.8
III ............. 5,669.0
IV ............. 5,767.5
2004: I ................ 5,839.4
II .............. 5,955.5
III ............. 6,036.7
IV p ........... ..............

Net value added
Consumption
of
fixed
capital

21.1
22.6
23.2
23.9
25.2
26.4
28.4
31.5
34.3
37.6
42.4
46.8
50.7
56.4
62.7
74.1
87.9
97.0
110.5
127.8
147.3
168.2
191.5
211.2
217.6
230.7
247.4
255.3
266.5
281.6
301.6
319.2
341.4
353.6
363.4
391.5
415.0
436.5
467.1
493.3
523.8
567.8
646.8
655.7
676.4
692.4
549.6
562.2
574.3
585.3
616.6
635.9
683.6
651.1
648.1
653.2
658.2
663.3
668.5
673.7
679.0
684.3
671.8
680.9
726.8
690.0

Addenda:

Net operating surplus

Total

244.9
253.8
260.5
285.9
304.7
329.7
362.8
397.4
416.8
460.2
498.1
511.5
552.4
613.2
688.1
735.7
788.7
892.7
1,008.8
1,145.1
1,268.6
1,368.9
1,554.5
1,594.9
1,715.4
1,936.8
2,054.6
2,132.2
2,290.6
2,490.0
2,610.7
2,722.3
2,758.3
2,882.3
3,034.4
3,278.0
3,464.5
3,673.0
3,934.7
4,161.7
4,427.0
4,704.3
4,646.7
4,722.0
4,930.5
..............
4,647.0
4,690.5
4,742.6
4,737.1
4,699.1
4,685.4
4,595.5
4,606.6
4,661.5
4,722.5
4,734.6
4,769.5
4,774.5
4,874.1
4,990.0
5,083.3
5,167.6
5,274.7
5,309.8
..............

Taxes
Comon
Net
penprodinterest Business
sauction
and
curtion
and
misrent
of
imports Total
cel- transemploy- less
lafer
ees
subsineous paydies
pay- ments
ments
170.8
180.4
184.5
199.3
210.1
225.7
245.4
272.9
291.1
321.9
357.1
376.5
399.4
443.9
502.2
552.2
575.5
651.4
735.3
845.3
959.9
1,049.8
1,161.5
1,203.9
1,266.9
1,406.1
1,504.2
1,583.1
1,687.8
1,812.8
1,914.7
2,012.9
2,048.4
2,154.1
2,244.8
2,381.5
2,509.8
2,630.8
2,812.9
3,045.6
3,267.7
3,544.4
3,595.9
3,601.3
3,696.2
3,901.6
3,485.0
3,506.0
3,577.5
3,608.9
3,616.6
3,604.8
3,587.6
3,574.5
3,571.2
3,605.1
3,610.3
3,618.7
3,627.4
3,668.5
3,717.9
3,771.0
3,818.1
3,878.6
3,928.2
3,981.6

24.4
49.7
2.9
26.6
46.8
3.2
27.6
48.4
3.7
29.9
56.8
4.3
31.7
62.9
4.7
33.9
70.2
5.2
36.0
81.4
5.8
37.0
87.6
7.0
39.3
86.4
8.4
45.5
92.8
9.7
50.2
90.8
12.7
54.2
80.7
16.6
59.5
93.4
17.6
63.7 105.6
18.6
70.1 115.8
21.8
74.4 109.1
27.5
80.2 133.1
28.4
86.7 154.7
26.0
94.6 178.9
28.5
102.7 197.0
33.4
108.8 200.0
41.8
121.5 197.6
54.2
146.7 246.4
67.2
152.9 238.1
77.4
168.0 280.5
77.0
185.0 345.7
86.0
196.6 353.8
91.5
204.6 344.5
95.1
216.8 386.0
96.4
233.8 443.4 109.8
248.2 447.9 142.0
263.5 445.8 146.2
285.7 424.2 135.9
302.5 425.7 111.3
318.8 470.8 102.0
349.6 546.9 101.0
356.9 597.8 115.2
369.1 673.1 111.9
385.5 736.3 124.0
398.7 717.4 143.8
416.6 742.7 160.2
443.4 716.5 191.7
439.1 611.8 204.0
465.1 655.5 181.7
483.4 750.8 170.8
510.6 ............ ............
432.0 730.0 183.5
440.3 744.2 189.7
447.6 717.5 196.0
453.9 674.4 197.6
444.4 638.2 202.0
437.1 643.6 207.0
423.3 584.7 205.8
451.5 580.6 201.3
456.4 633.9 193.3
464.7 652.7 183.6
469.7 654.5 177.4
469.8 681.0 172.5
477.1 669.9 171.4
472.6 733.0 169.6
489.0 783.2 170.2
495.0 817.2 172.1
501.1 848.5 174.8
508.4 887.6 177.2
511.7 870.0 177.3
521.3 ............ ............

Corporate profits with
inventory valuation and
capital consumption
adjustments
Total

Taxes
on cor- Profits
porate after
2
income tax

InCapivental
tory
conProfits valua- sumpbefore tion
tion
tax
adadjustjustment ment

1.3
45.5
20.7
24.8
43.4
−0.3
1.4
42.2
19.1
23.1
40.1
−.2
1.5
43.2
19.4
23.8
39.9
.3
1.7
50.8
20.6
30.2
44.6
.0
1.7
56.5
22.8
33.8
49.7
.1
2.0
63.0
23.9
39.2
55.9
−.5
2.2
73.3
27.1
46.2
66.1
−1.2
2.7
77.9
29.5
48.4
71.4
−2.1
2.8
75.2
27.8
47.3
67.6
−1.6
3.1
80.0
33.5
46.5
74.0
−3.7
3.2
74.9
33.3
41.6
71.2
−5.9
3.3
60.9
27.3
33.6
58.5
−6.6
3.7
72.1
30.0
42.1
67.4
−4.6
4.0
83.0
33.8
49.2
79.2
−6.6
4.7
89.4
40.4
49.0
99.4 −19.6
4.1
77.5
42.8
34.7 110.1 −38.2
5.0
99.6
41.9
57.7 110.7 −10.5
7.0 121.7
53.5
68.2 138.2 −14.1
9.0 141.4
60.6
80.9 159.4 −15.7
9.5 154.1
67.6
86.6 183.7 −23.7
9.5 148.8
70.6
78.1 197.0 −40.1
10.2 133.2
68.2
65.0 184.0 −42.1
11.4 167.7
66.0 101.7 185.0 −24.6
8.8 151.9
48.8 103.1 139.9
−7.5
10.5 192.9
61.7 131.2 163.3
−7.4
11.7 248.0
75.9 172.0 197.6
−4.0
16.1 246.3
71.1 175.2 173.4
.0
27.3 222.1
76.2 145.9 149.7
7.1
29.9 259.7
94.2 165.5 209.8 −16.2
27.4 306.2
104.0 202.3 260.4 −22.2
23.0 282.9
101.2 181.7 238.7 −16.3
25.4 274.3
98.5 175.8 239.0 −12.9
26.7 261.5
88.6 172.9 222.4
4.9
25.2 289.2
94.4 194.8 258.2
−2.8
29.6 339.2
108.0 231.2 303.3
−4.0
30.0 415.9
132.9 283.1 380.1 −12.4
30.2 452.5
141.0 311.4 419.3 −18.3
38.0 523.2
153.1 370.1 458.5
3.1
39.0 573.4
161.9 411.5 494.2
14.1
35.2 538.3
158.6 379.7 449.4
20.2
45.0 537.6
171.2 366.3 457.9
1.0
48.4 476.4
170.2 306.2 423.9 −14.1
50.6 357.2
111.7 245.5 310.6
11.3
55.5 418.4
89.0 329.4 324.1
−1.2
63.5 516.4
130.0 386.4 397.7 −14.1
63.0 ............ .............. ............ ............ ............
48.5 498.0
183.6 314.4 454.8 −28.6
47.9 506.6
181.4 325.2 451.3 −11.3
48.1 473.5
165.9 307.6 415.8
−6.3
49.3 427.5
150.0 277.5 373.7 −10.1
51.9 384.2
127.6 256.6 363.7
−4.1
56.9 379.7
126.2 253.5 359.9
1.1
37.8 341.1
110.9 230.2 312.8
18.0
55.5 323.7
82.0 241.7 206.1
30.4
54.8 385.8
73.2 312.7 266.0
15.9
54.3 414.8
86.5 328.2 314.6
1.6
55.3 421.8
93.6 328.2 340.8 −11.8
57.4 451.1
102.6 348.5 374.8 −10.6
58.4 440.1
120.5 319.5 376.6 −27.4
62.3 501.1
120.5 380.6 367.8
−1.0
65.7 547.3
132.2 415.1 401.4
−3.8
67.8 577.3
146.8 430.5 445.0 −24.3
69.0 604.6
147.7 456.9 443.4 −37.0
69.6 640.8
164.9 475.9 496.5 −47.8
42.5 650.2
167.5 482.7 506.5 −37.8
70.9 ............ .............. ............ ............ ............

2.3
2.3
3.0
6.1
6.8
7.7
8.4
8.5
9.1
9.7
9.6
8.9
9.3
10.5
9.5
5.6
−.5
−2.4
−2.2
−5.9
−8.1
−8.7
7.4
19.5
37.1
54.3
72.8
65.3
66.2
68.0
60.6
48.2
34.2
33.8
39.9
48.3
51.5
61.6
65.0
68.7
78.7
66.6
35.2
95.6
132.9
197.0
71.8
66.6
64.0
63.9
24.6
18.7
10.4
87.3
104.0
98.5
92.8
86.9
90.8
134.3
149.7
156.6
198.3
192.0
181.5
216.0

1 Estimates for nonfinancial corporate business for 2000 and earlier periods are based on the Standard Industrial Classification (SIC); later
estimates are based on the North American Industry Classification System (NAICS).
2 With inventory valuation and capital consumption adjustments.
Source: Department of Commerce, Bureau of Economic Analysis.

228

TABLE B–15.—Gross value added and price, costs, and profits of nonfinancial corporate business,
1959–2004
[Quarterly data at seasonally adjusted annual rates]

Year or quarter

Gross
value added
of
nonfinancial
corporate
business
(billions of
dollars) 1
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 ..................................
1994 ..................................
1995 ..................................
1996 ..................................
1997 ..................................
1998 ..................................
1999 ..................................
2000 ..................................
2001 ..................................
2002 ..................................
2003 ..................................
2000: I ...............................
II ..............................
III .............................
IV .............................
2001: I ...............................
II ..............................
III .............................
IV .............................
2002: I ...............................
II ..............................
III .............................
IV .............................
2003: I ...............................
II ..............................
III .............................
IV .............................
2004: I ...............................
II ..............................
III .............................

266.0
276.4
283.7
309.8
329.9
356.1
391.2
429.0
451.2
497.8
540.5
558.3
603.0
669.5
750.8
809.8
876.7
989.7
1,119.4
1,272.9
1,415.9
1,537.1
1,746.0
1,806.2
1,933.0
2,167.5
2,302.0
2,387.5
2,557.1
2,771.6
2,912.3
3,041.5
3,099.7
3,236.0
3,397.8
3,669.5
3,879.5
4,109.5
4,401.8
4,655.0
4,950.8
5,272.2
5,293.5
5,377.7
5,606.8
5,196.5
5,252.7
5,316.9
5,322.4
5,315.8
5,321.3
5,279.1
5,257.7
5,309.6
5,375.6
5,392.8
5,432.9
5,443.0
5,547.8
5,669.0
5,767.5
5,839.4
5,955.5
6,036.7

Price per unit of real gross value added of nonfinancial corporate business (dollars) 1

Total 2

Chained
(2000)
dollars
980.4
1,012.0
1,033.6
1,120.7
1,186.7
1,270.3
1,375.1
1,472.6
1,508.9
1,604.8
1,667.6
1,649.9
1,716.6
1,846.4
1,957.7
1,925.4
1,898.8
2,050.0
2,200.0
2,344.1
2,418.7
2,394.6
2,491.5
2,430.6
2,545.1
2,772.8
2,896.3
2,963.3
3,119.6
3,300.7
3,361.8
3,404.0
3,376.2
3,479.5
3,575.5
3,797.9
3,977.4
4,196.4
4,469.3
4,725.4
5,011.0
5,272.2
5,224.5
5,275.9
5,423.0
5,228.5
5,258.1
5,302.1
5,299.9
5,285.9
5,256.7
5,197.6
5,158.0
5,225.7
5,279.7
5,294.6
5,303.5
5,294.8
5,373.1
5,471.9
5,552.0
5,598.7
5,657.4
5,731.7

0.271
.273
.274
.276
.278
.280
.284
.291
.299
.310
.324
.338
.351
.363
.384
.421
.462
.483
.509
.543
.585
.642
.701
.743
.759
.782
.795
.806
.820
.840
.866
.894
.918
.930
.950
.966
.975
.979
.985
.985
.988
1.000
1.013
1.019
1.034
.994
.999
1.003
1.004
1.006
1.012
1.016
1.019
1.016
1.018
1.019
1.024
1.028
1.033
1.036
1.039
1.043
1.053
1.053

Compensation
of
employees
(unit
labor
cost)
0.174
.178
.179
.178
.177
.178
.178
.185
.193
.201
.214
.228
.233
.240
.257
.287
.303
.318
.334
.361
.397
.438
.466
.495
.498
.507
.519
.534
.541
.549
.570
.591
.607
.619
.628
.627
.631
.627
.629
.645
.652
.672
.688
.683
.682
.667
.667
.675
.681
.684
.686
.690
.693
.683
.683
.682
.682
.685
.683
.679
.679
.682
.686
.685

Unit nonlabor cost

Total

Consumption
of
fixed
capital

Taxes
on
production
and
imports 3

Net
interest
and
miscellaneous
payments

0.051
.053
.054
.053
.053
.053
.053
.053
.057
.059
.065
.073
.077
.078
.081
.093
.106
.106
.110
.117
.127
.148
.167
.186
.185
.185
.190
.196
.195
.197
.213
.222
.234
.228
.228
.230
.230
.228
.228
.226
.229
.237
.257
.257
.258
.232
.236
.238
.242
.249
.254
.261
.263
.259
.257
.257
.257
.259
.257
.256
.255
.253
.253
.255

0.022
.022
.022
.021
.021
.021
.021
.021
.023
.023
.025
.028
.030
.031
.032
.038
.046
.047
.050
.055
.061
.070
.077
.087
.085
.083
.085
.086
.085
.085
.090
.094
.101
.102
.102
.103
.104
.104
.105
.104
.105
.108
.124
.124
.125
.105
.107
.108
.110
.117
.121
.132
.126
.124
.124
.124
.125
.126
.125
.124
.123
.120
.120
.127

0.026
.028
.028
.028
.028
.028
.028
.027
.028
.030
.032
.035
.037
.037
.038
.041
.045
.046
.047
.048
.049
.055
.063
.067
.070
.071
.073
.078
.079
.079
.081
.085
.093
.094
.097
.100
.097
.097
.095
.092
.092
.093
.094
.099
.101
.092
.093
.093
.095
.094
.094
.089
.098
.098
.098
.099
.099
.101
.100
.101
.101
.102
.102
.097

0.003
.003
.004
.004
.004
.004
.004
.005
.006
.006
.008
.010
.010
.010
.011
.014
.015
.013
.013
.014
.017
.023
.027
.032
.030
.031
.032
.032
.031
.033
.042
.043
.040
.032
.029
.027
.029
.027
.028
.030
.032
.036
.039
.034
.032
.035
.036
.037
.037
.038
.039
.040
.039
.037
.035
.034
.033
.032
.032
.031
.031
.031
.031
.031

2

Corporate profits with
inventory valuation and
capital consumption
adjustments 4

Total

0.046
.042
.042
.045
.048
.050
.053
.053
.050
.050
.045
.037
.042
.045
.046
.040
.052
.059
.064
.066
.062
.056
.067
.062
.076
.089
.085
.075
.083
.093
.084
.081
.077
.083
.095
.110
.114
.125
.128
.114
.107
.090
.068
.079
.095
.095
.096
.089
.081
.073
.072
.066
.063
.074
.079
.080
.085
.083
.093
.100
.104
.108
.113
.113

Taxes
on
corporate
income

Profits
after
tax 5

0.021
.019
.019
.018
.019
.019
.020
.020
.018
.021
.020
.017
.017
.018
.021
.022
.022
.026
.028
.029
.029
.028
.026
.020
.024
.027
.025
.026
.030
.031
.030
.029
.026
.027
.030
.035
.035
.036
.036
.034
.034
.032
.021
.017
.024
.035
.034
.031
.028
.024
.024
.021
.016
.014
.016
.018
.019
.023
.022
.024
.026
.026
.029
.029

0.025
.023
.023
.027
.028
.031
.034
.033
.031
.029
.025
.020
.025
.027
.025
.018
.030
.033
.037
.037
.032
.027
.041
.042
.052
.062
.060
.049
.053
.061
.054
.052
.051
.056
.065
.075
.078
.088
.092
.080
.073
.058
.047
.062
.071
.060
.062
.058
.052
.049
.048
.044
.047
.060
.062
.062
.066
.060
.071
.076
.078
.082
.084
.084

1 Estimates for nonfinancial corporate business for 2000 and earlier periods are based on the Standard Industrial Classification (SIC); later
estimates are based on the North American Industry Classification System (NAICS).
2 The implicit price deflator for gross value added of nonfinancial corporate business divided by 100.
3 Less subsidies plus business current transfer payments.
4 Unit profits from current production.
5 With inventory valuation and capital consumption adjustments.
Source: Department of Commerce, Bureau of Economic Analysis.

229

TABLE B–16.—Personal consumption expenditures, 1959–2004
[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
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999

Personal
consumption
expendi- Total 1
tures

Nondurable goods

FurniMotor ture
vehiand
cles house- Total 1
and
hold
parts equipment

Clothing
and
shoes

Food

Services

Gaso- Fuel
line
oil
1
and and Total
oil
coal

Household
operation
Housing 2

Total 1

Electricity
and
gas

Trans- Mediporcal
tacare
tion

...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............

317.6
331.7
342.1
363.3
382.7
411.4
443.8
480.9
507.8
558.0
605.2
648.5
701.9
770.6
852.4
933.4
1,034.4
1,151.9
1,278.6
1,428.5
1,592.2
1,757.1
1,941.1
2,077.3
2,290.6
2,503.3
2,720.3
2,899.7
3,100.2
3,353.6
3,598.5
3,839.9
3,986.1
4,235.3
4,477.9
4,743.3
4,975.8
5,256.8
5,547.4
5,879.5
6,282.5

42.7
43.3
41.8
46.9
51.6
56.7
63.3
68.3
70.4
80.8
85.9
85.0
96.9
110.4
123.5
122.3
133.5
158.9
181.2
201.7
214.4
214.2
231.3
240.2
280.8
326.5
363.5
403.0
421.7
453.6
471.8
474.2
453.9
483.6
526.7
582.2
611.6
652.6
692.7
750.2
817.6

18.9
19.7
17.8
21.5
24.4
26.0
29.9
30.3
30.0
36.1
38.4
35.5
44.5
51.1
56.1
49.5
54.8
71.3
83.5
93.1
93.5
87.0
95.8
102.9
126.5
152.1
175.9
194.1
195.0
209.4
215.3
212.8
193.5
213.0
234.0
260.5
266.7
284.9
305.1
336.1
370.8

18.1
18.0
18.3
19.3
20.7
23.2
25.1
28.2
30.0
32.9
34.7
35.7
37.8
42.4
47.9
51.5
54.5
60.2
67.2
74.3
82.7
86.7
92.1
93.4
106.6
119.0
128.5
143.0
153.4
163.7
171.6
171.6
171.7
178.7
193.4
213.4
228.6
242.9
256.2
273.1
293.9

148.5
152.8
156.6
162.8
168.2
178.6
191.5
208.7
217.1
235.7
253.1
272.0
285.5
308.0
343.1
384.5
420.7
458.3
497.1
550.2
624.5
696.1
758.9
787.6
831.2
884.6
928.7
958.4
1,015.3
1,083.5
1,166.7
1,249.9
1,284.8
1,330.5
1,379.4
1,437.2
1,485.1
1,555.5
1,619.0
1,683.6
1,804.8

80.6
82.3
84.0
86.1
88.2
93.5
100.7
109.3
112.4
122.2
131.5
143.8
149.7
161.4
179.6
201.8
223.2
242.5
262.6
289.6
324.7
356.0
383.5
403.4
423.8
447.4
467.6
492.0
515.2
553.5
591.6
636.8
657.5
669.3
691.9
720.6
740.9
768.7
796.2
829.8
873.1

26.4
27.0
27.6
29.0
29.8
32.4
34.1
37.4
39.2
43.2
46.5
47.8
51.7
56.4
62.5
66.0
70.8
76.6
84.1
94.3
101.2
107.3
117.2
120.5
130.9
142.5
152.1
163.1
174.4
185.5
198.9
204.1
208.7
221.9
229.9
238.1
241.7
250.2
258.1
270.9
286.3

11.3
12.0
12.0
12.6
13.0
13.6
14.8
16.0
17.1
18.6
20.5
21.9
23.2
24.4
28.1
36.1
39.7
43.0
46.9
50.1
66.2
86.7
97.9
94.1
93.1
94.6
97.2
80.1
85.4
88.3
98.6
111.2
108.5
112.4
114.1
116.2
120.2
130.4
134.4
122.4
137.9

4.0
3.8
3.8
3.8
4.0
4.1
4.4
4.7
4.8
4.7
4.6
4.4
4.6
5.1
6.3
7.8
8.4
10.1
11.1
11.5
14.4
15.4
15.8
14.5
13.6
13.9
13.6
11.3
11.2
11.7
11.9
12.9
12.4
12.2
12.4
12.8
13.1
14.3
13.3
11.5
11.9

126.5
135.6
143.8
153.6
162.9
176.1
189.0
203.8
220.3
241.6
266.1
291.5
319.5
352.2
385.8
426.6
480.2
534.7
600.2
676.6
753.3
846.9
950.8
1,049.4
1,178.6
1,292.2
1,428.1
1,538.3
1,663.3
1,816.5
1,960.0
2,115.9
2,247.4
2,421.2
2,571.8
2,723.9
2,879.1
3,048.7
3,235.8
3,445.7
3,660.0

45.0
48.2
51.2
54.7
58.0
61.4
65.4
69.5
74.1
79.8
86.9
94.1
102.8
112.6
123.3
134.8
147.7
162.2
180.2
202.4
227.3
256.2
289.7
315.2
341.0
374.5
412.7
448.4
483.7
521.5
557.4
597.9
631.1
658.5
683.9
726.1
764.4
800.1
842.6
894.6
948.4

18.7
20.3
21.2
22.4
23.6
25.0
26.5
28.1
30.0
32.3
35.0
37.8
41.1
45.4
49.9
55.8
64.0
72.5
81.8
91.2
100.3
113.7
126.8
142.5
157.0
169.4
181.8
187.7
195.4
207.3
221.1
227.3
238.6
250.7
269.9
286.2
298.7
318.5
337.0
350.5
364.8

7.6
8.3
8.8
9.4
9.9
10.4
10.9
11.5
12.2
13.0
14.1
15.3
16.9
18.8
20.4
24.0
29.2
33.2
38.5
43.0
47.8
57.5
64.8
74.2
82.4
86.5
90.8
89.2
90.9
96.3
101.0
101.0
107.4
108.9
118.2
120.7
122.2
129.4
131.3
129.8
130.6

10.6
11.2
11.6
12.3
12.9
13.8
14.7
15.9
17.4
19.3
21.6
24.0
26.8
29.6
31.6
34.1
37.9
42.5
48.7
53.4
59.9
65.2
70.3
72.9
81.1
93.2
104.5
111.1
120.9
133.4
142.0
147.7
145.3
157.7
172.7
190.6
207.7
226.5
245.7
259.5
276.4

16.4
17.7
19.0
21.2
23.0
26.4
28.6
31.5
34.7
40.1
45.8
51.7
58.4
65.6
73.3
82.3
95.6
109.1
125.3
143.1
161.0
184.4
216.7
243.3
274.3
303.2
331.5
357.5
392.2
442.8
492.5
556.0
608.9
672.2
715.1
752.9
797.9
833.5
873.0
921.4
961.1

2000 ...............
2001 ...............
2002 ...............
2003 ...............
2004 p ............

6,739.4
7,055.0
7,376.1
7,760.9
8,231.1

863.3
883.7
916.2
950.7
995.7

386.5
407.9
426.1
440.1
449.3

312.9
312.1
319.9
328.0
351.5

1,947.2 925.2
2,017.1 967.9
2,080.1 1,005.8
2,200.1 1,064.5
2,376.5 1,149.7

297.7
297.7
302.1
307.2
326.5

175.7
171.6
163.4
191.3
224.5

15.8
15.4
14.1
16.9
20.3

3,928.8
4,154.3
4,379.8
4,610.1
4,859.0

1,006.5
1,073.7
1,144.8
1,188.4
1,238.8

390.1
409.0
409.0
431.3
452.1

143.3
156.7
152.6
167.3
177.8

291.3
292.8
288.0
294.0
301.7

1,026.8
1,113.8
1,210.3
1,301.1
1,391.3

2000: I ............
II ...........
III ..........
IV .........
2001: I ............
II ...........
III ..........
IV ..........
2002: I ............
II ...........
III ..........
IV ..........
2003: I ............
II ...........
III ..........
IV ..........
2004: I ............
II ...........
III ..........
IVp ........

6,613.9 876.9
6,688.1 854.2
6,783.9 861.3
6,871.6 860.9
6,955.8 872.1
7,017.5 864.7
7,058.5 865.1
7,188.4 932.8
7,236.9 903.5
7,339.3 907.5
7,428.0 932.8
7,500.0 920.8
7,609.8 912.1
7,696.3 946.8
7,822.5 972.7
7,914.9 971.1
8,060.2 976.3
8,153.8 975.5
8,282.5 1,007.0
8,428.1 1,023.9

402.3
376.9
382.6
384.3
395.5
390.8
393.7
451.5
414.5
415.8
444.6
429.7
421.4
442.4
452.5
444.1
438.4
432.5
458.4
468.0

311.4
313.4
314.7
312.2
312.3
310.7
309.9
315.5
319.8
321.9
318.5
319.4
316.8
323.9
333.3
338.0
345.0
348.6
353.8
358.8

1,894.2
1,938.3
1,965.8
1,990.5
2,000.0
2,016.6
2,024.2
2,027.5
2,046.8
2,077.7
2,081.3
2,114.6
2,167.5
2,163.6
2,219.2
2,250.1
2,316.6
2,354.6
2,387.2
2,447.6

292.8
296.1
300.3
301.6
299.8
297.1
295.0
299.0
303.9
303.2
297.7
303.6
299.9
303.6
311.0
314.4
325.0
322.9
325.2
332.8

168.6
173.7
177.5
182.8
180.2
183.6
170.8
152.0
147.8
163.0
166.1
176.5
201.9
180.1
190.9
192.5
211.1
224.5
224.2
238.2

14.3
14.9
16.2
18.0
17.5
15.2
15.2
13.8
12.6
13.7
14.3
15.8
17.2
15.5
16.7
18.2
18.6
18.7
21.3
22.8

3,842.8
3,895.6
3,956.7
4,020.3
4,083.7
4,136.2
4,169.1
4,228.0
4,286.5
4,354.0
4,413.9
4,464.7
4,530.2
4,585.9
4,630.6
4,693.6
4,767.3
4,823.8
4,888.2
4,956.5

983.8
998.8
1,013.6
1,029.6
1,047.0
1,065.6
1,082.3
1,099.9
1,121.8
1,140.0
1,153.2
1,164.2
1,174.5
1,182.7
1,193.4
1,202.8
1,215.4
1,232.7
1,247.3
1,259.7

372.0
385.4
393.7
409.4
418.3
409.6
408.8
399.3
400.6
406.7
410.9
417.7
426.6
428.9
431.8
438.1
445.6
447.6
453.5
461.5

128.6
138.7
145.4
160.6
168.9
157.3
154.3
146.2
146.5
151.6
153.0
159.2
164.9
166.3
166.7
171.2
175.7
174.3
177.4
183.8

286.8
290.9
292.5
294.7
297.4
296.1
290.7
287.1
287.6
288.8
287.2
288.3
291.5
293.0
295.1
296.5
297.8
300.5
302.6
305.9

998.1
1,017.0
1,036.9
1,055.2
1,079.5
1,101.0
1,125.4
1,149.4
1,173.7
1,197.9
1,222.5
1,247.0
1,267.6
1,290.5
1,312.1
1,334.0
1,356.8
1,379.1
1,404.4
1,425.0

906.9
922.1
932.0
939.7
953.8
961.9
972.9
983.1
994.6
1,004.1
1,006.2
1,018.4
1,039.5
1,052.2
1,074.6
1,091.8
1,120.3
1,137.5
1,157.0
1,184.1

1 Includes

other items not shown separately.
imputed rental value of owner-occupied housing.
Source: Department of Commerce, Bureau of Economic Analysis.
2 Includes

230

TABLE B–17.—Real personal consumption expenditures, 1990–2004
[Billions of chained (2000) dollars; quarterly data at seasonally adjusted annual rates]

Year or
quarter

1990
1991
1992
1993
1994
1995
1996
1997
1998
1999

.........
.........
.........
.........
.........
.........
.........
.........
.........
.........

Durable goods
Personal
FurniconMotor ture
sumpvehiand
tion Total 1 cles houseexand
hold
pendiparts equiptures
ment
4,770.3
4,778.4
4,934.8
5,099.8
5,290.7
5,433.5
5,619.4
5,831.8
6,125.8
6,438.6

Nondurable goods

Total 1

Food

Clothing
and
shoes

Gasoline
and
oil

Services
Fuel
oil
and
coal

Household
operation
Total 1

Housing 2

Total 1

Electricity
and
gas

Transportation

Medical
care

453.5
427.9
453.0
488.4
529.4
552.6
595.9
646.9
720.3
804.6

256.1
226.6
244.9
259.2
276.2
272.3
285.4
304.7
339.0
372.4

119.9
121.1
127.8
141.1
156.8
173.3
193.4
216.3
244.7
280.7

1,484.0
1,480.5
1,510.1
1,550.4
1,603.9
1,638.6
1,680.4
1,725.3
1,794.4
1,876.6

784.4
783.3
787.9
802.2
821.8
827.1
834.7
845.2
865.6
893.6

188.2
188.8
199.2
207.4
218.5
227.4
238.7
246.0
263.1
282.7

141.8
140.3
146.0
149.7
151.7
154.5
157.9
162.8
170.3
176.3

16.7
16.6
17.0
17.4
18.2
18.7
18.4
16.9
16.0
16.4

2,851.7
2,900.0
3,000.8
3,085.7
3,176.6
3,259.9
3,356.0
3,468.0
3,615.0
3,758.0

802.2
820.1
832.7
841.8
869.3
887.5
901.1
922.5
948.8
978.6

266.4
269.9
277.4
291.1
303.3
312.9
327.3
340.4
357.1
371.9

117.4
121.1
120.4
126.8
128.8
130.2
134.7
133.7
136.7
138.1

195.7
186.3
194.2
202.5
218.4
231.8
247.5
263.2
272.0
283.4

797.6
824.5
863.6
877.2
887.1
906.4
922.5
942.8
970.7
989.0

2000 .........
2001 .........
2002 .........
2003 .........
2004 p .......

6,739.4 863.3
6,910.4 900.7
7,123.4 959.6
7,355.6 1,030.6
7,634.7 1,101.3

386.5
405.8
428.7
452.1
467.4

312.9
331.8
360.7
393.5
439.7

1,947.2 925.2
1,986.7 940.2
2,037.4 958.4
2,112.4 995.1
2,208.3 1,042.8

297.7
303.7
316.7
330.2
352.3

175.7
178.3
180.7
182.0
181.4

15.8
15.2
15.4
15.4
16.2

3,928.8
4,023.2
4,128.6
4,220.3
4,339.0

1,006.5
1,033.7
1,062.0
1,076.1
1,094.7

390.1
391.0
394.1
400.2
410.9

143.3
140.9
144.7
147.2
150.6

291.3
288.0
279.9
277.7
280.7

1,026.8
1,075.2
1,139.3
1,184.3
1,228.4

2000: I ......
II .....
III ....
IV ....

6,661.3
6,703.3
6,768.0
6,825.0

872.8
851.3
863.8
865.4

403.3
376.1
383.2
383.5

306.7
311.3
315.9
317.8

1,917.2
1,944.0
1,955.0
1,972.7

916.1
925.6
927.8
931.2

291.3
296.4
301.1
302.1

176.7
174.4
173.0
178.5

14.8
15.7
16.1
16.7

3,871.1 995.7
3,908.2 1,003.3
3,949.3 1,009.9
3,986.8 1,016.9

376.3
388.6
392.5
403.0

133.9
142.0
143.8
153.6

289.9
291.9
291.6
291.7

1,010.7
1,022.0
1,032.1
1,042.5

2001: I ......
II .....
III ....
IV ....

6,853.1
6,870.3
6,900.5
7,017.6

879.5
878.9
885.6
958.7

392.6
388.6
392.7
449.4

323.8
328.1
332.2
343.0

1,975.2
1,974.7
1,986.5
2,010.3

937.1
938.3
940.6
945.0

300.5
301.8
302.9
309.8

180.4
173.5
176.1
183.1

16.0
14.9
15.0
14.7

3,997.9
4,016.0
4,027.8
4,051.2

1,024.4
1,031.2
1,036.5
1,042.8

397.6
389.5
390.3
386.6

148.5
138.8
138.9
137.3

292.9
291.5
285.9
281.6

1,053.5
1,065.7
1,082.7
1,099.1

2002: I ......
II .....
III ....
IV ....

7,049.7
7,099.2
7,149.9
7,194.6

937.8
947.8
979.3
973.4

415.1
418.6
447.1
433.9

354.4
360.1
361.2
367.2

2,029.3
2,033.2
2,030.2
2,056.8

951.4
958.4
958.0
965.8

316.4
316.2
312.9
321.2

183.3
178.4
178.0
183.0

14.6
15.3
15.4
16.3

4,084.1
4,119.7
4,143.8
4,166.9

1,052.8
1,060.8
1,065.5
1,068.7

388.5
394.5
394.7
398.9

139.6
144.2
145.1
149.9

282.0
280.9
278.5
278.2

1,117.1
1,132.5
1,147.0
1,160.5

2003: I ......
II .....
III ....
IV ....

7,242.2 973.2
7,311.4 1,020.0
7,401.7 1,059.6
7,466.8 1,069.7

428.0
451.3
465.6
463.5

369.3
385.2
405.0
414.6

2,082.0 981.4
2,090.1 988.0
2,125.3 1,002.2
2,152.0 1,008.6

320.6
327.1
334.9
338.2

184.5
177.8
179.1
186.4

15.0
14.3
15.5
16.9

4,188.7
4,207.7
4,227.9
4,256.7

1,071.6
1,074.3
1,078.1
1,080.3

399.5
396.8
398.7
406.0

149.0
144.5
144.7
150.6

279.3
277.7
277.1
276.7

1,170.0
1,179.7
1,189.3
1,198.3

2004: I ......
II .....
III ....
IV p

7,543.0
7,572.4
7,667.8
7,755.4

456.7
449.6
478.9
484.5

425.6
433.3
445.4
454.6

2,187.3
2,188.0
2,213.2
2,244.7

351.2
346.5
351.6
359.9

186.0
179.0
179.8
180.6

16.1
16.1
16.6
15.8

4,291.7
4,320.0
4,352.4
4,391.8

1,086.0
1,091.5
1,097.9
1,103.4

409.3
408.4
409.7
416.1

151.9
148.8
148.5
153.3

278.1
280.1
281.3
283.4

1,207.9
1,221.0
1,236.1
1,248.5

1,075.5
1,074.7
1,118.3
1,136.6

1,028.4
1,034.3
1,045.4
1,063.0

1 Includes

other items not shown separately.
2 Includes imputed rental value of owner-occupied housing.
Note.—See Table B-2 for data for total personal consumption expenditures for 1959-89.
Source: Department of Commerce, Bureau of Economic Analysis.

231

TABLE B–18.—Private fixed investment by type, 1959–2004
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Nonresidential

Residential
Structures

Equipment and software
Year or
quarter

1959 ...........

Private
fixed
investment

Total
nonresidential

Information processing equipment and software
Structures

Total

Computers
and peripheral
equipment

Total

Software

Other

Industrial
equipment

Transportation
equipment

Other
equipment

Total
residential 1

Total 1

Single
family

74.6

46.5

18.1

28.4

4.0

0.0

0.0

4.0

8.5

8.3

7.6

28.1

27.5

16.7

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

...........
...........
...........
...........
...........
...........
...........
...........
...........
...........

75.7
75.2
82.0
88.1
97.2
109.0
117.7
118.7
132.1
147.3

49.4
48.8
53.1
56.0
63.0
74.8
85.4
86.4
93.4
104.7

19.6
19.7
20.8
21.2
23.7
28.3
31.3
31.5
33.6
37.7

29.8
29.1
32.3
34.8
39.2
46.5
54.0
54.9
59.9
67.0

4.9
5.3
5.7
6.5
7.4
8.5
10.7
11.3
11.9
14.6

.2
.3
.3
.7
.9
1.2
1.7
1.9
1.9
2.4

.1
.2
.2
.4
.5
.7
1.0
1.2
1.3
1.8

4.6
4.8
5.1
5.4
5.9
6.7
8.0
8.2
8.7
10.4

9.4
8.8
9.3
10.0
11.4
13.7
16.2
16.9
17.3
19.1

8.5
8.0
9.8
9.4
10.6
13.2
14.5
14.3
17.6
18.9

7.1
7.0
7.5
8.8
9.9
11.0
12.7
12.4
13.0
14.4

26.3
26.4
29.0
32.1
34.3
34.2
32.3
32.4
38.7
42.6

25.8
25.9
28.4
31.5
33.6
33.5
31.6
31.6
37.9
41.6

14.9
14.1
15.1
16.0
17.6
17.8
16.6
16.8
19.5
19.7

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

...........
...........
...........
...........
...........
...........
...........
...........
...........
...........

150.4
169.9
198.5
228.6
235.4
236.5
274.8
339.0
412.2
474.9

109.0
114.1
128.8
153.3
169.5
173.7
192.4
228.7
280.6
333.9

40.3
42.7
47.2
55.0
61.2
61.4
65.9
74.6
93.6
117.7

68.7
71.5
81.7
98.3
108.2
112.4
126.4
154.1
187.0
216.2

16.6
17.3
19.5
23.1
27.0
28.5
32.7
39.2
48.7
58.5

2.7
2.8
3.5
3.5
3.9
3.6
4.4
5.7
7.6
10.2

2.3
2.4
2.8
3.2
3.9
4.8
5.2
5.5
6.3
8.1

11.6
12.2
13.2
16.3
19.2
20.2
23.1
28.0
34.8
40.2

20.3
19.5
21.4
26.0
30.7
31.3
34.1
39.4
47.7
56.2

16.2
18.4
21.8
26.6
26.3
25.2
30.0
39.3
47.3
53.6

15.6
16.3
19.0
22.6
24.3
27.4
29.6
36.3
43.2
47.9

41.4
55.8
69.7
75.3
66.0
62.7
82.5
110.3
131.6
141.0

40.2
54.5
68.1
73.6
64.1
60.8
80.4
107.9
128.9
137.8

17.5
25.8
32.8
35.2
29.7
29.6
43.9
62.2
72.8
72.3

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989

...........
...........
...........
...........
...........
...........
...........
...........
...........
...........

485.6
542.6
532.1
570.1
670.2
714.4
739.9
757.8
803.1
847.3

362.4
420.0
426.5
417.2
489.6
526.2
519.8
524.1
563.8
607.7

136.2
167.3
177.6
154.3
177.4
194.5
176.5
174.2
182.8
193.7

226.2
252.7
248.9
262.9
312.2
331.7
343.3
349.9
381.0
414.0

68.8
81.5
88.3
100.1
121.5
130.3
136.8
141.2
154.9
172.6

12.5
17.1
18.9
23.9
31.6
33.7
33.4
35.8
38.0
43.1

9.8
11.8
14.0
16.4
20.4
23.8
25.6
29.0
34.2
41.9

46.4
52.5
55.3
59.8
69.6
72.9
77.7
76.4
82.8
87.6

60.7
65.5
62.7
58.9
68.1
72.5
75.4
76.7
84.2
93.3

48.4
50.6
46.8
53.5
64.4
69.0
70.5
68.1
72.9
67.9

48.3
55.2
51.2
50.4
58.1
59.9
60.7
63.9
69.0
80.2

123.2
122.6
105.7
152.9
180.6
188.2
220.1
233.7
239.3
239.5

119.8
118.9
102.0
148.6
175.9
183.1
214.6
227.9
233.2
233.4

52.9
52.0
41.5
72.5
86.4
87.4
104.1
117.2
120.1
120.9

1990
1991
1992
1993
1994
1995
1996
1997
1998
1999

...........
...........
...........
...........
...........
...........
...........
...........
...........
..........

846.4
803.3
848.5
932.5
1,033.3
1,112.9
1,209.5
1,317.8
1,438.4
1,558.8

622.4
598.2
612.1
666.6
731.4
810.0
875.4
968.7
1,052.6
1,133.9

202.9
183.6
172.6
177.2
186.8
207.3
224.6
250.3
275.2
282.2

419.5
414.6
439.6
489.4
544.6
602.8
650.8
718.3
777.3
851.7

177.2
182.9
199.9
217.6
235.2
263.0
290.1
330.3
363.4
411.0

38.6
37.7
44.0
47.9
52.4
66.1
72.8
81.4
87.2
96.0

47.6
53.7
57.9
64.3
68.3
74.6
85.5
107.5
124.0
152.6

90.9
91.5
98.1
105.4
114.6
122.3
131.9
141.4
152.2
162.4

92.1
89.3
93.0
102.2
113.6
129.0
136.5
140.4
146.4
147.0

70.0
71.5
74.7
89.4
107.7
116.1
123.2
135.5
144.0
167.6

80.2
70.8
72.0
80.2
88.1
94.7
101.0
112.1
123.5
126.0

224.0
205.1
236.3
266.0
301.9
302.8
334.1
349.1
385.8
424.9

218.0
199.4
230.4
259.9
295.6
296.5
327.8
342.8
379.3
417.8

112.9
99.4
122.0
140.1
162.3
153.5
170.8
175.2
199.4
223.8

2000 ...........
2001 ...........
2002 ...........
2003 ...........
2004 p ........

1,679.0
1,646.1
1,568.0
1,667.0
1,879.3

1,232.1
1,176.8
1,063.9
1,094.7
1,217.6

313.2
322.6
271.6
261.6
277.0

918.9
854.2
792.4
833.1
940.7

467.6
437.0
400.5
431.2
484.3

101.4
85.4
81.4
95.3
110.8

176.2
174.7
161.7
165.8
182.4

190.0
177.0
157.3
170.0
191.0

159.2
146.7
138.6
139.8
150.5

160.8
141.7
126.0
126.6
148.0

131.2
128.8
127.3
135.5
157.8

446.9
469.3
504.1
572.3
661.7

439.5
461.9
496.6
564.3
653.0

236.8
249.1
265.9
310.6
367.1

2000: I ........
II .......
III ......
IV ......

1,642.4
1,685.4
1,690.6
1,697.5

1,193.9
1,236.5
1,247.5
1,250.3

295.2
310.4
321.1
326.0

898.7
926.1
926.5
924.2

446.4
466.5
473.6
484.0

96.2
103.5
103.8
102.2

168.7
174.8
177.9
183.2

181.5
188.1
191.9
198.5

156.0
159.5
162.1
159.3

165.6
166.7
160.3
150.8

130.7
133.4
130.6
130.1

448.5
448.8
443.1
447.2

441.2
441.5
435.7
439.8

240.6
238.9
233.3
234.3

2001: I ........
II .......
III ......
IV ......

1,685.2
1,654.7
1,644.8
1,599.6

1,229.6
1,187.1
1,167.2
1,123.2

323.9
325.7
335.8
305.2

905.7
861.4
831.4
818.1

470.8
442.8
422.0
412.5

97.3
88.3
77.5
78.4

182.8
176.1
172.1
167.6

190.6
178.4
172.4
166.5

160.1
148.4
141.6
136.6

142.7
142.3
138.2
143.7

132.2
127.9
129.6
125.3

455.6
467.6
477.6
476.3

448.2
460.2
470.2
468.9

241.0
248.5
255.1
251.8

2002: I ........
II .......
III ......
IV ......

1,577.4
1,563.0
1,562.2
1,569.5

1,091.4
1,061.2
1,055.0
1,048.1

290.0
273.4
262.7
260.1

801.4
787.8
792.3
788.0

401.7
398.2
404.9
397.2

80.5
79.5
83.1
82.6

163.3
160.6
163.8
159.3

157.9
158.2
158.0
155.3

142.5
136.9
137.9
136.9

134.3
125.1
120.7
123.9

122.9
127.6
128.7
130.1

486.0
501.8
507.2
521.4

478.5
494.2
499.8
513.8

254.0
264.0
268.5
277.0

2003: I ........
II .......
III ......
IV ......

1,586.0
1,626.4
1,700.2
1,755.2

1,046.4
1,072.7
1,113.3
1,146.3

253.6
262.3
262.3
268.2

792.8
810.4
851.1
878.1

407.9
419.3
442.8
454.7

85.6
91.5
99.7
104.5

161.0
162.8
169.1
170.5

161.4
165.0
174.0
179.7

139.7
139.3
140.8
139.5

116.1
121.4
128.8
140.0

129.0
130.3
138.7
144.0

539.6
553.8
586.9
609.0

532.0
545.9
578.7
600.6

292.1
297.1
315.0
338.2

2004: I ........
II .......
III ......
IV p ...

1,783.5
1,861.7
1,915.4
1,956.6

1,158.8
1,198.5
1,238.5
1,274.7

266.0
275.5
281.2
285.2

892.8
923.1
957.3
989.6

468.5
480.9
486.3
501.3

104.4
108.8
111.1
119.1

176.8
180.0
182.9
190.0

187.4
192.2
192.2
192.3

143.1
145.0
155.2
158.7

134.5
143.2
153.0
161.4

146.6
153.9
162.7
168.1

624.6
663.2
677.0
681.9

616.1
654.6
668.3
673.1

349.3
365.8
376.1
377.4

1 Includes

other items, not shown separately.

Source: Department of Commerce, Bureau of Economic Analysis.

232

TABLE B–19.—Real private fixed investment by type, 1990–2004
[Billions of chained (2000) dollars; quarterly data at seasonally adjusted annual rates]
Nonresidential

Residential
Structures

Equipment and software

Year or
quarter

1990
1991
1992
1993
1994
1995
1996
1997
1998
1999

Private
fixed
investment

Total
nonresidential

Information processing equipment
and software
Structures

Total

Computers
and
Total peripheral
equipment1

Software

Other

Industrial
equipment

Transportation
equipment

Other
equipment

Total
residential 2

Total 2

Single
family

.......
.......
.......
.......
.......
.......
.......
.......
.......
......

886.6
829.1
878.3
953.5
1,042.3
1,109.6
1,209.2
1,320.6
1,455.0
1,576.3

595.1
563.2
581.3
631.9
689.9
762.5
833.6
934.2
1,037.8
1,133.3

275.2
244.6
229.9
228.3
232.3
247.1
261.1
280.1
294.5
293.2

355.0
345.9
371.1
417.4
467.2
523.1
578.7
658.3
745.6
840.2

100.7
105.9
122.2
138.2
155.7
182.7
218.9
269.9
328.9
398.5

...........
...........
...........
...........
...........
...........
...........
...........
...........
...........

39.9
45.1
53.0
59.3
65.1
71.6
84.1
108.8
129.4
157.2

80.1
79.6
84.4
90.9
99.4
107.0
117.2
127.3
143.2
158.0

109.2
102.2
104.0
112.9
122.9
134.9
139.9
143.0
148.1
147.9

81.0
78.8
80.2
95.1
111.4
120.6
125.4
135.9
145.4
167.7

96.0
82.0
81.6
89.3
96.5
101.7
105.6
115.8
125.7
126.7

298.9
270.2
307.6
332.7
364.8
353.1
381.3
388.6
418.3
443.6

292.6
264.0
301.4
326.4
358.6
346.8
375.1
382.4
411.9
436.6

154.2
135.1
164.1
179.7
198.9
180.6
197.3
196.6
218.1
234.2

2000 .......
2001 .......
2002 .......
2003 .......
2004 p .....

1,679.0
1,629.4
1,548.9
1,627.3
1,790.4

1,232.1
1,180.5
1,075.6
1,110.8
1,225.6

313.2
306.1
251.6
237.4
239.7

918.9
874.2
826.5
879.2
996.6

467.6
459.0
439.6
492.4
571.9

...........
...........
...........
...........
...........

176.2
173.8
163.6
171.2
192.4

190.0
181.7
164.3
179.4
205.0

159.2
145.7
137.4
137.6
144.5

160.8
142.8
125.6
121.6
135.3

131.2
126.9
124.5
131.2
151.1

446.9
448.5
470.0
511.2
559.6

439.5
441.1
462.5
503.0
550.4

236.8
237.1
246.3
274.2
304.6

2000: I ....
II ...
III ..
IV ..

1,651.1
1,689.1
1,686.4
1,689.4

1,196.7
1,238.6
1,245.2
1,247.9

299.9
312.5
319.7
320.6

896.7
926.0
925.5
927.3

442.9
465.7
473.8
488.1

...........
...........
...........
...........

171.4
175.8
176.2
181.2

179.9
187.7
192.3
200.2

156.3
159.7
161.9
159.0

166.1
167.0
159.5
150.7

131.3
133.6
130.4
129.6

454.5
450.4
441.2
441.6

447.1
443.1
433.8
434.2

243.5
239.7
232.4
231.5

2001: I ....
II ..
III ..
IV ..

1,678.2
1,640.5
1,621.9
1,577.0

1,234.4
1,190.2
1,169.3
1,128.2

313.8
310.6
315.1
284.9

920.8
879.2
852.9
843.8

485.7
461.4
447.3
441.7

...........
...........
...........
...........

181.4
174.1
172.3
167.4

193.7
182.9
177.8
172.2

159.3
147.3
140.6
135.4

145.3
144.5
137.6
144.0

130.9
126.3
127.6
122.8

444.0
450.1
452.1
447.8

436.6
442.7
444.8
440.4

234.6
239.1
240.3
234.5

2002: I ....
II ...
III ..
IV ..

1,559.6
1,545.9
1,546.6
1,543.5

1,099.8
1,072.4
1,069.5
1,060.9

270.7
253.9
243.0
238.9

830.1
820.6
829.8
825.5

434.1
435.5
446.5
442.2

...........
...........
...........
...........

163.8
162.9
165.9
161.7

163.7
164.9
165.4
163.2

141.5
136.0
136.6
135.4

134.1
124.3
121.9
121.9

120.4
125.1
125.7
126.7

457.8
470.3
473.6
478.5

450.3
462.7
466.0
470.9

237.7
246.0
249.5
252.0

2003: I ....
II ...
III ..
IV ..

1,552.7
1,593.4
1,660.6
1,702.7

1,060.5
1,090.6
1,131.1
1,161.0

230.7
238.7
237.9
242.4

834.6
856.7
899.7
925.6

460.0
475.7
507.1
526.6

...........
...........
...........
...........

164.9
166.8
174.6
178.5

169.6
173.7
183.9
190.4

137.9
137.3
138.4
136.8

113.9
120.5
124.3
127.8

125.2
126.1
134.0
139.3

487.3
497.9
523.8
535.9

479.5
489.8
515.3
527.2

260.3
264.1
278.3
294.1

2004: I ....
II ...
III ..
IV p

1,721.4
1,778.3
1,816.1
1,845.7

1,173.0
1,207.9
1,245.3
1,276.3

237.7
241.7
241.0
238.5

943.7
975.5
1,015.6
1,051.5

547.0
565.4
575.6
599.4

...........
...........
...........
...........

185.6
189.5
192.7
201.6

200.2
206.2
206.8
206.9

139.0
139.7
148.5
150.6

122.7
130.0
141.0
147.5

142.1
147.5
155.2
159.6

542.5
563.6
565.9
566.3

533.6
554.6
556.7
556.9

299.3
305.7
307.9
305.7

1 For details on this component see Survey of Current Business, Table 5.3.6, Table 5.3.1 for growth rates, Table 5.3.2 for contributions, and
Table 5.3.3 for quantity indexes.
2 Includes other items, not shown separately.
Source: Department of Commerce, Bureau of Economic Analysis.

233

TABLE B–20.—Government consumption expenditures and gross investment by type, 1959–2004
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Government consumption expenditures and gross investment
Federal
National defense
Year or
quarter

Total

Total

Total

State and local

Nondefense

Gross
investment

Consumption
expenditures

Structures

Equipment
and
software

Total

Gross
investment

Consumption
expenditures

Structures

Equipment
and
software

Total

Gross
investment

Consumption
expenditures

Structures

Equipment
and
software

1959 .......

110.0

65.4

53.8

40.1

2.5

11.2

11.5

9.8

1.5

0.2

44.7

30.7

12.8

1.1

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

.......
.......
.......
.......
.......
.......
.......
.......
.......
.......

111.6
119.5
130.1
136.4
143.2
151.5
171.8
192.7
209.4
221.5

64.1
67.9
75.3
76.9
78.5
80.4
92.5
104.8
111.4
113.4

53.4
56.5
61.1
61.0
60.3
60.6
71.7
83.5
89.3
89.5

41.0
42.7
46.6
48.3
48.8
50.6
60.0
70.0
77.2
78.2

2.2
2.4
2.0
1.6
1.3
1.1
1.3
1.2
1.2
1.5

10.1
11.5
12.5
11.0
10.2
8.9
10.5
12.3
10.9
9.9

10.7
11.4
14.2
15.9
18.2
19.8
20.8
21.3
22.1
23.8

8.7
9.0
11.3
12.4
14.0
15.1
15.9
17.1
18.3
20.2

1.7
1.9
2.1
2.3
2.5
2.8
2.8
2.2
2.1
1.9

.3
.6
.8
1.2
1.6
1.9
2.1
1.9
1.7
1.7

47.5
51.6
54.9
59.5
64.8
71.0
79.2
87.9
98.0
108.2

33.5
36.6
39.0
41.9
45.8
50.2
56.1
62.6
70.4
79.9

12.7
13.8
14.5
16.0
17.2
19.0
21.0
23.0
25.2
25.6

1.2
1.3
1.3
1.5
1.8
1.9
2.1
2.3
2.4
2.7

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

.......
.......
.......
.......
.......
.......
.......
.......
.......
.......

233.8
246.5
263.5
281.7
317.9
357.7
383.0
414.1
453.6
500.8

113.5
113.7
119.7
122.5
134.6
149.1
159.7
175.4
190.9
210.6

87.6
84.6
87.0
88.2
95.6
103.9
111.1
120.9
130.5
145.2

76.6
77.1
79.5
79.4
84.5
90.9
95.8
104.2
112.7
123.8

1.3
1.8
1.8
2.1
2.2
2.3
2.1
2.4
2.5
2.5

9.8
5.7
5.7
6.6
8.9
10.7
13.2
14.4
15.3
18.9

25.8
29.1
32.7
34.3
39.0
45.1
48.6
54.5
60.4
65.4

22.1
24.9
28.2
29.4
33.4
38.7
41.4
46.5
50.6
55.1

2.1
2.5
2.7
3.1
3.4
4.1
4.6
5.0
6.1
6.3

1.7
1.7
1.8
1.8
2.2
2.4
2.7
3.0
3.7
4.0

120.3
132.8
143.8
159.2
183.4
208.7
223.3
238.7
262.6
290.2

91.5
102.7
113.2
126.0
143.7
165.1
179.5
195.9
213.2
233.3

25.8
27.0
27.1
29.1
34.7
38.1
38.1
36.9
42.8
49.0

3.0
3.1
3.5
4.1
4.9
5.5
5.7
5.9
6.6
7.8

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989

.......
.......
.......
.......
.......
.......
.......
.......
.......
.......

566.2
627.5
680.5
733.5
797.0
879.0
949.3
999.5
1,039.0
1,099.1

243.8
280.2
310.8
342.9
374.4
412.8
438.6
460.1
462.3
482.2

168.0
196.3
225.9
250.7
281.6
311.2
330.9
350.0
354.9
362.2

143.7
167.3
191.2
208.8
232.9
253.7
268.0
283.6
293.6
299.5

3.2
3.2
4.0
4.8
4.9
6.2
6.8
7.7
7.4
6.4

21.1
25.7
30.8
37.1
43.8
51.3
56.1
58.8
53.9
56.3

75.8
84.0
84.9
92.3
92.8
101.6
107.8
110.0
107.4
120.0

63.8
71.0
72.1
77.7
77.1
84.7
90.3
90.6
88.9
99.7

7.1
7.7
6.8
6.7
7.0
7.3
8.0
9.0
6.8
6.9

4.9
5.3
6.0
7.8
8.7
9.6
9.5
10.4
11.7
13.4

322.4
347.3
369.7
390.5
422.6
466.2
510.7
539.4
576.7
616.9

258.4
282.3
304.9
324.1
347.7
381.8
417.9
440.9
470.4
502.1

55.1
55.4
54.2
54.2
60.5
67.6
74.2
78.8
84.8
88.7

8.9
9.5
10.6
12.2
14.4
16.8
18.6
19.6
21.5
26.0

1990
1991
1992
1993
1994
1995
1996
1997
1998
1999

.......
.......
.......
.......
.......
.......
.......
......
.......
......

1,180.2
1,234.4
1,271.0
1,291.2
1,325.5
1,369.2
1,416.0
1,468.7
1,518.3
1,620.8

508.3
527.7
533.9
525.2
519.1
519.2
527.4
530.9
530.4
555.8

374.0
383.2
376.9
362.9
353.7
348.7
354.6
349.6
345.7
360.6

308.1
319.8
315.3
307.6
300.7
297.3
302.5
304.7
300.7
312.9

6.1
4.6
5.2
5.1
5.7
6.3
6.7
5.7
5.1
5.0

59.8
58.8
56.3
50.1
47.2
45.1
45.4
39.2
39.9
42.8

134.3
144.5
157.0
162.4
165.5
170.5
172.8
181.3
184.7
195.2

111.7
119.7
129.8
134.2
140.1
143.2
143.8
153.0
153.9
162.2

8.0
9.2
10.3
11.2
10.5
10.8
11.2
9.8
10.6
10.6

14.6
15.7
16.9
16.9
14.9
16.5
17.9
18.5
20.2
22.4

671.9
706.7
737.0
766.0
806.3
850.0
888.6
937.8
987.9
1,065.0

544.6
574.6
602.7
630.3
663.3
696.1
724.8
758.9
801.4
858.9

98.5
103.2
104.2
104.5
108.7
117.3
126.8
139.5
143.6
159.7

28.7
28.9
30.1
31.2
34.3
36.7
36.9
39.4
43.0
46.4

2000 ......
2001 ......
2002 .......
2003 .......
2004 p .....
2000: I ....
II ...
III ..
IV ..

1,721.6
1,825.6
1,956.6
2,075.5
2,183.8
1,689.6
1,720.0
1,729.9
1,746.9

578.8
612.9
680.8
752.2
810.0
565.3
586.6
581.2
582.0

370.3
392.6
437.4
496.4
548.1
360.9
375.2
371.3
373.8

321.5
342.4
382.0
436.1
477.8
311.9
326.2
322.1
325.7

5.0
4.6
4.4
5.3
5.4
4.5
5.2
5.4
4.8

43.8
45.6
51.0
55.1
64.9
44.5
43.8
43.8
43.3

208.5
220.3
243.4
255.7
261.9
204.4
211.4
209.9
208.2

177.8
189.5
210.7
222.5
227.0
173.8
178.9
179.4
179.2

8.3
8.3
9.9
10.2
10.0
9.2
8.6
8.1
7.5

22.3
22.5
22.9
23.0
24.9
21.5
24.0
22.4
21.5

1,142.8
1,212.8
1,275.8
1,323.3
1,373.9
1,124.3
1,133.4
1,148.6
1,164.9

917.8
969.8
1,016.5
1,058.5
1,099.8
900.6
910.8
923.4
936.3

176.0
192.4
208.2
213.4
221.7
176.0
173.8
175.9
178.5

49.0
50.6
51.0
51.5
52.4
47.8
48.8
49.4
50.1

2001: I ....
II ...
III ..
IV ..

1,783.3
1,825.4
1,825.6
1,868.2

596.2
610.9
614.3
630.1

383.5
388.3
393.0
405.6

335.8
338.0
341.4
354.3

4.8
4.7
4.3
4.6

42.9
45.6
47.3
46.6

212.7
222.6
221.3
224.5

182.6
189.9
191.3
194.1

8.0
8.0
8.4
8.8

22.1
24.7
21.6
21.6

1,187.2
1,214.5
1,211.2
1,238.1

951.7
963.6
976.6
987.1

185.7
200.4
183.7
199.9

49.7
50.6
51.0
51.1

2002: I ....
II ...
III ..
IV ..

1,909.2
1,944.9
1,968.3
2,004.2

654.2
676.6
684.4
708.2

418.5
431.7
438.5
461.0

367.1
376.0
380.0
404.8

4.2
4.4
4.5
4.6

47.2
51.2
53.9
51.6

235.8
244.9
245.9
247.2

203.7
210.3
213.4
215.5

9.7
9.7
9.9
10.3

22.4
24.9
22.7
21.4

1,255.0
1,268.3
1,283.9
1,296.0

996.2
1,011.5
1,023.8
1,034.6

207.7
205.8
208.9
210.6

51.1
51.0
51.3
50.8

2003: I ....
II ...
III ..
IV ..

2,041.4
2,074.2
2,086.4
2,100.0

723.4
761.1
756.7
767.5

467.4
506.7
498.1
513.6

410.1
446.7
437.1
450.2

4.8
4.9
5.7
5.7

52.5
55.0
55.3
57.7

256.0
254.4
258.7
253.9

224.2
219.0
225.9
221.1

10.0
10.6
10.5
9.7

21.8
24.8
22.2
23.1

1,318.0
1,313.1
1,329.7
1,332.6

1,054.8
1,051.8
1,061.0
1,066.3

212.2
210.3
217.0
214.2

51.0
51.1
51.7
52.0

2004: I ....
II ...
III ..
IV p

2,139.5
2,174.3
2,197.2
2,224.3

793.3
804.4
817.4
824.8

534.1
541.2
557.0
559.9

465.2
473.6
487.1
485.2

5.9
4.9
5.6
5.2

63.1
62.8
64.3
69.5

259.1
263.2
260.4
264.9

225.9
226.6
225.9
229.5

9.7
10.1
10.4
9.9

23.5
26.4
24.2
25.5

1,346.3
1,369.9
1,379.8
1,399.5

1,079.8
1,091.8
1,105.5
1,122.0

214.9
226.0
221.8
224.1

51.5
52.1
52.5
53.5

Source: Department of Commerce, Bureau of Economic Analysis.

234

TABLE B–21.—Real government consumption expenditures and gross investment by type, 1990–2004
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Government consumption expenditures and gross investment
Federal
National defense
Year or
quarter

Total

Total

Total

State and local

Nondefense

Gross
investment

Consumption
expenditures

Structures

Equipment
and
software

Total

Gross
investment

Consumption
expenditures

Structures

Equipment
and
software

Total

Gross
investment

Consumption
expenditures

Structures

Equipment
and
software

1990 .........
1991 .........
1992 .........
1993 .........
1994 .........
1995 .........
1996 .........
1997 .........
1998 .........
1999 .........
2000 .........
2001 .........
2002 .........
2003 .........
2004 p ......

1,530.0
1,547.2
1,555.3
1,541.1
1,541.3
1,549.7
1,564.9
1,594.0
1,624.4
1,686.9
1,721.6
1,780.3
1,857.9
1,909.4
1,946.7

659.1
658.0
646.6
619.6
596.4
580.3
573.5
567.6
561.2
573.7
578.8
601.4
646.6
689.6
721.9

479.4
474.2
450.7
425.3
404.6
389.2
383.8
373.0
365.3
372.2
370.3
384.9
414.6
451.8
485.1

404.9
404.4
383.5
367.2
350.6
338.1
332.2
328.1
319.8
324.6
321.5
334.1
358.2
390.3
415.4

8.6
6.4
7.0
6.4
7.1
7.4
7.7
6.4
5.5
5.2
5.0
4.4
4.2
4.8
4.7

64.2
61.8
58.7
51.1
46.8
43.7
43.8
38.9
40.1
42.5
43.8
46.4
52.5
56.8
65.9

178.6
182.8
195.4
194.1
191.7
191.0
189.6
194.5
195.9
201.5
208.5
216.5
232.0
237.6
236.4

156.5
158.4
168.2
166.0
167.3
164.7
161.1
166.6
164.8
168.1
177.8
185.8
199.0
204.0
201.5

10.6
11.8
13.2
14.1
12.7
12.6
12.7
10.9
11.5
11.1
8.3
8.0
9.3
9.4
8.8

12.9
13.7
15.0
15.0
13.3
14.7
16.4
17.5
19.8
22.3
22.3
22.7
23.6
24.1
26.5

868.4
886.8
906.5
919.5
943.3
968.3
990.5
1,025.9
1,063.0
1,113.2
1,142.8
1,179.0
1,211.4
1,219.8
1,224.7

714.2
729.0
746.5
761.4
780.6
798.4
812.8
834.9
866.4
900.3
917.8
941.2
962.2
969.0
973.8

132.1
136.5
137.0
133.9
134.9
139.5
146.3
155.8
155.6
167.0
176.0
186.0
195.7
196.1
195.1

25.0
24.8
25.9
26.8
29.5
31.7
32.7
36.1
41.2
45.9
49.0
51.7
53.5
54.8
56.2

2000: I ......
II ....
III ....
IV ....

1,707.3
1,730.5
1,721.5
1,727.1

568.2
591.2
578.6
577.2

362.6
377.1
369.9
371.5

313.8
328.1
320.7
323.4

4.5
5.2
5.4
4.7

44.3
43.8
43.9
43.4

205.6
214.0
208.7
205.6

174.8
181.5
178.2
176.8

9.3
8.6
8.1
7.3

21.5
24.0
22.4
21.5

1,139.2
1,139.3
1,142.9
1,149.9

912.4
916.3
918.7
923.7

179.1
174.2
174.9
175.9

47.7
48.8
49.3
50.2

2001: I ......
II ....
III ...
IV ....

1,749.6
1,783.0
1,776.1
1,812.7

588.5
601.4
601.5
614.2

377.9
381.9
384.1
395.6

329.8
331.3
332.1
343.1

4.7
4.6
4.1
4.4

43.3
46.1
48.1
48.2

210.6
219.5
217.3
218.6

180.6
187.1
187.3
188.2

7.8
7.7
8.1
8.4

22.3
24.8
21.9
21.9

1,161.1
1,181.6
1,174.6
1,198.5

929.6
935.6
945.2
954.5

181.1
194.6
177.4
191.1

50.4
51.5
52.1
52.9

2002: I ......
II ....
III ...
IV ....

1,833.5
1,853.4
1,863.1
1,881.6

626.4
645.5
650.1
664.5

401.3
412.3
415.8
429.2

348.6
355.7
356.5
371.9

4.0
4.2
4.2
4.3

48.6
52.8
55.5
53.0

225.2
233.2
234.3
235.3

193.0
198.5
201.4
203.2

9.2
9.2
9.3
9.6

22.9
25.6
23.5
22.3

1,207.2
1,208.0
1,213.1
1,217.3

957.0
960.9
963.7
967.3

197.1
193.8
195.6
196.5

53.1
53.3
53.9
53.5

2003: I ......
II ....
III ...
IV ...

1,882.5
1,915.3
1,916.0
1,923.7

665.0
699.0
693.1
701.2

426.2
462.3
453.1
465.7

367.8
401.0
391.1
401.4

4.5
4.5
5.2
5.1

54.1
56.7
57.0
59.5

238.8
236.5
239.9
235.2

206.6
200.9
206.7
202.0

9.3
9.8
9.7
8.8

22.7
25.9
23.3
24.4

1,217.7
1,216.3
1,222.9
1,222.5

967.7
968.6
968.8
970.9

196.1
193.4
199.0
196.1

54.0
54.4
55.3
55.7

2004: I ......
II ....
III ...
IV p

1,935.8
1,946.5
1,949.9
1,954.5

713.3
718.1
726.6
729.5

477.6
479.9
491.5
491.5

408.5
412.5
422.1
418.3

5.3
4.3
4.8
4.4

64.7
63.7
65.2
70.1

235.4
237.9
234.7
237.6

201.8
201.5
200.2
202.4

8.7
8.9
9.0
8.4

24.9
28.0
25.8
27.2

1,222.4
1,228.3
1,223.2
1,224.9

971.5
971.5
974.6
977.6

195.8
201.2
192.7
190.5

55.3
55.8
56.3
57.4

Note.—See Table B-2 for data for total government consumption expenditures and gross investment for 1959-89.
Source: Department of Commerce, Bureau of Economic Analysis.

235

TABLE B–22.—Private inventories and domestic final sales by industry, 1959–2004
[Billions of dollars, except as noted; seasonally adjusted]
Private inventories 1
Quarter

Fourth quarter:
1959 ....................

Total 2

Farm

Mining,
utilities,
and
construction 2

Manufacturing

Wholesale
trade

Retail
trade

Other
industries 2

Nonfarm 2

Final
sales
of
domestic
business 3

Ratio of private
inventories
to final sales of
domestic business
Total

Nonfarm

132.9

42.1

.................

47.7

16.5

20.5

6.1

90.8

34.0

3.90

2.67

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

....................
....................
....................
....................
....................
....................
....................
....................
....................
....................

136.2
139.6
147.2
149.7
154.3
169.3
185.7
194.9
208.2
227.7

42.7
44.3
46.7
44.2
42.1
47.1
47.4
45.8
48.9
53.1

.................
.................
.................
.................
.................
.................
.................
.................
.................
.................

48.7
50.1
53.2
55.1
58.6
63.4
73.0
79.9
85.1
92.6

16.9
17.3
18.0
19.5
20.8
22.5
25.8
28.1
29.3
32.5

21.9
21.3
22.7
23.9
25.2
28.0
30.6
30.9
34.2
37.5

6.1
6.6
6.6
7.1
7.7
8.3
8.9
10.1
10.6
12.0

93.5
95.2
100.5
105.5
112.2
122.2
138.3
149.1
159.3
174.6

35.1
36.7
38.8
41.3
44.1
48.9
51.8
55.0
60.7
64.7

3.89
3.80
3.79
3.62
3.50
3.46
3.59
3.54
3.43
3.52

2.67
2.59
2.59
2.55
2.54
2.50
2.67
2.71
2.62
2.70

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

....................
....................
....................
....................
....................
....................
....................
....................
....................
....................

236.0
253.9
283.9
352.2
406.3
409.3
440.1
482.4
571.4
668.2

52.7
59.5
74.0
102.8
88.2
90.3
85.8
91.0
119.7
135.6

.................
.................
.................
.................
.................
.................
.................
.................
.................
.................

95.5
96.6
102.1
121.5
162.6
162.2
178.7
193.2
219.8
261.8

36.4
39.4
43.1
51.7
66.9
66.5
74.1
84.0
99.0
119.5

38.5
44.7
49.8
58.4
63.9
64.4
73.0
80.9
94.1
104.7

12.9
13.7
14.8
17.7
24.7
25.9
28.5
33.3
38.8
46.6

183.3
194.4
209.9
249.4
318.1
319.0
354.2
391.4
451.7
532.6

68.0
73.9
82.6
91.1
98.8
110.9
121.7
136.1
157.4
174.8

3.47
3.43
3.44
3.86
4.11
3.69
3.62
3.55
3.63
3.82

2.70
2.63
2.54
2.74
3.22
2.88
2.91
2.88
2.87
3.05

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989

....................
....................
....................
....................
....................
....................
....................
....................
....................
....................

739.8
779.2
774.1
797.6
869.3
876.1
858.0
924.2
999.2
1,044.4

141.1
127.5
131.5
132.5
131.8
125.9
112.9
119.8
130.2
129.6

.................
.................
.................
.................
.................
.................
.................
.................
.................
.................

293.4
313.1
304.6
308.9
344.5
333.3
320.6
339.6
372.4
390.5

139.4
148.8
147.9
153.4
169.1
175.9
182.0
195.8
213.9
222.8

111.7
123.2
123.2
137.6
157.0
171.4
176.2
199.1
213.2
231.4

54.1
66.6
66.8
65.2
66.9
69.5
66.3
69.9
69.5
70.1

598.7
651.7
642.6
665.1
737.6
750.2
745.1
804.4
869.1
914.7

191.5
206.2
216.4
238.1
258.4
277.9
295.2
309.9
337.3
358.0

3.86
3.78
3.58
3.35
3.36
3.15
2.91
2.98
2.96
2.92

3.13
3.16
2.97
2.79
2.85
2.70
2.52
2.60
2.58
2.55

1990
1991
1992
1993
1994
1995
NAICS:
1996
1997
1998
1999

....................
....................
....................
....................
....................
....................

1,082.3
1,057.2
1,082.4
1,115.8
1,194.3
1,257.0

133.4
123.2
132.9
132.1
134.3
130.9

.................
.................
.................
.................
.................
.................

404.5
384.1
377.6
380.1
404.3
424.5

236.8
239.2
248.3
258.6
281.5
303.7

236.6
240.2
249.4
268.6
293.6
312.2

71.0
70.5
74.3
76.5
80.6
85.6

948.9
934.0
949.5
983.7
1,060.0
1,126.1

373.8
384.5
412.2
433.9
458.6
482.4

2.90
2.75
2.63
2.57
2.60
2.61

2.54
2.43
2.30
2.27
2.31
2.33

....................
....................
....................
....................

1,284.4
1,329.5
1,346.8
1,442.2

136.3
136.7
120.3
124.2

31.1
33.7
37.3
39.6

421.0
431.7
431.5
457.7

285.1
303.1
313.3
337.4

328.7
337.5
353.6
383.8

82.1
86.9
90.9
99.5

1,148.1
1,192.9
1,226.5
1,318.0

515.0
544.3
578.0
612.6

2.49
2.44
2.33
2.35

2.23
2.19
2.12
2.15

2000: I ..................
II ................
III ...............
IV ...............

1,467.5
1,494.1
1,509.6
1,535.9

126.8
125.6
121.9
132.1

40.4
41.6
43.6
44.5

463.9
470.1
473.8
477.0

346.1
352.1
354.8
359.0

386.4
396.8
403.0
409.0

104.0
107.8
112.6
114.4

1,340.7
1,368.5
1,387.7
1,403.8

624.0
632.6
636.7
643.4

2.35
2.36
2.37
2.39

2.15
2.16
2.18
2.18

2001: I ..................
II ................
III ...............
IV ...............

1,539.0
1,528.1
1,501.8
1,458.3

136.9
135.9
131.1
126.1

49.5
48.6
46.8
47.5

475.2
465.6
452.8
437.9

357.1
356.2
349.6
338.6

404.9
406.5
407.5
395.6

115.3
115.3
114.1
112.6

1,402.1
1,392.2
1,370.7
1,332.2

650.1
656.0
654.6
663.5

2.37
2.33
2.29
2.20

2.16
2.12
2.09
2.01

2002: I ..................
II ................
III ...............
IV ...............

1,460.1
1,469.6
1,487.7
1,508.2

129.2
126.9
129.7
136.7

47.7
48.8
47.6
48.8

435.9
436.0
440.1
443.5

336.4
338.3
346.0
346.9

400.0
407.9
412.8
420.9

111.0
111.6
111.4
111.5

1,330.9
1,342.7
1,358.0
1,371.5

663.0
666.9
673.9
678.2

2.20
2.20
2.21
2.22

2.01
2.01
2.02
2.02

2003: I ..................
II ................
III ...............
IV ...............

1,533.0
1,520.2
1,534.8
1,552.5

136.9
137.0
149.5
152.0

53.5
52.3
51.9
52.3

448.5
441.2
437.6
442.0

351.0
347.2
350.2
357.7

430.7
429.8
432.8
435.2

112.2
112.6
113.0
113.3

1,396.0
1,383.2
1,385.4
1,400.4

686.4
699.4
715.3
723.5

2.23
2.17
2.15
2.15

2.03
1.98
1.94
1.94

2004: I ..................
II ................
III ...............
IV p .............

1,606.0
1,645.8
1,660.1
1,690.3

175.4
178.6
163.4
162.6

53.9
55.4
57.9
61.6

452.1
463.7
478.6
487.8

366.6
376.4
389.0
401.4

443.8
456.3
453.9
457.3

114.3
115.4
117.2
119.6

1,430.6
1,467.2
1,496.7
1,527.7

733.9
745.1
757.8
766.6

2.19
2.21
2.19
2.20

1.95
1.97
1.97
1.99

1 Inventories at end of quarter. Quarter-to-quarter change calculated from this table is not the current-dollar change in private inventories
component of GDP. The former is the difference between two inventory stocks, each valued at its respective end-of-quarter 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 change in private inventories is stated at annual rates.
2 Inventories of construction, mining, and utilities establishments are included in other industries through 1995.
3 Quarterly totals at monthly rates. Final sales of domestic business equals final sales of domestic product less gross value added of
households and institutions and of general government and includes a small amount of final sales by farm and by government enterprises.
Note.—The industry classification of inventories is on an establishment basis. Estimates through 1995 are based on the Standard Industrial Classification (SIC). Beginning with 1996, estimates are based on the North American Industry Classification System (NAICS).
Source: Department of Commerce, Bureau of Economic Analysis.

236

TABLE B–23.—Real private inventories and domestic final sales by industry, 1990–2004
[Billions of chained (2000) dollars, except as noted; seasonally adjusted]
Private inventories 1

Quarter

Total 2

Farm

Mining,
utilities,
and,
construction 2

Manufacturing

Wholesale
trade

Retail
trade

Other
industries 2

Nonfarm 2

Final
sales
of
domestic
business 3

Ratio of private
inventories
to final sales of
domestic business
Total

Nonfarm

Fourth quarter:
1990 ............................
1991 ............................
1992 ............................
1993 ............................
1994 ............................
1995 ............................

1,092.8
1,092.3
1,108.7
1,129.4
1,193.0
1,222.8

120.9
119.4
125.1
119.1
130.3
119.6

............
............
............
............
............
............

390.0
383.5
378.9
382.4
394.1
407.8

242.0
246.4
254.8
261.0
276.7
289.9

258.9
259.5
264.1
279.4
299.9
312.0

78.3
81.4
83.9
86.9
91.1
93.3

971.2
972.2
982.5
1,010.2
1,062.2
1,103.5

394.0
394.6
415.7
429.8
447.2
464.2

2.77
2.77
2.67
2.63
2.67
2.63

2.46
2.46
2.36
2.35
2.38
2.38

NAICS:
1996
1997
1998
1999

............................
............................
............................
............................

1,251.6
1,322.7
1,395.3
1,464.2

126.4
129.3
130.7
127.8

33.6
36.1
43.3
42.7

409.9
430.7
449.3
466.3

273.3
298.3
320.9
340.6

325.9
340.6
357.9
385.5

82.7
88.1
94.0
101.3

1,125.2
1,193.7
1,264.9
1,336.4

488.3
509.2
538.0
563.4

2.56
2.60
2.59
2.60

2.30
2.34
2.35
2.37

2000: I .........................
II ........................
III ......................
IV ......................

1,470.9
1,495.7
1,509.8
1,520.7

124.2
125.7
125.0
126.4

43.7
43.0
43.1
41.1

465.6
470.6
471.5
474.2

345.4
351.6
355.3
358.2

387.6
396.7
402.4
407.1

104.6
108.1
112.5
113.7

1,346.8
1,370.1
1,384.8
1,394.3

571.2
575.0
577.5
581.0

2.58
2.60
2.61
2.62

2.36
2.38
2.40
2.40

2001: I .........................
II ........................
III ......................
IV ......................

1,518.7
1,518.1
1,510.6
1,488.9

127.8
127.5
127.7
126.5

43.1
46.5
49.1
51.7

472.0
466.1
458.9
452.8

358.4
359.1
354.6
347.5

402.9
404.3
405.7
396.3

114.3
114.2
114.1
113.9

1,390.9
1,390.6
1,382.8
1,362.4

581.8
581.5
578.8
583.6

2.61
2.61
2.61
2.55

2.39
2.39
2.39
2.33

2002: I .........................
II ........................
III ......................
IV ......................

1,487.1
1,489.1
1,494.7
1,500.7

127.6
125.6
125.2
124.9

51.6
49.8
48.7
47.5

449.1
446.1
446.5
445.4

344.0
344.2
346.9
347.6

401.3
409.3
413.9
422.6

113.1
113.4
113.0
112.3

1,359.4
1,363.5
1,369.6
1,375.9

582.3
583.7
586.3
585.6

2.55
2.55
2.55
2.56

2.33
2.34
2.34
2.35

2003: I .........................
II ........................
III ......................
IV ......................

1,503.1
1,498.7
1,497.8
1,499.9

124.9
124.4
124.3
125.1

47.0
46.6
46.9
47.8

442.3
438.6
433.5
430.2

347.1
346.0
346.5
347.5

429.6
429.9
433.3
435.6

111.9
113.0
113.1
113.3

1,378.3
1,374.4
1,373.7
1,374.8

590.2
597.9
612.1
618.7

2.55
2.51
2.45
2.42

2.34
2.30
2.24
2.22

2004: I .........................
II ........................
III ......................
IV p ....................

1,509.9
1,525.2
1,533.8
1,545.3

126.4
127.2
128.1
128.8

46.6
46.2
47.3
47.7

430.9
433.2
435.0
436.5

349.7
354.7
363.0
370.8

442.0
449.5
444.5
444.7

114.0
114.6
115.6
116.4

1,383.5
1,398.2
1,405.8
1,416.6

624.5
628.7
637.8
643.0

2.42
2.43
2.40
2.40

2.22
2.22
2.20
2.20

1 Inventories at end of quarter. Quarter-to-quarter changes calculated from this table are at quarterly rates, whereas the change in private
inventories component of GDP is stated at annual rates.
2 Inventories of construction, mining, and utilities establishments are included in other industries through 1995.
3 Quarterly totals at monthly rates. Final sales of domestic business equals final sales of domestic product less gross value added of
households and institutions and of general government and includes a small amount of final sales by farm and by government enterprises.
Note.—The industry classification of inventories is on an establishment basis. Estimates for 1990 through 1995 are based on the 1987
Standard Industrial Classification (SIC). Beginning with 1996, estimates are based on the North American Industry Classification System
(NAICS).
See Survey of Current Business, Table 5.7.6B, for detailed information on calculation of the chained (2000) dollar inventory series. Also,
historical data on SIC basis are available from the Department of Commerce, Bureau of Economic Analysis.
Source: Department of Commerce, Bureau of Economic Analysis.

237

TABLE B–24.—Foreign transactions in the national income and product accounts, 1959–2004
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Current receipts from rest of the world

Year or
quarter

Exports of goods and
services
Total
Total

Goods 1

Services 1

Current payments to rest of the world

Income
receipts

Imports of goods and
services
Total
Total

Goods 1

Services 1

Income
payments

Current taxes and
transfer payments
to rest of the world (net)
Total

From
persons
(net)

From
government
(net)

From
business
(net)

Balance
on
current
account,
NIPA

1959 .................

27.0

22.7

16.5

6.3

4.3

28.2

22.3

15.3

7.0

1.5

4.3

0.5

3.8

0.1

−1.2

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

.................
.................
.................
.................
.................
.................
.................
.................
.................
.................

31.9
32.9
35.0
37.6
42.3
45.0
49.0
52.1
58.0
63.7

27.0
27.6
29.1
31.1
35.0
37.1
40.9
43.5
47.9
51.9

20.5
20.9
21.7
23.3
26.7
27.8
30.7
32.2
35.3
38.3

6.6
6.7
7.4
7.7
8.3
9.4
10.2
11.3
12.6
13.7

4.9
5.3
5.9
6.5
7.2
7.9
8.1
8.7
10.1
11.8

28.7
28.6
31.1
32.6
34.7
38.8
45.1
48.6
56.3
61.9

22.8
22.7
25.0
26.1
28.1
31.5
37.1
39.9
46.6
50.5

15.2
15.1
16.9
17.7
19.4
22.2
26.3
27.8
33.9
36.8

7.6
7.6
8.1
8.4
8.7
9.3
10.7
12.2
12.6
13.7

1.8
1.8
1.8
2.1
2.3
2.6
3.0
3.3
4.0
5.7

4.1
4.2
4.3
4.4
4.3
4.7
5.0
5.4
5.7
5.8

.5
.5
.5
.7
.7
.8
.8
1.0
1.0
1.1

3.5
3.6
3.6
3.6
3.4
3.7
4.0
4.1
4.4
4.4

.1
.1
.1
.1
.2
.2
.2
.2
.3
.3

3.2
4.3
3.9
5.0
7.5
6.2
3.9
3.6
1.7
1.8

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

.................
.................
.................
.................
.................
.................
.................
.................
.................
.................

72.5
77.0
87.1
118.8
156.5
166.7
181.9
196.6
233.1
298.5

59.7
63.0
70.8
95.3
126.7
138.7
149.5
159.4
186.9
230.1

44.5
45.6
51.8
73.9
101.0
109.6
117.8
123.7
145.4
184.0

15.2
17.4
19.0
21.3
25.7
29.1
31.7
35.7
41.5
46.1

12.8
14.0
16.3
23.5
29.8
28.0
32.4
37.2
46.3
68.3

68.5
76.4
90.7
109.5
149.8
145.4
173.0
205.6
243.6
297.0

55.8
62.3
74.2
91.2
127.5
122.7
151.1
182.4
212.3
252.7

40.9
46.6
56.9
71.8
104.5
99.0
124.6
152.6
177.4
212.8

14.9
15.8
17.3
19.3
22.9
23.7
26.5
29.8
34.8
39.9

6.4
6.4
7.7
10.9
14.3
15.0
15.5
16.9
24.7
36.4

6.3
7.6
8.8
7.4
8.1
7.6
6.3
6.2
6.7
8.0

1.3
1.3
1.4
1.5
1.3
1.3
1.3
1.3
1.5
1.6

4.7
5.9
7.0
5.2
5.8
5.6
3.9
3.5
3.8
4.3

.4
.4
.5
.7
1.0
.7
1.1
1.4
1.4
2.0

4.0
.6
−3.6
9.3
6.6
21.4
8.9
−9.0
−10.4
1.4

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989

.................
.................
.................
.................
.................
.................
.................
.................
.................
.................

359.9
397.3
384.2
378.9
424.2
414.5
431.9
487.1
596.2
681.0

280.8
305.2
283.2
277.0
302.4
302.0
320.5
363.9
444.1
503.3

225.8
239.1
215.0
207.3
225.6
222.2
226.0
257.5
325.8
369.4

55.0
66.1
68.2
69.7
76.7
79.8
94.5
106.4
118.3
134.0

79.1
92.0
101.0
101.9
121.9
112.4
111.4
123.2
152.1
177.7

348.5
390.9
384.4
410.9
511.2
525.3
571.2
637.9
708.4
769.3

293.8
317.8
303.2
328.6
405.1
417.2
453.3
509.1
554.5
591.5

248.6
267.8
250.5
272.7
336.3
343.3
370.0
414.8
452.1
484.8

45.3
49.9
52.6
56.0
68.8
73.9
83.3
94.3
102.4
106.7

44.9
59.1
64.5
64.8
85.6
85.9
93.6
105.3
128.5
151.5

9.8
14.1
16.7
17.5
20.5
22.2
24.3
23.5
25.5
26.4

1.8
5.5
6.6
6.9
7.8
8.2
9.0
9.9
10.6
11.4

5.5
5.4
6.7
7.2
9.2
11.1
12.2
10.3
10.4
10.4

2.4
3.2
3.4
3.4
3.5
2.9
3.2
3.4
4.5
4.6

11.4
6.3
−.2
−32.1
−86.9
−110.8
−139.2
−150.8
−112.2
−88.3

1990
1991
1992
1993
1994
1995
1996
1997
1998
1999

.................
.................
.................
.................
.................
.................
.................
................
................
................

741.5
765.7
788.0
812.1
907.3
1,046.1
1,117.3
1,242.0
1,243.1
1,312.1

552.4
596.8
635.3
655.8
720.9
812.2
868.6
955.3
955.9
991.2

396.6
423.5
448.0
459.9
510.1
583.3
618.3
687.7
680.9
697.2

155.7
173.3
187.4
195.9
210.8
228.9
250.2
267.6
275.1
294.0

189.1
168.9
152.7
156.2
186.4
233.9
248.7
286.7
287.1
320.8

811.5 630.3 508.1
752.3 624.3 500.7
824.9 668.6 544.9
882.5 720.9 592.8
1,012.5 814.5 676.8
1,137.1 903.6 757.4
1,217.6 964.8 807.4
1,352.2 1,056.9 885.3
1,430.5 1,115.9 929.0
1,585.9 1,251.7 1,045.5

122.3
123.6
123.6
128.1
137.7
146.1
157.4
171.5
186.9
206.3

154.3
138.5
123.0
124.3
160.2
198.1
213.7
253.7
265.8
287.0

26.9
−10.6
33.4
37.3
37.8
35.4
39.1
41.6
48.8
47.2

12.0
13.0
12.3
14.2
15.4
16.2
18.0
21.0
24.6
28.3

10.0
−28.6
17.1
17.8
15.8
10.1
14.1
10.9
11.2
11.6

4.8
5.0
3.9
5.4
6.6
9.1
7.1
9.7
12.9
7.3

−70.1
13.5
−36.9
−70.4
−105.2
−91.0
−100.3
−110.2
−187.4
−273.9

2000 ................
2001 ................
2002 ................
2003 ................
2004 p ...............

1,478.9
1,355.2
1,306.8
1,375.2
............

1,096.3
1,032.8
1,005.0
1,046.2
1,170.2

784.3
731.2
697.0
726.4
815.6

311.9
301.6
308.0
319.8
354.7

382.7
322.4
301.8
329.0
..........

1,875.6
1,725.6
1,764.4
1,886.1
............

1,475.8
1,399.8
1,429.9
1,544.3
1,779.6

1,243.5
1,167.9
1,189.6
1,282.0
1,488.8

232.3 343.7
231.9 278.8
240.2 274.7
262.3 273.9
290.8 ............

56.1
47.0
59.8
67.9
73.5

31.5
33.0
35.7
38.2
42.5

13.5
9.5
14.4
18.4
19.9

11.2
4.5
9.7
11.3
11.1

−396.6
−370.4
−457.7
−510.9
............

2000: I ..............
II .............
III ............
IV ............

1,418.0
1,477.8
1,502.1
1,517.8

1,055.1
1,091.8
1,122.4
1,115.8

749.2
776.9
810.9
800.4

305.9
315.0
311.5
315.4

362.9
386.0
379.7
402.1

1,780.8
1,858.9
1,925.6
1,937.0

1,401.5
1,458.7
1,523.1
1,519.7

1,177.0
1,229.6
1,284.9
1,282.3

224.5
229.1
238.3
237.3

330.4
349.2
348.1
347.2

48.9
51.0
54.3
70.1

31.9
31.6
31.3
31.2

8.7
9.1
11.4
24.6

8.3
10.3
11.6
14.4

−362.8
−381.1
−423.5
−419.2

2001: I ..............
II .............
III ............
IV ............

1,462.5 1,100.7 788.9
1,398.3 1,060.5 749.8
1,309.5 1,003.5 704.5
1,250.8 966.6 681.7

311.8
310.7
299.0
284.8

361.8
337.8
306.0
284.2

1,873.4
1,774.6
1,661.9
1,592.6

1,493.7
1,422.2
1,365.3
1,318.2

1,258.5
1,181.2
1,135.6
1,096.5

235.2
241.0
229.8
221.7

323.0
293.2
289.3
209.6

56.8
59.2
7.3
64.8

32.6
32.9
33.6
32.9

6.9
8.0
8.9
14.1

17.2
18.3
−35.1
17.8

−411.0
−376.3
−352.5
−341.8

2002: I ..............
II .............
III ............
IV ............

1,263.4 975.0 676.3
1,312.6 1,008.1 702.6
1,336.4 1,023.4 713.5
1,314.6 1,013.5 695.5

298.7
305.5
310.0
318.0

288.5
304.5
312.9
301.2

1,686.4
1,766.8
1,796.5
1,808.0

1,351.3
1,423.5
1,454.5
1,490.1

1,117.7
1,188.5
1,213.4
1,238.9

233.6
235.1
241.1
251.1

265.0
288.6
287.8
257.5

70.1
54.7
54.2
60.4

34.8
34.8
36.1
37.2

23.0
10.1
9.6
14.9

12.3
9.8
8.5
8.3

−422.9
−454.2
−460.2
−493.4

2003: I ..............
II .............
III ............
IV ............

1,324.6
1,327.9
1,377.5
1,471.0

1,019.8
1,018.1
1,047.7
1,099.2

708.4
709.8
725.9
761.3

311.4
308.3
321.7
337.9

304.8
309.8
329.8
371.8

1,858.8
1,846.4
1,881.7
1,957.6

1,523.0
1,515.7
1,536.4
1,602.0

1,268.7
1,262.6
1,270.3
1,326.4

254.3
253.1
266.1
275.6

268.0
264.7
278.2
284.6

67.7
66.0
67.1
71.0

37.2
37.6
36.5
41.6

21.2
18.1
18.7
15.8

9.3
10.3
11.9
13.6

−534.2
−518.6
−504.3
−486.6

2004: I ..............
II .............
III ............
IV p ..........

1,508.2
1,555.6
1,596.3
............

1,134.3
1,167.6
1,189.5
1,189.6

790.3
812.2
833.4
826.5

344.1
355.4
356.1
363.1

373.8
388.0
406.8
..........

2,065.2
2,185.7
2,230.0
............

1,681.2
1,758.9
1,801.2
1,877.1

1,399.2
1,470.1
1,506.9
1,579.1

282.0 300.3
288.8 351.9
294.4 368.6
297.9 ............

83.8
74.9
60.1
75.2

41.7
42.1
43.2
42.9

28.0
17.6
17.1
16.8

14.1
15.2
−.2
15.4

−557.0
−630.1
−633.7
............

1 Certain goods, primarily military equipment purchased and sold by the Federal Government, are included in services. Beginning with
1986, repairs and alterations of equipment were reclassified from goods to services.
Source: Department of Commerce, Bureau of Economic Analysis.

238

TABLE B–25.—Real exports and imports of goods and services, 1990–2004
[Billions of chained (2000) dollars; quarterly data at seasonally adjusted annual rates]
Exports of goods and services
Year or quarter

1990
1991
1992
1993
1994
1995
1996
1997
1998
1999

Total

......................................................................
552.5
......................................................................
589.1
......................................................................
629.7
......................................................................
650.0
......................................................................
706.5
......................................................................
778.2
......................................................................
843.4
......................................................................
943.7
......................................................................
966.5
...................................................................... 1,008.2

Imports of goods and services

Goods 1

Goods 1

Total

Durable
goods

Nondurable
goods

Services 1

Total

Total

Durable
goods

Nondurable
goods

Services 1

367.2
392.5
421.9
435.6
478.0
533.9
581.1
664.5
679.4
705.2

226.3
243.1
262.5
276.1
309.6
353.6
394.9
466.2
481.2
503.6

145.1
153.7
163.6
162.4
170.1
181.1
186.7
198.7
198.5
201.7

188.7 607.1 469.7
199.9 603.7 469.3
210.8 645.6 513.1
217.5 702.1 564.8
231.1 785.9 640.0
245.8 849.1 697.6
263.5 923.0 762.7
279.2 1,048.3 872.6
287.2 1,170.3 974.4
303.2 1,304.4 1,095.2

264.7
266.1
294.0
328.8
383.1
427.1
472.8
550.3
621.8
711.7

218.4
215.9
231.9
248.0
266.0
277.0
295.2
326.4
355.7
384.3

142.7
139.0
135.5
139.4
147.3
152.1
160.5
175.6
195.6
209.1

2000 ......................................................................
2001 ......................................................................
2002 ......................................................................
2003 ......................................................................
2004 p ....................................................................

1,096.3
1,036.7
1,012.3
1,031.8
1,115.3

784.3
736.3
706.4
721.7
781.0

569.2
522.2
490.9
500.8
553.8

215.1
214.2
215.8
221.2
228.3

311.9
300.4
305.7
309.9
334.1

1,475.8
1,435.8
1,484.4
1,550.3
1,701.7

1,243.5
1,204.1
1,248.5
1,307.3
1,446.0

820.7
769.4
801.2
834.3
946.4

422.8
435.1
447.7
473.2
501.7

232.3
231.6
235.9
243.3
257.2

2000: I ...................................................................
II ..................................................................
III .................................................................
IV ................................................................

1,060.9
1,092.0
1,120.0
1,112.3

751.9
776.6
810.0
798.9

543.7
566.9
586.7
579.7

208.2
209.8
223.3
219.1

309.0
315.3
310.0
313.4

1,411.5
1,466.5
1,515.6
1,509.5

1,187.1
1,236.3
1,277.7
1,272.7

785.3
813.7
842.0
841.8

401.5
422.5
435.8
431.3

224.4
230.1
237.9
236.8

2001: I ................................................................... 1,097.2
II .................................................................. 1,060.6
III ................................................................. 1,008.7
IV ................................................................
980.3

787.8
751.7
710.9
694.7

569.4
535.7
500.4
483.1

218.4
216.0
210.6
211.9

309.4
308.9
297.7
285.6

1,495.4
1,445.8
1,407.1
1,394.9

1,261.6
1,204.7
1,177.9
1,172.1

812.9
769.7
752.3
742.8

448.7
435.2
426.0
430.3

233.7
240.9
229.0
222.8

2002: I ...................................................................
991.6
II .................................................................. 1,017.8
III ................................................................ 1,025.5
IV ................................................................ 1,014.5

691.4
714.4
719.5
700.5

478.4
497.2
502.9
485.1

213.3
217.5
216.8
215.6

300.0
303.3
305.9
313.6

1,436.5
1,475.9
1,495.3
1,529.8

1,200.7
1,244.2
1,262.1
1,287.2

769.9
804.1
813.9
816.7

431.2
440.3
448.5
470.8

235.4
232.0
233.6
242.7

2003: I ...................................................................
II ..................................................................
III ................................................................
IV ................................................................

1,010.6
1,006.5
1,033.8
1,076.2

707.3
705.9
723.1
750.6

485.6
489.3
500.6
527.6

221.8
216.9
222.7
223.6

303.1
300.4
310.5
325.4

1,522.3
1,531.7
1,542.5
1,604.5

1,281.3
1,297.3
1,297.3
1,353.2

812.0
826.7
825.4
873.1

469.3
470.8
472.0
480.8

241.2
235.3
245.2
251.7

2004: I ...................................................................
II ..................................................................
III ................................................................
IV p ...............................................................

1,095.4
1,114.8
1,131.1
1,120.0

767.2
778.4
796.3
782.3

541.9
553.0
566.7
553.5

226.1
226.6
230.9
229.7

328.1
336.2
334.6
337.4

1,645.5
1,695.1
1,714.3
1,751.9

1,394.1
1,437.4
1,454.9
1,497.4

896.4
945.3
960.9
983.0

498.2
494.7
497.2
516.7

252.4
258.9
260.7
256.8

1 Certain goods, primarily military equipment purchased and sold by the Federal Government, are included in services. Beginning with
1986, repairs and alterations of equipment were reclassified from goods to services.
Note.—See Table B-2 for data for total exports of goods and services and total imports of goods and services for 1959-89.
Source: Department of Commerce, Bureau of Economic Analysis.

239

TABLE B–26.—Relation of gross domestic product, gross national product, net national product, and
national income, 1959–2004
[Billions of dollars; quarterly data at seasonally adjusted annual rates]

Year or
quarter

Gross
domestic
product

Plus:
Income
receipts
from rest
of the
world

Less:
Income
payments
to
rest of
the
world

Less: Consumption of fixed capital
Equals:
Gross
national
product

Total

Private

Government

Equals:
Net
national
product

Less:
Statistical
discrepancy

Equals:
National
income

1959 ...........

506.6

4.3

1.5

509.3

53.0

38.6

14.5

456.3

0.5

455.8

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

...........
...........
...........
...........
...........
...........
...........
...........
...........
...........

526.4
544.7
585.6
617.7
663.6
719.1
787.8
832.6
910.0
984.6

4.9
5.3
5.9
6.5
7.2
7.9
8.1
8.7
10.1
11.8

1.8
1.8
1.8
2.1
2.3
2.6
3.0
3.3
4.0
5.7

529.5
548.2
589.7
622.2
668.5
724.4
792.9
838.0
916.1
990.7

55.6
57.2
59.3
62.4
65.0
69.4
75.6
81.5
88.4
97.9

40.5
41.6
42.8
44.9
46.9
50.5
55.5
59.9
65.2
73.1

15.0
15.6
16.5
17.5
18.1
18.9
20.1
21.6
23.1
24.8

473.9
491.0
530.5
559.8
603.5
655.0
717.3
756.5
827.7
892.8

−.9
−.6
.4
−.8
.8
1.6
6.3
4.6
4.6
3.2

474.9
491.6
530.1
560.6
602.7
653.4
711.0
751.9
823.2
889.7

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

...........
...........
...........
...........
...........
...........
...........
...........
...........
...........

1,038.5
1,127.1
1,238.3
1,382.7
1,500.0
1,638.3
1,825.3
2,030.9
2,294.7
2,563.3

12.8
14.0
16.3
23.5
29.8
28.0
32.4
37.2
46.3
68.3

6.4
6.4
7.7
10.9
14.3
15.0
15.5
16.9
24.7
36.4

1,044.9
1,134.7
1,246.8
1,395.3
1,515.5
1,651.3
1,842.1
2,051.2
2,316.3
2,595.3

106.7
115.0
126.5
139.3
162.5
187.7
205.2
230.0
262.3
300.1

80.0
86.7
97.1
107.9
126.6
147.8
162.5
184.3
212.8
245.7

26.7
28.3
29.5
31.4
35.9
40.0
42.6
45.7
49.5
54.5

938.2
1,019.7
1,120.3
1,256.0
1,353.0
1,463.6
1,637.0
1,821.2
2,054.0
2,295.1

7.3
11.6
9.1
8.6
10.9
17.7
25.1
22.3
26.6
46.0

930.9
1,008.1
1,111.2
1,247.4
1,342.1
1,445.9
1,611.8
1,798.9
2,027.4
2,249.1

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989

...........
...........
...........
...........
...........
...........
...........
...........
...........
...........

2,789.5
3,128.4
3,255.0
3,536.7
3,933.2
4,220.3
4,462.8
4,739.5
5,103.8
5,484.4

79.1
92.0
101.0
101.9
121.9
112.4
111.4
123.2
152.1
177.7

44.9
59.1
64.5
64.8
85.6
85.9
93.6
105.3
128.5
151.5

2,823.7
3,161.4
3,291.5
3,573.8
3,969.5
4,246.8
4,480.6
4,757.4
5,127.4
5,510.6

343.0
388.1
426.9
443.8
472.6
506.7
531.3
561.9
597.6
644.3

281.1
317.9
349.8
362.1
385.6
414.0
431.8
455.3
483.5
522.1

61.8
70.1
77.1
81.7
87.0
92.7
99.5
106.7
114.1
122.2

2,480.7
2,773.3
2,864.6
3,130.0
3,496.9
3,740.1
3,949.3
4,195.4
4,529.8
4,866.3

41.4
30.9
.3
45.7
14.6
16.7
47.0
21.7
−19.5
39.7

2,439.3
2,742.4
2,864.3
3,084.2
3,482.3
3,723.4
3,902.3
4,173.7
4,549.4
4,826.6

1990
1991
1992
1993
1994
1995
1996
1997
1998
1999

...........
...........
...........
...........
...........
...........
...........
...........
...........
...........

5,803.1
5,995.9
6,337.7
6,657.4
7,072.2
7,397.7
7,816.9
8,304.3
8,747.0
9,268.4

189.1
168.9
152.7
156.2
186.4
233.9
248.7
286.7
287.1
320.8

154.3
138.5
123.0
124.3
160.2
198.1
213.7
253.7
265.8
287.0

5,837.9
6,026.3
6,367.4
6,689.3
7,098.4
7,433.4
7,851.9
8,337.3
8,768.3
9,302.2

682.5
725.9
751.9
776.4
833.7
878.4
918.1
974.4
1,030.2
1,101.3

551.6
586.9
607.3
624.7
675.1
713.4
748.8
800.3
851.2
914.3

130.9
139.1
144.6
151.8
158.6
165.0
169.3
174.1
179.0
187.0

5,155.4
5,300.4
5,615.5
5,912.9
6,264.7
6,555.1
6,933.8
7,362.8
7,738.2
8,200.9

66.2
72.5
102.7
139.5
142.5
101.2
93.7
70.7
−14.6
−35.7

5,089.1
5,227.9
5,512.8
5,773.4
6,122.3
6,453.9
6,840.1
7,292.2
7,752.8
8,236.7

9,817.0
382.7
343.7
9,855.9
10,128.0
322.4
278.8
10,171.6
10,487.0
301.8
274.7
10,514.1
11,004.0
329.0
273.9
11,059.2
11,728.0 .................. .................. ....................

1,187.8
1,281.5
1,303.9
1,353.9
1,406.9

990.8
1,075.5
1,092.8
1,135.9
1,177.9

197.0
8,668.1
−127.2
8,795.2
206.0
8,890.2
−89.6
8,979.8
211.2
9,210.1
−15.3
9,225.4
218.1
9,705.2
25.6
9,679.6
229.0 .................. ................ ..................

2000 ...........
2001 ...........
2002 ...........
2003 ...........
2004 p .........
2000: I .........
II .......
III ......
IV ......

9,629.4
9,822.8
9,862.1
9,953.6

362.9
386.0
379.7
402.1

330.4
349.2
348.1
347.2

9,661.9
9,859.6
9,893.6
10,008.4

1,153.1
1,177.0
1,199.9
1,221.3

959.6
981.0
1,001.6
1,021.1

193.4
196.0
198.3
200.2

8,508.8
8,682.6
8,693.7
8,787.2

−171.7
−67.8
−164.6
−104.6

8,680.5
8,750.4
8,858.3
8,891.7

2001: I .........
II .......
III .....
IV ......

10,021.5
10,128.9
10,135.1
10,226.3

361.8
337.8
306.0
284.2

323.0
293.2
289.3
209.6

10,060.2
10,173.5
10,151.8
10,300.9

1,240.5
1,270.8
1,332.7
1,281.8

1,038.4
1,067.0
1,121.3
1,075.2

202.0
203.8
211.4
206.6

8,819.8
8,902.7
8,819.1
9,019.1

−167.8
−98.8
−71.1
−20.9

8,987.6
9,001.5
8,890.3
9,039.9

2002: I .........
II .......
III .....
IV ......

10,338.2
10,445.7
10,546.5
10,617.5

288.5
304.5
312.9
301.2

265.0
288.6
287.8
257.5

10,361.7
10,461.6
10,571.7
10,661.2

1,287.1
1,297.9
1,309.3
1,321.5

1,078.5
1,087.7
1,097.4
1,107.6

208.6
210.3
211.9
213.8

9,074.7
9,163.7
9,262.4
9,339.7

−61.8
−58.7
20.8
38.4

9,136.5
9,222.3
9,241.6
9,301.3

2003: I .........
II .......
III ......
IV ......

10,744.6
10,884.0
11,116.7
11,270.9

304.8
309.8
329.8
371.8

268.0
264.7
278.2
284.6

10,781.3
10,929.0
11,168.3
11,358.1

1,334.0
1,347.0
1,360.6
1,374.2

1,118.4
1,129.7
1,141.5
1,153.8

215.6
217.3
219.1
220.4

9,447.3
9,582.0
9,807.7
9,983.9

39.6
13.2
36.6
12.8

9,407.7
9,568.8
9,771.1
9,971.1

2004: I .........
II .......
III ......
IV p ....

11,472.6
373.8
300.3
11,546.1
11,657.5
388.0
351.9
11,693.6
11,814.9
406.8
368.6
11,853.0
11,967.0 .................. .................. ....................

1,355.0
1,375.2
1,497.9
1,399.5

1,132.4
1,148.1
1,266.8
1,164.0

222.6
10,191.1
63.0
10,128.1
227.0
10,318.4
56.4
10,262.0
231.1
10,355.1
90.4
10,264.7
235.5 .................. ................ ..................

Source: Department of Commerce, Bureau of Economic Analysis.

240

TABLE B–27.—Relation of national income and personal income, 1959–2004
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Less:

Year or quarter

National
income

Plus:

Corporate
profits
Taxes ContriNet
with
buon prointerest
inventory duction tions and mis- Business Current
current surplus
valuation
for
and
cellane- transfer of govand
imports govern- ous paypayernment
capital
ment
less
ments
ments
enterconsump- subsi- social
on
(net)
prises
tion
insurdies
assets
adjustance
ments

Wage
Personal
accruals income
less
receipts
disburse- on asments
sets

Equals:

Personal
current
transfer
receipts

Personal
income

1959 .......................

455.8

55.7

40.0

13.8

9.6

1.8

1.0

0.0

34.6

24.2

392.8

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................

474.9
491.6
530.1
560.6
602.7
653.4
711.0
751.9
823.2
889.7

53.8
54.9
63.3
69.0
76.5
87.5
93.2
91.3
98.8
95.4

43.4
45.0
48.2
51.2
54.6
57.8
59.3
64.2
72.3
79.4

16.4
17.0
19.1
21.7
22.4
23.4
31.3
34.9
38.7
44.1

10.6
12.5
14.2
15.2
17.4
19.6
22.4
25.5
27.1
32.7

1.9
2.0
2.2
2.7
3.1
3.6
3.5
3.8
4.3
4.9

.9
.8
.9
1.4
1.3
1.3
1.0
.9
1.2
1.0

.0
.0
.0
.0
.0
.0
.0
.0
.0
.0

37.9
40.1
44.1
47.9
53.8
59.4
64.1
69.0
75.2
84.1

25.7
29.5
30.4
32.2
33.5
36.2
39.6
48.0
56.1
62.3

411.5
429.0
456.7
479.6
514.6
555.7
603.9
648.3
712.0
778.5

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................

930.9
1,008.1
1,111.2
1,247.4
1,342.1
1,445.9
1,611.8
1,798.9
2,027.4
2,249.1

83.6
98.0
112.1
125.5
115.8
134.8
163.3
192.4
216.6
223.2

86.7
95.9
101.4
112.1
121.7
131.0
141.5
152.8
162.2
171.9

46.4
51.2
59.2
75.5
85.2
89.3
101.3
113.1
131.3
152.7

39.1
43.9
47.9
55.2
70.8
81.6
85.5
101.1
115.0
138.9

4.5
4.3
4.9
6.0
7.1
9.4
9.5
8.4
10.6
13.0

.0
−.2
.5
−.4
−.9
−3.2
−1.8
−2.6
−1.9
−2.6

.0
.6
.0
−.1
−.5
.1
.1
.1
.3
−.2

93.5
101.0
109.6
124.7
146.4
162.2
178.4
205.3
234.8
274.7

74.7
88.1
97.9
112.6
133.3
170.0
184.0
194.2
209.6
235.3

838.8
903.5
992.7
1,110.7
1,222.6
1,335.0
1,474.8
1,633.2
1,837.7
2,062.2

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989

.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................

2,439.3
2,742.4
2,864.3
3,084.2
3,482.3
3,723.4
3,902.3
4,173.7
4,549.4
4,826.6

201.1
226.1
209.7
264.2
318.6
330.3
319.5
368.8
432.6
426.6

190.9
224.5
226.4
242.5
269.3
287.3
298.9
317.7
345.5
372.1

166.2
195.7
208.9
226.0
257.5
281.4
303.4
323.1
361.5
385.2

181.8
232.3
271.1
285.3
327.1
341.3
366.8
366.4
385.3
432.1

14.4
17.6
20.1
22.5
30.1
34.8
36.6
33.8
34.0
39.2

−4.8
−4.9
−4.0
−3.1
−1.9
.8
1.3
1.2
2.5
4.9

.0
.1
.0
−.4
.2
−.2
.0
.0
.0
.0

338.7
421.9
488.4
529.6
607.9
654.0
695.5
717.0
769.3
878.0

279.5
318.4
354.8
383.7
400.1
424.9
451.0
467.6
496.6
543.4

2,307.9
2,591.3
2,775.3
2,960.7
3,289.5
3,526.7
3,722.4
3,947.4
4,253.7
4,587.8

1990
1991
1992
1993
1994
1995
1996
1997
1998
1999

.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................

5,089.1
5,227.9
5,512.8
5,773.4
6,122.3
6,453.9
6,840.1
7,292.2
7,752.8
8,236.7

437.8
451.2
479.3
541.9
600.3
696.7
786.2
868.5
801.6
851.3

398.7
430.2
453.9
467.0
513.5
524.2
546.8
579.1
604.4
629.8

410.1
430.2
455.0
477.7
508.2
532.8
555.2
587.2
624.2
661.4

442.2
418.2
388.5
365.7
366.4
367.1
376.2
415.6
487.1
495.4

39.4
39.9
42.4
40.7
43.3
46.9
53.1
49.9
64.7
67.4

1.6
5.7
7.6
7.2
8.6
11.4
12.7
12.6
10.3
10.1

.1
−.1
−15.8
6.4
17.6
16.4
3.6
−2.9
−.7
5.2

924.0
932.0
910.9
901.8
950.8
1,016.4
1,089.2
1,181.7
1,283.2
1,264.2

595.2
666.4
749.4
790.1
827.3
877.4
925.0
951.2
978.6
1,022.1

4,878.6
5,051.0
5,362.0
5,558.5
5,842.5
6,152.3
6,520.6
6,915.1
7,423.0
7,802.4

8,795.2
817.9
8,979.8
767.3
9,225.4
874.6
9,679.6
1,021.1
.................. ................

664.6
673.3
724.4
751.3
800.1

702.7
731.1
748.3
773.2
818.3

559.0
566.3
532.9
543.0
548.2

87.1
92.8
80.9
77.7
81.7

5.3
−1.4
2.8
9.5
6.7

.0
.0
.0
.0
.0

1,387.0
1,380.0
1,334.6
1,322.7
1,386.6

1,084.0
1,193.9
1,282.7
1,335.4
1,406.3

8,429.7
8,724.1
8,878.9
9,161.8
9,659.1

2000 .......................
2001 .......................
2002 .......................
2003 .......................
2004 p .....................
2000: I ....................
II ...................
III ..................
IV .................

8,680.5
8,750.4
8,858.3
8,891.7

832.6
833.0
811.8
794.3

653.2
662.6
667.9
674.6

695.5
696.3
707.7
711.2

548.3
560.6
564.3
563.0

81.3
85.0
88.9
93.1

7.9
7.1
4.2
2.2

.0
.0
.0
.0

1,349.9
1,385.6
1,406.2
1,406.5

1,054.6
1,080.8
1,094.8
1,106.0

8,266.2
8,372.3
8,514.4
8,565.8

2001: I ....................
II ...................
III .................
IV .................

8,987.6
9,001.5
8,890.3
9,039.9

778.7
783.1
714.5
793.0

672.8
667.9
658.2
694.5

729.2
731.5
731.9
731.9

565.2
569.9
565.5
564.8

98.3
104.8
65.7
102.5

1.7
−1.1
−2.9
−3.4

.0
.0
.0
.0

1,397.4
1,388.7
1,373.3
1,360.3

1,149.6
1,185.7
1,202.6
1,237.8

8,688.7
8,719.9
8,733.1
8,754.8

2002: I ....................
II ...................
III .................
IV .................

9,136.5
9,222.3
9,241.6
9,301.3

838.2
868.4
876.2
915.4

708.4
723.4
732.8
733.1

745.7
749.1
748.9
749.6

549.2
527.3
526.8
528.3

89.6
81.3
78.0
74.6

−.9
−.1
6.0
6.0

.0
.0
.0
.0

1,337.8
1,340.2
1,333.7
1,326.7

1,259.4
1,284.0
1,289.1
1,298.1

8,803.6
8,897.1
8,895.7
8,919.2

2003: I ....................
II ...................
III ..................
IV ..................

9,407.7
9,568.8
9,771.1
9,971.1

912.0
986.2
1,057.1
1,129.1

740.7
737.7
757.4
769.4

762.4
768.9
776.7
785.0

541.3
542.8
542.8
545.3

74.8
76.9
78.9
80.1

10.3
9.8
9.3
8.7

1.4
−1.4
.0
.0

1,325.9
1,324.7
1,314.4
1,325.8

1,311.4
1,333.1
1,346.2
1,350.7

9,002.2
9,105.7
9,209.3
9,330.0

10,128.1
1,165.6
10,262.0
1,173.9
10,264.7
1,118.0
.................. ................

782.9
796.3
803.5
817.9

803.9
814.0
823.0
832.3

554.5
548.5
546.7
543.0

82.7
83.5
76.0
84.4

8.1
7.4
6.5
4.7

1.5
−1.5
.0
.0

1,337.1
1,352.3
1,367.8
1,489.3

1,379.0
1,400.4
1,415.4
1,430.2

9,445.0
9,592.7
9,674.3
9,924.6

2004: I ....................
II ...................
III ..................
IV p ................

Source: Department of Commerce, Bureau of Economic Analysis.

241

TABLE B–28.—National income by type of income, 1959–2004
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Compensation of employees

Proprietors’ income
with inventory valuation and capital consumption adjustments

Wage and salary accruals
Year or
quarter

National
income

Supplements to wages and
salaries

Government

Employer
contributions for
employee
pension
and
insurance
funds

Employer
contributions for
government
social
insurance

Total
Total

Other

Total

Total

Farm

Nonfarm

Rental
income
of persons
with
capital
consumption
adjustment

1959 ........

455.8

281.0

259.8

46.1

213.8

21.1

13.3

7.9

50.7

10.0

40.6

16.2

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

........
........
........
........
........
........
........
........
........
........

474.9
491.6
530.1
560.6
602.7
653.4
711.0
751.9
823.2
889.7

296.4
305.3
327.1
345.2
370.7
399.5
442.7
475.1
524.3
577.6

272.9
280.5
299.4
314.9
337.8
363.8
400.3
429.0
472.0
518.3

49.2
52.5
56.3
60.0
64.9
69.9
78.4
86.5
96.7
105.6

223.7
228.0
243.0
254.8
272.9
293.8
321.9
342.5
375.3
412.7

23.6
24.8
27.8
30.4
32.9
35.7
42.3
46.1
52.3
59.3

14.3
15.2
16.6
18.0
20.3
22.7
25.5
28.1
32.4
36.5

9.3
9.6
11.2
12.4
12.6
13.1
16.8
18.0
20.0
22.8

50.8
53.2
55.4
56.5
59.4
63.9
68.2
69.8
74.3
77.4

10.5
11.0
11.0
10.8
9.6
11.8
12.8
11.5
11.5
12.6

40.3
42.2
44.4
45.7
49.8
52.1
55.4
58.4
62.8
64.7

17.1
17.9
18.8
19.5
19.6
20.2
20.8
21.2
20.9
21.2

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

........
........
........
........
........
........
........
........
........
........

930.9
1,008.1
1,111.2
1,247.4
1,342.1
1,445.9
1,611.8
1,798.9
2,027.4
2,249.1

617.2
658.9
725.1
811.2
890.2
949.1
1,059.3
1,180.5
1,336.1
1,500.8

551.6
584.5
638.8
708.8
772.3
814.8
899.7
994.2
1,121.2
1,255.8

117.2
126.8
137.9
148.8
160.5
176.2
188.9
202.6
220.0
237.1

434.3
457.8
500.9
560.0
611.8
638.6
710.8
791.6
901.2
1,018.7

65.7
74.4
86.4
102.5
118.0
134.3
159.6
186.4
214.9
245.0

41.8
47.9
55.2
62.7
73.3
87.6
105.2
125.3
143.4
162.4

23.8
26.4
31.2
39.8
44.7
46.7
54.4
61.1
71.5
82.6

78.4
84.8
95.9
113.5
113.1
119.5
132.2
145.7
166.6
180.1

12.7
13.2
16.8
28.9
23.2
21.7
17.0
15.7
19.6
21.8

65.7
71.6
79.1
84.6
89.9
97.8
115.2
130.0
147.1
158.3

21.4
22.4
23.4
24.3
24.3
23.7
22.3
20.7
22.1
23.8

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989

........
........
........
........
........
........
........
........
........
........

2,439.3
2,742.4
2,864.3
3,084.2
3,482.3
3,723.4
3,902.3
4,173.7
4,549.4
4,826.6

1,651.8
1,825.8
1,925.8
2,042.6
2,255.6
2,424.7
2,570.1
2,750.2
2,967.2
3,145.2

1,377.6
1,517.5
1,593.7
1,684.6
1,855.1
1,995.5
2,114.8
2,270.7
2,452.9
2,596.3

261.5
285.8
307.5
324.8
348.1
373.9
397.0
422.6
451.3
480.2

1,116.2
1,231.7
1,286.2
1,359.8
1,507.0
1,621.6
1,717.9
1,848.1
2,001.6
2,116.2

274.2
308.3
332.1
358.0
400.5
429.2
455.3
479.5
514.2
548.9

185.2
204.7
222.4
238.1
261.5
281.5
297.5
313.2
329.6
355.2

88.9
103.6
109.8
119.9
139.0
147.7
157.9
166.3
184.6
193.7

174.1
183.0
176.3
192.5
243.3
262.3
275.7
302.2
341.6
363.3

11.3
18.7
13.1
6.0
20.6
20.8
22.6
28.7
26.8
33.0

162.8
164.3
163.3
186.5
222.7
241.5
253.1
273.5
314.7
330.3

30.0
38.0
38.8
37.8
40.2
41.9
33.5
33.5
40.6
43.1

1990
1991
1992
1993
1994
1995
1996
1997
1998
1999

........
........
........
........
........
........
........
........
........
........

5,089.1
5,227.9
5,512.8
5,773.4
6,122.3
6,453.9
6,840.1
7,292.2
7,752.8
8,236.7

3,338.2
3,445.2
3,635.4
3,801.4
3,997.2
4,193.3
4,390.5
4,661.7
5,019.4
5,357.1

2,754.0
2,823.0
2,964.5
3,089.2
3,249.8
3,435.7
3,623.2
3,874.7
4,182.7
4,471.4

517.7
546.8
569.2
586.8
606.2
625.5
644.4
668.1
697.3
729.3

2,236.3
2,276.2
2,395.3
2,502.4
2,643.5
2,810.2
2,978.8
3,206.6
3,485.5
3,742.1

584.2
622.3
670.9
712.2
747.5
757.7
767.3
787.0
836.7
885.7

377.8
407.1
442.5
472.4
493.3
493.6
492.5
497.5
529.7
562.4

206.5
215.1
228.4
239.8
254.1
264.0
274.9
289.5
307.0
323.3

380.6
377.1
427.6
453.8
473.3
492.1
543.2
576.0
627.8
678.3

31.9
26.7
34.5
31.2
33.9
22.7
37.3
34.2
29.4
28.6

348.7
350.4
393.0
422.6
439.4
469.5
505.9
541.8
598.4
649.7

50.7
60.3
78.0
95.6
119.7
122.1
131.5
128.8
137.5
147.3

2000 ........
2001 ........
2002 ........
2003 ........
2004 p ......

8,795.2
8,979.8
9,225.4
9,679.6
..............

5,782.7
5,942.1
6,069.5
6,289.0
6,616.6

4,829.2
4,942.8
4,976.3
5,103.6
5,342.6

774.7
815.9
862.6
897.9
925.8

4,054.5
4,126.9
4,113.7
4,205.6
4,416.7

953.4
999.3
1,093.2
1,185.5
1,274.1

609.9
642.7
729.6
808.9
875.4

343.5
356.6
363.6
376.6
398.7

728.4
771.9
769.6
834.1
902.4

22.7
19.7
9.7
21.8
18.0

705.7
752.2
759.9
812.3
884.4

150.3
167.4
170.9
153.8
165.6

2000: I .....
II ....
III ..
IV ..

8,680.5
8,750.4
8,858.3
8,891.7

5,694.1
5,727.2
5,837.4
5,871.9

4,760.0
4,783.2
4,874.9
4,898.8

762.0
772.8
779.2
784.9

3,998.0
4,010.5
4,095.8
4,113.9

934.1
944.0
962.5
973.1

593.9
603.7
616.5
625.6

340.2
340.3
346.0
347.6

709.3
726.5
735.6
742.1

23.2
23.8
23.0
20.7

686.1
702.7
712.6
721.4

153.8
148.5
148.2
150.5

2001: I .....
II ....
III ..
IV ..

8,987.6
9,001.5
8,890.3
9,039.9

5,946.2
5,944.6
5,939.3
5,938.3

4,961.1
4,951.4
4,935.2
4,923.4

798.0
809.1
822.2
834.1

4,163.0
4,142.2
4,113.0
4,089.4

985.1
993.2
1,004.1
1,014.8

629.3
636.4
647.2
657.9

355.8
356.9
356.9
356.9

769.4
770.6
773.4
774.2

21.9
19.2
17.7
20.0

747.5
751.5
755.7
754.1

155.3
161.7
176.4
176.2

2002: I .....
II ....
III ...
IV ..

9,136.5
9,222.3
9,241.6
9,301.3

6,010.2
6,068.3
6,086.0
6,113.4

4,956.2
4,980.3
4,981.2
4,987.3

850.7
859.7
866.8
873.2

4,105.6
4,120.6
4,114.4
4,114.1

1,054.0
1,088.0
1,104.8
1,126.0

691.5
723.8
740.9
762.0

362.5
364.2
363.9
364.0

762.2
769.0
770.4
776.7

10.8
10.4
8.7
8.8

751.4
758.6
761.7
767.9

179.7
184.7
165.4
153.8

2003: I .....
II ....
III ...
IV ..

9,407.7
9,568.8
9,771.1
9,971.1

6,179.1
6,245.6
6,324.7
6,406.7

5,024.7
5,072.0
5,128.6
5,188.9

889.2
896.4
901.1
905.0

4,135.6
4,175.6
4,227.5
4,283.9

1,154.3
1,173.7
1,196.1
1,217.8

782.7
799.0
817.9
835.9

371.6
374.6
378.2
381.9

794.0
825.7
852.0
864.7

13.8
24.1
24.8
24.7

780.2
801.6
827.2
840.0

155.5
144.1
148.8
167.1

2004: I .....
II ....
III ...
IV p

10,128.1
10,262.0
10,264.7
..............

6,489.4
6,578.5
6,657.4
6,741.1

5,240.7
5,311.4
5,375.0
5,443.2

918.8
922.0
928.2
934.3

4,321.8
4,389.3
4,446.8
4,508.9

1,248.8
1,267.2
1,282.3
1,297.9

856.5
870.4
881.6
892.9

392.3
396.8
400.8
405.0

872.1
901.4
902.9
933.1

17.9
18.9
13.6
21.6

854.2
882.5
889.3
911.6

172.8
172.6
153.8
163.1

See next page for continuation of table.

242

TABLE B–28.—National income by type of income, 1959–2004—Continued
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Corporate profits with inventory valuation and capital consumption adjustments
Profits with inventory valuation adjustment and without
capital consumption adjustment
Year or
quarter

Total
Total

Capital
Profits
conInven- sumptory
Profits after tax
tion
valu- adjustProfits Taxes on
ation
before corpoNet
Undis- adjust- ment
rate
tax
Total
divi- tributed ment
income
dends profits

BusiNet
ness
interest Taxes Less: current
on
and
produc- Sub- transmisceltion
sifer
laneous
and
dies paypayimports
ments
ments
(net)

Current
surplus
of
government
enterprises

1959 ............

55.7

53.5

53.8

23.7

30.0

12.6

17.5

−0.3

2.2

9.6

41.1

1.1

1.8

1.0

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

............
............
............
............
............
............
............
............
............
............

53.8
54.9
63.3
69.0
76.5
87.5
93.2
91.3
98.8
95.4

51.5
51.8
57.0
62.1
68.6
78.9
84.6
82.0
88.8
85.5

51.6
51.6
57.0
62.1
69.1
80.2
86.7
83.5
92.4
91.4

22.8
22.9
24.1
26.4
28.2
31.1
33.9
32.9
39.6
40.0

28.8
28.7
32.9
35.7
40.9
49.1
52.8
50.6
52.8
51.4

13.4
13.9
15.0
16.2
18.2
20.2
20.7
21.5
23.5
24.2

15.5
14.8
17.9
19.5
22.7
28.9
32.1
29.1
29.3
27.2

−.2
.3
.0
.1
−.5
−1.2
−2.1
−1.6
−3.7
−5.9

2.3
3.0
6.2
6.8
7.9
8.6
8.6
9.3
10.0
9.9

10.6
12.5
14.2
15.2
17.4
19.6
22.4
25.5
27.1
32.7

44.6
47.0
50.4
53.4
57.3
60.8
63.3
68.0
76.5
84.0

1.1
2.0
2.3
2.2
2.7
3.0
3.9
3.8
4.2
4.5

1.9
2.0
2.2
2.7
3.1
3.6
3.5
3.8
4.3
4.9

.9
.8
.9
1.4
1.3
1.3
1.0
.9
1.2
1.0

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

............
............
............
............
............
............
............
............
............
............

83.6
98.0
112.1
125.5
115.8
134.8
163.3
192.4
216.6
223.2

74.4
88.3
101.2
115.3
109.5
135.0
165.6
194.7
222.4
231.8

81.0
92.9
107.8
134.8
147.8
145.5
179.7
210.4
246.1
271.9

34.8
38.2
42.3
50.0
52.8
51.6
65.3
74.4
84.9
90.0

46.2
54.7
65.5
84.9
95.0
93.9
114.4
136.0
161.3
181.9

24.3
25.0
26.8
29.9
33.2
33.0
39.0
44.8
50.8
57.5

21.9
29.7
38.6
55.0
61.8
60.9
75.4
91.2
110.5
124.4

−6.6
−4.6
−6.6
−19.6
−38.2
−10.5
−14.1
−15.7
−23.7
−40.1

9.2
9.7
10.9
10.2
6.2
−.2
−2.3
−2.3
−5.8
−8.5

39.1
43.9
47.9
55.2
70.8
81.6
85.5
101.1
115.0
138.9

91.5
100.6
108.1
117.3
125.0
135.5
146.6
159.9
171.2
180.4

4.8
4.7
6.6
5.2
3.3
4.5
5.1
7.1
8.9
8.5

4.5
4.3
4.9
6.0
7.1
9.4
9.5
8.4
10.6
13.0

.0
−.2
.5
−.4
−.9
−3.2
−1.8
−2.6
−1.9
−2.6

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989

............
............
............
............
............
............
............
............
............
............

201.1
226.1
209.7
264.2
318.6
330.3
319.5
368.8
432.6
426.6

211.4
219.1
191.0
226.5
264.6
257.5
253.0
301.4
363.9
367.4

253.5
243.7
198.5
233.9
268.6
257.4
246.0
317.6
386.1
383.7

87.2
84.3
66.5
80.6
97.5
99.4
109.7
130.4
141.6
146.1

166.3
159.4
132.0
153.3
171.1
158.0
136.3
187.2
244.4
237.7

64.1
73.8
77.7
83.5
90.8
97.6
106.2
112.3
129.9
158.0

102.2
85.6
54.3
69.8
80.3
60.5
30.1
74.9
114.5
79.7

−42.1 −10.2
−24.6
7.0
−7.5
18.6
−7.4
37.8
−4.0
54.0
.0
72.9
7.1
66.5
−16.2
67.5
−22.2
68.7
−16.3
59.2

181.8
232.3
271.1
285.3
327.1
341.3
366.8
366.4
385.3
432.1

200.7
236.0
241.3
263.7
290.2
308.5
323.7
347.9
374.9
399.3

9.8
11.5
15.0
21.2
21.0
21.3
24.8
30.2
29.4
27.2

14.4
17.6
20.1
22.5
30.1
34.8
36.6
33.8
34.0
39.2

−4.8
−4.9
−4.0
−3.1
−1.9
.8
1.3
1.2
2.5
4.9

1990
1991
1992
1993
1994
1995
1996
1997
1998
1999

............
............
............
............
............
............
............
............
............
............

437.8
451.2
479.3
541.9
600.3
696.7
786.2
868.5
801.6
851.3

396.6
427.9
458.3
513.1
564.6
656.0
736.1
812.3
738.5
776.8

409.5
423.0
461.1
517.1
577.1
674.3
733.0
798.2
718.3
775.9

145.4
138.6
148.7
171.0
193.7
218.7
231.7
246.1
248.3
258.6

264.1
284.4
312.4
346.1
383.3
455.6
501.4
552.1
470.0
517.2

169.1
180.7
187.9
202.8
234.7
254.2
297.6
334.5
351.6
337.4

95.0
103.7
124.5
143.3
148.6
201.4
203.8
217.6
118.3
179.9

−12.9
4.9
−2.8
−4.0
−12.4
−18.3
3.1
14.1
20.2
1.0

41.2
23.3
21.1
28.8
35.7
40.7
50.1
56.2
63.1
74.5

442.2
418.2
388.5
365.7
366.4
367.1
376.2
415.6
487.1
495.4

425.5
457.5
483.8
503.4
545.6
558.2
581.1
612.0
639.8
674.0

26.8
27.3
29.9
36.4
32.2
34.0
34.3
32.9
35.4
44.2

39.4
39.9
42.4
40.7
43.3
46.9
53.1
49.9
64.7
67.4

1.6
5.7
7.6
7.2
8.6
11.4
12.7
12.6
10.3
10.1

2000 ............
817.9
759.3
773.4
265.2
508.2
2001 ............
767.3
719.2
707.9
204.1
503.8
2002 ............
874.6
756.8
758.0
183.8
574.2
2003 ............ 1,021.1
860.4
874.5
234.9
639.6
2004 p .......... .............. .............. .............. .............. ..............

377.9
130.3
−14.1
370.9
132.9
11.3
390.0
184.1
−1.2
395.3
244.2
−14.1
443.9 .............. ..............

58.6
48.1
117.8
160.8
239.4

559.0
566.3
532.9
543.0
548.2

708.9
728.6
762.6
798.1
840.1

44.3
55.3
38.2
46.7
39.9

87.1
92.8
80.9
77.7
81.7

5.3
−1.4
2.8
9.5
6.7

2000: I .........
II ........
III .......
IV .......

832.6
833.0
811.8
794.3

766.8
773.5
756.3
740.7

795.4
784.8
762.6
750.8

280.8
272.5
260.3
247.1

514.6
512.2
502.3
503.7

360.3
377.3
386.6
387.6

154.4
135.0
115.7
116.1

−28.6
−11.3
−6.3
−10.1

65.8
59.6
55.5
53.6

548.3
560.6
564.3
563.0

697.6
706.9
712.2
718.7

44.4
44.4
44.3
44.1

81.3
85.0
88.9
93.1

7.9
7.1
4.2
2.2

2001: I .........
II ........
III ......
IV ......

778.7
783.1
714.5
793.0

750.5
756.0
689.1
681.3

754.6
755.0
671.1
650.9

222.5
217.9
197.6
178.6

532.1
537.1
473.6
472.4

379.2
370.1
366.0
368.4

152.9
167.0
107.5
104.0

−4.1
1.1
18.0
30.4

28.2
27.1
25.4
111.7

565.2
569.9
565.5
564.8

725.1
726.3
725.6
737.6

52.3
58.4
67.3
43.1

98.3
104.8
65.7
102.5

1.7
−1.1
−2.9
−3.4

2002: I .........
II ........
III ......
IV ......

838.2
868.4
876.2
915.4

711.7
747.5
761.2
806.8

695.8
745.9
773.0
817.4

168.9
183.5
188.3
194.7

526.9
562.4
584.8
622.7

378.7
389.2
395.3
396.9

148.2
173.2
189.4
225.7

15.9
1.6
−11.8
−10.6

126.6
121.0
115.0
108.6

549.2
527.3
526.8
528.3

747.3
760.1
771.2
771.8

38.9
36.8
38.4
38.7

89.6
81.3
78.0
74.6

−.9
−.1
6.0
6.0

2003: I .........
II ........
III .......
IV ......

912.0
986.2
1,057.1
1,129.1

798.7
823.5
877.2
941.9

826.1
824.5
881.0
966.2

224.0
224.6
238.7
252.3

602.1
600.0
642.3
713.9

396.0
394.7
394.1
396.4

206.1
205.3
248.1
317.5

−27.4
−1.0
−3.8
−24.3

113.3
162.7
179.9
187.2

541.3
542.8
542.8
545.3

783.5
792.9
802.0
813.9

42.8
55.2
44.5
44.4

74.8
76.9
78.9
80.1

10.3
9.8
9.3
8.7

403.4
302.5
−37.0
413.2
303.9
−47.8
424.0
255.5
−37.8
534.7 .............. ..............

240.2
233.3
223.0
261.2

554.5
548.5
546.7
543.0

823.3
835.7
843.1
858.1

40.4
39.4
39.7
40.2

82.7
83.5
76.0
84.4

8.1
7.4
6.5
4.7

2004: I ......... 1,165.6
925.4
962.4
256.5
705.9
II ........ 1,173.9
940.6
988.3
271.2
717.1
III ...... 1,118.0
895.0
932.8
253.3
679.5
IV p .... .............. .............. .............. .............. ..............

Source: Department of Commerce, Bureau of Economic Analysis.

243

TABLE B–29.—Sources of personal income, 1959–2004
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Compensation of employees, received
Wage and salary disbursements
Year or quarter

Personal
income

Total
Total

Private Governindusment
tries

Supplements to wages and salaries

Total

Employer
contributions for
employee
pension
and insurance funds

Employer
contributions for
government social insurance

Proprietors’ income
with inventory
valuation and
capital
consumption
adjustments

Total

Farm

Nonfarm

Rental
income
of
persons
with
capital
consumption
adjustment

1959 ....................

392.8

281.0

259.8

213.8

46.1

21.1

13.3

7.9

50.7

10.0

40.6

16.2

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

....................
....................
....................
....................
....................
....................
....................
....................
....................
....................

411.5
429.0
456.7
479.6
514.6
555.7
603.9
648.3
712.0
778.5

296.4
305.3
327.1
345.2
370.7
399.5
442.7
475.1
524.3
577.6

272.9
280.5
299.4
314.9
337.8
363.8
400.3
429.0
472.0
518.3

223.7
228.0
243.0
254.8
272.9
293.8
321.9
342.5
375.3
412.7

49.2
52.5
56.3
60.0
64.9
69.9
78.4
86.5
96.7
105.6

23.6
24.8
27.8
30.4
32.9
35.7
42.3
46.1
52.3
59.3

14.3
15.2
16.6
18.0
20.3
22.7
25.5
28.1
32.4
36.5

9.3
9.6
11.2
12.4
12.6
13.1
16.8
18.0
20.0
22.8

50.8
53.2
55.4
56.5
59.4
63.9
68.2
69.8
74.3
77.4

10.5
11.0
11.0
10.8
9.6
11.8
12.8
11.5
11.5
12.6

40.3
42.2
44.4
45.7
49.8
52.1
55.4
58.4
62.8
64.7

17.1
17.9
18.8
19.5
19.6
20.2
20.8
21.2
20.9
21.2

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

....................
....................
....................
....................
....................
....................
....................
....................
....................
....................

838.8
903.5
992.7
1,110.7
1,222.6
1,335.0
1,474.8
1,633.2
1,837.7
2,062.2

617.2
551.6
434.3
658.3
584.0
457.4
725.1
638.8
501.2
811.3
708.8
560.0
890.7
772.8
611.8
949.0
814.7
638.6
1,059.2
899.6
710.8
1,180.4
994.1
791.6
1,335.8 1,120.9
901.2
1,501.0 1,256.0 1,018.7

117.2
126.6
137.6
148.8
161.0
176.1
188.8
202.5
219.7
237.3

65.7
74.4
86.4
102.5
118.0
134.3
159.6
186.4
214.9
245.0

41.8
47.9
55.2
62.7
73.3
87.6
105.2
125.3
143.4
162.4

23.8
26.4
31.2
39.8
44.7
46.7
54.4
61.1
71.5
82.6

78.4
84.8
95.9
113.5
113.1
119.5
132.2
145.7
166.6
180.1

12.7
13.2
16.8
28.9
23.2
21.7
17.0
15.7
19.6
21.8

65.7
71.6
79.1
84.6
89.9
97.8
115.2
130.0
147.1
158.3

21.4
22.4
23.4
24.3
24.3
23.7
22.3
20.7
22.1
23.8

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989

....................
....................
....................
....................
....................
....................
....................
....................
....................
....................

2,307.9
2,591.3
2,775.3
2,960.7
3,289.5
3,526.7
3,722.4
3,947.4
4,253.7
4,587.8

1,651.8
1,825.7
1,925.9
2,043.0
2,255.4
2,424.9
2,570.1
2,750.2
2,967.2
3,145.2

1,377.7
1,517.5
1,593.7
1,685.0
1,854.9
1,995.7
2,114.8
2,270.7
2,452.9
2,596.3

1,116.2
1,231.7
1,286.2
1,359.8
1,507.0
1,621.6
1,717.9
1,848.1
2,001.6
2,116.2

261.5
285.8
307.5
325.2
347.9
374.1
397.0
422.6
451.3
480.2

274.2
308.3
332.1
358.0
400.5
429.2
455.3
479.5
514.2
548.9

185.2
204.7
222.4
238.1
261.5
281.5
297.5
313.2
329.6
355.2

88.9
103.6
109.8
119.9
139.0
147.7
157.9
166.3
184.6
193.7

174.1
183.0
176.3
192.5
243.3
262.3
275.7
302.2
341.6
363.3

11.3
18.7
13.1
6.0
20.6
20.8
22.6
28.7
26.8
33.0

162.8
164.3
163.3
186.5
222.7
241.5
253.1
273.5
314.7
330.3

30.0
38.0
38.8
37.8
40.2
41.9
33.5
33.5
40.6
43.1

1990
1991
1992
1993
1994
1995
1996
1997
1998
1999

....................
....................
....................
....................
....................
....................
....................
....................
....................
....................

4,878.6
5,051.0
5,362.0
5,558.5
5,842.5
6,152.3
6,520.6
6,915.1
7,423.0
7,802.4

3,338.2
3,445.3
3,651.2
3,794.9
3,979.6
4,177.0
4,386.9
4,664.6
5,020.1
5,352.0

2,754.0
2,823.0
2,980.3
3,082.7
3,232.1
3,419.3
3,619.6
3,877.6
4,183.4
4,466.3

2,236.3
2,276.2
2,411.1
2,496.0
2,625.9
2,793.8
2,975.2
3,209.5
3,486.2
3,736.9

517.7
546.8
569.2
586.8
606.2
625.5
644.4
668.1
697.3
729.3

584.2
622.3
670.9
712.2
747.5
757.7
767.3
787.0
836.7
885.7

377.8
407.1
442.5
472.4
493.3
493.6
492.5
497.5
529.7
562.4

206.5
215.1
228.4
239.8
254.1
264.0
274.9
289.5
307.0
323.3

380.6
377.1
427.6
453.8
473.3
492.1
543.2
576.0
627.8
678.3

31.9
26.7
34.5
31.2
33.9
22.7
37.3
34.2
29.4
28.6

348.7
350.4
393.0
422.6
439.4
469.5
505.9
541.8
598.4
649.7

50.7
60.3
78.0
95.6
119.7
122.1
131.5
128.8
137.5
147.3

2000 ....................
2001 ....................
2002 ....................
2003 ....................
2004 p ..................

8,429.7
8,724.1
8,878.9
9,161.8
9,659.1

5,782.7
5,942.1
6,069.5
6,289.0
6,616.6

4,829.2
4,942.8
4,976.3
5,103.6
5,342.6

4,054.5
4,126.9
4,113.7
4,205.6
4,416.7

774.7
815.9
862.6
897.9
925.8

953.4
999.3
1,093.2
1,185.5
1,274.1

609.9
642.7
729.6
808.9
875.4

343.5
356.6
363.6
376.6
398.7

728.4
771.9
769.6
834.1
902.4

22.7
19.7
9.7
21.8
18.0

705.7
752.2
759.9
812.3
884.4

150.3
167.4
170.9
153.8
165.6

2000: I .................
II ................
III ...............
IV ...............

8,266.2
8,372.3
8,514.4
8,565.8

5,694.1
5,727.2
5,837.4
5,871.9

4,760.0
4,783.2
4,874.9
4,898.8

3,998.0
4,010.5
4,095.8
4,113.9

762.0
772.8
779.2
784.9

934.1
944.0
962.5
973.1

593.9
603.7
616.5
625.6

340.2
340.3
346.0
347.6

709.3
726.5
735.6
742.1

23.2
23.8
23.0
20.7

686.1
702.7
712.6
721.4

153.8
148.5
148.2
150.5

2001: I .................
II ................
III ..............
IV ..............

8,688.7
8,719.9
8,733.1
8,754.8

5,946.2
5,944.6
5,939.3
5,938.3

4,961.1
4,951.4
4,935.2
4,923.5

4,163.0
4,142.2
4,113.0
4,089.4

798.0
809.1
822.2
834.1

985.1
993.2
1,004.1
1,014.8

629.3
636.4
647.2
657.9

355.8
356.9
356.9
356.9

769.4
770.6
773.4
774.2

21.9
19.2
17.7
20.0

747.5
751.5
755.7
754.1

155.3
161.7
176.4
176.2

2002: I .................
II ................
III ..............
IV ..............

8,803.6
8,897.1
8,895.7
8,919.2

6,010.2
6,068.3
6,086.0
6,113.4

4,956.2
4,980.3
4,981.2
4,987.3

4,105.6
4,120.6
4,114.4
4,114.1

850.7
859.7
866.8
873.2

1,054.0
1,088.0
1,104.8
1,126.0

691.5
723.8
740.9
762.0

362.5
364.2
363.9
364.0

762.2
769.0
770.4
776.7

10.8
10.4
8.7
8.8

751.4
758.6
761.7
767.9

179.7
184.7
165.4
153.8

2003: I .................
II ................
III ..............
IV ..............

9,002.2
9,105.7
9,209.3
9,330.0

6,177.7
6,247.0
6,324.7
6,406.7

5,023.3
5,073.3
5,128.6
5,188.9

4,135.6
4,175.6
4,227.5
4,283.9

887.8
897.8
901.1
905.0

1,154.3
1,173.7
1,196.1
1,217.8

782.7
799.0
817.9
835.9

371.6
374.6
378.2
381.9

794.0
825.7
852.0
864.7

13.8
24.1
24.8
24.7

780.2
801.6
827.2
840.0

155.5
144.1
148.8
167.1

2004: I .................
II ................
III ..............
IV p .............

9,445.0
9,592.7
9,674.3
9,924.6

6,487.9
6,580.0
6,657.4
6,741.1

5,239.2
5,312.8
5,375.0
5,443.2

4,321.8
4,389.3
4,446.8
4,508.9

917.3
923.5
928.2
934.3

1,248.8
1,267.2
1,282.3
1,297.9

856.5
870.4
881.6
892.9

392.3
396.8
400.8
405.0

872.1
901.4
902.9
933.1

17.9
18.9
13.6
21.6

854.2
882.5
889.3
911.6

172.8
172.6
153.8
163.1

1 Consists of aid to families with dependent children and, beginning with 1996, assistance programs operating under the Personal Responsibility and Work Opportunity Reconciliation Act of 1996.

See next page for continuation of table.

244

TABLE B–29.—Sources of personal income, 1959–2004—Continued
[Billions of dollars; quarterly data at seasonally adjusted annual rates]
Personal income receipts on
assets

Year or
quarter

Total

Personal Personal
interest dividend
income income

Personal current transfer receipts
Government social benefits to persons

Total

Old-age,
survivors, Government
disability, unemand
ployment
health
insurinsurance
ance ben- benefits
efits

Total

Veterans
benefits

Family
assistance 1

Other

Less:
Other Contributions
current
for
transfer governreceipts, ment
from
social
business insurance
(net)

1959 ..................

34.6

22.0

12.6

24.2

22.9

10.2

2.8

4.6

0.9

4.5

1.3

13.8

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

..................
..................
..................
..................
..................
..................
..................
..................
..................
..................

37.9
40.1
44.1
47.9
53.8
59.4
64.1
69.0
75.2
84.1

24.5
26.2
29.1
31.7
35.6
39.2
43.4
47.5
51.6
59.9

13.4
13.9
15.0
16.2
18.2
20.2
20.7
21.5
23.5
24.2

25.7
29.5
30.4
32.2
33.5
36.2
39.6
48.0
56.1
62.3

24.4
28.1
28.8
30.3
31.3
33.9
37.5
45.8
53.3
59.0

11.1
12.6
14.3
15.2
16.0
18.1
20.8
25.8
30.5
33.1

3.0
4.3
3.1
3.0
2.7
2.3
1.9
2.2
2.1
2.2

4.6
5.0
4.7
4.8
4.7
4.9
4.9
5.6
5.9
6.7

1.0
1.1
1.3
1.4
1.5
1.7
1.9
2.3
2.8
3.5

4.7
5.1
5.5
5.9
6.4
7.0
8.1
9.9
11.9
13.4

1.3
1.4
1.5
1.9
2.2
2.3
2.1
2.3
2.8
3.3

16.4
17.0
19.1
21.7
22.4
23.4
31.3
34.9
38.7
44.1

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

..................
..................
..................
..................
..................
..................
..................
..................
..................
..................

93.5
101.0
109.6
124.7
146.4
162.2
178.4
205.3
234.8
274.7

69.2
75.9
82.8
94.8
113.2
129.3
139.5
160.6
184.0
217.3

24.3
25.0
26.8
29.9
33.2
32.9
39.0
44.7
50.7
57.4

74.7
88.1
97.9
112.6
133.3
170.0
184.0
194.2
209.6
235.3

71.7
85.4
94.8
108.6
128.6
163.1
177.3
189.1
203.2
227.1

38.6
44.7
49.8
60.9
70.3
81.5
93.3
105.3
116.9
132.5

4.0
5.8
5.7
4.4
6.8
17.6
15.8
12.7
9.1
9.4

7.7
8.8
9.7
10.4
11.8
14.5
14.4
13.8
13.9
14.4

4.8
6.2
6.9
7.2
8.0
9.3
10.1
10.6
10.8
11.1

16.6
20.0
22.7
25.7
31.7
40.2
43.7
46.7
52.5
59.6

2.9
2.7
3.1
3.9
4.7
6.8
6.7
5.1
6.5
8.2

46.4
51.2
59.2
75.5
85.2
89.3
101.3
113.1
131.3
152.7

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989

..................
..................
..................
..................
..................
..................
..................
..................
..................
..................

338.7
421.9
488.4
529.6
607.9
654.0
695.5
717.0
769.3
878.0

274.7
348.3
410.8
446.3
517.2
556.6
589.5
604.9
639.5
720.2

64.0
73.6
77.6
83.3
90.6
97.4
106.0
112.2
129.7
157.8

279.5
318.4
354.8
383.7
400.1
424.9
451.0
467.6
496.6
543.4

270.8
307.2
342.4
369.9
380.4
402.6
428.0
447.4
476.0
519.9

154.8
182.1
204.6
222.2
237.8
253.0
268.9
282.6
300.2
325.6

15.7
15.6
25.1
26.2
15.9
15.7
16.3
14.5
13.2
14.3

15.0
16.1
16.4
16.6
16.4
16.7
16.7
16.6
16.9
17.3

12.5
13.1
12.9
13.8
14.5
15.2
16.1
16.4
16.9
17.5

72.8
80.2
83.4
91.0
95.9
102.0
109.9
117.3
128.8
145.3

8.6
11.2
12.4
13.8
19.7
22.3
22.9
20.2
20.6
23.5

166.2
195.7
208.9
226.0
257.5
281.4
303.4
323.1
361.5
385.2

1990
1991
1992
1993
1994
1995
1996
1997
1998
1999

..................
..................
..................
..................
..................
..................
..................
..................
..................
..................

924.0
932.0
910.9
901.8
950.8
1,016.4
1,089.2
1,181.7
1,283.2
1,264.2

755.2
751.7
723.4
699.6
716.8
763.2
793.0
848.7
933.2
928.6

168.8
595.2
180.3
666.4
187.4
749.4
202.2
790.1
234.0
827.3
253.2
877.4
296.2
925.0
333.0
951.2
349.9
978.6
335.6 1,022.1

573.1
648.5
729.8
775.7
812.2
858.4
902.1
931.8
952.6
988.0

351.8
381.7
414.4
443.4
475.4
506.8
537.7
563.2
575.1
588.9

18.0
26.6
38.9
34.1
23.5
21.4
22.0
19.9
19.5
20.3

17.8
18.3
19.3
20.1
20.1
20.9
21.7
22.5
23.4
24.3

19.2
21.1
22.2
22.8
23.2
22.6
20.3
17.9
17.4
17.9

166.2
200.8
234.9
255.3
270.0
286.7
300.4
308.3
317.3
336.7

22.2
17.9
19.6
14.4
15.1
19.0
22.9
19.4
26.0
34.1

410.1
430.2
455.0
477.7
508.2
532.8
555.2
587.2
624.2
661.4

2000 ..................
2001 ..................
2002 ..................
2003 ..................
2004 p ................

1,387.0 1,011.0
1,380.0 1,011.0
1,334.6
946.7
1,322.7
929.9
1,386.6
945.6

376.1
369.0
387.9
392.8
441.1

1,084.0
1,193.9
1,282.7
1,335.4
1,406.3

1,041.6
1,143.9
1,248.9
1,306.4
1,373.6

620.8
668.5
708.3
733.8
778.8

20.3
31.7
53.2
52.8
34.6

25.1
26.7
29.9
32.3
33.7

18.4
18.1
17.7
18.3
18.7

357.0
398.9
440.0
469.2
507.8

42.4
50.0
33.7
28.9
32.7

702.7
731.1
748.3
773.2
818.3

2000: I ...............
II ..............
III .............
IV .............

1,349.9
991.5
1,385.6 1,010.2
1,406.2 1,021.4
1,406.5 1,020.8

358.4
375.4
384.7
385.7

1,054.6
1,080.8
1,094.8
1,106.0

1,014.0
1,038.9
1,051.6
1,061.8

605.7
621.5
625.2
631.0

20.1
19.5
20.1
21.3

25.0
25.0
25.1
25.4

18.3
18.4
18.5
18.5

345.0
354.6
362.8
365.6

40.6
41.8
43.1
44.1

695.5
696.3
707.7
711.2

2001: I ...............
II ..............
III ............
IV ............

1,397.4 1,020.2
1,388.7 1,020.6
1,373.3 1,009.2
1,360.3
994.0

377.2
368.2
364.1
366.4

1,149.6
1,185.7
1,202.6
1,237.8

1,105.3
1,136.8
1,142.7
1,190.9

655.3
663.5
675.0
680.4

25.2
28.3
32.9
40.6

26.1
26.4
26.5
27.7

18.4
18.2
18.0
17.9

380.4
400.5
390.2
424.5

44.2
48.9
60.0
46.9

729.2
731.5
731.9
731.9

2002: I ...............
II ..............
III ............
IV ............

1,337.8
1,340.2
1,333.7
1,326.7

961.2
953.1
940.5
932.1

376.6
387.1
393.2
394.6

1,259.4
1,284.0
1,289.1
1,298.1

1,219.9
1,249.7
1,256.8
1,269.3

699.5
705.9
711.2
716.4

42.3
60.3
56.8
53.4

28.9
29.6
30.2
30.7

17.6
17.6
17.6
17.8

431.5
436.4
441.0
451.0

39.6
34.2
32.3
28.9

745.7
749.1
748.9
749.6

2003: I ...............
II ..............
III ............
IV ............

1,325.9
1,324.7
1,314.4
1,325.8

932.4
932.4
922.8
932.0

393.5
392.3
391.6
393.8

1,311.4
1,333.1
1,346.2
1,350.7

1,282.2
1,304.1
1,317.4
1,322.0

722.8
731.1
736.6
744.9

50.4
54.8
54.3
51.6

31.9
32.3
32.5
32.4

18.1
18.3
18.4
18.5

459.0
467.7
475.5
474.6

29.2
29.0
28.9
28.8

762.4
768.9
776.7
785.0

2004: I ...............
II ..............
III ............
IV p ...........

1,337.1
1,352.3
1,367.8
1,489.3

936.2
941.7
946.5
957.9

400.9
410.6
421.3
531.4

1,379.0
1,400.4
1,415.4
1,430.2

1,349.6
1,371.1
1,372.5
1,401.0

762.1
774.0
782.4
796.7

41.4
33.5
32.4
31.1

33.6
33.6
33.8
33.9

18.6
18.6
18.7
18.8

494.0
511.4
505.2
520.6

29.3
29.3
42.9
29.2

803.9
814.0
823.0
832.3

Source: Department of Commerce, Bureau of Economic Analysis.

245

TABLE B–30.—Disposition of personal income, 1959–2004
[Billions of dollars, except as noted; quarterly data at seasonally adjusted annual rates]
Less: Personal outlays

Year or quarter

Personal
income

Less:
Personal
current
taxes

Equals:
Disposable
personal
income

Total

Personal
Personal Personal curconrent
sumption interest transpayexpendi- ments 1
fer
tures
payments

Percent of disposable
personal income 2
Equals:
Personal
saving

Personal outlays

Total

Personal Personal
consumption saving
expenditures

1959 .....................

392.8

42.3

350.5

323.9

317.6

5.5

0.8

26.7

92.4

90.6

7.6

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................

411.5
429.0
456.7
479.6
514.6
555.7
603.9
648.3
712.0
778.5

46.1
47.3
51.6
54.6
52.1
57.7
66.4
73.0
87.0
104.5

365.4
381.8
405.1
425.1
462.5
498.1
537.5
575.3
625.0
674.0

338.8
349.6
371.3
391.8
421.7
455.1
493.1
520.9
572.2
621.4

331.7
342.1
363.3
382.7
411.4
443.8
480.9
507.8
558.0
605.2

6.2
6.5
7.0
7.9
8.9
9.9
10.7
11.1
12.2
14.0

.8
1.0
1.1
1.2
1.3
1.4
1.6
2.0
2.0
2.2

26.7
32.2
33.8
33.3
40.8
43.0
44.4
54.4
52.8
52.5

92.7
91.6
91.7
92.2
91.2
91.4
91.7
90.5
91.6
92.2

90.8
89.6
89.7
90.0
89.0
89.1
89.5
88.3
89.3
89.8

7.3
8.4
8.3
7.8
8.8
8.6
8.3
9.5
8.4
7.8

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................

838.8
903.5
992.7
1,110.7
1,222.6
1,335.0
1,474.8
1,633.2
1,837.7
2,062.2

103.1
101.7
123.6
132.4
151.0
147.6
172.3
197.5
229.4
268.7

735.7
801.8
869.1
978.3
1,071.6
1,187.4
1,302.5
1,435.7
1,608.3
1,793.5

666.2
721.2
791.9
875.6
958.0
1,061.9
1,180.2
1,310.4
1,465.8
1,634.4

648.5
701.9
770.6
852.4
933.4
1,034.4
1,151.9
1,278.6
1,428.5
1,592.2

15.2
16.6
18.1
19.8
21.2
23.7
23.9
27.0
31.9
36.2

2.6
2.8
3.1
3.4
3.4
3.8
4.4
4.8
5.4
5.9

69.5
80.6
77.2
102.7
113.6
125.6
122.3
125.3
142.5
159.1

90.6
89.9
91.1
89.5
89.4
89.4
90.6
91.3
91.1
91.1

88.1
87.5
88.7
87.1
87.1
87.1
88.4
89.1
88.8
88.8

9.4
10.1
8.9
10.5
10.6
10.6
9.4
8.7
8.9
8.9

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989

.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................

2,307.9
2,591.3
2,775.3
2,960.7
3,289.5
3,526.7
3,722.4
3,947.4
4,253.7
4,587.8

298.9
345.2
354.1
352.3
377.4
417.4
437.3
489.1
505.0
566.1

2,009.0
2,246.1
2,421.2
2,608.4
2,912.0
3,109.3
3,285.1
3,458.3
3,748.7
4,021.7

1,807.5
2,001.8
2,150.4
2,374.8
2,597.3
2,829.3
3,016.7
3,216.9
3,475.8
3,734.5

1,757.1
1,941.1
2,077.3
2,290.6
2,503.3
2,720.3
2,899.7
3,100.2
3,353.6
3,598.5

43.6
49.3
59.5
69.2
77.0
90.4
96.1
93.6
96.8
108.2

6.8
11.4
13.6
15.0
16.9
18.6
20.9
23.1
25.4
27.8

201.4
244.3
270.8
233.6
314.8
280.0
268.4
241.4
272.9
287.1

90.0
89.1
88.8
91.0
89.2
91.0
91.8
93.0
92.7
92.9

87.5
86.4
85.8
87.8
86.0
87.5
88.3
89.6
89.5
89.5

10.0
10.9
11.2
9.0
10.8
9.0
8.2
7.0
7.3
7.1

1990
1991
1992
1993
1994
1995
1996
1997
1998
1999

.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................

4,878.6
5,051.0
5,362.0
5,558.5
5,842.5
6,152.3
6,520.6
6,915.1
7,423.0
7,802.4

592.8
586.7
610.6
646.6
690.7
744.1
832.1
926.3
1,027.0
1,107.5

4,285.8
4,464.3
4,751.4
4,911.9
5,151.8
5,408.2
5,688.5
5,988.8
6,395.9
6,695.0

3,986.4
4,140.1
4,385.4
4,627.9
4,902.4
5,157.3
5,460.0
5,770.5
6,119.1
6,536.4

3,839.9
3,986.1
4,235.3
4,477.9
4,743.3
4,975.8
5,256.8
5,547.4
5,879.5
6,282.5

116.1
118.5
111.8
107.3
112.8
132.7
150.3
163.9
174.5
181.0

30.4
35.6
38.3
42.7
46.3
48.9
52.9
59.2
65.2
73.0

299.4
324.2
366.0
284.0
249.5
250.9
228.4
218.3
276.8
158.6

93.0
92.7
92.3
94.2
95.2
95.4
96.0
96.4
95.7
97.6

89.6
89.3
89.1
91.2
92.1
92.0
92.4
92.6
91.9
93.8

7.0
7.3
7.7
5.8
4.8
4.6
4.0
3.6
4.3
2.4

2000 .....................
2001 .....................
2002 .....................
2003 .....................
2004 p ...................

8,429.7
8,724.1
8,878.9
9,161.8
9,659.1

1,235.7
1,237.3
1,051.2
1,001.9
1,036.4

7,194.0
7,486.8
7,827.7
8,159.9
8,622.8

7,025.6
7,354.5
7,668.5
8,049.3
8,532.8

6,739.4
7,055.0
7,376.1
7,760.9
8,231.1

204.7
212.2
197.2
185.3
188.2

81.5
87.2
95.3
103.1
113.5

168.5
132.3
159.2
110.6
90.0

97.7
98.2
98.0
98.6
99.0

93.7
94.2
94.2
95.1
95.5

2.3
1.8
2.0
1.4
1.0

2000: I ..................
II .................
III ................
IV ................

8,266.2
8,372.3
8,514.4
8,565.8

1,207.0
1,231.1
1,248.0
1,256.6

7,059.2
7,141.2
7,266.4
7,309.3

6,888.0
6,970.0
7,076.3
7,168.1

6,613.9
6,688.1
6,783.9
6,871.6

194.1
201.0
210.4
213.3

79.9
81.0
82.0
83.1

171.2
171.3
190.1
141.2

97.6
97.6
97.4
98.1

93.7
93.7
93.4
94.0

2.4
2.4
2.6
1.9

2001: I ..................
II .................
III ................
IV ................

8,688.7
8,719.9
8,733.1
8,754.8

1,296.6
1,312.3
1,110.3
1,230.0

7,392.1
7,407.6
7,622.8
7,524.8

7,253.5
7,318.8
7,361.2
7,484.4

6,955.8
7,017.5
7,058.5
7,188.4

212.4
214.9
214.5
207.2

85.3
86.5
88.3
88.8

138.6
88.7
261.6
40.5

98.1
98.8
96.6
99.5

94.1
94.7
92.6
95.5

1.9
1.2
3.4
.5

2002: I ..................
II .................
III ................
IV ................
2003: I ..................
II .................
III ................
IV ................
2004: I ..................
II .................
III ................
IV p ..............

8,803.6
8,897.1
8,895.7
8,919.2
9,002.2
9,105.7
9,209.3
9,330.0
9,445.0
9,592.7
9,674.3
9,924.6

1,065.8
1,052.1
1,046.7
1,040.3
1,025.7
1,030.7
941.7
1,009.4
1,006.6
1,030.6
1,043.7
1,064.5

7,737.8
7,845.0
7,849.0
7,878.8
7,976.5
8,075.0
8,267.6
8,320.5
8,438.4
8,562.1
8,630.7
8,860.0

7,528.5
7,635.0
7,722.9
7,787.6
7,897.0
7,982.9
8,107.8
8,209.4
8,351.6
8,448.7
8,588.1
8,742.8

7,236.9
7,339.3
7,428.0
7,500.0
7,609.8
7,696.3
7,822.5
7,914.9
8,060.2
8,153.8
8,282.5
8,428.1

199.3
202.1
198.6
188.8
187.1
184.8
183.3
185.9
181.1
182.6
190.6
198.4

92.3
93.7
96.3
98.7
100.0
101.8
102.1
108.6
110.3
112.2
115.0
116.4

209.3
210.0
126.1
91.2
79.5
92.1
159.8
111.1
86.8
113.4
42.6
117.2

97.3
97.3
98.4
98.8
99.0
98.9
98.1
98.7
99.0
98.7
99.5
98.7

93.5
93.6
94.6
95.2
95.4
95.3
94.6
95.1
95.5
95.2
96.0
95.1

2.7
2.7
1.6
1.2
1.0
1.1
1.9
1.3
1.0
1.3
.5
1.3

1 Consists

of nonmortgage interest paid by households.
2 Percents based on data in millions of dollars.
Source: Department of Commerce, Bureau of Economic Analysis.

246

TABLE B–31.—Total and per capita disposable personal income and personal consumption expenditures,
and per capita gross domestic product, in current and real dollars, 1959–2004
[Quarterly data at seasonally adjusted annual rates, except as noted]
Disposable personal income
Year or
quarter

Total (billions of
dollars)

Personal consumption expenditures

Per capita
(dollars)

Total (billions of
dollars)

Per capita
(dollars)

Gross domestic
product
per capita
(dollars)

Population
(thousands) 1

Current
dollars

Chained
(2000)
dollars

Current
dollars

Chained
(2000)
dollars

Current
dollars

Chained
(2000)
dollars

Current
dollars

Chained
(2000)
dollars

Current
dollars

Chained
(2000)
dollars

1959 ........

350.5

1,715.5

1,979

9,685

317.6

1,554.6

1,793

8,776

2,860

13,782

177,130

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

........
........
........
........
........
........
........
........
........
........

365.4
381.8
405.1
425.1
462.5
498.1
537.5
575.3
625.0
674.0

1,759.7
1,819.2
1,908.2
1,979.1
2,122.8
2,253.3
2,371.9
2,475.9
2,588.0
2,668.7

2,022
2,078
2,171
2,246
2,410
2,563
2,734
2,895
3,114
3,324

9,735
9,901
10,227
10,455
11,061
11,594
12,065
12,457
12,892
13,163

331.7
342.1
363.3
382.7
411.4
443.8
480.9
507.8
558.0
605.2

1,597.4
1,630.3
1,711.1
1,781.6
1,888.4
2,007.7
2,121.8
2,185.0
2,310.5
2,396.4

1,835
1,862
1,947
2,022
2,144
2,283
2,446
2,555
2,780
2,985

8,837
8,873
9,170
9,412
9,839
10,331
10,793
10,994
11,510
11,820

2,912
2,965
3,139
3,263
3,458
3,700
4,007
4,189
4,533
4,857

13,840
13,932
14,552
14,971
15,624
16,420
17,290
17,533
18,196
18,573

180,760
183,742
186,590
189,300
191,927
194,347
196,599
198,752
200,745
202,736

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

........
........
........
........
........
........
........
........
........
........

735.7
801.8
869.1
978.3
1,071.6
1,187.4
1,302.5
1,435.7
1,608.3
1,793.5

2,781.7
2,907.9
3,046.5
3,252.3
3,228.5
3,302.6
3,432.2
3,552.9
3,718.8
3,811.2

3,587
3,860
4,140
4,616
5,010
5,498
5,972
6,517
7,224
7,967

13,563
14,001
14,512
15,345
15,094
15,291
15,738
16,128
16,704
16,931

648.5
701.9
770.6
852.4
933.4
1,034.4
1,151.9
1,278.6
1,428.5
1,592.2

2,451.9
2,545.5
2,701.3
2,833.8
2,812.3
2,876.9
3,035.5
3,164.1
3,303.1
3,383.4

3,162
3,379
3,671
4,022
4,364
4,789
5,282
5,804
6,417
7,073

11,955
12,256
12,868
13,371
13,148
13,320
13,919
14,364
14,837
15,030

5,064
5,427
5,899
6,524
7,013
7,586
8,369
9,219
10,307
11,387

18,391
18,771
19,555
20,484
20,195
19,961
20,822
21,565
22,526
22,982

205,089
207,692
209,924
211,939
213,898
215,981
218,086
220,289
222,629
225,106

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989

........
........
........
........
........
........
........
........
........
........

2,009.0
2,246.1
2,421.2
2,608.4
2,912.0
3,109.3
3,285.1
3,458.3
3,748.7
4,021.7

3,857.7
3,960.0
4,044.9
4,177.7
4,494.1
4,645.2
4,791.0
4,874.5
5,082.6
5,224.8

8,822
9,765
10,426
11,131
12,319
13,037
13,649
14,241
15,297
16,257

16,940
17,217
17,418
17,828
19,011
19,476
19,906
20,072
20,740
21,120

1,757.1
1,941.1
2,077.3
2,290.6
2,503.3
2,720.3
2,899.7
3,100.2
3,353.6
3,598.5

3,374.1
3,422.2
3,470.3
3,668.6
3,863.3
4,064.0
4,228.9
4,369.8
4,546.9
4,675.0

7,716
8,439
8,945
9,775
10,589
11,406
12,048
12,766
13,685
14,546

14,816
14,879
14,944
15,656
16,343
17,040
17,570
17,994
18,554
18,898

12,249
13,601
14,017
15,092
16,638
17,695
18,542
19,517
20,827
22,169

22,666
23,007
22,346
23,146
24,593
25,382
26,024
26,664
27,514
28,221

227,726
230,008
232,218
234,333
236,394
238,506
240,683
242,843
245,061
247,387

1990
1991
1992
1993
1994
1995
1996
1997
1998
1999

........
........
........
........
........
........
........
........
........
........

4,285.8
4,464.3
4,751.4
4,911.9
5,151.8
5,408.2
5,688.5
5,988.8
6,395.9
6,695.0

5,324.2
5,351.7
5,536.3
5,594.2
5,746.4
5,905.7
6,080.9
6,295.8
6,663.9
6,861.3

17,131
17,609
18,494
18,872
19,555
20,287
21,091
21,940
23,161
23,968

21,281
21,109
21,548
21,493
21,812
22,153
22,546
23,065
24,131
24,564

3,839.9
3,986.1
4,235.3
4,477.9
4,743.3
4,975.8
5,256.8
5,547.4
5,879.5
6,282.5

4,770.3
4,778.4
4,934.8
5,099.8
5,290.7
5,433.5
5,619.4
5,831.8
6,125.8
6,438.6

15,349
15,722
16,485
17,204
18,004
18,665
19,490
20,323
21,291
22,491

19,067
18,848
19,208
19,593
20,082
20,382
20,835
21,365
22,183
23,050

23,195
23,650
24,668
25,578
26,844
27,749
28,982
30,424
31,674
33,181

28,429
28,007
28,556
28,940
29,741
30,128
30,881
31,886
32,833
33,904

250,181
253,530
256,922
260,282
263,455
266,588
269,714
272,958
276,154
279,328

2000 .......
2001 .......
2002 .......
2003 .......
2004 p ......

7,194.0
7,486.8
7,827.7
8,159.9
8,622.8

7,194.0
7,333.3
7,559.5
7,733.8
7,997.9

25,472
26,236
27,159
28,034
29,334

25,472
25,698
26,229
26,570
27,208

6,739.4
7,055.0
7,376.1
7,760.9
8,231.1

6,739.4
6,910.4
7,123.4
7,355.6
7,634.7

23,862
24,723
25,592
26,663
28,002

23,862
24,216
24,715
25,270
25,973

34,759
35,491
36,386
37,805
39,898

34,759
34,660
34,955
35,666
36,867

282,429
285,366
288,217
291,073
293,951

2000: I .....
II ....
III ...
IV ..

7,059.2
7,141.2
7,266.4
7,309.3

7,109.7
7,157.5
7,249.3
7,259.6

25,094
25,322
25,694
25,774

25,274
25,380
25,633
25,599

6,613.9
6,688.1
6,783.9
6,871.6

6,661.3
6,703.3
6,768.0
6,825.0

23,512
23,715
23,988
24,231

23,680
23,769
23,931
24,066

34,231
34,831
34,872
35,099

34,467
34,920
34,782
34,867

281,304
282,015
282,810
283,588

2001: I .....
II ....
III ..
IV ..

7,392.1
7,407.6
7,622.8
7,524.8

7,283.0
7,252.1
7,452.2
7,346.0

26,004
25,995
26,678
26,264

25,620
25,450
26,081
25,640

6,955.8
7,017.5
7,058.5
7,188.4

6,853.1
6,870.3
6,900.5
7,017.6

24,469
24,626
24,703
25,090

24,108
24,110
24,150
24,494

35,254
35,545
35,470
35,694

34,741
34,763
34,546
34,590

284,265
284,959
285,736
286,502

2002: I .....
II ....
III ..
IV ..

7,737.8
7,845.0
7,849.0
7,878.8

7,537.6
7,588.4
7,555.1
7,558.0

26,947
27,257
27,199
27,231

26,249
26,366
26,181
26,123

7,236.9
7,339.3
7,428.0
7,500.0

7,049.7
7,099.2
7,149.9
7,194.6

25,202
25,500
25,740
25,922

24,550
24,666
24,777
24,867

36,002
36,294
36,547
36,697

34,802
34,928
35,059
35,033

287,154
287,812
288,575
289,328

2003: I .....
II ...
III ..
IV ..

7,976.5
8,075.0
8,267.6
8,320.5

7,591.2
7,671.1
7,822.9
7,849.6

27,507
27,782
28,368
28,474

26,179
26,392
26,842
26,862

7,609.8
7,696.3
7,822.5
7,914.9

7,242.2
7,311.4
7,401.7
7,466.8

26,243
26,479
26,841
27,086

24,975
25,155
25,397
25,552

37,053
37,446
38,144
38,570

35,121
35,394
35,935
36,208

289,977
290,656
291,442
292,217

2004: I .....
II ...
III ..
IV p

8,438.4
8,562.1
8,630.7
8,860.0

7,897.0
7,951.5
7,990.2
8,152.9

28,813
29,168
29,325
30,026

26,964
27,088
27,148
27,630

8,060.2
8,153.8
8,282.5
8,428.1

7,543.0
7,572.4
7,667.8
7,755.4

27,521
27,778
28,142
28,562

25,755
25,797
26,053
26,283

39,173
39,713
40,144
40,556

36,526
36,740
37,005
37,196

292,872
293,540
294,315
295,077

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).

247

TABLE B–32.—Gross saving and investment, 1959–2004
[Billions of dollars, except as noted; quarterly data at seasonally adjusted annual rates]
Gross saving
Net saving
Year or quarter

Total
gross
saving

Net private saving
Total
net
saving

Total

Net government saving

Wage
Undisaccruals
Personal tributed less discorsaving
porate burseprofits 1 ments

Total

Federal

State
and
local

Consumption of fixed
capital

Total

Private Government

1959 .............................

106.2

53.2

46.0

26.7

19.4

0.0

7.1

3.3

3.8

53.0

38.6

14.5

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................

111.3
114.3
124.9
133.2
143.4
158.5
168.7
170.5
182.0
198.3

55.8
57.1
65.7
70.8
78.4
89.1
93.1
89.0
93.6
100.4

44.3
50.2
57.9
59.7
71.0
79.2
83.1
91.4
88.4
83.7

26.7
32.2
33.8
33.3
40.8
43.0
44.4
54.4
52.8
52.5

17.6
18.1
24.1
26.4
30.1
36.2
38.7
36.9
35.6
31.2

.0
.0
.0
.0
.0
.0
.0
.0
.0
.0

11.5
6.9
7.8
11.1
7.4
9.9
10.0
−2.4
5.2
16.7

7.2
2.6
2.5
5.4
1.0
3.3
2.3
−9.4
−2.3
8.7

4.3
4.3
5.2
5.7
6.4
6.5
7.8
7.0
7.5
8.0

55.6
57.2
59.3
62.4
65.0
69.4
75.6
81.5
88.4
97.9

40.5
41.6
42.8
44.9
46.9
50.5
55.5
59.9
65.2
73.1

15.0
15.6
16.5
17.5
18.1
18.9
20.1
21.6
23.1
24.8

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................

192.7
208.9
237.5
292.0
301.5
297.0
342.1
397.5
478.0
536.7

86.0
93.9
111.0
152.7
139.0
109.2
137.0
167.5
215.7
236.6

94.0
115.8
119.8
148.3
143.4
175.8
181.3
198.5
223.5
234.9

69.5
80.6
77.2
102.7
113.6
125.6
122.3
125.3
142.5
159.1

24.6
34.8
42.9
45.6
29.8
50.2
59.0
73.2
81.0
75.7

.0
.4
−.3
.0
.0
.0
.0
.0
.0
.0

−8.1
−21.9
−8.8
4.4
−4.4
−66.6
−44.4
−31.0
−7.8
1.7

−15.2
−28.4
−24.4
−11.3
−13.8
−69.0
−51.7
−44.1
−26.5
−11.3

7.1
6.5
15.6
15.7
9.3
2.5
7.4
13.1
18.7
13.0

106.7
115.0
126.5
139.3
162.5
187.7
205.2
230.0
262.3
300.1

80.0
86.7
97.1
107.9
126.6
147.8
162.5
184.3
212.8
245.7

26.7
28.3
29.5
31.4
35.9
40.0
42.6
45.7
49.5
54.5

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989

.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................

549.4
654.7
629.1
609.4
773.4
767.5
733.5
796.8
915.0
944.7

206.5
266.6
202.2
165.6
300.9
260.7
202.2
234.9
317.4
300.4

251.3
312.3
336.2
333.7
445.0
413.4
372.0
367.4
434.0
409.7

201.4
244.3
270.8
233.6
314.8
280.0
268.4
241.4
272.9
287.1

49.9
68.0
65.4
100.1
130.3
133.4
103.7
126.1
161.1
122.6

.0
.0
.0
.0
.0
.0
.0
.0
.0
.0

−44.8
−45.7
−134.1
−168.1
−144.1
−152.6
−169.9
−132.6
−116.6
−109.3

−53.6
−53.3
−131.9
−173.0
−168.1
−175.0
−190.8
−145.0
−134.5
−130.1

8.8
7.6
−2.2
4.9
23.9
22.3
21.0
12.4
17.9
20.8

343.0
388.1
426.9
443.8
472.6
506.7
531.3
561.9
597.6
644.3

281.1
317.9
349.8
362.1
385.6
414.0
431.8
455.3
483.5
522.1

61.8
70.1
77.1
81.7
87.0
92.7
99.5
106.7
114.1
122.2

1990
1991
1992
1993
1994
1995
1996
1997
1998
1999

.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
............................

940.4
964.1
948.2
962.4
1,070.7
1,184.5
1,291.1
1,461.1
1,598.7
1,674.3

258.0
238.2
196.3
186.0
237.1
306.2
373.0
486.6
568.6
573.0

422.7
456.1
493.0
458.6
438.9
491.1
489.0
503.3
477.8
419.0

299.4
324.2
366.0
284.0
249.5
250.9
228.4
218.3
276.8
158.6

123.3
131.9
142.7
168.1
171.8
223.8
256.9
287.9
201.7
255.3

.0
.0
−15.8
6.4
17.6
16.4
3.6
−2.9
−.7
5.2

−164.8
−217.9
−296.7
−272.6
−201.9
−184.9
−116.0
−16.7
90.8
154.0

−172.0
−213.7
−297.4
−273.5
−212.3
−197.0
−141.8
−55.8
38.8
103.6

7.2
682.5
−4.2
725.9
.7
751.9
.9
776.4
10.5
833.7
12.0
878.4
25.8
918.1
39.1
974.4
52.0 1,030.2
50.4 1,101.3

551.6
586.9
607.3
624.7
675.1
713.4
748.8
800.3
851.2
914.3

130.9
139.1
144.6
151.8
158.6
165.0
169.3
174.1
179.0
187.0

2000 ............................
1,770.5
582.7 343.3
2001 .............................
1,657.6
376.1 324.6
2002 .............................
1,484.3
180.3 459.8
2003 .............................
1,487.7
133.8 501.5
2004 p ........................... ................ .............. ............

168.5
174.8
132.3
192.3
159.2
300.7
110.6
390.9
90.0 ..............

.0
239.4
189.5
50.0
.0
51.5
46.7
4.8
.0 −279.5 −254.5
−25.0
.0 −367.8 −364.5
−3.2
.0 .............. .............. ..............

1,187.8
1,281.5
1,303.9
1,353.9
1,406.9

990.8
1,075.5
1,092.8
1,135.9
1,177.9

197.0
206.0
211.2
218.1
229.0

2000: I ..........................
II .........................
III .......................
IV .......................

1,784.5
1,772.4
1,795.1
1,730.0

631.4
595.4
595.2
508.7

362.8
354.5
355.0
300.8

171.2
171.3
190.1
141.2

191.6
183.2
164.9
159.6

.0
.0
.0
.0

268.7
240.9
240.2
207.9

212.7
181.4
191.2
172.5

55.9
59.5
49.0
35.4

1,153.1
959.6
1,177.0
981.0
1,199.9 1,001.6
1,221.3 1,021.1

193.4
196.0
198.3
200.2

2001: I ..........................
II .........................
III .......................
IV .......................

1,745.3
1,704.0
1,647.9
1,533.1

504.8
433.2
315.2
251.2

315.7
283.8
412.4
286.5

138.6
88.7
261.6
40.5

177.0
195.1
150.9
246.1

.0
.0
.0
.0

189.2
149.4
−97.2
−35.3

156.6
123.6
−88.6
−4.7

32.5
25.8
−8.6
−30.6

1,240.5
1,270.8
1,332.7
1,281.8

1,038.4
1,067.0
1,121.3
1,075.2

202.0
203.8
211.4
206.6

2002: I ..........................
II ........................
III .......................
IV .......................

1,549.7
1,528.5
1,451.5
1,407.4

262.6
230.6
142.2
85.9

499.9
505.8
418.7
414.9

209.3
210.0
126.1
91.2

290.6
295.8
292.6
323.7

.0
.0
.0
.0

−237.3
−275.2
−276.5
−329.0

−208.5
−251.6
−255.1
−302.7

−28.8
−23.6
−21.3
−26.3

1,287.1
1,297.9
1,309.3
1,321.5

1,078.5
1,087.7
1,097.4
1,107.6

208.6
210.3
211.9
213.8

2003: I ..........................
II ........................
III .......................
IV .......................

1,375.0
1,436.0
1,518.1
1,621.7

41.0
89.0
157.5
247.6

371.6
459.1
584.0
591.5

79.5
92.1
159.8
111.1

292.0
367.0
424.2
480.4

.0
.0
.0
.0

−330.6
−370.1
−426.5
−343.9

−281.6
−364.4
−433.0
−379.2

−49.0
−5.7
6.5
35.3

1,334.0
1,347.0
1,360.6
1,374.2

1,118.4
1,129.7
1,141.5
1,153.8

215.6
217.3
219.1
220.4

.0 −379.2 −391.0
11.8
.0 −361.7 −380.0
18.3
.0 −379.6 −384.1
4.5
.0 .............. .............. ..............

1,355.0
1,375.2
1,497.9
1,399.5

1,132.4
1,148.1
1,266.8
1,164.0

222.6
227.0
231.1
235.5

2004: I ..........................
1,568.3
213.3 592.4
II .........................
1,616.3
241.2 602.9
III .......................
1,601.5
103.6 483.2
IV p ..................... ................ .............. ............

86.8
505.7
113.4
489.5
42.6
440.7
117.2 ..............

1 With inventory valuation and capital consumption adjustments.
See next page for continuation of table.

248

TABLE B–32.—Gross saving and investment, 1959–2004—Continued
[Billions of dollars, except as noted; quarterly data at seasonally adjusted annual rates]
Gross domestic investment, capital account transactions, and net lending, NIPA

Addenda:
Gross government saving

Gross domestic investment
Year or
quarter

Total

Total

CapNet
ital lending Statistical
Gross
acGross
private govern- count or net discrepborancy
domes- ment transrowing
tic
ac(–),
invest- invest- tions
ment 2
NIPA 4
ment
(net) 3

Gross
private
saving

Total

Federal

State
and
local

Gross
saving
as a
Net
perdomes- cent
tic
of
invest- gross
ment
national
income

Net
saving
as a
percent
of
gross
national
income

1959 ..........

106.7

107.8

78.5

−1.2

0.5

84.6

21.6

13.6

8.0

54.8

20.9

10.4

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

..........
..........
..........
..........
..........
..........
..........
..........
..........
..........

110.4
113.8
125.3
132.4
144.2
160.0
175.0
175.1
186.6
201.5

107.2
109.5
121.4
127.4
136.7
153.8
171.1
171.6
184.8
199.7

78.9
78.2
88.1
93.8
102.1
118.2
131.3
128.6
141.2
156.4

28.3
31.3
33.3
33.6
34.6
35.6
39.8
43.0
43.6
43.3

..........
..........
..........
..........
..........
..........
..........
..........
..........
..........

3.2
4.3
3.9
5.0
7.5
6.2
3.9
3.6
1.7
1.8

−.9
−.6
.4
−.8
.8
1.6
6.3
4.6
4.6
3.2

84.8
91.8
100.7
104.6
117.9
129.7
138.6
151.3
153.7
156.8

26.5
22.5
24.3
28.6
25.5
28.8
30.1
19.2
28.3
41.5

17.8
13.5
14.0
17.5
13.4
16.0
15.5
4.7
12.5
24.2

8.7
9.0
10.3
11.1
12.1
12.8
14.6
14.5
15.8
17.3

51.6
52.3
62.2
65.0
71.7
84.4
95.5
90.1
96.5
101.8

21.0
20.8
21.2
21.4
21.5
21.9
21.4
20.5
20.0
20.1

10.5
10.4
11.1
11.4
11.7
12.3
11.8
10.7
10.3
10.2

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

..........
..........
..........
..........
..........
..........
..........
..........
..........
..........

200.0
220.5
246.6
300.7
312.3
314.7
367.2
419.8
504.6
582.8

196.0
219.9
250.2
291.3
305.7
293.3
358.4
428.8
515.0
581.4

152.4
178.2
207.6
244.5
249.4
230.2
292.0
361.3
438.0
492.9

43.6
41.8
42.6
46.8
56.3
63.1
66.4
67.5
77.1
88.5

..........
..........
..........
..........
..........
..........
..........
..........
..........
..........

4.0
.6
−3.6
9.3
6.6
21.4
8.9
−9.0
−10.4
1.4

7.3
11.6
9.1
8.6
10.9
17.7
25.1
22.3
26.6
46.0

174.1
202.5
216.8
256.3
270.0
323.6
343.8
382.8
436.3
480.5

18.6
6.4
20.7
35.8
31.5
−26.6
−1.7
14.7
41.7
56.2

.9
−11.9
−7.7
5.8
4.5
−49.3
−30.3
−21.0
−1.5
15.7

17.7
18.3
28.5
30.0
27.0
22.7
28.6
35.7
43.2
40.5

89.3
104.9
123.7
152.1
143.2
105.6
153.2
198.8
252.7
281.2

18.6
18.6
19.2
21.1
20.0
18.2
18.8
19.6
20.9
21.1

8.3
8.4
9.0
11.0
9.2
6.7
7.5
8.3
9.4
9.3

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989

..........
..........
..........
..........
..........
..........
..........
..........
..........
..........

590.9
579.5
685.6
679.3
629.4
629.5
655.1
687.2
788.0
875.0
784.1
895.0
780.5
919.7
818.5
969.2
895.5 1,007.7
984.3 1,072.6

479.3
572.4
517.2
564.3
735.6
736.2
746.5
785.0
821.6
874.9

100.3 ..........
106.9 ..........
112.3 −0.2
122.9
−.2
139.4
−.2
158.8
−.3
173.2
−.3
184.3
−.4
186.1
−.5
197.7
−.3

11.4
6.3
.0
−31.8
−86.7
−110.5
−138.9
−150.4
−111.7
−88.0

41.4
30.9
.3
45.7
14.6
16.7
47.0
21.7
−19.5
39.7

532.4
630.3
686.0
695.8
830.6
827.3
803.9
822.7
917.5
931.8

17.0
24.4
−56.9
−86.5
−57.2
−59.9
−70.4
−25.9
−2.5
12.9

−23.6
−19.4
−94.2
−132.3
−123.5
−126.9
−139.2
−89.8
−75.2
−66.7

40.6
43.9
37.3
45.8
66.3
67.0
68.8
63.9
72.7
79.6

236.6
291.2
202.6
243.4
402.4
388.3
388.4
407.3
410.1
428.4

19.7
20.9
19.1
17.3
19.6
18.1
16.5
16.8
17.8
17.3

7.4
8.5
6.1
4.7
7.6
6.2
4.6
5.0
6.2
5.5

1990
1991
1992
1993
1994
1995
1996
1997
1998
1999

..........
..........
..........
..........
..........
..........
..........
..........
..........
.........

−76.6
9.0
−37.5
−71.7
−106.9
−91.9
−101.0
−111.3
−188.1
−278.7

66.2
72.5
102.7
139.5
142.5
101.2
93.7
70.7
−14.6
−35.7

974.3
1,042.9
1,100.4
1,083.3
1,114.0
1,204.5
1,237.8
1,303.6
1,328.9
1,333.3

−33.8
−78.8
−152.1
−120.8
−43.2
−19.9
53.3
157.5
269.8
341.0

−104.1
−141.5
−222.7
−195.5
−132.2
−115.1
−59.7
26.7
121.6
188.5

70.3
62.7
70.6
74.7
88.9
95.2
113.0
130.7
148.2
152.5

394.2
297.3
336.0
395.9
484.7
498.4
567.1
667.5
741.3
811.2

16.3
16.2
15.1
14.7
15.4
16.2
16.6
17.7
18.2
17.9

4.5
4.0
3.1
2.8
3.4
4.2
4.8
5.9
6.5
6.1

29.3 ..........

1,006.7
1,036.6
1,051.0
1,102.0
1,213.2
1,285.7
1,384.8
1,531.7
1,584.1
1,638.5

1,076.7
1,023.2
1,087.9
1,172.4
1,318.4
1,376.7
1,485.2
1,641.9
1,771.5
1,912.4

861.0
802.9
864.8
953.4
1,097.1
1,144.0
1,240.3
1,389.8
1,509.1
1,625.7

215.7
220.3
223.1
219.0
221.4
232.7
244.9
252.2
262.4
286.8

6.6
4.5
.6
1.3
1.7
.9
.7
1.0
.7
4.8

2000 ......... 1,643.3
2001 .......... 1,567.9
2002 .......... 1,468.9
2003 .......... 1,513.3
2004 p ....... ..............

2,040.0
1,938.3
1,926.6
2,024.2
2,301.7

1,735.5
1,614.3
1,579.2
1,665.8
1,922.4

304.5
.8 −397.4 −127.2 1,334.1
436.4
276.6
159.8
324.0
1.1 −371.5
−89.6 1,400.1
257.5
134.9
122.6
347.4
1.3 −458.9
−15.3 1,552.6
−68.4 −165.5
97.1
358.5
3.1 −514.0
25.6 1,637.4 −149.7 −274.3
124.7
379.3 .......... .............. .............. .............. .............. .............. ..............

2000: I .......
II ......
III .....
IV ....

1,612.8
1,704.6
1,630.6
1,625.4

1,975.6
2,085.7
2,054.0
2,044.5

1,672.3
1,781.7
1,749.0
1,738.9

303.3
304.0
305.0
305.6

.8
.8
.9
.8

−363.6
−381.9
−424.3
−419.9

−171.7
−67.8
−164.6
−104.6

1,322.4
1,335.5
1,356.6
1,321.9

462.1
437.0
438.5
408.1

299.4
268.4
278.7
260.1

162.7
168.6
159.8
147.9

822.6
908.7
854.1
823.3

18.1
17.9
17.8
17.1

6.4
6.0
5.9
5.0

2001: I .......
II ......
III ....
IV ....

1,577.5
1,605.3
1,576.8
1,512.2

1,988.5
1,981.6
1,929.3
1,854.0

1,675.3
1,647.7
1,613.0
1,521.4

313.2
333.9
316.3
332.7

1.1
1.0
1.2
1.0

−412.0
−377.4
−353.7
−342.9

−167.8
−98.8
−71.1
−20.9

1,354.1
1,350.8
1,533.8
1,361.7

391.2
353.2
114.1
171.4

244.5
211.9
−.2
83.5

146.7
141.4
114.3
87.8

748.0
710.7
596.6
572.2

17.1
16.6
16.1
14.9

4.9
4.2
3.1
2.4

2002: I .......
II ......
III ....
IV ....

1,487.9
1,469.8
1,472.3
1,445.8

1,910.8
1,924.1
1,932.4
1,939.2

1,568.5
1,577.0
1,581.3
1,589.9

342.3
347.1
351.1
349.2

1.1
1.1
1.4
1.4

−424.1
−455.3
−461.6
−494.7

−61.8
−58.7
20.8
38.4

1,578.4
1,593.4
1,516.1
1,522.6

−28.7
−64.9
−64.6
−115.2

−119.8
−162.8
−166.1
−213.0

91.1
97.9
101.6
97.8

623.7
626.1
623.1
617.7

14.9
14.5
13.8
13.2

2.5
2.2
1.3
.8

2003: I .......
II ......
III .....
IV .....

1,414.7
1,449.3
1,554.7
1,634.6

1,948.9
1,967.8
2,059.0
2,121.2

1,596.6
1,611.1
1,696.6
1,758.8

352.3
356.7
362.4
362.4

1.6
6.2
3.3
1.2

−535.9
−524.8
−507.5
−487.8

39.6
13.2
36.6
12.8

1,490.0
1,588.8
1,725.5
1,745.3

−114.9
−152.7
−207.4
−123.5

−192.0
−274.3
−342.5
−288.5

77.0
121.6
135.0
165.0

614.9
620.8
698.4
747.0

12.8
13.2
13.6
14.3

.4
.8
1.4
2.2

2004: I ....... 1,631.3
II ...... 1,672.8
III ..... 1,691.9
IV p .. ..............

2,188.3
2,302.9
2,325.6
2,389.8

1,819.7
1,920.7
1,947.0
2,002.2

368.6
1.4 −558.4
63.0 1,724.9 −156.6 −299.5
142.9
382.2
1.1 −631.2
56.4 1,751.1 −134.7 −287.2
152.5
378.7
1.3 −635.0
90.4 1,750.1 −148.5 −290.7
142.2
387.7 .......... .............. .............. .............. .............. .............. ..............

2 For

details on government investment, see Table B–20.
of capital transfers and the acquisition and disposal of nonproduced nonfinancial assets.
to 1982, equals the balance on current account, NIPA (see Table B–24).
Source: Department of Commerce, Bureau of Economic Analysis.
3 Consists
4 Prior

249

852.1 17.7
5.8
656.9 16.2
3.7
622.7 14.1
1.7
670.3 13.5
1.2
894.8 .......... ..........

833.3 13.7
1.9
927.7 13.9
2.1
827.7 13.6
.9
990.3 .......... ..........

TABLE B–33.—Median money income (in 2003 dollars) and poverty status of families and persons,
by race, selected years, 1989–2003
Families 1

Year

ALL RACES
1989 .........................
1990 .........................
1991 .........................
1992 3 .......................
1993 .........................
1994 .........................
1995 .........................
1996 .........................
1997 .........................
1998 .........................
1999 4 .......................
2000 5 .......................
2001 .........................
2002 .........................
2003 .........................
WHITE
1989 .........................
1990 .........................
1991 .........................
1992 3 .......................
1993 .........................
1994 .........................
1995 .........................
1996 .........................
1997 .........................
1998 .........................
1999 4 .......................
2000 5 .......................
2001 .........................
Alone 6
2002 .........................
2003 .........................
Alone or in
combination 6
2002 .........................
2003 .........................
BLACK
1989 .........................
1990 .........................
1991 .........................
1992 3 .......................
1993 .........................
1994 .........................
1995 .........................
1996 .........................
1997 .........................
1998 .........................
1999 4 .......................
2000 5 .......................
2001 .........................
Alone 6
2002 .........................
2003 .........................
Alone or in
combination 6
2002 .........................
2003 .........................

Number
(millions)

Median
money
income
(in
2003
dollars) 2

Persons
below
poverty level

Below poverty level
Female
householder

Total
Number
(millions)

Percent

Number
(millions)

Percent

Median money income (in 2003 dollars)
of persons 15 years old and over with
income 2
Males

Number
(millions)

Percent

Females

All
persons

Yearround
full-time
workers

All
persons

Yearround
full-time
workers

66.1
66.3
67.2
68.2
68.5
69.3
69.6
70.2
70.9
71.6
73.2
73.8
74.3
75.6
76.2

$49,014
48,248
47,336
46,992
46,333
47,615
48,679
49,378
50,938
52,675
53,901
54,191
53,421
52,864
52,680

6.8
7.1
7.7
8.1
8.4
8.1
7.5
7.7
7.3
7.2
6.8
6.4
6.8
7.2
7.6

10.3
10.7
11.5
11.9
12.3
11.6
10.8
11.0
10.3
10.0
9.3
8.7
9.2
9.6
10.0

3.5
3.8
4.2
4.3
4.4
4.2
4.1
4.2
4.0
3.8
3.6
3.3
3.5
3.6
3.9

32.2
33.4
35.6
35.4
35.6
34.6
32.4
32.6
31.6
29.9
27.8
25.4
26.4
26.5
28.0

31.5
33.6
35.7
38.0
39.3
38.1
36.4
36.5
35.6
34.5
32.8
31.6
32.9
34.6
35.9

12.8
13.5
14.2
14.8
15.1
14.5
13.8
13.7
13.3
12.7
11.9
11.3
11.7
12.1
12.5

$28,499
27,695
26,960
26,282
26,454
26,667
27,044
27,822
28,815
29,858
30,127
30,275
30,241
29,908
29,931

$40,714
39,549
39,949
39,616
38,959
38,812
38,596
39,150
40,286
40,858
41,339
41,543
41,708
41,435
41,503

$13,788
13,743
13,798
13,766
13,848
14,078
14,540
14,959
15,661
16,263
16,893
17,158
17,265
17,197
17,259

$28,134
28,102
27,982
28,387
28,168
28,564
28,500
29,107
29,749
30,267
30,207
31,109
31,612
31,680
31,653

56.6
56.8
57.2
57.7
57.9
58.4
58.9
58.9
59.5
60.1
61.1
61.3
61.6

51,539
50,380
49,764
49,687
49,268
50,196
51,118
52,245
53,436
55,251
56,383
56,645
56,185

4.4
4.6
5.0
5.3
5.5
5.3
5.0
5.1
5.0
4.8
4.4
4.3
4.6

7.8
8.1
8.8
9.1
9.4
9.1
8.5
8.6
8.4
8.0
7.3
7.1
7.4

1.9
2.0
2.2
2.2
2.4
2.3
2.2
2.3
2.3
2.1
1.9
1.8
1.9

25.4
26.8
28.4
28.5
29.2
29.0
26.6
27.3
27.7
24.9
22.5
21.2
22.4

20.8
22.3
23.7
25.3
26.2
25.4
24.4
24.7
24.4
23.5
22.2
21.6
22.7

10.0
10.7
11.3
11.9
12.2
11.7
11.2
11.2
11.0
10.5
9.8
9.5
9.9

29,889
28,892
28,180
27,504
27,556
27,832
28,642
29,123
29,847
31,158
31,640
31,829
31,425

42,509
41,053
40,768
40,558
39,905
39,829
40,173
40,554
41,280
41,922
43,283
42,998
42,388

14,057
14,080
14,121
14,086
14,123
14,279
14,763
15,130
15,763
16,474
16,946
17,175
17,304

28,468
28,440
28,390
28,716
28,807
29,336
29,084
29,601
30,253
30,773
30,907
31,993
32,058

62.3
62.6

55,885
55,768

4.9
5.1

7.8
8.1

2.0
2.2

22.6
24.0

23.5
24.3

10.2
10.5

31,079
30,732

42,323
42,142

17,224
17,422

32,119
32,192

63.0
63.5

55,696
55,604

5.0
5.2

7.9
8.1

2.1
2.2

22.6
24.2

24.1
25.0

10.3
10.6

31,011
30,658

42,263
42,079

17,190
17,391

32,107
32,180

7.5
7.5
7.7
8.0
8.0
8.1
8.1
8.5
8.4
8.5
8.7
8.7
8.8

28,952
29,237
28,381
27,115
27,006
30,324
31,129
30,960
32,690
33,140
35,157
35,972
34,914

2.1
2.2
2.3
2.5
2.5
2.2
2.1
2.2
2.0
2.0
1.9
1.7
1.8

27.8
29.3
30.4
31.1
31.3
27.3
26.4
26.1
23.6
23.4
21.8
19.3
20.7

1.5
1.6
1.8
1.9
1.9
1.7
1.7
1.7
1.6
1.6
1.5
1.3
1.4

46.5
48.1
51.2
50.2
49.9
46.2
45.1
43.7
39.8
40.8
39.2
34.3
35.2

9.3
9.8
10.2
10.8
10.9
10.2
9.9
9.7
9.1
9.1
8.4
8.0
8.1

30.7
31.9
32.7
33.4
33.1
30.6
29.3
28.4
26.5
26.1
23.6
22.5
22.7

18,064
17,562
17,072
16,786
18,309
18,394
19,186
19,250
20,682
21,776
22,563
22,798
22,307

29,661
29,316
29,804
29,541
29,543
29,964
29,724
31,676
30,741
30,962
33,285
32,568
33,172

11,282
11,366
11,612
11,419
11,919
12,946
13,138
13,742
14,913
14,806
16,310
16,964
16,920

25,602
25,308
25,202
26,029
25,467
25,326
25,267
25,669
26,017
26,896
27,751
27,506
28,366

8.9
8.9

34,293
34,369

1.9
2.0

21.5
22.3

1.4
1.5

35.8
36.9

8.6
8.8

24.1
24.4

22,055
21,986

32,664
33,429

17,112
16,581

28,258
27,622

9.1
9.1

34,405
34,607

2.0
2.0

21.4
22.1

1.5
1.5

35.7
36.8

8.9
9.1

23.9
24.3

22,002
21,935

32,698
33,464

17,053
16,540

28,338
27,675

1 The

term ‘‘family’’ refers to a group of two or more persons related by birth, marriage, or adoption and residing together. Every family
must include a reference person.
2 Current dollar median money income adjusted by CPI–U–RS.
3 Based on 1990 census adjusted population controls; comparable with succeeding years.
4 Reflects implementation of Census 2000-based population controls comparable with succeeding years.
5 Reflects household sample expansion.
6 Data are for white alone; for white alone or in combination; for black alone; and, for black alone or in combination. (Black is also Black or
African American.) Beginning with data for 2002 the Current Population Survey allowed respondents to choose more than one race; for earlier
years respondents could report only one race group.
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; 1971, 12.5; 1972, 11.9;
1973, 11.1; 1974, 11.2; 1975, 12.3; 1976, 11.8; 1977, 11.6; 1978, 11.4; 1979, 11.7; 1980, 13.0; 1981, 14.0; 1982, 15.0; 1983, 15.2; 1984,
14.4; 1985, 14.0; 1986, 13.6; 1987, 13.4; and 1988, 13.0.
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.
Source: Department of Commerce, Bureau of the Census.

250

POPULATION, EMPLOYMENT, WAGES, AND PRODUCTIVITY
TABLE B–34.—Population by age group, 1929–2004
[Thousands of persons]
Age (years)
July 1

Total

Under 5

5-15

16-19

20-24

25-44

45-64

65 and
over

1929 ..........................
1933 ..........................
1939 ..........................

121,767
125,579
130,880

11,734
10,612
10,418

26,800
26,897
25,179

9,127
9,302
9,822

10,694
11,152
11,519

35,862
37,319
39,354

21,076
22,933
25,823

6,474
7,363
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

1990
1991
1992
1993
1994

..........................
..........................
..........................
..........................
..........................

250,132
253,493
256,894
260,255
263,436

18,856
19,208
19,528
19,729
19,777

38,632
39,349
40,161
40,904
41,689

14,466
13,992
13,781
13,953
14,228

19,323
19,414
19,314
19,101
18,758

81,291
82,844
83,201
83,766
84,334

46,316
46,874
48,553
49,899
51,318

31,247
31,812
32,356
32,902
33,331

1995
1996
1997
1998
1999

..........................
..........................
..........................
..........................
..........................

266,557
269,667
272,912
276,115
279,295

19,627
19,408
19,233
19,145
19,136

42,510
43,172
43,833
44,332
44,755

14,522
15,057
15,433
15,856
16,164

18,391
17,965
17,992
18,250
18,672

84,933
85,527
85,737
85,663
85,408

52,806
54,396
56,283
58,249
60,362

33,769
34,143
34,402
34,619
34,798

2000 1 ........................
2001 1 ........................
2002 1 ........................
2003 1 ........................
2004 ..........................

282,388
285,321
288,205
291,049
293,907

19,212
19,364
19,576
19,769
................

45,105
45,173
45,131
45,087
................

16,198
16,224
16,285
16,374
................

19,214
19,852
20,408
20,810
................

85,092
84,864
84,595
84,378
................

62,485
64,506
66,604
68,711
................

35,081
35,338
35,608
35,919
................

1 Revised total population data for 2000–2003 are available as follows: 2000, 282,402; 2001, 285,329; 2002, 288,173; and 2003, 291,028.
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.

251

TABLE B–35.—Civilian population and labor force, 1929–2004
[Monthly data seasonally adjusted, except as noted]
Civilian labor force

Year or month

Civilian
noninstitutional
population 1

Employment
Total

Total

Agricultural

Nonagricultural

Unemployment

Not in
labor
force

Civil- Civilian
ian
emlabor ployforce ment/
parpopticipation ulation
rate 2 ratio 3

Thousands of persons 14 years of age and over
1929
1933
1939
1940
1941
1942
1943
1944
1945
1946
1947

.............................................................. ................
.............................................................. ................
.............................................................. ................
..............................................................
99,840
..............................................................
99,900
..............................................................
98,640
..............................................................
94,640
..............................................................
93,220
..............................................................
94,090
..............................................................
103,070
..............................................................
106,018

49,180
51,590
55,230
55,640
55,910
56,410
55,540
54,630
53,860
57,520
60,168

47,630
38,760
45,750
47,520
50,350
53,750
54,470
53,960
52,820
55,250
57,812

10,450
10,090
9,610
9,540
9,100
9,250
9,080
8,950
8,580
8,320
8,256

37,180
28,670
36,140
37,980
41,250
44,500
45,390
45,010
44,240
46,930
49,557

Unemployment
rate,
civilian
workers 4

Percent

1,550 ............
12,830 ............
9,480 ............
8,120 44,200
5,560 43,990
2,660 42,230
1,070 39,100
670 38,590
1,040 40,230
2,270 45,550
2,356 45,850

.......... ..........
.......... ..........
.......... ..........
55.7 47.6
56.0 50.4
57.2 54.5
58.7 57.6
58.6 57.9
57.2 56.1
55.8 53.6
56.8 54.5

3.2
24.9
17.2
14.6
9.9
4.7
1.9
1.2
1.9
3.9
3.9

Thousands of persons 16 years of age and over
1947 ..............................................................
1948 ..............................................................
1949 ..............................................................
1950 ..............................................................
1951 ..............................................................
1952 ..............................................................
1953 5 ...........................................................
1954 ..............................................................
1955 ..............................................................
1956 ..............................................................
1957 ..............................................................
1958 ..............................................................
1959 ..............................................................
1960 5 ...........................................................
1961 ..............................................................
1962 5 ...........................................................
1963 ..............................................................
1964 ..............................................................
1965 ..............................................................
1966 ..............................................................
1967 ..............................................................
1968 ..............................................................
1969 ..............................................................
1970 ..............................................................
1971 ..............................................................
1972 5 ...........................................................
1973 5 ...........................................................
1974 ..............................................................
1975 ..............................................................
1976 ..............................................................
1977 ..............................................................
1978 5 ...........................................................
1979 ..............................................................
1980 ..............................................................
1981 ..............................................................
1982 ..............................................................
1983 ..............................................................
1984 ..............................................................
1985 ..............................................................
1986 5 ...........................................................
1987 ..............................................................
1988 ..............................................................
1989 ..............................................................
1990 5 ...........................................................
1991 ..............................................................
1992 ..............................................................
1993 ..............................................................
1994 5 ...........................................................
1995 ..............................................................
1996 ..............................................................
1997 5 ...........................................................
1998 5 ...........................................................
1999 5 ...........................................................

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
189,164
190,925
192,805
194,838
196,814
198,584
200,591
203,133
205,220
207,753

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
125,840
126,346
128,105
129,200
131,056
132,304
133,943
136,297
137,673
139,368

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
118,793
117,718
118,492
120,259
123,060
124,900
126,708
129,558
131,463
133,488

1 Not

seasonally adjusted.
labor force as percent of civilian noninstitutional population.
employment as percent of civilian noninstitutional population.
4 Unemployed as percent of civilian labor force.
See next page for continuation of table.
2 Civilian
3 Civilian

252

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
3,223
3,269
3,247
3,115
3,409
3,440
3,443
3,399
3,378
3,281

49,148
50,714
49,993
51,758
53,235
53,749
54,919
53,904
55,722
57,514
58,123
57,450
59,065
60,318
60,546
61,759
63,076
64,782
66,726
68,915
70,527
72,103
74,296
75,215
75,972
78,669
81,594
83,279
82,438
85,421
88,734
92,661
95,477
95,938
97,030
96,125
97,450
101,685
103,971
106,434
109,232
111,800
114,142
115,570
114,449
115,245
117,144
119,651
121,460
123,264
126,159
128,085
130,207

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
7,047
8,628
9,613
8,940
7,996
7,404
7,236
6,739
6,210
5,880

42,477
42,447
42,708
42,787
42,604
43,093
44,041
44,678
44,660
44,402
45,336
46,088
46,960
47,617
48,312
49,539
50,583
51,394
52,058
52,288
52,527
53,291
53,602
54,315
55,834
57,091
57,667
58,171
59,377
59,991
60,025
59,659
59,900
60,806
61,460
62,067
62,665
62,839
62,744
62,752
62,888
62,944
62,523
63,324
64,578
64,700
65,638
65,758
66,280
66,647
66,837
67,547
68,385

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
66.5
66.2
66.4
66.3
66.6
66.6
66.8
67.1
67.1
67.1

56.0
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
62.8
61.7
61.5
61.7
62.5
62.9
63.2
63.8
64.1
64.3

3.9
3.8
5.9
5.3
3.3
3.0
2.9
5.5
4.4
4.1
4.3
6.8
5.5
5.5
6.7
5.5
5.7
5.2
4.5
3.8
3.8
3.6
3.5
4.9
5.9
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
5.6
6.8
7.5
6.9
6.1
5.6
5.4
4.9
4.5
4.2

TABLE B–35.—Civilian population and labor force, 1929–2004—Continued
[Monthly data seasonally adjusted, except as noted]
Civilian labor force

Year or month

Civilian
noninstitutional
population 1

Employment
Total

Total

Agricultural

Nonagricultural

Unemployment

Not in
labor
force

Civil- Civilian
ian
emlabor ployforce ment/
parpopticipation ulation
rate 2 ratio 3

Thousands of persons 16 years of age and over

Unemployment
rate,
civilian
workers 4

Percent

2000 5 6 .........................................................
2001 ..............................................................
2002 ..............................................................
2003 5 ...........................................................
2004 5 ...........................................................
2001: Jan ......................................................
Feb ......................................................
Mar .....................................................
Apr ......................................................
May .....................................................
June ....................................................
July ......................................................
Aug ......................................................
Sept .....................................................
Oct ......................................................
Nov ......................................................
Dec ......................................................
2002: Jan ......................................................
Feb ......................................................
Mar .....................................................
Apr ......................................................
May .....................................................
June ....................................................
July ......................................................
Aug ......................................................
Sept .....................................................
Oct ......................................................
Nov ......................................................
Dec ......................................................
2003: Jan 5 ....................................................
Feb 5 ....................................................
Mar .....................................................
Apr ......................................................
May .....................................................
June ....................................................
July ......................................................
Aug ......................................................
Sept .....................................................
Oct ......................................................
Nov ......................................................
Dec ......................................................

212,577
215,092
217,570
221,168
223,357
213,888
214,110
214,305
214,525
214,732
214,950
215,180
215,420
215,665
215,903
216,117
216,315
216,506
216,663
216,823
217,006
217,198
217,407
217,630
217,866
218,107
218,340
218,548
218,741
219,897
220,114
220,317
220,540
220,768
221,014
221,252
221,507
221,779
222,039
222,279
222,509

142,583
143,734
144,863
146,510
147,401
143,788
143,675
143,931
143,567
143,320
143,361
143,662
143,301
143,995
144,097
144,246
144,324
143,858
144,604
144,474
144,717
144,931
144,802
144,818
145,052
145,573
145,347
145,072
145,091
145,914
146,001
145,944
146,449
146,478
147,003
146,535
146,507
146,580
146,778
147,109
146,808

136,891
136,933
136,485
137,736
139,252
137,771
137,587
137,799
137,292
137,098
136,882
137,082
136,257
136,849
136,392
136,232
136,043
135,693
136,385
136,211
136,128
136,549
136,424
136,429
136,734
137,310
137,016
136,511
136,400
137,429
137,365
137,451
137,628
137,552
137,775
137,511
137,593
137,619
138,022
138,457
138,409

2,464
2,299
2,311
2,275
2,232
2,353
2,366
2,347
2,335
2,353
2,090
2,308
2,301
2,321
2,323
2,210
2,288
2,369
2,386
2,365
2,376
2,263
2,187
2,353
2,126
2,282
2,435
2,268
2,342
2,315
2,224
2,260
2,163
2,185
2,224
2,229
2,294
2,334
2,428
2,381
2,239

134,427
134,635
134,174
135,461
137,020
135,323
135,273
135,362
135,028
134,745
134,758
134,810
133,964
134,577
134,116
133,966
133,755
133,256
134,084
133,782
133,830
134,299
134,137
134,023
134,627
135,143
134,627
134,196
134,082
135,059
135,218
135,160
135,537
135,389
135,418
135,138
135,262
135,426
135,668
136,068
136,172

5,692
6,801
8,378
8,774
8,149
6,017
6,088
6,132
6,276
6,222
6,480
6,580
7,044
7,146
7,705
8,014
8,281
8,165
8,219
8,263
8,589
8,382
8,379
8,388
8,318
8,263
8,332
8,561
8,691
8,484
8,636
8,493
8,822
8,926
9,228
9,024
8,914
8,961
8,755
8,651
8,399

69,994
71,359
72,707
74,658
75,956
70,101
70,435
70,374
70,958
71,412
71,588
71,518
72,118
71,670
71,806
71,871
71,991
72,648
72,059
72,350
72,289
72,267
72,605
72,812
72,813
72,534
72,993
73,476
73,650
73,984
74,113
74,373
74,091
74,290
74,011
74,717
75,000
75,198
75,262
75,171
75,701

67.1
66.8
66.6
66.2
66.0
67.2
67.1
67.2
66.9
66.7
66.7
66.8
66.5
66.8
66.7
66.7
66.7
66.4
66.7
66.6
66.7
66.7
66.6
66.5
66.6
66.7
66.6
66.4
66.3
66.4
66.3
66.2
66.4
66.3
66.5
66.2
66.1
66.1
66.1
66.2
66.0

64.4
63.7
62.7
62.3
62.3
64.4
64.3
64.3
64.0
63.8
63.7
63.7
63.3
63.5
63.2
63.0
62.9
62.7
62.9
62.8
62.7
62.9
62.8
62.7
62.8
63.0
62.8
62.5
62.4
62.5
62.4
62.4
62.4
62.3
62.3
62.2
62.1
62.1
62.2
62.3
62.2

4.0
4.7
5.8
6.0
5.5
4.2
4.2
4.3
4.4
4.3
4.5
4.6
4.9
5.0
5.3
5.6
5.7
5.7
5.7
5.7
5.9
5.8
5.8
5.8
5.7
5.7
5.7
5.9
6.0
5.8
5.9
5.8
6.0
6.1
6.3
6.2
6.1
6.1
6.0
5.9
5.7

2004: Jan 5 ....................................................
Feb ......................................................
Mar .....................................................
Apr ......................................................
May .....................................................
June ....................................................
July ......................................................
Aug ......................................................
Sept .....................................................
Oct ......................................................
Nov ......................................................
Dec ......................................................

222,161
222,357
222,550
222,757
222,967
223,196
223,422
223,677
223,941
224,192
224,422
224,640

146,785
146,529
146,737
146,788
147,018
147,386
147,823
147,676
147,531
147,893
148,313
148,203

138,481
138,334
138,408
138,645
138,846
139,158
139,639
139,658
139,527
139,827
140,293
140,156

2,172
2,201
2,180
2,261
2,301
2,291
2,273
2,305
2,221
2,155
2,212
2,179

136,234
136,191
136,192
136,427
136,565
136,751
137,257
137,321
137,460
137,764
138,068
137,973

8,303
8,195
8,330
8,143
8,172
8,228
8,184
8,018
8,005
8,066
8,020
8,047

75,377
75,828
75,812
75,969
75,950
75,809
75,599
76,001
76,410
76,299
76,109
76,437

66.1
65.9
65.9
65.9
65.9
66.0
66.2
66.0
65.9
66.0
66.1
66.0

62.3
62.2
62.2
62.2
62.3
62.3
62.5
62.4
62.3
62.4
62.5
62.4

5.7
5.6
5.7
5.5
5.6
5.6
5.5
5.4
5.4
5.5
5.4
5.4

5 Not strictly comparable with earlier data due to population adjustments or other changes. See Employment and Earnings for details on
breaks in series.
6 Beginning in 2000, data for agricultural employment are for agricultural and related industries; data for this series and for nonagricultural employment are not strictly comparable with data for earlier years. Because of independent seasonal adjustment for these two
series, monthly data will not add to total civilian employment.
Note.—Labor force data in Tables B-35 through B-44 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.

253

TABLE B–36.—Civilian employment and unemployment by sex and age, 1959–2004
[Thousands of persons 16 years of age and over; monthly data seasonally adjusted]
Civilian employment
Males
Year or month

Total

Total

16-19
years

Unemployment
Females

20
years
and
over

Total

16-19
years

Males
20
years
and
over

Total

Total

Females

20
16-19 years
years and
over

Total

20
16-19 years
years and
over

1959 ....................

64,630 43,466

2,198 41,267 21,164

1,640 19,524

3,740 2,420

398 2,022 1,320

256 1,063

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

43,904
43,656
44,177
44,657
45,474
46,340
46,919
47,479
48,114
48,818

2,361
2,315
2,362
2,406
2,587
2,918
3,253
3,186
3,255
3,430

41,543
41,342
41,815
42,251
42,886
43,422
43,668
44,294
44,859
45,388

21,874
22,090
22,525
23,105
23,831
24,748
25,976
26,893
27,807
29,084

1,768
1,793
1,833
1,849
1,929
2,118
2,468
2,496
2,526
2,687

20,105
20,296
20,693
21,257
21,903
22,630
23,510
24,397
25,281
26,397

3,852
4,714
3,911
4,070
3,786
3,366
2,875
2,975
2,817
2,832

2,486
2,997
2,423
2,472
2,205
1,914
1,551
1,508
1,419
1,403

426
479
408
501
487
479
432
448
426
440

2,060
2,518
2,016
1,971
1,718
1,435
1,120
1,060
993
963

1,366
1,717
1,488
1,598
1,581
1,452
1,324
1,468
1,397
1,429

286
349
313
383
385
395
405
391
412
413

1,080
1,368
1,175
1,216
1,195
1,056
921
1,078
985
1,015

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

48,990
49,390
50,896
52,349
53,024
51,857
53,138
54,728
56,479
57,607

3,409
3,478
3,765
4,039
4,103
3,839
3,947
4,174
4,336
4,300

45,581
45,912
47,130
48,310
48,922
48,018
49,190
50,555
52,143
53,308

29,688
29,976
31,257
32,715
33,769
33,989
35,615
37,289
39,569
41,217

2,735
2,730
2,980
3,231
3,345
3,263
3,389
3,514
3,734
3,783

26,952
27,246
28,276
29,484
30,424
30,726
32,226
33,775
35,836
37,434

4,093
5,016
4,882
4,365
5,156
7,929
7,406
6,991
6,202
6,137

2,238
2,789
2,659
2,275
2,714
4,442
4,036
3,667
3,142
3,120

599
693
711
653
757
966
939
874
813
811

1,638
2,097
1,948
1,624
1,957
3,476
3,098
2,794
2,328
2,308

1,855
2,227
2,222
2,089
2,441
3,486
3,369
3,324
3,061
3,018

506
568
598
583
665
802
780
789
769
743

1,349
1,658
1,625
1,507
1,777
2,684
2,588
2,535
2,292
2,276

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

57,186
57,397
56,271
56,787
59,091
59,891
60,892
62,107
63,273
64,315

4,085
3,815
3,379
3,300
3,322
3,328
3,323
3,381
3,492
3,477

53,101
53,582
52,891
53,487
55,769
56,562
57,569
58,726
59,781
60,837

42,117
43,000
43,256
44,047
45,915
47,259
48,706
50,334
51,696
53,027

3,625
3,411
3,170
3,043
3,122
3,105
3,149
3,260
3,313
3,282

38,492 7,637 4,267
913 3,353 3,370
39,590 8,273 4,577
962 3,615 3,696
40,086 10,678 6,179 1,090 5,089 4,499
41,004 10,717 6,260 1,003 5,257 4,457
42,793 8,539 4,744
812 3,932 3,794
44,154 8,312 4,521
806 3,715 3,791
45,556 8,237 4,530
779 3,751 3,707
47,074 7,425 4,101
732 3,369 3,324
48,383 6,701 3,655
667 2,987 3,046
49,745 6,528 3,525
658 2,867 3,003

755
800
886
825
687
661
675
616
558
536

2,615
2,895
3,613
3,632
3,107
3,129
3,032
2,709
2,487
2,467

1990
1991
1992
1993
1994
1995
1996
1997
1998
1999

....................
....................
....................
....................
....................
....................
....................
....................
....................
....................

118,793
117,718
118,492
120,259
123,060
124,900
126,708
129,558
131,463
133,488

65,104
64,223
64,440
65,349
66,450
67,377
68,207
69,685
70,693
71,446

3,427
3,044
2,944
2,994
3,156
3,292
3,310
3,401
3,558
3,685

61,678
61,178
61,496
62,355
63,294
64,085
64,897
66,284
67,135
67,761

53,689
53,496
54,052
54,910
56,610
57,523
58,501
59,873
60,771
62,042

3,154
2,862
2,724
2,811
3,005
3,127
3,190
3,260
3,493
3,487

50,535
50,634
51,328
52,099
53,606
54,396
55,311
56,613
57,278
58,555

7,047
8,628
9,613
8,940
7,996
7,404
7,236
6,739
6,210
5,880

3,906
4,946
5,523
5,055
4,367
3,983
3,880
3,577
3,266
3,066

667
751
806
768
740
744
733
694
686
633

3,239
4,195
4,717
4,287
3,627
3,239
3,146
2,882
2,580
2,433

3,140
3,683
4,090
3,885
3,629
3,421
3,356
3,162
2,944
2,814

544
608
621
597
580
602
573
577
519
529

2,596
3,074
3,469
3,288
3,049
2,819
2,783
2,585
2,424
2,285

2000
2001
2002
2003
2004

....................
....................
....................
....................
....................

136,891
136,933
136,485
137,736
139,252

73,305
73,196
72,903
73,332
74,524

3,671
3,420
3,169
2,917
2,952

69,634
69,776
69,734
70,415
71,572

63,586
63,737
63,582
64,404
64,728

3,519
3,320
3,162
3,002
2,955

60,067
60,417
60,420
61,402
61,773

5,692
6,801
8,378
8,774
8,149

2,975
3,690
4,597
4,906
4,456

599
650
700
697
664

2,376
3,040
3,896
4,209
3,791

2,717
3,111
3,781
3,868
3,694

483
512
553
554
543

2,235
2,599
3,228
3,314
3,150

2003: Jan ............
Feb ............
Mar ............
Apr .............
May ...........
June ...........

137,429
137,365
137,451
137,628
137,552
137,775

72,891
73,163
73,096
73,207
73,145
73,123

2,997
2,961
2,852
2,864
2,892
2,948

69,894
70,202
70,244
70,343
70,253
70,175

64,538
64,202
64,355
64,421
64,407
64,652

3,086
3,075
3,076
3,073
3,034
2,951

61,452
61,127
61,279
61,349
61,372
61,700

8,484
8,636
8,493
8,822
8,926
9,228

4,800
4,819
4,696
4,969
5,033
5,218

701
730
719
723
721
733

4,099
4,089
3,977
4,246
4,313
4,485

3,684
3,816
3,798
3,852
3,893
4,010

558
538
546
573
574
647

3,126
3,278
3,252
3,280
3,318
3,363

July ............
Aug ............
Sept ...........
Oct .............
Nov ............
Dec ............

137,511
137,593
137,619
138,022
138,457
138,409

73,090
73,174
73,493
73,589
73,869
74,122

2,866
2,913
2,897
2,895
2,931
2,987

70,224
70,262
70,596
70,694
70,939
71,135

64,421
64,418
64,126
64,433
64,588
64,286

2,986
2,963
2,963
2,938
3,056
2,849

61,435
61,456
61,163
61,495
61,532
61,437

9,024
8,914
8,961
8,755
8,651
8,399

5,127
4,956
4,995
4,856
4,893
4,587

740
618
711
661
663
620

4,387
4,337
4,283
4,195
4,230
3,968

3,898
3,958
3,967
3,899
3,758
3,811

558
563
539
539
456
505

3,340
3,396
3,427
3,360
3,302
3,306

2004: Jan ............
Feb ............
Mar ............
Apr .............
May ...........
June ...........

138,481
138,334
138,408
138,645
138,846
139,158

74,284
73,937
74,062
74,104
74,118
74,501

3,001
2,923
2,904
2,947
2,891
2,925

71,283
71,014
71,158
71,158
71,226
71,575

64,197
64,397
64,345
64,541
64,728
64,658

2,960
2,941
2,921
2,950
3,005
2,927

61,237
61,456
61,424
61,591
61,723
61,731

8,303
8,195
8,330
8,143
8,172
8,228

4,494
4,454
4,527
4,451
4,545
4,427

638
613
650
700
676
642

3,856
3,840
3,877
3,751
3,869
3,786

3,809
3,741
3,803
3,692
3,627
3,800

572
562
504
506
547
542

3,238
3,179
3,299
3,185
3,080
3,259

July ............
Aug ............
Sept ...........
Oct .............
Nov ............
Dec ............

139,639
139,658
139,527
139,827
140,293
140,156

74,811
74,824
74,629
74,852
75,188
74,938

2,981
2,977
2,927
2,957
3,055
2,917

71,830
71,847
71,701
71,895
72,134
72,020

64,828
64,834
64,898
64,975
65,104
65,218

2,926
2,957
2,959
2,951
2,959
3,010

61,902
61,877
61,939
62,024
62,145
62,208

8,184
8,018
8,005
8,066
8,020
8,047

4,381
4,429
4,413
4,438
4,414
4,474

645
660
652
701
681
741

3,737
3,768
3,761
3,736
3,733
3,733

3,803
3,589
3,592
3,628
3,606
3,573

620
557
523
526
507
522

3,183
3,032
3,069
3,102
3,099
3,051

Note.—See footnote 5 and Note, Table B–35.
Source: Department of Labor, Bureau of Labor Statistics.

254

TABLE B–37.—Civilian employment by demographic characteristic, 1959–2004
[Thousands of persons 16 years of age and over; monthly data seasonally adjusted]
Year or
month

All
civilian
workers

White 1
Total

Males

Black and other 1

Females

Both
sexes Total
16-19

Males

Females

Black or African American 1
Both
sexes
16-19

Total

Both
FeMales males sexes
16-19

1959 ..........................................

64,630

58,006 39,494 18,512 3,475

6,623

3,971

2,652

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 8,464
5,670 8,488
6,173 8,783
6,623 9,356
6,796 9,610
6,487 9,435
6,724 9,899
7,068 10,317
7,367 11,112
7,356 11,565

4,813
4,796
4,952
5,265
5,352
5,161
5,363
5,579
5,936
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 7,802 4,368 3,433
509
647 8,128 4,527 3,601
570
652 8,203 4,527 3,677
554
615 7,894 4,275 3,618
507
611 8,227 4,404 3,823
508
619 8,540 4,565 3,975
508
703 9,102 4,796 4,307
571
727 9,359 4,923 4,436
579

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989

..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................

99,303 87,715
100,397 88,709
99,526 87,903
100,834 88,893
105,005 92,120
107,150 93,736
109,597 95,660
112,440 97,789
114,968 99,812
117,342 101,584

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
11,688
11,624
11,941
12,885
13,414
13,937
14,652
15,156
15,757

6,059
6,083
5,983
6,166
6,629
6,845
7,107
7,459
7,722
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
1994
1995
1996
1997
1998
1999

..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................

118,793
117,718
118,492
120,259
123,060
124,900
126,708
129,558
131,463
133,488

102,261
101,182
101,669
103,045
105,190
106,490
107,808
109,856
110,931
112,235

56,703
55,797
55,959
56,656
57,452
58,146
58,888
59,998
60,604
61,139

45,558
45,385
45,710
46,390
47,738
48,344
48,920
49,859
50,327
51,096

5,779
5,216
4,985
5,113
5,398
5,593
5,667
5,807
6,089
6,204

16,533 8,401 8,131
16,536 8,426 8,110
16,823 8,482 8,342
17,214 8,693 8,521
17,870 8,998 8,872
18,409 9,231 9,179
18,900 9,319 9,580
19,701 9,687 10,014
20,532 10,089 10,443
21,253 10,307 10,945

801
690
684
691
763
826
832
853
962
968

12,175
12,074
12,151
12,382
12,835
13,279
13,542
13,969
14,556
15,056

5,995
5,961
5,930
6,047
6,241
6,422
6,456
6,607
6,871
7,027

6,180
6,113
6,221
6,334
6,595
6,857
7,086
7,362
7,685
8,029

598
494
492
494
552
586
613
631
736
691

2000
2001
2002
2003
2004

..........................................
..........................................
..........................................
..........................................
..........................................

136,891
136,933
136,485
137,736
139,252

114,424
114,430
114,013
114,235
115,239

62,289
62,212
61,849
61,866
62,712

52,136
52,218
52,164
52,369
52,527

6,160
5,817
5,441
5,064
5,039

............
............
............
............
............

............
............
............
............
............

............
............
............
............
............

............
............
............
............
............

15,156
15,006
14,872
14,739
14,909

7,082
6,938
6,959
6,820
6,912

8,073
8,068
7,914
7,919
7,997

711
637
611
516
520

2003: Jan ...................................
Feb ...................................
Mar ..................................
Apr ...................................
May ..................................
June .................................

137,429
137,365
137,451
137,628
137,552
137,775

114,110
114,149
114,187
114,265
113,964
114,233

61,633
61,840
61,785
61,804
61,675
61,676

52,476
52,309
52,402
52,460
52,289
52,557

5,231
5,159
5,057
5,069
5,077
5,070

............
............
............
............
............
............

............
............
............
............
............
............

............
............
............
............
............
............

............
............
............
............
............
............

14,713
14,670
14,678
14,757
14,858
14,720

6,745
6,827
6,742
6,798
6,767
6,806

7,968
7,843
7,937
7,959
8,091
7,915

565
551
515
533
516
476

July ..................................
Aug ..................................
Sept .................................
Oct ...................................
Nov ..................................
Dec ..................................

137,511
137,593
137,619
138,022
138,457
138,409

114,042
114,074
113,962
114,485
114,699
114,626

61,667
61,705
61,888
62,081
62,261
62,346

52,375
52,368
52,074
52,404
52,438
52,280

5,012
5,042
5,012
5,015
5,091
4,944

............
............
............
............
............
............

............
............
............
............
............
............

............
............
............
............
............
............

............
............
............
............
............
............

14,750
14,759
14,794
14,658
14,818
14,697

6,845
6,829
6,855
6,819
6,873
6,926

7,905
7,930
7,939
7,839
7,945
7,770

512
505
549
482
496
511

2004: Jan ...................................
Feb ...................................
Mar ..................................
Apr ...................................
May ..................................
June .................................

138,481
138,334
138,408
138,645
138,846
139,158

114,771
114,615
114,500
114,779
115,006
115,199

62,629
62,343
62,288
62,426
62,340
62,645

52,142
52,272
52,212
52,353
52,666
52,554

5,121
5,036
4,982
5,045
5,065
4,994

............
............
............
............
............
............

............
............
............
............
............
............

............
............
............
............
............
............

............
............
............
............
............
............

14,875
14,829
14,917
14,893
14,837
14,825

6,936
6,852
6,914
6,847
6,896
6,933

7,939
7,977
8,003
8,046
7,942
7,892

529
507
515
489
504
502

July ..................................
Aug ..................................
Sept .................................
Oct ...................................
Nov ..................................
Dec ..................................

139,639
139,658
139,527
139,827
140,293
140,156

115,610
115,526
115,318
115,618
115,966
115,910

63,037
62,927
62,674
62,965
63,176
63,060

52,573
52,599
52,644
52,652
52,789
52,850

5,070
5,032
5,028
5,017
5,083
4,995

............
............
............
............
............
............

............
............
............
............
............
............

............
............
............
............
............
............

............
............
............
............
............
............

14,937
14,972
14,981
15,012
14,913
14,907

6,854
6,918
6,947
6,970
6,951
6,911

8,083
8,054
8,033
8,043
7,962
7,996

496
564
526
534
542
528

............
............
............
............
............
............
............
............
............
............

..........
..........
..........
..........
..........
..........
..........
..........
..........
..........

..........
..........
..........
..........
..........
..........
..........
..........
..........
..........

..........
..........
..........
..........
..........
..........
..........
..........
..........
..........

1 Beginning in 2003, persons who selected this race group only. Prior to 2003, persons who selected more than one race were included in
the group they identified as the main race. Data for black or African American were for black prior to 2003. Data discontinued for black and
other series. See Employment and Earnings, for details.
Note.—Beginning with data for 2000, since data for all race groups are not shown here, detail will not sum to total.
See footnote 5 and Note, Table B–35.
Source: Department of Labor, Bureau of Labor Statistics.

255

TABLE B–38.—Unemployment by demographic characteristic, 1959–2004
[Thousands of persons 16 years of age and over; monthly data seasonally adjusted]
Year or
month

All
civilian
workers

White 1
Total

Males

Females

Black and other 1
Both
sexes
16-19

Total

Black or African American 1

Males

Females

Both
sexes
16-19

Total

Males

Females

Both
sexes
16-19

1959 ..............

3,740

2,946

1,903

1,043

525

793

517

276

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

...........
...........
448
395
494
741
698
698
641
636

...........
...........
458
451
470
629
637
695
690
683

..........
..........
279
262
297
330
330
354
360
333

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

1,291
1,374
1,534
1,387
1,116
1,074
1,070
995
910
863

1,752
1,930
2,437
2,588
2,167
2,121
2,097
1,924
1,757
1,757

922
997
1,334
1,401
1,144
1,095
1,097
969
888
889

830
933
1,104
1,187
1,022
1,026
999
955
869
868

377
388
443
441
384
394
383
353
316
331

1,553
1,731
2,142
2,272
1,914
1,864
1,840
1,684
1,547
1,544

815
891
1,167
1,213
1,003
951
946
826
771
773

738
840
975
1,059
911
913
894
858
776
772

343
357
396
392
353
357
347
312
288
300

1990
1991
1992
1993
1994
1995
1996
1997
1998
1999

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............

7,047
8,628
9,613
8,940
7,996
7,404
7,236
6,739
6,210
5,880

5,186
6,560
7,169
6,655
5,892
5,459
5,300
4,836
4,484
4,273

2,935
3,859
4,209
3,828
3,275
2,999
2,896
2,641
2,431
2,274

2,251
2,701
2,959
2,827
2,617
2,460
2,404
2,195
2,053
1,999

903
1,029
1,037
992
960
952
939
912
876
844

1,860
2,068
2,444
2,285
2,104
1,945
1,936
1,903
1,726
1,606

971
1,087
1,314
1,227
1,092
984
984
935
835
792

889
981
1,130
1,058
1,011
961
952
967
891
814

308
330
390
373
360
394
367
359
329
318

1,565
1,723
2,011
1,844
1,666
1,538
1,592
1,560
1,426
1,309

806
890
1,067
971
848
762
808
747
671
626

758
833
944
872
818
777
784
813
756
684

268
280
324
313
300
325
310
302
281
268

2000
2001
2002
2003
2004

..............
..............
.............
.............
.............

5,692
6,801
8,378
8,774
8,149

4,121
4,969
6,137
6,311
5,847

2,177
2,754
3,459
3,643
3,282

1,944
2,215
2,678
2,668
2,565

795
845
925
909
890

............
............
............
............
............

...........
...........
...........
...........
...........

...........
...........
...........
...........
...........

..........
..........
..........
..........
..........

1,241
1,416
1,693
1,787
1,729

620
709
835
891
860

621
706
858
895
868

230
260
260
255
241

2003: Jan .......
Feb .......
Mar ......
Apr .......
May ......
June .....

8,484
8,636
8,493
8,822
8,926
9,228

6,139
6,183
6,128
6,308
6,491
6,570

3,577
3,540
3,475
3,673
3,702
3,837

2,562
2,642
2,653
2,634
2,789
2,733

906
941
921
917
917
991

............
............
............
............
............
............

...........
...........
...........
...........
...........
...........

...........
...........
...........
...........
...........
...........

..........
..........
..........
..........
..........
..........

1,726
1,772
1,676
1,808
1,810
1,934

883
914
842
911
982
966

843
858
835
896
828
968

248
252
268
264
289
286

July ......
Aug ......
Sept .....
Oct .......
Nov ......
Dec ......

9,024
8,914
8,961
8,755
8,651
8,399

6,540
6,494
6,387
6,192
6,265
6,077

3,891
3,784
3,658
3,525
3,672
3,445

2,649
2,710
2,729
2,666
2,593
2,632

929
900
904
841
850
852

............
............
............
............
............
............

...........
...........
...........
...........
...........
...........

...........
...........
...........
...........
...........
...........

..........
..........
..........
..........
..........
..........

1,809
1,810
1,854
1,876
1,692
1,665

878
860
943
932
838
777

931
950
911
944
854
889

267
218
265
283
202
195

2004: Jan .......
Feb .......
Mar ......
Apr .......
May ......
June .....

8,303
8,195
8,330
8,143
8,172
8,228

5,972
5,975
6,098
5,934
5,991
6,013

3,286
3,339
3,414
3,374
3,493
3,316

2,686
2,636
2,684
2,560
2,498
2,697

841
912
867
936
939
867

............
............
............
............
............
............

...........
...........
...........
...........
...........
...........

...........
...........
...........
...........
...........
...........

..........
..........
..........
..........
..........
..........

1,728
1,598
1,685
1,612
1,642
1,696

856
768
809
777
793
822

872
830
876
834
849
873

262
171
222
194
241
244

July ......
Aug ......
Sept .....
Oct .......
Nov ......
Dec ......

8,184
8,018
8,005
8,066
8,020
8,047

5,773
5,752
5,677
5,655
5,640
5,600

3,168
3,228
3,186
3,217
3,138
3,171

2,605
2,523
2,491
2,438
2,502
2,429

886
917
865
894
855
931

............
............
............
............
............
............

...........
...........
...........
...........
...........
...........

...........
...........
...........
...........
...........
...........

..........
..........
..........
..........
..........
..........

1,838
1,749
1,730
1,808
1,814
1,806

899
910
897
914
944
938

939
839
834
894
870
868

294
235
211
283
263
235

1 See

footnote 1 and Note, Table B–37.

Note.—See footnote 5 and Note, Table B–35.
Source: Department of Labor, Bureau of Labor Statistics.

256

TABLE B–39.—Civilian labor force participation rate and employment/population ratio, 1959–2004
[Percent;1 monthly data seasonally adjusted]
Labor force participation rate
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 .......................
1994 .......................
1995 .......................
1996 .......................
1997 .......................
1998 .......................
1999 .......................
2000 .......................
2001 .......................
2002 .......................
2003 .......................
2004 .......................
2003: Jan ...............
Feb ...............
Mar ..............
Apr ...............
May ..............
June .............
July ...............
Aug ...............
Sept ..............
Oct ...............
Nov ...............
Dec ...............
2004: Jan ...............
Feb ...............
Mar ..............
Apr ...............
May ..............
June .............
July ...............
Aug ...............
Sept ..............
Oct ...............
Nov ...............
Dec ...............

All
civilFeian Males males
workers
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
66.5
66.2
66.4
66.3
66.6
66.6
66.8
67.1
67.1
67.1
67.1
66.8
66.6
66.2
66.0
66.4
66.3
66.2
66.4
66.3
66.5
66.2
66.1
66.1
66.1
66.2
66.0
66.1
65.9
65.9
65.9
65.9
66.0
66.2
66.0
65.9
66.0
66.1
66.0

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
76.4
75.8
75.8
75.4
75.1
75.0
74.9
75.0
74.9
74.7
74.8
74.4
74.1
73.5
73.3
73.5
73.6
73.4
73.7
73.6
73.7
73.5
73.3
73.5
73.4
73.6
73.5
73.6
73.1
73.3
73.1
73.2
73.3
73.5
73.5
73.2
73.3
73.5
73.3

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
57.5
57.4
57.8
57.9
58.8
58.9
59.3
59.8
59.8
60.0
59.9
59.8
59.6
59.5
59.2
59.8
59.6
59.6
59.7
59.6
59.9
59.5
59.5
59.2
59.3
59.3
59.0
59.1
59.2
59.1
59.1
59.2
59.2
59.3
59.1
59.1
59.1
59.2
59.2

Employment/population ratio

Both
sexes
16–19
years

White 2

Black
and
other 2

Black
or
African
American 2

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
51.6
51.3
51.5
52.7
53.5
52.3
51.6
52.8
52.0
52.0
49.6
47.4
44.5
43.9
45.8
45.6
44.8
45.1
44.9
45.2
44.4
43.8
44.1
43.6
44.0
43.0
44.4
43.5
43.1
43.9
43.9
43.4
44.2
44.1
43.5
43.9
44.2
44.1

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
66.9
66.6
66.8
66.8
67.1
67.1
67.2
67.5
67.3
67.3
67.3
67.0
66.8
66.5
66.3
66.6
66.6
66.6
66.7
66.5
66.7
66.5
66.4
66.2
66.4
66.5
66.3
66.4
66.3
66.2
66.2
66.3
66.4
66.4
66.3
66.1
66.2
66.3
66.2

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
64.4
63.8
64.6
63.8
63.9
64.3
64.6
65.2
66.0
65.9
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........

............
............
............
............
............
............
............
............
............
............
............
............
............
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
64.0
63.3
63.9
63.2
63.4
63.7
64.1
64.7
65.6
65.8
65.8
65.3
64.8
64.3
63.8
64.5
64.4
64.0
64.7
65.0
64.9
64.4
64.4
64.6
64.0
63.8
63.2
64.2
63.4
64.0
63.6
63.4
63.4
64.3
64.0
63.9
64.2
63.8
63.6

1 Civilian

All
civilFeian Males males
workers
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
62.8
61.7
61.5
61.7
62.5
62.9
63.2
63.8
64.1
64.3
64.4
63.7
62.7
62.3
62.3
62.5
62.4
62.4
62.4
62.3
62.3
62.2
62.1
62.1
62.2
62.3
62.2
62.3
62.2
62.2
62.2
62.3
62.3
62.5
62.4
62.3
62.4
62.5
62.4

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
72.0
70.4
69.8
70.0
70.4
70.8
70.9
71.3
71.6
71.6
71.9
70.9
69.7
68.9
69.2
68.9
69.1
69.0
69.0
68.9
68.7
68.6
68.6
68.9
68.9
69.0
69.2
69.4
69.0
69.0
69.0
68.9
69.2
69.4
69.4
69.1
69.2
69.4
69.1

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
55.3
55.6
56.0
56.8
57.1
57.4
57.5
57.0
56.3
56.1
56.0
56.5
56.2
56.3
56.3
56.2
56.4
56.1
56.1
55.7
56.0
56.0
55.7
55.8
55.9
55.8
55.9
56.1
55.9
56.0
56.0
56.0
56.0
56.1
56.1

Both
sexes
16–19
years

White 2

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
45.3
42.0
41.0
41.7
43.4
44.2
43.5
43.4
45.1
44.7
45.2
42.3
39.6
36.8
36.4
38.0
37.7
37.0
37.0
36.9
36.7
36.3
36.5
36.3
36.1
37.0
36.1
36.9
36.3
36.0
36.4
36.4
36.1
36.4
36.6
36.2
36.3
36.9
36.4

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
63.7
62.6
62.4
62.7
63.5
63.8
64.1
64.6
64.7
64.8
64.9
64.2
63.4
63.0
63.1
63.2
63.2
63.2
63.2
63.0
63.0
62.9
62.8
62.7
62.9
63.0
62.9
63.1
63.0
62.9
63.0
63.1
63.1
63.3
63.2
63.0
63.1
63.3
63.2

labor force or civilian employment as percent of civilian noninstitutional population in group specified.
footnote 1, Table B–37.
Note.—Data relate to persons 16 years of age and over.
See footnote 5 and Note, Table B-35.
Source: Department of Labor, Bureau of Labor Statistics.
2 See

257

Black
Black
or
and African
other 2 American 2
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
57.9
56.7
56.4
56.3
57.2
58.1
58.6
59.4
60.9
61.3
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........

............
............
............
............
............
............
............
............
............
............
............
............
............
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
56.7
55.4
54.9
55.0
56.1
57.1
57.4
58.2
59.7
60.6
60.9
59.7
58.1
57.4
57.2
57.7
57.5
57.4
57.7
58.0
57.4
57.4
57.3
57.4
56.8
57.3
56.8
57.5
57.3
57.5
57.4
57.1
56.9
57.3
57.3
57.3
57.3
56.8
56.7

TABLE B–40.—Civilian labor force participation rate by demographic characteristic, 1965–2004
[Percent;1 monthly data seasonally adjusted]
Black and other or black or African American 2

White 2
Year or
month

All
civilian
workers

Males
Total

Total

16-19
years

Females
20
years
and
over

Total

16-19
years

Males
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
1965
1966
1967
1968
1969
1970
1971
1972

.............
.............
.............
.............
.............
.............
.............
.............

58.9
59.2
59.6
59.6
60.1
60.4
60.2
60.4

58.4
58.7
59.2
59.3
59.9
60.2
60.1
60.4

80.8
80.6
80.6
80.4
80.2
80.0
79.6
79.6

54.1
55.9
56.3
55.9
56.8
57.5
57.9
60.1

83.9
83.6
83.5
83.2
83.0
82.8
82.3
82.0

38.1
39.2
40.1
40.7
41.8
42.6
42.6
43.2

39.2
42.6
42.5
43.0
44.6
45.6
45.4
48.1

38.0
38.8
39.8
40.4
41.5
42.2
42.3
42.7

62.9
63.0
62.8
62.2
62.1
61.8
60.9
60.2

79.6
79.0
78.5
77.7
76.9
76.5
74.9
73.9

51.3
51.4
51.1
49.7
49.6
47.4
44.7
46.0

83.7
83.3
82.9
82.2
81.4
81.4
80.0
78.6

1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004

.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............

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
66.5
66.2
66.4
66.3
66.6
66.6
66.8
67.1
67.1
67.1
67.1
66.8
66.6
66.2
66.0

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
66.9
66.6
66.8
66.8
67.1
67.1
67.2
67.5
67.3
67.3
67.3
67.0
66.8
66.5
66.3

79.6
79.4
79.4
78.7
78.4
78.5
78.6
78.6
78.2
77.9
77.4
77.1
77.1
77.0
76.9
76.8
76.9
77.1
77.1
76.5
76.5
76.2
75.9
75.7
75.8
75.9
75.6
75.6
75.5
75.1
74.8
74.2
74.1

60.1
62.0
62.9
61.9
62.3
64.0
65.0
64.8
63.7
62.4
60.0
59.4
59.0
59.7
59.3
59.0
60.0
61.0
59.6
57.3
56.9
56.6
57.7
58.5
57.1
56.1
56.6
56.4
56.5
53.7
50.3
47.5
47.4

82.0
81.6
81.4
80.7
80.3
80.2
80.1
80.1
79.8
79.5
79.2
78.9
78.7
78.5
78.5
78.4
78.3
78.5
78.5
78.0
78.0
77.7
77.3
77.1
77.3
77.5
77.2
77.2
77.1
76.9
76.7
76.3
76.2

43.2
44.1
45.2
45.9
46.9
48.0
49.4
50.5
51.2
51.9
52.4
52.7
53.3
54.1
55.0
55.7
56.4
57.2
57.4
57.4
57.7
58.0
58.9
59.0
59.1
59.5
59.4
59.6
59.5
59.4
59.3
59.2
58.9

48.1
50.1
51.7
51.5
52.8
54.5
56.7
57.4
56.2
55.4
55.0
54.5
55.4
55.2
56.3
56.5
57.2
57.1
55.3
54.1
52.5
53.5
55.1
55.5
54.7
54.1
55.4
54.5
54.5
52.4
50.8
47.9
46.7

42.7
43.5
44.4
45.3
46.2
47.3
48.7
49.8
50.6
51.5
52.2
52.5
53.1
54.0
54.9
55.6
56.3
57.2
57.6
57.6
58.1
58.3
59.2
59.2
59.4
59.9
59.7
59.9
59.9
59.9
60.0
59.9
59.7

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
64.0
63.3
63.9
63.2
63.4
63.7
64.1
64.7
65.6
65.8
65.8
65.3
64.8
64.3
63.8

73.6
73.4
72.9
70.9
70.0
70.6
71.5
71.3
70.3
70.0
70.1
70.6
70.8
70.8
71.2
71.1
71.0
71.0
71.0
70.4
70.7
69.6
69.1
69.0
68.7
68.3
69.0
68.7
69.2
68.4
68.4
67.3
66.7

46.3
45.7
46.7
42.6
41.3
43.2
44.9
43.6
43.2
41.6
39.8
39.9
41.7
44.6
43.7
43.6
43.8
44.6
40.7
37.3
40.6
39.5
40.8
40.1
39.5
37.4
40.7
38.6
39.2
37.9
37.3
31.1
30.0

78.5
78.4
77.6
76.0
75.4
75.6
76.2
76.3
75.1
74.5
74.7
75.2
74.8
74.4
74.8
74.7
74.6
74.4
75.0
74.6
74.3
73.2
72.5
72.5
72.3
72.2
72.5
72.4
72.8
72.1
72.1
71.5
70.9

2003: Jan ......
Feb ......
Mar .....
Apr ......
May .....
June ....

66.4
66.3
66.2
66.4
66.3
66.5

66.6
66.6
66.6
66.7
66.5
66.7

74.3
74.4
74.2
74.4
74.2
74.3

48.8
48.3
47.0
46.9
47.3
48.3

76.3
76.4
76.3
76.5
76.3
76.3

59.4
59.3
59.3
59.3
59.3
59.5

49.6
49.4
48.8
49.0
48.5
48.5

60.1
60.0
60.1
60.1
60.0
60.2

64.5
64.4
64.0
64.7
65.0
64.9

67.2
68.1
66.6
67.6
67.8
67.9

33.5
35.0
31.4
31.8
32.1
30.7

July .....
Aug .....
Sept ....
Oct ......
Nov .....
Dec .....

66.2
66.1
66.1
66.1
66.2
66.0

66.5
66.4
66.2
66.4
66.5
66.3

74.3
74.1
74.1
74.1
74.4
74.1

47.6
47.0
47.3
46.0
47.6
47.6

76.3
76.2
76.2
76.3
76.5
76.2

59.1
59.1
58.8
59.0
58.9
58.8

47.2
47.8
47.0
47.3
46.9
44.5

60.0
59.9
59.6
59.8
59.8
59.8

64.4
64.4
64.6
64.0
63.8
63.2

67.4
67.0
67.8
67.3
66.8
66.7

2004: Jan ......
Feb ......
Mar .....
Apr ......
May .....
June ....

66.1
65.9
65.9
65.9
65.9
66.0

66.4
66.3
66.2
66.2
66.3
66.4

74.4
74.1
74.0
74.1
74.1
74.1

48.2
47.5
46.9
48.4
47.6
46.6

76.4
76.1
76.1
76.1
76.1
76.3

58.8
58.8
58.8
58.8
59.0
59.1

46.6
47.1
46.1
46.5
47.7
46.5

59.7
59.7
59.7
59.6
59.8
60.0

64.2
63.4
64.0
63.6
63.4
63.4

July .....
Aug .....
Sept ....
Oct ......
Nov .....
Dec .....

66.2
66.0
65.9
66.0
66.1
66.0

66.4
66.3
66.1
66.2
66.3
66.2

74.3
74.2
73.8
74.1
74.2
74.0

47.5
47.3
46.7
48.0
48.0
47.0

76.4
76.3
75.9
76.1
76.2
76.1

58.9
58.8
58.8
58.7
58.9
58.8

47.1
47.1
46.8
45.7
46.1
46.8

59.8
59.7
59.6
59.6
59.8
59.7

64.3
64.0
63.9
64.2
63.8
63.6

48.6
49.4
49.5
49.3
49.8
49.5
49.2
48.8

29.5
33.5
35.2
34.8
34.6
34.1
31.2
32.3

51.1
51.6
51.6
51.4
52.0
51.8
51.8
51.2

48.7
49.3
49.0
48.8
49.8
50.8
53.1
53.1
53.1
53.5
53.7
54.2
55.2
56.5
56.9
58.0
58.0
58.7
58.3
57.5
58.5
57.9
58.7
59.5
60.4
61.7
62.8
63.5
63.1
62.8
61.8
61.9
61.5

32.2
34.2
33.4
34.2
32.9
32.9
37.3
36.8
34.9
34.0
33.5
33.0
35.0
37.9
39.1
39.6
37.9
40.4
36.8
33.5
35.2
34.6
36.3
39.8
38.9
39.9
42.5
38.8
39.6
37.3
34.7
33.7
32.8

51.2
51.6
51.4
51.1
52.5
53.6
55.5
55.4
55.6
56.0
56.2
56.8
57.6
58.6
58.9
60.0
60.1
60.6
60.6
60.0
60.8
60.2
60.9
61.4
62.6
64.0
64.8
66.1
65.4
65.2
64.4
64.6
64.2

71.1
71.9
70.6
71.7
71.9
72.2

62.4
61.5
61.9
62.5
62.8
62.5

35.4
32.9
34.7
35.4
35.6
33.2

64.9
64.1
64.4
65.0
65.3
65.2

31.1
28.3
32.1
33.8
26.7
26.8

71.5
71.4
71.9
71.1
71.4
71.2

62.1
62.3
62.0
61.4
61.4
60.4

34.2
32.2
35.9
30.0
31.4
31.9

64.6
65.0
64.4
64.3
64.2
63.0

67.4
65.8
66.6
65.7
66.1
66.6

29.4
24.3
30.1
26.0
27.0
29.6

71.8
70.6
70.8
70.2
70.6
70.8

61.6
61.5
61.9
61.8
61.1
60.9

36.3
31.9
31.1
30.5
34.6
32.0

63.9
64.2
64.8
64.8
63.6
63.6

66.5
67.0
67.0
67.2
67.2
66.7

30.3
32.5
31.2
32.7
34.1
31.2

70.6
70.9
71.1
71.2
71.0
70.8

62.6
61.6
61.3
61.7
60.9
61.1

34.9
33.4
29.4
34.4
31.9
31.3

65.2
64.2
64.3
64.3
63.6
63.9

Black or African American 2

1Civilian labor force as percent of civilian noninstitutional population in group specified.
2 See footnote 1, Table B–37.
Note.—Data relate to persons 16 years of age and over.
See footnote 5 and Note, Table B–35.
Source: Department of Labor, Bureau of Labor Statistics.

258

TABLE B–41.—Civilian employment/population ratio by demographic characteristic, 1965–2004
[Percent;1 monthly data seasonally adjusted]
Black and other or black or African American 2

White 2
Year or month

All
civilian
workers

Males
Total

Females

Total

16-19
years

20
years
and
over

Total

Males

16-19
years

20
years
and
over

Total

Total

16-19
years

39.4
40.5
38.8
38.7
39.0
35.5
31.8
32.4

Females
20
years
and
over

Total

16-19
years

20
years
and
over

20.2
23.1
24.8
24.7
25.1
22.4
20.2
19.9

47.3
48.2
47.9
48.2
48.9
48.2
47.3
46.7

Black and other
1965
1966
1967
1968
1969
1970
1971
1972

.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................

56.2
56.9
57.3
57.5
58.0
57.4
56.6
57.0

56.0
56.8
57.2
57.4
58.0
57.5
56.8
57.4

77.9
78.3
78.4
78.3
78.2
76.8
75.7
76.0

47.1
50.1
50.2
50.3
51.1
49.6
49.2
51.5

81.5
81.7
81.7
81.6
81.4
80.1
79.0
79.0

36.2
37.5
38.3
38.9
40.1
40.3
39.9
40.7

33.7
37.5
37.7
37.8
39.5
39.5
38.6
41.3

36.5
37.5
38.3
39.1
40.1
40.4
40.1
40.6

57.8
58.4
58.2
58.0
58.1
56.8
54.9
54.1

73.7
74.0
73.8
73.3
72.8
70.9
68.1
67.3

78.7
79.2
79.4
78.9
78.4
76.8
74.2
73.2

44.1
45.1
45.0
45.2
45.9
44.9
43.9
43.3

1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004

.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................

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
62.8
61.7
61.5
61.7
62.5
62.9
63.2
63.8
64.1
64.3
64.4
63.7
62.7
62.3
62.3

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
63.7
62.6
62.4
62.7
63.5
63.8
64.1
64.6
64.7
64.8
64.9
64.2
63.4
63.0
63.1

76.0
76.5
75.9
73.0
73.4
74.1
75.0
75.1
73.4
72.8
70.6
70.4
72.1
72.3
72.3
72.7
73.2
73.7
73.3
71.6
71.1
71.4
71.8
72.0
72.3
72.7
72.7
72.8
73.0
72.0
70.8
70.1
70.4

51.5
54.3
54.4
50.6
51.5
54.4
56.3
55.7
53.4
51.3
47.0
47.4
49.1
49.9
49.6
49.9
51.7
52.6
51.0
47.2
46.4
46.6
48.3
49.4
48.2
48.1
48.6
49.3
49.5
46.2
42.3
39.4
39.7

79.0
79.2
78.6
75.7
76.0
76.5
77.2
77.3
75.6
75.1
73.0
72.6
74.3
74.3
74.3
74.7
75.1
75.4
75.1
73.5
73.1
73.3
73.6
73.8
74.2
74.7
74.7
74.8
74.9
74.0
73.1
72.5
72.8

40.7
41.8
42.4
42.0
43.2
44.5
46.3
47.5
47.8
48.3
48.1
48.5
49.8
50.7
51.7
52.8
53.8
54.6
54.7
54.2
54.2
54.6
55.8
56.1
56.3
57.0
57.1
57.3
57.4
57.0
56.4
56.3
56.1

41.3
43.6
44.3
42.5
44.2
45.9
48.5
49.4
47.9
46.2
44.6
44.5
47.0
47.1
47.9
49.0
50.2
50.5
48.3
45.9
44.2
45.7
47.5
48.1
47.6
47.2
49.3
48.3
48.8
46.5
44.1
41.5
40.3

40.6
41.6
42.2
41.9
43.1
44.4
46.1
47.3
47.8
48.5
48.4
48.9
50.0
51.0
52.0
53.1
54.0
54.9
55.2
54.8
54.9
55.2
56.4
56.7
57.0
57.8
57.7
58.0
58.0
57.7
57.3
57.3
57.2

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
56.7
55.4
54.9
55.0
56.1
57.1
57.4
58.2
59.7
60.6
60.9
59.7
58.1
57.4
57.2

66.8
67.5
65.8
60.6
60.6
61.4
63.3
63.4
60.4
59.1
56.0
56.3
59.2
60.0
60.6
62.0
62.7
62.8
62.6
61.3
59.9
60.0
60.8
61.7
61.1
61.4
62.9
63.1
63.6
62.1
61.1
59.5
59.3

31.6
32.8
31.4
26.3
25.8
26.4
28.5
28.7
27.0
24.6
20.3
20.4
23.9
26.3
26.5
28.5
29.4
30.4
27.7
23.8
23.6
23.6
25.4
25.2
24.9
23.7
28.4
26.7
28.9
26.4
25.6
19.9
19.3

73.0
73.7
71.9
66.5
66.8
67.5
69.1
69.1
65.8
64.5
61.4
61.6
64.1
64.6
65.1
66.4
67.1
67.0
67.1
65.9
64.3
64.3
65.0
66.1
65.5
66.1
67.1
67.5
67.7
66.3
65.2
64.1
63.9

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
51.9
50.6
50.8
50.9
52.3
53.4
54.4
55.6
57.2
58.6
58.6
57.8
55.8
55.6
55.5

19.2
22.0
20.9
20.2
19.2
18.5
22.1
22.4
21.0
19.7
17.7
17.0
20.1
23.1
23.8
25.8
25.8
27.1
25.8
21.5
22.1
21.6
24.5
26.1
27.1
28.5
31.8
29.0
30.6
27.0
24.9
23.4
23.6

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
51.6
53.0
53.9
54.6
54.7
53.6
53.6
53.8
55.0
56.1
57.1
58.4
59.7
61.5
61.3
60.7
58.7
58.6
58.5

2003: Jan ..............
Feb ..............
Mar .............
Apr ..............
May .............
June ............

62.5
62.4
62.4
62.4
62.3
62.3

63.2
63.2
63.2
63.2
63.0
63.0

70.2
70.4
70.2
70.2
70.0
69.9

40.7
40.0
38.7
38.7
39.3
39.8

72.5
72.7
72.7
72.7
72.4
72.3

56.6
56.4
56.5
56.5
56.3
56.5

43.1
42.7
42.4
42.5
41.9
41.1

57.6
57.4
57.5
57.5
57.3
57.6

57.7
57.5
57.4
57.7
58.0
57.4

59.4
60.0
59.2
59.6
59.2
59.5

22.3
21.9
17.8
19.9
18.8
19.5

63.7
64.4
63.9
64.1
63.9
64.1

56.4
55.4
56.0
56.1
57.0
55.7

25.5
24.7
25.6
25.0
24.5
20.5

59.2
58.3
58.9
59.0
60.0
58.9

July .............
Aug .............
Sept ............
Oct ..............
Nov .............
Dec .............

62.2
62.1
62.1
62.2
62.3
62.2

62.9
62.8
62.7
62.9
63.0
62.9

69.9
69.8
70.0
70.1
70.2
70.3

39.0
39.2
38.9
38.8
39.5
40.0

72.3
72.2
72.4
72.5
72.6
72.6

56.3
56.2
55.9
56.2
56.2
55.9

41.0
41.3
41.0
41.2
41.5
38.6

57.4
57.3
56.9
57.2
57.2
57.2

57.4
57.3
57.4
56.8
57.3
56.8

59.7
59.5
59.6
59.2
59.6
59.9

19.7
20.4
21.1
19.8
17.9
19.2

64.3
64.0
64.0
63.7
64.3
64.6

55.5
55.6
55.6
54.8
55.5
54.2

23.1
21.9
24.8
20.4
23.4
23.3

58.5
58.7
58.4
58.0
58.4
57.1

2004: Jan ..............
Feb ..............
Mar .............
Apr ..............
May .............
June ............

62.3
62.2
62.2
62.2
62.3
62.3

63.1
63.0
62.9
63.0
63.1
63.1

70.7
70.3
70.2
70.3
70.1
70.4

41.5
40.1
39.3
39.8
38.8
39.0

73.0
72.7
72.6
72.7
72.6
72.8

55.9
56.0
55.9
56.0
56.3
56.2

40.0
40.0
39.9
40.4
41.7
40.3

57.0
57.2
57.1
57.1
57.4
57.3

57.5
57.3
57.5
57.4
57.1
56.9

60.0
59.2
59.7
59.0
59.3
59.5

17.0
17.2
18.9
18.0
18.8
19.4

64.9
64.0
64.3
63.7
63.9
64.1

55.5
55.7
55.8
56.0
55.2
54.8

26.9
24.8
23.8
22.4
22.9
22.0

58.1
58.6
58.8
59.2
58.2
57.9

July .............
Aug .............
Sept ............
Oct ..............
Nov .............
Dec .............

62.5
62.4
62.3
62.4
62.5
62.4

63.3
63.2
63.0
63.1
63.3
63.2

70.8
70.6
70.2
70.5
70.6
70.5

40.1
39.8
39.3
39.6
40.5
38.6

73.2
73.0
72.6
72.9
73.0
72.9

56.2
56.1
56.1
56.1
56.2
56.2

40.4
40.1
40.5
39.9
40.0
40.5

57.3
57.3
57.2
57.2
57.4
57.3

57.3
57.3
57.3
57.3
56.8
56.7

58.8
59.2
59.4
59.4
59.2
58.8

18.8
21.1
20.0
20.6
21.1
19.4

63.3
63.6
63.8
63.9
63.5
63.3

56.1
55.8
55.6
55.5
54.9
55.1

22.1
25.3
23.2
23.2
23.3
23.7

59.2
58.6
58.6
58.6
57.9
58.0

Black or African American 2

1 Civilian

employment as percent of civilian noninstitutional population in group specified.
footnote 1, Table B–37.
Note.—Data relate to persons 16 years of age and over.
See footnote 5 and Note, Table B–35.
Source: Department of Labor, Bureau of Labor Statistics.
2 See

259

TABLE B–42.—Civilian unemployment rate, 1959–2004
[Percent;1 monthly data seasonally adjusted, except as noted by NSA]
Males
Year or month

All
civilian
workers

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 ................
1994 ................
1995 ................
1996 ................
1997 ................
1998 ................
1999 ................
2000 ................
2001 ................
2002 ................
2003 ................
2004 ................
2003: Jan ........
Feb ........
Mar .......
Apr ........
May .......
June ......
July ........
Aug ........
Sept ......
Oct ........
Nov ........
Dec ........
2004: Jan ........
Feb ........
Mar .......
Apr ........
May .......
June ......
July ........
Aug ........
Sept ......
Oct ........
Nov ........
Dec ........

5.5
5.5
6.7
5.5
5.7
5.2
4.5
3.8
3.8
3.6
3.5
4.9
5.9
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
5.6
6.8
7.5
6.9
6.1
5.6
5.4
4.9
4.5
4.2
4.0
4.7
5.8
6.0
5.5
5.8
5.9
5.8
6.0
6.1
6.3
6.2
6.1
6.1
6.0
5.9
5.7
5.7
5.6
5.7
5.5
5.6
5.6
5.5
5.4
5.4
5.5
5.4
5.4

Females

By race

Both
20
20
16– years
16– years sexes
16–19
Total 19
19
and Total years and years
years over
over
5.2
5.4
6.4
5.2
5.2
4.6
4.0
3.2
3.1
2.9
2.8
4.4
5.3
5.0
4.2
4.9
7.9
7.1
6.3
5.3
5.1
6.9
7.4
9.9
9.9
7.4
7.0
6.9
6.2
5.5
5.2
5.7
7.2
7.9
7.2
6.2
5.6
5.4
4.9
4.4
4.1
3.9
4.8
5.9
6.3
5.6
6.2
6.2
6.0
6.4
6.4
6.7
6.6
6.3
6.4
6.2
6.2
5.8
5.7
5.7
5.8
5.7
5.8
5.6
5.5
5.6
5.6
5.6
5.5
5.6

15.3
15.3
17.1
14.7
17.2
15.8
14.1
11.7
12.3
11.6
11.4
15.0
16.6
15.9
13.9
15.6
20.1
19.2
17.3
15.8
15.9
18.3
20.1
24.4
23.3
19.6
19.5
19.0
17.8
16.0
15.9
16.3
19.8
21.5
20.4
19.0
18.4
18.1
16.9
16.2
14.7
14.0
16.0
18.1
19.3
18.4
19.0
19.8
20.1
20.2
19.9
19.9
20.5
17.5
19.7
18.6
18.4
17.2
17.5
17.3
18.3
19.2
19.0
18.0
17.8
18.1
18.2
19.2
18.2
20.3

4.7
4.7
5.7
4.6
4.5
3.9
3.2
2.5
2.3
2.2
2.1
3.5
4.4
4.0
3.3
3.8
6.8
5.9
5.2
4.3
4.2
5.9
6.3
8.8
8.9
6.6
6.2
6.1
5.4
4.8
4.5
5.0
6.4
7.1
6.4
5.4
4.8
4.6
4.2
3.7
3.5
3.3
4.2
5.3
5.6
5.0
5.5
5.5
5.4
5.7
5.8
6.0
5.9
5.8
5.7
5.6
5.6
5.3
5.1
5.1
5.2
5.0
5.2
5.0
4.9
5.0
5.0
4.9
4.9
4.9

5.9
5.9
7.2
6.2
6.5
6.2
5.5
4.8
5.2
4.8
4.7
5.9
6.9
6.6
6.0
6.7
9.3
8.6
8.2
7.2
6.8
7.4
7.9
9.4
9.2
7.6
7.4
7.1
6.2
5.6
5.4
5.5
6.4
7.0
6.6
6.0
5.6
5.4
5.0
4.6
4.3
4.1
4.7
5.6
5.7
5.4
5.4
5.6
5.6
5.6
5.7
5.8
5.7
5.8
5.8
5.7
5.5
5.6
5.6
5.5
5.6
5.4
5.3
5.6
5.5
5.2
5.2
5.3
5.2
5.2

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
21.3
18.0
17.6
17.6
15.9
14.4
14.0
14.7
17.5
18.6
17.5
16.2
16.1
15.2
15.0
12.9
13.2
12.1
13.4
14.9
15.6
15.5
15.3
14.9
15.1
15.7
15.9
18.0
15.7
16.0
15.4
15.5
13.0
15.1
16.2
16.0
14.7
14.7
15.4
15.6
17.5
15.9
15.0
15.1
14.6
14.8

5.2
5.1
6.3
5.4
5.4
5.2
4.5
3.8
4.2
3.8
3.7
4.8
5.7
5.4
4.9
5.5
8.0
7.4
7.0
6.0
5.7
6.4
6.8
8.3
8.1
6.8
6.6
6.2
5.4
4.9
4.7
4.9
5.7
6.3
5.9
5.4
4.9
4.8
4.4
4.1
3.8
3.6
4.1
5.1
5.1
4.9
4.8
5.1
5.0
5.1
5.1
5.2
5.2
5.2
5.3
5.2
5.1
5.1
5.0
4.9
5.1
4.9
4.8
5.0
4.9
4.7
4.7
4.8
4.7
4.7

White 2

Black
and
other 2

Black
or
African
American 2

4.8
5.0
6.0
4.9
5.0
4.6
4.1
3.4
3.4
3.2
3.1
4.5
5.4
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
4.8
6.1
6.6
6.1
5.3
4.9
4.7
4.2
3.9
3.7
3.5
4.2
5.1
5.2
4.8
5.1
5.1
5.1
5.2
5.4
5.4
5.4
5.4
5.3
5.1
5.2
5.0
4.9
5.0
5.1
4.9
5.0
5.0
4.8
4.7
4.7
4.7
4.6
4.6

10.7
10.2
12.4
10.9
10.8
9.6
8.1
7.3
7.4
6.7
6.4
8.2
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
10.5
9.6
9.3
8.8
7.8
7.0
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........

.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
.............
10.4
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
11.4
12.5
14.2
13.0
11.5
10.4
10.5
10.0
8.9
8.0
7.6
8.6
10.2
10.8
10.4
10.5
10.8
10.2
10.9
10.9
11.6
10.9
10.9
11.1
11.3
10.2
10.2
10.4
9.7
10.2
9.8
10.0
10.3
11.0
10.5
10.4
10.7
10.8
10.8

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
18.7
20.1
19.0
17.6
17.3
16.7
16.0
14.6
13.9
13.1
14.7
16.5
17.5
17.0
17.1
17.4
17.6
17.9
17.9
19.0
18.2
16.7
17.6
17.1
15.7
16.2
16.9
16.7
16.5
17.0
17.2
16.8
17.6
17.0
16.6
17.2
16.5
17.6

1 Unemployed

as percent of civilian labor force in group specified.
footnote 1, Table B-37.
whose ethnicity is identified as Hispanic or Latino may be of any race.
Note.—Data relate to persons 16 years of age and over.
See footnote 5 and Note, Table B-35.
NSA indicates data are not seasonally adjusted.
Source: Department of Labor, Bureau of Labor Statistics.
2 See

3 Persons

260

Asian
(NSA) 2

............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
3.6
4.5
5.9
6.0
4.4
5.6
6.0
6.5
5.8
5.1
7.8
6.2
5.9
6.2
6.1
5.2
5.3
5.2
4.7
4.2
4.4
4.2
5.0
4.3
3.6
4.3
4.8
4.2
4.1

Women
Hispanic Married who
mainor
men,
tain
Latino spouse
eth- present families
ni(NSA)
city 3
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
..........
7.5
8.1
12.2
11.5
10.1
9.1
8.3
10.1
10.4
13.8
13.7
10.7
10.5
10.6
8.8
8.2
8.0
8.2
10.0
11.6
10.8
9.9
9.3
8.9
7.7
7.2
6.4
5.7
6.6
7.5
7.7
7.0
7.8
7.6
7.6
7.6
8.1
8.4
8.1
7.8
7.5
7.4
7.4
6.6
7.3
7.4
7.4
7.1
6.9
6.7
6.8
6.9
7.0
6.7
6.7
6.6

3.6
3.7
4.6
3.6
3.4
2.8
2.4
1.9
1.8
1.6
1.5
2.6
3.2
2.8
2.3
2.7
5.1
4.2
3.6
2.8
2.8
4.2
4.3
6.5
6.5
4.6
4.3
4.4
3.9
3.3
3.0
3.4
4.4
5.1
4.4
3.7
3.3
3.0
2.7
2.4
2.2
2.0
2.7
3.6
3.8
3.1
3.6
3.7
3.8
3.8
3.9
4.2
3.9
3.9
3.8
3.8
3.7
3.4
3.3
3.4
3.2
3.1
3.1
3.2
3.2
3.1
3.0
3.0
3.1
3.1

............
............
............
............
............
............
............
............
4.9
4.4
4.4
5.4
7.3
7.2
7.1
7.0
10.0
10.1
9.4
8.5
8.3
9.2
10.4
11.7
12.2
10.3
10.4
9.8
9.2
8.1
8.1
8.3
9.3
10.0
9.7
8.9
8.0
8.2
8.1
7.2
6.4
5.9
6.6
8.0
8.5
8.0
8.0
9.0
8.4
8.5
8.3
8.7
9.0
8.4
8.5
8.4
8.3
8.4
8.3
8.1
8.4
7.5
7.4
8.2
9.0
8.3
8.2
7.8
7.7
7.1

TABLE B–43.—Civilian unemployment rate by demographic characteristic, 1965–2004
[Percent; 1 monthly data seasonally adjusted]
Black and other or black or African American 2

White 2
Year or month

All
civilian
workers

Males
Total

Females

Total

16-19
years

20
years
and
over

Total

Males

16-19
years

20
years
and
over

Total

Total

16-19
years

23.3
21.3
23.9
22.1
21.4
25.0
28.8
29.7

Females
20
years
and
over

Total

16-19
years

20
years
and
over

31.7
31.3
29.6
28.7
27.6
34.5
35.4
38.4

7.5
6.6
7.1
6.3
5.8
6.9
8.7
8.8

Black and other
1965
1966
1967
1968
1969
1970
1971
1972

.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................

4.5
3.8
3.8
3.6
3.5
4.9
5.9
5.6

4.1
3.4
3.4
3.2
3.1
4.5
5.4
5.1

3.6
2.8
2.7
2.6
2.5
4.0
4.9
4.5

12.9
10.5
10.7
10.1
10.0
13.7
15.1
14.2

2.9
2.2
2.1
2.0
1.9
3.2
4.0
3.6

5.0
4.3
4.6
4.3
4.2
5.4
6.3
5.9

14.0
12.1
11.5
12.1
11.5
13.4
15.1
14.2

4.0
3.3
3.8
3.4
3.4
4.4
5.3
4.9

8.1
7.3
7.4
6.7
6.4
8.2
9.9
10.0

7.4
6.3
6.0
5.6
5.3
7.3
9.1
8.9

6.0
4.9
4.3
3.9
3.7
5.6
7.3
6.9

9.2
8.7
9.1
8.3
7.8
9.3
10.9
11.4

1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004

.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................

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
5.6
6.8
7.5
6.9
6.1
5.6
5.4
4.9
4.5
4.2
4.0
4.7
5.8
6.0
5.5

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
4.8
6.1
6.6
6.1
5.3
4.9
4.7
4.2
3.9
3.7
3.5
4.2
5.1
5.2
4.8

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
4.9
6.5
7.0
6.3
5.4
4.9
4.7
4.2
3.9
3.6
3.4
4.2
5.3
5.6
5.0

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
14.3
17.6
18.5
17.7
16.3
15.6
15.5
14.3
14.1
12.6
12.3
13.9
15.9
17.1
16.3

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
5.8
6.4
5.7
4.8
4.3
4.1
3.6
3.2
3.0
2.8
3.7
4.7
5.0
4.4

5.9
5.3
6.1
8.6
7.9
7.3
6.2
5.9
6.5
6.9
8.3
7.9
6.5
6.4
6.1
5.2
4.7
4.5
4.7
5.6
6.1
5.7
5.2
4.8
4.7
4.2
3.9
3.8
3.6
4.1
4.9
4.8
4.7

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
15.8
14.7
13.8
13.4
12.9
12.8
10.9
11.3
10.4
11.4
13.1
13.3
13.6

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
5.0
5.5
5.2
4.6
4.3
4.1
3.7
3.4
3.3
3.1
3.6
4.4
4.4
4.2

10.4
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
11.4
12.5
14.2
13.0
11.5
10.4
10.5
10.0
8.9
8.0
7.6
8.6
10.2
10.8
10.4

9.3
8.0
9.8
14.8
13.7
13.3
11.8
11.4
14.5
15.7
20.1
20.3
16.4
15.3
14.8
12.7
11.7
11.5
11.9
13.0
15.2
13.8
12.0
10.6
11.1
10.2
8.9
8.2
8.0
9.3
10.7
11.6
11.1

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
31.9
36.3
42.0
40.1
37.6
37.1
36.9
36.5
30.1
30.9
26.2
30.4
31.3
36.0
35.6

7.0
6.0
7.4
12.5
11.4
10.7
9.3
9.3
12.4
13.5
17.8
18.1
14.3
13.2
12.9
11.1
10.1
10.0
10.4
11.5
13.5
12.1
10.3
8.8
9.4
8.5
7.4
6.7
6.9
8.0
9.5
10.3
9.9

11.8
11.1
11.3
14.8
14.3
14.9
13.8
13.3
14.0
15.6
17.6
18.6
15.4
14.9
14.2
13.2
11.7
11.4
10.9
12.0
13.2
12.1
11.0
10.2
10.0
9.9
9.0
7.8
7.1
8.1
9.8
10.2
9.8

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
29.9
36.0
37.2
37.4
32.6
34.3
30.3
28.7
25.3
25.1
22.8
27.5
28.3
30.3
28.2

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
9.7
10.6
11.8
10.7
9.8
8.6
8.7
8.8
7.9
6.8
6.2
7.0
8.8
9.2
8.9

2003: Jan .............
Feb ..............
Mar .............
Apr ..............
May .............
June ............
July .............
Aug .............
Sept ............
Oct ..............
Nov .............
Dec .............

5.8
5.9
5.8
6.0
6.1
6.3
6.2
6.1
6.1
6.0
5.9
5.7

5.1
5.1
5.1
5.2
5.4
5.4
5.4
5.4
5.3
5.1
5.2
5.0

5.5
5.4
5.3
5.6
5.7
5.9
5.9
5.8
5.6
5.4
5.6
5.2

16.5
17.3
17.6
17.3
16.9
17.5
18.0
16.6
17.7
15.8
17.0
15.9

4.9
4.8
4.7
5.0
5.1
5.3
5.3
5.3
5.0
4.9
5.0
4.7

4.7
4.8
4.8
4.8
5.1
4.9
4.8
4.9
5.0
4.8
4.7
4.8

13.0
13.5
13.2
13.3
13.7
15.1
13.1
13.7
12.7
12.9
11.4
13.3

4.2
4.3
4.3
4.3
4.6
4.4
4.4
4.4
4.6
4.4
4.3
4.3

10.5
10.8
10.2
10.9
10.9
11.6
10.9
10.9
11.1
11.3
10.2
10.2

11.6
11.8
11.1
11.8
12.7
12.4
11.4
11.2
12.1
12.0
10.9
10.1

33.3
37.5
43.2
37.3
41.5
36.7
36.5
28.0
34.3
41.4
33.1
28.2

10.4
10.4
9.5
10.5
11.2
11.2
10.1
10.4
11.0
10.4
9.9
9.3

9.6
9.9
9.5
10.1
9.3
10.9
10.5
10.7
10.3
10.7
9.7
10.3

27.9
25.1
26.3
29.4
31.0
38.3
32.3
32.0
31.0
32.2
25.5
27.1

8.6
9.1
8.7
9.2
8.2
9.6
9.5
9.7
9.2
9.8
9.0
9.5

2004: Jan .............
Feb ..............
Mar .............
Apr ..............
May .............
June ............
July .............
Aug .............
Sept ............
Oct ..............
Nov .............
Dec .............

5.7
5.6
5.7
5.5
5.6
5.6
5.5
5.4
5.4
5.5
5.4
5.4

4.9
5.0
5.1
4.9
5.0
5.0
4.8
4.7
4.7
4.7
4.6
4.6

5.0
5.1
5.2
5.1
5.3
5.0
4.8
4.9
4.8
4.9
4.7
4.8

14.0
15.6
16.3
17.8
18.5
16.2
15.5
15.8
15.9
17.4
15.5
17.9

4.5
4.6
4.7
4.5
4.7
4.5
4.3
4.4
4.3
4.2
4.2
4.2

4.9
4.8
4.9
4.7
4.5
4.9
4.7
4.6
4.5
4.4
4.5
4.4

14.2
15.1
13.3
13.3
12.7
13.3
14.2
15.0
13.5
12.6
13.2
13.4

4.4
4.2
4.4
4.2
4.1
4.4
4.2
4.0
4.0
4.0
4.1
3.9

10.4
9.7
10.2
9.8
10.0
10.3
11.0
10.5
10.4
10.7
10.8
10.8

11.0
10.1
10.5
10.2
10.3
10.6
11.6
11.6
11.4
11.6
12.0
11.9

42.2
29.1
37.0
30.7
30.4
34.4
37.9
34.9
35.9
37.1
38.1
37.7

9.5
9.3
9.2
9.3
9.4
9.5
10.3
10.4
10.2
10.2
10.5
10.7

9.9
9.4
9.9
9.4
9.7
10.0
10.4
9.4
9.4
10.0
9.9
9.8

25.9
22.4
23.5
26.4
33.9
31.2
36.6
24.2
21.1
32.4
27.0
24.0

9.0
8.8
9.3
8.6
8.4
9.0
9.1
8.7
8.9
8.9
9.0
9.1

Black or African American 2

1 Unemployed

as percent of civilian labor force in group specified.
2 See footnote 1, Table B–37.
Note.—Data relate to persons 16 years of age and over.
See footnote 5 and Note, Table B–35.
Source: Department of Labor, Bureau of Labor Statistics.

261

TABLE B–44.—Unemployment by duration and reason, 1959–2004
[ Thousands of persons, except as noted; monthly data seasonally adjusted 1 ]
Duration of unemployment
Unemployment

Less
than
5
weeks

5-14
weeks

15-26
weeks

1959 .........................
1960 .........................
1961 .........................
1962 .........................
1963 .........................
1964 .........................
1965 .........................
1966 .........................
1967 2 .......................
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 .........................
1994 .........................
1995 .........................
1996 .........................
1997 .........................
1998 .........................
1999 .........................
2000 .........................
2001 .........................
2002 .........................
2003 .........................
2004 .........................

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
7,047
8,628
9,613
8,940
7,996
7,404
7,236
6,739
6,210
5,880
5,692
6,801
8,378
8,774
8,149

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
3,265
3,480
3,376
3,262
2,728
2,700
2,633
2,538
2,622
2,568
2,558
2,853
2,893
2,785
2,696

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
2,257
2,791
2,830
2,584
2,408
2,342
2,287
2,138
1,950
1,832
1,815
2,196
2,580
2,612
2,382

2003: Jan .................
Feb .................
Mar .................
Apr ..................
May ................
June ................
July .................
Aug .................
Sept ................
Oct ..................
Nov .................
Dec .................

8,484
8,636
8,493
8,822
8,926
9,228
9,024
8,914
8,961
8,755
8,651
8,399

2,819
2,814
2,812
2,790
3,002
2,942
2,709
2,763
2,727
2,729
2,638
2,595

2004: Jan .................
Feb .................
Mar .................
Apr ..................
May ................
June ................
July .................
Aug .................
Sept ................
Oct ..................
Nov .................
Dec .................

8,303
8,195
8,330
8,143
8,172
8,228
8,184
8,018
8,005
8,066
8,020
8,047

2,623
2,449
2,623
2,772
2,731
2,715
2,803
2,605
2,796
2,753
2,611
2,865

Year or month

Reason for unemployment

27
weeks
and
over

Average
(mean)
duration
(weeks)

Median
duration
(weeks)

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
822
1,246
1,453
1,297
1,237
1,085
1,053
995
763
755
669
951
1,369
1,442
1,293

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
703
1,111
1,954
1,798
1,623
1,278
1,262
1,067
875
725
649
801
1,535
1,936
1,779

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
12.0
13.7
17.7
18.0
18.8
16.6
16.7
15.8
14.5
13.4
12.6
13.1
16.6
19.2
19.6

2,596
2,599
2,555
2,642
2,627
2,761
2,661
2,604
2,756
2,590
2,525
2,453

1,420
1,283
1,350
1,412
1,372
1,493
1,606
1,577
1,462
1,462
1,446
1,496

1,733
1,883
1,823
1,926
1,915
2,013
1,992
2,032
2,062
1,986
2,004
1,893

2,402
2,418
2,417
2,370
2,376
2,397
2,458
2,521
2,251
2,290
2,361
2,264

1,447
1,382
1,330
1,165
1,277
1,294
1,198
1,243
1,227
1,261
1,294
1,325

1,892
1,870
1,991
1,791
1,783
1,757
1,686
1,681
1,744
1,771
1,718
1,636

Job losers 3
Total

On
layoff

Other

Job
leavers

Reentrants

New
entrants

............
............
............
............
............
............
............
............
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
5.3
6.8
8.7
8.3
9.2
8.3
8.3
8.0
6.7
6.4
5.9
6.8
9.1
10.1
9.8

..........
..........
..........
..........
..........
..........
..........
..........
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
3,387
4,694
5,389
4,848
3,815
3,476
3,370
3,037
2,822
2,622
2,517
3,476
4,607
4,838
4,197

..........
..........
..........
..........
..........
..........
..........
..........
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
1,028
1,292
1,260
1,115
977
1,030
1,021
931
866
848
852
1,067
1,124
1,121
998

..........
..........
..........
..........
..........
..........
..........
..........
836
736
678
1,137
1,588
1,526
1,221
1,495
2,714
2,628
2,300
1,873
1,784
2,459
2,837
4,141
4,478
3,250
2,982
2,943
2,623
2,241
2,133
2,359
3,402
4,129
3,733
2,838
2,446
2,349
2,106
1,957
1,774
1,664
2,409
3,483
3,717
3,199

..........
..........
..........
..........
..........
..........
..........
..........
438
431
436
550
590
641
683
768
827
903
909
874
880
891
923
840
830
823
877
1,015
965
983
1,024
1,041
1,004
1,002
976
791
824
774
795
734
783
780
835
866
818
858

..........
..........
..........
..........
..........
..........
..........
..........
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
1,930
2,139
2,285
2,198
2,786
2,525
2,512
2,338
2,132
2,005
1,961
2,031
2,368
2,477
2,408

..........
..........
..........
..........
..........
..........
..........
..........
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
688
792
937
919
604
579
580
569
520
469
434
459
536
641
686

18.5
18.6
18.1
19.4
19.0
19.5
19.5
19.4
19.6
19.4
19.9
19.8

9.6
9.5
9.7
10.2
9.9
11.4
10.3
10.2
10.2
10.4
10.4
10.4

4,719
4,799
4,671
4,796
5,092
4,990
4,964
4,989
4,961
4,844
4,696
4,569

1,104
1,133
1,151
1,125
1,214
1,171
1,134
1,088
1,135
1,104
1,063
1,054

3,615
3,667
3,521
3,671
3,878
3,819
3,829
3,900
3,826
3,740
3,633
3,516

830
787
803
825
781
874
792
788
852
803
928
759

2,365
2,426
2,408
2,546
2,485
2,611
2,549
2,519
2,438
2,512
2,445
2,387

600
589
631
639
632
655
660
647
682
640
609
696

19.8
20.2
19.9
19.7
19.8
19.8
18.5
19.2
19.6
19.7
19.8
19.3

10.6
10.2
10.2
9.4
9.9
10.8
8.9
9.5
9.5
9.5
9.8
9.5

4,380
4,284
4,475
4,322
4,190
4,117
4,228
3,978
4,014
4,074
4,066
4,108

1,030
1,060
1,035
993
920
1,009
1,068
971
919
947
941
965

3,350
3,224
3,440
3,329
3,270
3,108
3,160
3,007
3,094
3,127
3,124
3,144

807
835
845
835
855
909
896
885
830
829
880
898

2,514
2,421
2,419
2,310
2,437
2,426
2,333
2,440
2,417
2,411
2,388
2,361

677
671
629
650
723
642
686
699
697
747
723
709

1 Because

of independent seasonal adjustment of the various series, detail will not add to totals.
for 1967 by reason for unemployment are not equal to total unemployment.
January 1994, job losers and persons who completed temporary jobs.
Note.—Data relate to persons 16 years of age and over.
See footnote 5 and Note, Table B-35.
Source: Department of Labor, Bureau of Labor Statistics.
2 Data

3 Beginning

262

TABLE B–45.—Unemployment insurance programs, selected data, 1978–2004
All programs
Insured
unemployment
(weekly
average) 2 3

State programs
Total
benefits
paid
(millions
of
dollars) 2 4

Year or month

Covered
employment 1

1978 ..................................
1979 ..................................
1980 ..................................
1981 ..................................
1982 ..................................
1983 ..................................
1984 ..................................
1985 ..................................
1986 ..................................
1987 ..................................
1988 ..................................
1989 ..................................
1990 ..................................
1991 ..................................
1992 ..................................
1993 ..................................
1994 ..................................
1995 ..................................
1996 ..................................
1997 .................................
1998 .................................
1999 .................................
2000 ..................................
2001 .................................
2002 .................................
2003 .................................
2004 p ................................

88,804
92,062
92,659
93,300
91,628
91,898
96,474
99,186
101,099
103,936
107,156
109,929
111,500
109,606
110,167
112,146
115,255
118,068
120,567
121,044
124,184
127,042
129,877
129,636
128,234
127,796
..................

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
2,746
2,639
2,656
2,370
2,260
2,223
2,146
3,012
3,624
3,573
2,999

9,007
9,401
16,175
15,287
24,491
20,968
13,739
15,217
16,563
14,684
13,481
14,569
18,387
26,327
7 26,035
7 22,629
22,508
21,991
22,495
20,324
19,941
21,024
20,983
32,228
8 42,978
8 42,413
..................

2003: Jan ..........................
Feb ..........................
Mar .........................
Apr .........................
May ........................
June ........................
July .........................
Aug .........................
Sept ........................
Oct ..........................
Nov .........................
Dec .........................
2004: Jan ..........................
Feb ..........................
Mar .........................
Apr .........................
May ........................
June ........................
July .........................
Aug .........................
Sept ........................
Oct ..........................
Nov .........................
Dec p .......................

..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................

3,977
4,179
4,354
3,712
3,273
3,676
3,452
3,382
3,226
2,802
3,207
3,548
3,709
3,982
3,576
2,974
2,846
2,871
2,726
2,917
2,403
2,429
2,624
2,696

4,130.1
3,889.6
4,204.7
3,862.7
3,305.1
3,387.0
3,615.3
3,174.1
3,212.8
2,974.9
2,806.6
3,697.3
3,696.7
3,630.8
3,880.9
3,007.0
2,650.9
2,856.8
2,630.9
2,773.7
2,391.1
2,224.2
2,543.6
2,826.5

Thousands

Insured
unemployment 3

Initial
claims

Exhaustions 5

Insured
unemployment as
percent
of
covered
employment

Benefits paid
Total
(millions
of
dollars) 4

Average
weekly
check
(dollars) 6

7,717
8,613
13,761
13,262
20,649
18,549
13,237
14,707
15,950
14,211
13,086
14,205
17,932
25,479
25,056
21,661
21,537
21,226
21,820
19,735
19,431
20,563
20,507
31,680
42,130
41,358
................

83.67
89.67
98.95
106.70
119.34
123.59
123.47
128.11
135.65
140.39
144.74
151.43
161.20
169.56
173.38
179.41
181.91
187.04
189.27
192.84
200.58
212.10
221.01
238.07
256.79
261.67
................

4,035.1
3,806.3
4,125.6
3,792.9
3,244.9
3,323.9
3,551.2
3,099.1
3,116.8
2,883.9
2,715.5
3,596.6
3,608.3
3,561.5
3,811.8
2,943.0
2,592.5
2,794.0
2,572.7
2,706.0
2,329.4
2,161.9
2,473.4
2,753.3

261.09
263.60
264.74
263.66
262.72
261.15
258.74
257.23
261.06
262.39
260.83
261.62
264.44
266.02
266.00
263.99
263.05
260.10
258.05
255.63
261.80
262.19
261.36
264.24

Weekly average; thousands
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
2,670
2,572
2,595
2,323
2,222
2,188
2,110
2,974
3,585
3,531
2,950
**
3,416
3,486
3,541
3,614
3,675
3,675
3,598
3,594
3,581
3,491
3,379
3,289
3,172
3,139
3,028
2,970
2,928
2,921
2,888
2,884
2,856
2,803
2,755
2,750

346
388
488
460
583
438
377
397
378
328
310
330
388
447
408
341
340
357
356
323
321
298
301
404
407
404
345
**
396
411
420
433
424
420
404
400
399
383
369
362
356
356
339
342
342
341
340
340
345
342
339
335

39
39
59
57
80
80
50
49
52
46
38
37
45
67
74
62
57
51
53
48
44
44
41
54
85
85
68
84
83
88
92
84
85
89
84
83
77
81
86
82
79
77
73
70
68
65
66
56
57
59
55

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
2.4
2.3
2.2
1.9
1.8
1.7
1.6
2.3
2.8
2.8
....................
**
2.7
2.7
2.8
2.9
2.9
2.9
2.8
2.8
2.8
2.8
2.7
2.6
2.5
2.5
2.4
2.4
2.3
2.3
2.3
2.3
2.3
2.2
2.2
2.2

** Monthly data are seasonally adjusted.
1 Through 1996 includes persons under the State, UCFE (Federal employee, effective January 1955), RRB (Railroad Retirement Board) programs, and UCX (unemployment compensation for ex-servicemembers, effective October 1958) programs. Beginning 1997, covered employment data are State and UCFE programs only. Workers covered by State programs account for about 97 percent of wage and salary earners.
Covered employment data beginning 2001 are based on the North American Industry Classification System (NAICS). Prior data are based
on the Standard Industrial Classification (SIC).
2 Includes State, UCFE, RR, and UCX. Also includes Federal and State extended benefit programs. Does not include FSB (Federal supplemental benefits), SUA (special unemployment assistance), Federal Supplemental Compensation, Emergency Unemployment Compensation, and
TEUC (Temporary Extended Unemployment Compensation) programs.
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 Including Emergency Unemployment Compensation, total benefits paid for 1992 and 1993 would be approximately (in millions of dollars):
for 1992, 39,990 and for 1993, 34,876.
8 Including Temporary Extended Unemployment Compensation, total benefits paid for 2002 and 2003 (not including RRB program) would be
approximately (in millions of dollars): for 2002, 53,829 and for 2003, 53,244.
Note.—Insured unemployment and initial claims programs include Puerto Rican sugar cane workers.
Source: Department of Labor, Employment and Training Administration.

263

TABLE B–46.—Employees on nonagricultural payrolls, by major industry, 1959–2004
[Thousands of persons; monthly data seasonally adjusted]
Goods-producing industries
Year or month

Total

Total

Natural
resources
and
mining

Service-providing industries

Manufacturing
Construction

Total

Dura
ble
goods

Nondurable
goods

Total

Trade, transportation, and
utilities 1
Total

Retail
trade

1959 .....................................

53,374

19,163

789

3,050

15,325

8,988

6,337

34,211

10,960

5,453

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 .....................................
1994 .....................................
1995 .....................................
1996 .....................................
1997 .....................................
1998 .....................................
1999 ....................................
2000 .....................................
2001 ....................................
2002 ....................................
2003 ....................................
2004 p ..................................

54,296
54,105
55,659
56,764
58,391
60,874
64,020
65,931
68,023
70,512
71,006
71,335
73,798
76,912
78,389
77,069
79,502
82,593
86,826
89,932
90,528
91,289
89,677
90,280
94,530
97,511
99,474
102,088
105,345
108,014
109,487
108,374
108,726
110,844
114,291
117,298
119,708
122,776
125,930
128,993
131,785
131,826
130,341
129,931
131,287

19,182
18,647
19,203
19,385
19,733
20,595
21,740
21,882
22,292
22,893
22,179
21,602
22,299
23,450
23,364
21,318
22,025
22,972
24,156
24,997
24,263
24,118
22,550
22,110
23,435
23,585
23,318
23,470
23,909
24,045
23,723
22,588
22,095
22,219
22,774
23,156
23,410
23,886
24,354
24,465
24,649
23,873
22,557
21,817
21,889

771
728
709
694
697
694
690
679
671
683
677
658
672
693
755
802
832
865
902
1,008
1,077
1,180
1,163
997
1,014
974
829
771
770
750
765
739
689
666
659
641
637
654
645
598
599
606
583
517
587

2,973
2,908
2,997
3,060
3,148
3,284
3,371
3,305
3,410
3,637
3,654
3,770
3,957
4,167
4,095
3,608
3,662
3,940
4,322
4,562
4,454
4,304
4,024
4,065
4,501
4,793
4,937
5,090
5,233
5,309
5,263
4,780
4,608
4,779
5,095
5,274
5,536
5,813
6,149
6,545
6,787
6,826
6,716
6,722
6,923

15,438
15,011
15,498
15,631
15,888
16,617
17,680
17,897
18,211
18,573
17,848
17,174
17,669
18,589
18,514
16,909
17,531
18,167
18,932
19,426
18,733
18,634
17,363
17,048
17,920
17,819
17,552
17,609
17,906
17,985
17,695
17,068
16,799
16,774
17,021
17,241
17,237
17,419
17,560
17,322
17,263
16,441
15,259
14,525
14,379

9,071
8,711
9,099
9,226
9,414
9,973
10,803
10,952
11,137
11,396
10,762
10,229
10,630
11,414
11,432
10,266
10,640
11,132
11,770
12,220
11,679
11,611
10,610
10,326
11,050
11,034
10,795
10,767
10,969
11,004
10,736
10,219
9,945
9,900
10,131
10,372
10,485
10,704
10,910
10,830
10,876
10,335
9,483
8,970
8,946

6,367
6,300
6,399
6,405
6,474
6,644
6,878
6,945
7,074
7,177
7,086
6,944
7,039
7,176
7,082
6,643
6,891
7,035
7,162
7,206
7,054
7,023
6,753
6,722
6,870
6,784
6,757
6,842
6,938
6,981
6,959
6,849
6,854
6,873
6,890
6,869
6,752
6,716
6,650
6,492
6,388
6,107
5,775
5,555
5,434

35,114
35,458
36,455
37,379
38,658
40,279
42,280
44,049
45,731
47,619
48,827
49,734
51,499
53,462
55,025
55,751
57,477
59,620
62,670
64,935
66,265
67,172
67,127
68,171
71,095
73,926
76,156
78,618
81,436
83,969
85,764
85,787
86,631
88,625
91,517
94,142
96,299
98,890
101,576
104,528
107,136
107,952
107,784
108,114
109,398

11,147
11,040
11,215
11,367
11,677
12,139
12,611
12,950
13,334
13,853
14,144
14,318
14,788
15,349
15,693
15,606
16,128
16,765
17,658
18,303
18,413
18,604
18,457
18,668
19,653
20,379
20,795
21,302
21,974
22,510
22,666
22,281
22,125
22,378
23,128
23,834
24,239
24,700
25,186
25,771
26,225
25,983
25,497
25,275
25,481

5,589
5,560
5,672
5,781
5,977
6,262
6,530
6,711
6,977
7,295
7,463
7,657
8,038
8,371
8,536
8,600
8,966
9,359
9,879
10,180
10,244
10,364
10,372
10,635
11,223
11,733
12,078
12,419
12,808
13,108
13,182
12,896
12,828
13,021
13,491
13,897
14,143
14,389
14,609
14,970
15,280
15,239
15,025
14,912
15,028

2003: Jan .............................
Feb .............................
Mar ............................
Apr .............................
May ............................
June ...........................
July ............................
Aug ............................
Sept ...........................
Oct .............................
Nov .............................
Dec .............................
2004: Jan .............................
Feb .............................
Mar ............................
Apr .............................
May ............................
June ...........................
July ............................
Aug ............................
Sept ...........................
Oct .............................
Nov p ..........................
Dec p ..........................

130,190
130,031
129,921
129,901
129,873
129,859
129,814
129,789
129,856
129,944
130,027
130,035
130,194
130,277
130,630
130,954
131,162
131,258
131,343
131,541
131,660
131,972
132,109
132,266

22,122
22,005
21,949
21,880
21,859
21,805
21,744
21,712
21,697
21,674
21,686
21,668
21,696
21,684
21,778
21,822
21,894
21,891
21,906
21,939
21,958
22,016
22,017
22,030

572
574
571
568
570
573
571
569
568
569
571
570
570
572
581
585
589
587
592
591
593
592
595
598

6,712
6,661
6,661
6,689
6,715
6,718
6,721
6,739
6,754
6,754
6,771
6,774
6,812
6,791
6,853
6,872
6,909
6,911
6,916
6,936
6,958
7,018
7,025
7,032

14,838
14,770
14,717
14,623
14,574
14,514
14,452
14,404
14,375
14,351
14,344
14,324
14,314
14,321
14,344
14,365
14,396
14,393
14,398
14,412
14,407
14,406
14,397
14,400

9,180
9,129
9,092
9,025
8,993
8,958
8,908
8,886
8,867
8,854
8,874
8,868
8,869
8,882
8,899
8,924
8,946
8,955
8,955
8,986
8,979
8,985
8,979
8,979

5,658
5,641
5,625
5,598
5,581
5,556
5,544
5,518
5,508
5,497
5,470
5,456
5,445
5,439
5,445
5,441
5,450
5,438
5,443
5,426
5,428
5,421
5,418
5,421

108,068
108,026
107,972
108,021
108,014
108,054
108,070
108,077
108,159
108,270
108,341
108,367
108,498
108,593
108,852
109,132
109,268
109,367
109,437
109,602
109,702
109,956
110,092
110,236

25,375
25,352
25,328
25,326
25,302
25,266
25,225
25,225
25,252
25,272
25,261
25,211
25,312
25,331
25,415
25,448
25,477
25,497
25,499
25,516
25,522
25,562
25,580
25,580

14,946
14,925
14,912
14,929
14,917
14,908
14,897
14,912
14,927
14,948
14,922
14,876
14,945
14,963
15,013
15,037
15,048
15,055
15,038
15,049
15,031
15,056
15,065
15,045

1 Includes

wholesale trade, transportation and warehousing, and utilities, not shown separately.

Note.—Data in Tables B–46 and B–47 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 that includes the 12th of the month. Not comparable with labor force data (Tables B–35 through B–44), which include proprietors, self-employed persons, unpaid family workers, and
private household workers; which count persons as employed when they are not at work because of industrial disputes, bad
See next page for continuation of table.

264

TABLE B–46.—Employees on nonagricultural payrolls, by major industry, 1959–2004—Continued
[Thousands of persons; monthly data seasonally adjusted]
Service-providing industries—Continued
Year or month

Information

Financial
activities

Professional
and
business
services

Education and
health
services

Leisure
and hospitality

Other
services

Government
Total

Federal

State

Local

1959 .....................................

1,718

2,454

3,591

2,822

3,365

1,107

8,192

2,342

1,484

4,366

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 .....................................
1994 .....................................
1995 .....................................
1996 .....................................
1997 .....................................
1998 .....................................
1999 ....................................
2000 ....................................
2001 ....................................
2002 ....................................
2003 ....................................
2004 p ..................................

1,728
1,693
1,723
1,735
1,766
1,824
1,908
1,955
1,991
2,048
2,041
2,009
2,056
2,135
2,160
2,061
2,111
2,185
2,287
2,375
2,361
2,382
2,317
2,253
2,398
2,437
2,445
2,507
2,585
2,622
2,688
2,677
2,641
2,668
2,738
2,843
2,940
3,084
3,218
3,419
3,631
3,629
3,395
3,198
3,169

2,532
2,590
2,656
2,731
2,811
2,878
2,961
3,087
3,234
3,404
3,532
3,651
3,784
3,920
4,023
4,047
4,155
4,348
4,599
4,843
5,025
5,163
5,209
5,334
5,553
5,815
6,128
6,385
6,500
6,562
6,614
6,558
6,540
6,709
6,867
6,827
6,969
7,178
7,462
7,648
7,687
7,807
7,847
7,974
8,048

3,694
3,744
3,885
3,990
4,137
4,306
4,517
4,720
4,918
5,156
5,267
5,328
5,523
5,774
5,974
6,034
6,287
6,587
6,972
7,312
7,544
7,782
7,848
8,039
8,464
8,871
9,211
9,608
10,090
10,555
10,848
10,714
10,970
11,495
12,174
12,844
13,462
14,335
15,147
15,957
16,666
16,476
15,976
15,997
16,452

2,937
3,030
3,172
3,288
3,438
3,587
3,770
3,986
4,191
4,428
4,577
4,675
4,863
5,092
5,322
5,497
5,756
6,052
6,427
6,767
7,072
7,357
7,515
7,766
8,193
8,657
9,061
9,515
10,063
10,616
10,984
11,506
11,891
12,303
12,807
13,289
13,683
14,087
14,446
14,798
15,109
15,645
16,199
16,577
16,921

3,460
3,468
3,557
3,639
3,772
3,951
4,127
4,269
4,453
4,670
4,789
4,914
5,121
5,341
5,471
5,544
5,794
6,065
6,411
6,631
6,721
6,840
6,874
7,078
7,489
7,869
8,156
8,446
8,778
9,062
9,288
9,256
9,437
9,732
10,100
10,501
10,777
11,018
11,232
11,543
11,862
12,036
11,986
12,125
12,322

1,152
1,188
1,243
1,288
1,346
1,404
1,475
1,558
1,638
1,731
1,789
1,827
1,900
1,990
2,078
2,144
2,244
2,359
2,505
2,637
2,755
2,865
2,924
3,021
3,186
3,366
3,523
3,699
3,907
4,116
4,261
4,249
4,240
4,350
4,428
4,572
4,690
4,825
4,976
5,087
5,168
5,258
5,372
5,393
5,405

8,464
8,706
9,004
9,341
9,711
10,191
10,910
11,525
11,972
12,330
12,687
13,012
13,465
13,862
14,303
14,820
15,001
15,258
15,812
16,068
16,375
16,180
15,982
16,011
16,159
16,533
16,838
17,156
17,540
17,927
18,415
18,545
18,787
18,989
19,275
19,432
19,539
19,664
19,909
20,307
20,790
21,118
21,513
21,575
21,600

2,381
2,391
2,455
2,473
2,463
2,495
2,690
2,852
2,871
2,893
2,865
2,828
2,815
2,794
2,858
2,882
2,863
2,859
2,893
2,894
3,000
2,922
2,884
2,915
2,943
3,014
3,044
3,089
3,124
3,136
3,196
3,110
3,111
3,063
3,018
2,949
2,877
2,806
2,772
2,769
2,865
2,764
2,766
2,756
2,713

1,536
1,607
1,669
1,747
1,856
1,996
2,141
2,302
2,442
2,533
2,664
2,747
2,859
2,923
3,039
3,179
3,273
3,377
3,474
3,541
3,610
3,640
3,640
3,662
3,734
3,832
3,893
3,967
4,076
4,182
4,305
4,355
4,408
4,488
4,576
4,635
4,606
4,582
4,612
4,709
4,786
4,905
5,029
5,017
5,032

4,547
4,708
4,881
5,121
5,392
5,700
6,080
6,371
6,660
6,904
7,158
7,437
7,790
8,146
8,407
8,758
8,865
9,023
9,446
9,633
9,765
9,619
9,458
9,434
9,482
9,687
9,901
10,100
10,339
10,609
10,914
11,081
11,267
11,438
11,682
11,849
12,056
12,276
12,525
12,829
13,139
13,449
13,718
13,802
13,855

2003: Jan .............................
Feb .............................
Mar ............................
Apr .............................
May ............................
June ...........................
July ............................
Aug ............................
Sept ...........................
Oct .............................
Nov .............................
Dec .............................
2004: Jan .............................
Feb .............................
Mar ............................
Apr .............................
May ............................
June ...........................
July ............................
Aug ............................
Sept ...........................
Oct .............................
Nov p ..........................
Dec p ..........................

3,258
3,233
3,221
3,214
3,203
3,194
3,188
3,174
3,175
3,166
3,172
3,175
3,163
3,169
3,169
3,173
3,177
3,182
3,173
3,166
3,159
3,163
3,164
3,161

7,915
7,933
7,945
7,968
7,987
7,988
7,995
7,996
8,004
7,990
7,985
7,981
7,981
7,989
8,003
8,015
8,029
8,049
8,044
8,053
8,078
8,092
8,107
8,121

15,902
15,906
15,871
15,897
15,943
15,967
16,021
15,998
16,051
16,070
16,114
16,159
16,172
16,196
16,237
16,363
16,432
16,457
16,490
16,518
16,548
16,643
16,664
16,705

16,432
16,465
16,488
16,538
16,564
16,576
16,568
16,591
16,622
16,678
16,705
16,731
16,746
16,764
16,813
16,854
16,871
16,897
16,901
16,965
16,980
17,049
17,086
17,133

12,171
12,116
12,107
12,084
12,078
12,097
12,118
12,117
12,126
12,147
12,178
12,192
12,218
12,229
12,271
12,303
12,331
12,339
12,344
12,341
12,353
12,362
12,387
12,399

5,397
5,396
5,396
5,397
5,396
5,399
5,394
5,396
5,390
5,387
5,382
5,374
5,379
5,376
5,391
5,404
5,407
5,418
5,414
5,414
5,410
5,410
5,417
5,421

21,618
21,625
21,616
21,597
21,541
21,567
21,561
21,580
21,539
21,560
21,544
21,544
21,527
21,539
21,553
21,572
21,544
21,528
21,572
21,629
21,652
21,675
21,687
21,716

2,785
2,787
2,789
2,768
2,769
2,763
2,758
2,750
2,747
2,736
2,723
2,720
2,715
2,716
2,710
2,727
2,712
2,716
2,710
2,712
2,713
2,706
2,713
2,706

5,021
5,028
5,024
5,020
5,013
4,996
4,990
4,997
5,019
5,031
5,023
5,027
5,007
5,018
5,023
5,019
5,004
5,004
5,019
5,035
5,047
5,058
5,066
5,076

13,812
13,810
13,803
13,809
13,759
13,808
13,813
13,833
13,773
13,793
13,798
13,797
13,805
13,805
13,820
13,826
13,828
13,808
13,843
13,882
13,892
13,911
13,908
13,934

Note (cont’d).—weather, etc., even if they are not paid for the time off; which are based on a sample of the working-age population; and
which count persons only once—as employed, unemployed, or not in the labor force. In the data shown here, persons who work at more than
one job are counted each time they appear on a payroll.
Establishment data for employment, hours, and earnings are classified based on the 2002 North American Industry Classification System
(NAICS).
For further description and details see Employment and Earnings.
Source: Department of Labor, Bureau of Labor Statistics.

265

TABLE B–47.—Hours and earnings in private nonagricultural industries, 1959–2004 1
[Monthly data seasonally adjusted]
Average weekly hours
Year or month

Total
private

Manufacturing
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 ..................................................
1994 ..................................................
1995 ..................................................
1996 ..................................................
1997 ..................................................
1998 ..................................................
1999 .................................................
2000 .................................................
2001 .................................................
2002 .................................................
2003 .................................................
2004 p ................................................
2003: Jan ...........................................
Feb ...........................................
Mar ..........................................
Apr ...........................................
May ..........................................
June .........................................
July ..........................................
Aug ..........................................
Sept .........................................
Oct ...........................................
Nov ..........................................
Dec ..........................................
2004: Jan ...........................................
Feb ...........................................
Mar ..........................................
Apr ...........................................
May ..........................................
June .........................................
July ..........................................
Aug ..........................................
Sept .........................................
Oct ..........................................
Nov p ........................................
Dec p ........................................

............
............
............
............
............
38.5
38.6
38.5
37.9
37.7
37.5
37.0
36.8
36.9
36.9
36.4
36.0
36.1
35.9
35.8
35.6
35.2
35.2
34.7
34.9
35.1
34.9
34.7
34.7
34.6
34.5
34.3
34.1
34.2
34.3
34.5
34.3
34.3
34.5
34.5
34.3
34.3
34.0
33.9
33.7
33.7
33.8
33.7
33.8
33.6
33.7
33.7
33.6
33.6
33.6
33.7
33.8
33.6
33.8
33.8
33.8
33.7
33.8
33.6
33.8
33.7
33.8
33.8
33.7
33.8

Average hourly earnings

40.3
39.8
39.9
40.5
40.6
40.8
41.2
41.4
40.6
40.7
40.6
39.8
39.9
40.6
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
40.9
41.0
40.9
40.5
40.4
40.7
41.1
41.7
41.3
41.3
41.7
41.4
41.4
41.3
40.3
40.5
40.4
40.8
40.3
40.4
40.4
40.1
40.2
40.3
40.1
40.2
40.4
40.5
40.8
40.6
41.0
41.0
40.9
40.7
41.1
40.8
40.8
40.9
40.8
40.6
40.5
40.5

Overtime
2.7
2.5
2.4
2.8
2.8
3.1
3.6
3.9
3.3
3.5
3.6
2.9
2.9
3.4
3.8
3.2
2.6
3.1
3.4
3.6
3.3
2.8
2.8
2.3
2.9
3.4
3.3
3.4
3.7
3.8
3.8
3.8
3.8
4.0
4.4
5.0
4.7
4.8
5.1
4.8
4.8
4.7
4.0
4.2
4.2
4.6
4.3
4.3
4.1
4.0
4.1
4.1
4.1
4.1
4.2
4.3
4.5
4.5
4.5
4.6
4.6
4.5
4.6
4.6
4.6
4.6
4.6
4.5
4.5
4.5

Current
dollars

1982
dollars 2

Manufacturing
(current
dollars)

............
............
............
............
............
$2.53
2.63
2.73
2.85
3.02
3.22
3.40
3.63
3.90
4.14
4.43
4.73
5.06
5.44
5.87
6.33
6.84
7.43
7.86
8.19
8.48
8.73
8.92
9.13
9.43
9.80
10.19
10.50
10.76
11.03
11.32
11.64
12.03
12.49
13.00
13.47
14.00
14.53
14.95
15.35
15.68
15.18
15.27
15.27
15.25
15.31
15.34
15.40
15.41
15.41
15.43
15.46
15.45
15.49
15.52
15.55
15.59
15.63
15.66
15.71
15.76
15.78
15.82
15.84
15.86

.............
.............
.............
.............
.............
$7.86
8.04
8.13
8.21
8.37
8.45
8.46
8.64
8.99
8.98
8.65
8.48
8.58
8.66
8.67
8.40
7.99
7.88
7.86
7.95
7.95
7.91
7.96
7.86
7.81
7.75
7.66
7.58
7.55
7.52
7.53
7.53
7.57
7.68
7.89
8.00
8.03
8.11
8.24
8.27
8.24
8.25
8.25
8.21
8.23
8.28
8.29
8.31
8.28
8.25
8.28
8.32
8.30
8.27
8.27
8.24
8.25
8.21
8.20
8.23
8.26
8.25
8.22
8.22
8.23

$2.08
2.15
2.20
2.27
2.34
2.41
2.49
2.60
2.71
2.89
3.07
3.23
3.45
3.70
3.97
4.31
4.71
5.09
5.55
6.05
6.57
7.15
7.86
8.36
8.70
9.05
9.40
9.59
9.77
10.05
10.35
10.78
11.13
11.40
11.70
12.04
12.34
12.75
13.14
13.45
13.85
14.32
14.76
15.29
15.74
16.15
15.58
15.62
15.63
15.64
15.68
15.72
15.73
15.79
15.84
15.83
15.89
15.93
15.94
15.99
16.01
16.08
16.08
16.13
16.16
16.23
16.29
16.29
16.30
16.36

Total private

1 For

Average weekly earnings, total private
Level
Current
dollars

1982
dollars 2

Current
dollars

1982
dollars 2

..............
..............
..............
..............
..............
$97.41
101.52
105.11
108.02
113.85
120.75
125.80
133.58
143.91
152.77
161.25
170.28
182.67
195.30
210.15
225.35
240.77
261.54
272.74
285.83
297.65
304.68
309.52
316.81
326.28
338.10
349.29
358.06
367.83
378.40
390.73
399.53
412.74
431.25
448.04
462.49
480.41
493.20
506.07
517.36
528.97
513.08
514.60
516.13
512.40
515.95
516.96
517.44
517.78
517.78
519.99
522.55
519.12
523.56
524.58
525.59
525.38
528.29
526.18
531.00
531.11
533.36
534.72
533.81
536.07

..............
..............
..............
..............
..............
$302.52
310.46
312.83
311.30
315.37
316.93
312.94
318.05
331.59
331.39
314.94
305.16
309.61
310.99
310.41
298.87
281.27
277.35
272.74
277.50
279.22
276.23
276.11
272.88
270.32
267.27
262.43
258.34
257.95
258.12
259.97
258.43
259.58
265.22
271.87
274.64
275.62
275.38
278.83
278.75
277.82
279.00
278.16
277.49
276.67
279.19
279.29
279.24
278.08
277.33
278.96
281.09
278.80
279.68
279.48
278.53
277.98
277.61
275.63
278.30
278.21
278.95
277.78
276.87
278.33

............
............
............
............
............
............
4.2
3.5
2.8
5.4
6.1
4.2
6.2
7.7
6.2
5.6
5.6
7.3
6.9
7.6
7.2
6.8
8.6
4.3
4.8
4.1
2.4
1.6
2.4
3.0
3.6
3.3
2.5
2.7
2.9
3.3
2.3
3.3
4.5
3.9
3.2
3.9
2.7
2.6
2.2
2.2
3.1
3.1
3.2
2.1
2.7
1.8
2.3
1.8
1.5
1.9
2.2
1.2
2.0
1.9
1.8
2.5
2.4
1.8
2.6
2.6
3.0
2.8
2.2
3.3

.............
.............
.............
.............
.............
.............
2.6
.8
−.5
1.3
.5
−1.3
1.6
4.3
−.1
−5.0
−3.1
1.5
.4
−.2
−3.7
−5.9
−1.4
−1.7
1.7
.6
−1.1
−.0
−1.2
−.9
−1.1
−1.8
−1.6
−.2
.1
.7
−.6
.4
2.2
2.5
1.0
.4
−.1
1.3
−.0
−.3
.4
−.0
−.1
−.3
.7
−.3
.3
−.4
−.7
.0
.6
−.5
.2
.5
.4
.5
−.6
−1.3
−.3
.0
.6
−.4
−1.5
−.2

production or nonsupervisory workers; total includes private industry groups shown in Table B-46.
dollars divided by the consumer price index for urban wage earners and clerical workers on a 1982=100 base.
Note.—See Note, Table B-46.
Source: Department of Labor, Bureau of Labor Statistics.
2 Current

266

Percent change
from year
earlier

TABLE B–48.—Employment cost index, private industry, 1984–2004
Total private
Year and month

Goods-producing

Total Wages
Total Wages
comand Bene- comand
pen- sala- fits 1 pen- salasation ries
sation ries

Service-producing
Total Wages
comand Benepen- sala- fits 1
sation ries

Benefits 1

Manufacturing

Nonmanufacturing

Total Wages
Total Wages
comand Bene- comand Benepen- sala- fits 1 pen- sala- fits 1
sation ries
sation ries

Index, June 1989=100; not seasonally adjusted
December:
1984 ..............
1985 ..............
1986 ..............
1987 ..............
1988 ..............
1989 ..............
1990 ..............
1991 ..............
1992 ..............
1993 ..............
1994 ..............
1995 ..............
1996 ..............
1997 ..............
1998 ..............
1999 ..............
2000 ..............
2001 ..............
2002 ..............
2003 ..............
2004: Mar ...........
June .........
Sept .........
Dec ...........

84.0
87.3
90.1
93.1
97.6
102.3
107.0
111.7
115.6
119.8
123.5
126.7
130.6
135.1
139.8
144.6
150.9
157.2
162.3
168.8
171.4
173.0
174.4
175.2

84.8
88.3
91.1
94.1
98.0
102.0
106.1
110.0
112.9
116.4
119.7
123.1
127.3
132.3
137.4
142.2
147.7
153.3
157.5
162.3
163.4
164.5
165.9
166.2

81.7
84.6
87.5
90.5
96.7
102.6
109.4
116.2
122.2
128.3
133.0
135.9
138.6
141.8
145.2
150.2
158.6
166.7
174.6
185.8
192.2
195.3
196.9
198.7

85.4
88.2
91.0
93.8
97.9
102.1
107.0
111.9
116.1
120.6
124.3
127.3
130.9
134.1
137.8
142.5
148.8
154.4
160.1
166.5
170.3
171.8
173.3
174.3

86.4
89.4
92.3
95.2
98.2
102.0
105.8
109.7
112.8
116.1
119.6
122.9
126.8
130.6
135.2
139.7
145.2
150.5
155.0
158.7
159.9
160.9
162.3
162.4

2003: Mar ...........
June .........
Sept .........
Dec ...........
2004: Mar ...........
June .........
Sept .........
Dec ...........

165.0
166.4
168.2
169.5
171.3
173.0
174.5
175.8

159.3
160.3
161.7
162.5
163.5
164.4
165.8
166.4

178.6
181.1
183.8
186.3
191.2
194.5
196.4
199.3

163.3
164.9
166.5
167.6
170.6
172.1
174.0
175.5

156.3
157.4
158.3
158.7
159.9
160.9
162.3
162.4

83.2
85.7
88.3
90.9
97.3
102.6
109.9
116.7
123.4
130.3
134.8
137.1
139.7
141.5
143.2
148.2
156.2
162.6
171.0
183.8
193.7
196.2
198.1
201.2

82.9
86.6
89.3
92.6
97.3
102.3
107.0
111.6
115.2
119.3
122.8
126.2
130.2
135.3
140.5
145.3
151.7
158.2
163.1
169.7
171.6
173.3
174.7
175.3

83.7
87.7
90.3
93.4
97.8
102.2
106.3
110.2
113.0
116.6
119.7
123.2
127.5
133.1
138.4
143.3
148.9
154.5
158.6
163.9
165.0
166.1
167.5
167.9

80.4
83.6
86.8
90.2
96.1
102.6
109.0
115.7
121.2
126.7
131.5
134.7
137.4
141.4
145.7
150.7
159.4
168.4
175.9
186.2
190.6
194.1
195.5
196.5

85.0
87.8
90.7
93.4
97.6
102.0
107.2
112.2
116.5
121.3
125.1
128.3
132.1
135.3
138.9
143.6
149.3
154.6
160.5
167.1
171.7
173.2
174.9
175.4

86.1
89.2
92.1
95.2
98.1
101.9
106.2
110.3
113.7
117.3
120.8
124.3
128.4
132.2
136.8
141.5
146.5
151.7
156.5
160.1
161.3
162.4
163.8
164.0

82.7
85.0
87.5
89.8
96.6
102.3
109.5
116.1
122.6
130.0
134.3
136.7
139.8
141.7
142.7
147.8
154.8
160.4
168.9
182.3
194.4
196.9
199.2
200.4

83.4
87.0
89.7
92.9
97.5
102.3
106.9
111.5
115.1
119.0
122.6
125.9
129.8
134.7
139.7
144.5
151.1
157.6
162.5
169.0
170.9
172.5
173.9
174.7

84.2
88.0
90.6
93.7
97.8
102.2
106.1
109.8
112.6
116.0
119.1
122.5
126.8
132.1
137.4
142.1
147.9
153.5
157.5
162.6
163.7
164.8
166.2
166.6

81.1
84.4
87.5
91.0
96.8
102.8
109.3
116.2
122.0
127.4
132.3
135.3
137.9
141.5
145.8
150.7
159.7
168.8
176.3
186.7
190.9
194.3
195.7
197.6

158.0
159.0
159.7
160.1
161.3
162.4
163.8
164.0

175.9
178.2
181.4
183.9
193.3
196.0
199.5
202.2

164.8
166.3
168.0
169.4
170.8
172.4
173.7
175.1

159.4
160.3
161.9
162.9
163.7
164.6
166.0
166.9

179.9
182.5
185.0
187.6
190.5
193.9
195.6
198.5

6.7
2.8
2.9
2.6
7.6
5.9
7.0
6.0
5.6
6.0
3.3
1.8
2.3
1.4
.7
3.4
4.7
3.6
5.3
7.9
9.9
10.0
10.0
9.9

4.8
4.3
3.1
3.6
5.0
4.9
4.5
4.3
3.2
3.4
3.0
2.7
3.1
3.8
3.7
3.4
4.6
4.3
3.1
4.0
3.6
3.7
3.5
3.4

4.0
4.5
3.0
3.4
4.4
4.5
3.8
3.5
2.6
3.0
2.7
2.9
3.5
4.2
4.0
3.4
4.1
3.8
2.6
3.2
2.7
2.7
2.5
2.5

6.4
4.1
3.7
4.0
6.4
6.2
6.3
6.3
5.0
4.4
3.8
2.3
1.9
2.6
3.0
3.4
6.0
5.7
4.4
5.9
5.9
6.3
5.7
5.8

3.3
1.3
1.8
1.4
5.1
1.4
1.8
1.4

1.2
.9
1.0
.8
.8
.9
.8
.8

1.0
.6
1.0
.6
.5
.5
.9
.5

1.6
1.4
1.4
1.4
1.5
1.8
.9
1.5

Index, June 1989=100; seasonally adjusted
177.2
179.6
182.6
185.1
192.8
195.5
198.4
202.6

165.8
167.1
169.0
170.4
171.7
173.4
174.8
176.0

160.6
161.5
163.2
164.2
165.0
165.9
167.4
168.2

179.5
182.1
184.5
187.0
190.2
193.9
195.3
197.4

163.6
164.9
166.5
167.6
171.4
172.8
174.9
175.9

Percent change from 12 months earlier, not seasonally adjusted
December:
1984 ..............
1985 ..............
1986 ..............
1987 ..............
1988 ..............
1989 ..............
1990 ..............
1991 ..............
1992 ..............
1993 ..............
1994 ..............
1995 ..............
1996 ..............
1997 ..............
1998 ..............
1999 ..............
2000 ..............
2001 ..............
2002 ..............
2003 ..............
2004: Mar ...........
June .........
Sept .........
Dec ...........

4.9
3.9
3.2
3.3
4.8
4.8
4.6
4.4
3.5
3.6
3.1
2.6
3.1
3.4
3.5
3.4
4.4
4.2
3.2
4.0
3.9
4.0
3.7
3.8

4.2
4.1
3.2
3.3
4.1
4.1
4.0
3.7
2.6
3.1
2.8
2.8
3.4
3.9
3.9
3.5
3.9
3.8
2.7
3.0
2.6
2.6
2.6
2.4

6.5
3.5
3.4
3.4
6.9
6.1
6.6
6.2
5.2
5.0
3.7
2.2
2.0
2.3
2.4
3.4
5.6
5.1
4.7
6.4
7.0
7.3
6.8
6.9

4.7
3.3
3.2
3.1
4.4
4.3
4.8
4.6
3.8
3.9
3.1
2.4
2.8
2.4
2.8
3.4
4.4
3.8
3.7
4.0
4.5
4.4
4.6
4.7

2003: Mar ...........
June .........
Sept .........
Dec ...........
2004: Mar ...........
June .........
Sept .........
Dec ...........

1.4
.8
1.1
.8
1.1
1.0
.9
.7

1.0
.6
.9
.5
.6
.6
.9
.4

2.1
1.4
1.5
1.4
2.6
1.7
1.0
1.5

1.6
1.0
1.0
.7
1.8
.9
1.1
.9

3.8
3.5
3.2
3.1
3.2
3.9
3.7
3.7
2.8
2.9
3.0
2.8
3.2
3.0
3.5
3.3
3.9
3.7
3.0
2.4
2.3
2.2
2.5
2.3

6.3
3.0
3.0
2.9
7.0
5.4
7.1
6.2
5.7
5.6
3.5
1.7
1.9
1.3
1.2
3.4
5.4
4.1
5.2
7.5
8.8
8.9
8.7
9.5

5.1
4.5
3.1
3.7
5.1
5.1
4.6
4.3
3.2
3.6
2.9
2.8
3.2
3.9
3.8
3.4
4.4
4.3
3.1
4.0
3.6
3.8
3.5
3.3

4.4
4.8
3.0
3.4
4.7
4.5
4.0
3.7
2.5
3.2
2.7
2.9
3.5
4.4
4.0
3.5
3.9
3.8
2.7
3.3
2.7
2.7
2.6
2.4

6.9
4.0
3.8
3.9
6.5
6.8
6.2
6.1
4.8
4.5
3.8
2.4
2.0
2.9
3.0
3.4
5.8
5.6
4.5
5.9
5.9
6.5
5.8
5.5

5.2
3.3
3.3
3.0
4.5
4.5
5.1
4.7
3.8
4.1
3.1
2.6
3.0
2.4
2.7
3.4
4.0
3.5
3.8
4.1
4.7
4.7
5.0
5.0

4.4
3.6
3.3
3.4
3.0
3.9
4.2
3.9
3.1
3.2
3.0
2.9
3.3
3.0
3.5
3.4
3.5
3.5
3.2
2.3
2.1
2.1
2.6
2.4

Percent change from 3 months earlier, seasonally adjusted
0.8
.7
.6
.3
.8
.6
.9
.1

3.0
1.4
1.7
1.4
4.2
1.4
1.5
2.1

1.3
.8
1.1
.8
.8
1.0
.8
.7

1.1
.6
1.1
.6
.5
.5
.9
.5

1.6
1.4
1.3
1.4
1.7
1.9
.7
1.1

1.6
.8
1.0
.7
2.3
.8
1.2
.6

1.0
.6
.4
.3
.7
.7
.9
.1

1 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.
Source: Department of Labor, Bureau of Labor Statistics.

267

TABLE B–49.—Productivity and related data, business sector, 1959–2004
[Index numbers, 1992=100; quarterly data seasonally adjusted]

Year or
quarter

Output per hour
of all persons

Hours of all
persons 2

Output 1

Compensation
per hour 3

Real compensation
per hour 4

Unit labor
costs

Implicit price
deflator 5

Busi- Nonfarm Busi- Nonfarm Busi- Nonfarm Busi- Nonfarm Busi- Nonfarm Busi- Nonfarm Busi- Nonfarm
ness business ness business ness business ness business ness business ness business ness business
sector sector sector sector sector sector sector sector sector sector sector sector sector sector

1959 ..........

48.1

51.2

31.4

31.2

65.4

60.9

13.4

13.9

59.5

61.8

27.8

27.1

26.8

26.3

1960
1961
1962
1963
1964

..........
..........
..........
..........
..........

48.9
50.6
52.9
55.0
56.8

51.8
53.4
55.8
57.8
59.5

32.0
32.7
34.8
36.4
38.7

31.8
32.4
34.6
36.2
38.7

65.5
64.5
65.7
66.2
68.1

61.3
60.6
62.0
62.7
65.0

13.9
14.5
15.1
15.6
16.2

14.5
15.0
15.6
16.1
16.6

60.9
62.6
64.7
66.1
67.7

63.3
64.8
66.7
68.1
69.3

28.4
28.5
28.5
28.4
28.5

27.9
28.0
27.9
27.8
27.9

27.1
27.3
27.6
27.7
28.1

26.6
26.8
27.1
27.3
27.6

1965
1966
1967
1968
1969

..........
..........
..........
..........
..........

58.8
61.2
62.5
64.6
64.9

61.3
63.5
64.6
66.8
66.9

41.4
44.2
45.1
47.3
48.8

41.4
44.4
45.1
47.5
48.9

70.4
72.3
72.1
73.2
75.1

67.5
69.8
69.8
71.1
73.1

16.8
17.9
19.0
20.5
21.9

17.1
18.2
19.2
20.7
22.1

69.1
71.7
73.5
76.3
77.4

70.5
72.6
74.5
77.1
78.1

28.6
29.3
30.3
31.7
33.8

27.9
28.6
29.7
31.0
33.1

28.5
29.2
30.0
31.2
32.6

28.0
28.6
29.5
30.7
32.1

1970
1971
1972
1973
1974

..........
..........
..........
..........
..........

66.2
69.0
71.2
73.5
72.3

67.9
70.6
73.0
75.3
74.2

48.7
50.6
53.9
57.6
56.8

48.9
50.7
54.1
58.0
57.3

73.6
73.3
75.6
78.5
78.6

72.0
71.8
74.1
77.1
77.2

23.6
25.1
26.7
28.9
31.7

23.7
25.2
26.9
29.1
31.9

78.8
80.2
82.6
84.4
83.3

79.1
80.7
83.2
84.8
83.8

35.6
36.3
37.4
39.4
43.9

34.9
35.7
36.8
38.6
43.0

34.1
35.5
36.8
38.7
42.4

33.5
35.0
36.1
37.4
41.2

1975
1976
1977
1978
1979

..........
..........
..........
..........
..........

74.8
77.2
78.5
79.3
79.4

76.2
78.7
79.9
81.0
80.7

56.3
60.0
63.3
67.3
69.6

56.3
60.2
63.6
67.8
70.0

75.3
77.7
80.7
84.8
87.7

73.9
76.5
79.6
83.7
86.6

35.0
38.0
41.0
44.6
48.9

35.1
38.1
41.2
44.8
49.1

84.1
86.4
87.6
89.1
89.4

84.5
86.6
88.0
89.6
89.7

46.7
49.2
52.2
56.2
61.6

46.1
48.4
51.5
55.3
60.8

46.6
49.0
52.0
55.6
60.4

45.6
48.1
51.2
54.6
59.2

1980
1981
1982
1983
1984

..........
..........
..........
..........
..........

79.2
80.8
80.2
83.1
85.3

80.6
81.7
80.9
84.6
86.3

68.8
70.7
68.6
72.3
78.6

69.2
70.7
68.4
72.9
78.9

86.9
87.5
85.5
87.0
92.1

85.9
86.5
84.6
86.2
91.4

54.2
59.4
63.6
66.3
69.1

54.4
59.7
64.0
66.6
69.5

89.2
89.3
90.4
90.4
90.7

89.5
89.9
90.8
90.9
91.1

68.4
73.5
79.3
79.7
81.0

67.5
73.1
79.1
78.8
80.5

65.8
71.8
75.9
78.5
80.8

64.9
71.1
75.5
77.9
80.1

1985
1986
1987
1988
1989

..........
..........
..........
..........
..........

87.2
89.9
90.4
91.7
92.6

87.6
90.3
90.7
92.1
92.8

82.2
85.3
88.3
92.1
95.4

82.2 94.2
85.4 94.9
88.4 97.7
92.4 100.3
95.7 103.0

93.8
94.6
97.5
100.3
103.1

72.4
76.2
79.0
83.1
85.3

72.6
76.4
79.2
83.1
85.2

91.9
94.9
95.3
96.6
95.1

92.2
95.2
95.4
96.6
95.0

83.0
84.8
87.5
90.6
92.1

82.9
84.6
87.3
90.2
91.9

82.7
84.1
85.9
88.6
91.9

82.5
83.9
85.7
88.3
91.5

1990
1991
1992
1993
1994

..........
..........
..........
..........
..........

94.5
96.0
100.0
100.3
101.5

94.6 96.9
96.1 96.1
100.0 100.0
100.4 103.1
101.5 108.2

97.1
96.3
100.0
103.4
108.3

102.5
100.2
100.0
102.8
106.7

102.7 90.6
100.2 95.0
100.0 100.0
103.0 102.2
106.6 103.8

90.4
95.0
100.0
102.0
103.8

96.2
97.4
100.0
99.7
99.2

96.0 95.9
97.4 99.0
100.0 100.0
99.5 101.9
99.1 102.3

95.6 95.1
98.8 98.2
100.0 100.0
101.6 102.1
102.2 103.9

94.9
98.1
100.0
102.1
104.0

1995
1996
1997
1998
1999

..........
..........
..........
..........
..........

101.6
104.6
106.5
109.4
112.6

102.0
104.8
106.5
109.3
112.3

111.4
116.5
122.7
128.6
135.2

111.8
116.8
122.8
128.9
135.6

109.6
111.4
115.1
117.6
120.1

109.5
111.5
115.4
117.9
120.7

106.0
109.6
113.1
119.9
125.6

105.9
109.5
112.9
119.6
125.1

98.9
99.6
100.6
105.1
107.9

98.8
99.5
100.4
104.9
107.5

104.3
104.8
106.1
109.6
111.6

103.8
104.5
106.0
109.4
111.4

105.7
107.4
109.0
109.7
110.7

105.8
107.3
109.1
109.9
111.1

2000
2001
2002
2003

..........
..........
..........
..........

115.9
118.8
123.9
129.5

115.5
118.3
123.5
129.0

140.5
141.0
143.5
149.0

140.8
141.3
143.9
149.4

121.3
118.7
115.8
115.1

121.9
119.4
116.5
115.8

134.5
140.1
144.5
150.5

134.0
139.3
143.8
149.7

111.8
113.3
115.0
117.1

111.4
112.7
114.5
116.5

116.1
118.0
116.6
116.2

116.0
117.7
116.5
116.1

112.7
114.9
116.0
117.4

113.3
115.4
116.6
117.9

2000: I .......
II ......
III .....
IV .....

114.0
116.2
115.9
117.1

113.7
115.8
115.5
116.6

138.6
141.1
140.8
141.5

138.8
141.4
141.1
141.8

121.6
121.5
121.5
120.8

122.1
122.1
122.1
121.6

132.4
133.0
135.6
136.5

132.1
132.5
135.1
135.9

111.5
111.0
112.2
112.2

111.2
110.6
111.8
111.6

116.2
114.4
117.0
116.6

116.2
114.4
116.9
116.5

112.1
112.6
112.9
113.3

112.6
113.1
113.5
113.9

2001: I .......
II ......
III .....
IV .....

117.0
118.4
118.8
120.9

116.5
118.1
118.5
120.4

141.1
141.4
140.3
141.0

141.4
141.9
140.8
141.2

120.7
119.4
118.1
116.6

121.4
120.2
118.9
117.3

138.8
139.7
140.4
141.5

138.1
138.9
139.6
140.7

113.0
112.8
113.2
114.2

112.5
112.2
112.5
113.5

118.7
117.9
118.2
117.0

118.6
117.6
117.8
116.8

114.1
114.9
115.2
115.6

114.6
115.4
115.6
116.0

2002: I .......
II ......
III .....
IV .....

122.7
123.2
124.7
125.0

122.4
122.8
124.1
124.6

142.2
142.9
144.3
144.7

142.6
143.2
144.5
145.0

115.9
116.0
115.7
115.7

116.5
116.7
116.4
116.4

143.2
144.4
145.0
145.5

142.6
143.8
144.3
144.7

115.2
115.2
115.0
114.8

114.7
114.7
114.4
114.3

116.7
117.2
116.3
116.3

116.4
117.1
116.2
116.1

115.5
115.9
116.1
116.5

116.0
116.5
116.8
117.2

2003: I .......
II ......
III .....
IV .....

126.2
128.6
131.2
132.0

125.8
127.8
130.6
131.7

145.5
147.5
150.8
152.3

145.9
147.8
151.1
152.8

115.3
114.7
114.9
115.4

116.0
115.6
115.7
116.1

147.4
149.6
151.7
153.2

146.6
148.7
150.9
152.5

115.3
116.8
117.7
118.7

114.7
116.1
117.1
118.2

116.8
116.4
115.6
116.0

116.6
116.3
115.5
115.9

117.1
117.3
117.5
117.8

117.7
117.8
118.0
118.1

2004: I .......
II ......
III .....

133.3
134.2
135.0

132.8 154.3
134.1 155.8
134.7 157.5

116.7 154.2
116.7 156.2
117.4 157.7

153.3
155.5
156.9

118.4
118.6
119.2

117.7 115.7
118.0 116.4
118.5 116.8

115.4 118.4
115.9 119.4
116.5 119.6

118.7
119.6
120.0

155.0 115.8
156.5 116.1
158.2 116.6

1 Output refers to real gross domestic product in the sector.
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 for recent quarters. The trend from 1978–2003 is
based on the consumer price index research series (CPI–U–RS).
5 Current dollar output divided by the output index.
Source: Department of Labor, Bureau of Labor Statistics.

268

TABLE B–50.—Changes in productivity and related data, business sector, 1959–2004
[Percent change from preceding period; quarterly data at seasonally adjusted annual rates]

Year or
quarter

Output per hour
of all persons

Hours of all
persons 2

Output 1

Compensation
per hour 3

Busi- Nonfarm Busi- Nonfarm Busi- Nonfarm Busi- Nonfarm
ness business ness business ness business ness business
sector sector sector sector sector sector sector sector

Real compensation
per hour 4
Business
sector

Unit labor
costs

Implicit price
deflator 5

Nonfarm Busi- Nonfarm Busi- Nonfarm
business ness business ness business
sector sector sector sector sector

1959 ...............

3.8

3.8

8.1

8.6

4.2

4.7

4.1

3.9

3.4

3.2

0.3

0.1

0.8

1.3

1960
1961
1962
1963
1964

...............
...............
...............
...............
...............

1.7
3.5
4.6
3.9
3.3

1.2
3.1
4.5
3.5
3.0

1.9
1.9
6.4
4.6
6.4

1.7
2.0
6.8
4.7
6.7

.2
−1.5
1.8
.7
2.9

.6
−1.1
2.2
1.1
3.7

4.2
3.8
4.4
3.6
3.8

4.3
3.3
4.0
3.4
3.1

2.4
2.8
3.4
2.2
2.4

2.5
2.3
3.0
2.1
1.8

2.4
.4
−.1
−.3
.4

3.1
.2
−.5
−.1
.2

1.1
.8
1.0
.6
1.1

1.2
.8
1.0
.7
1.3

1965
1966
1967
1968
1969

...............
...............
...............
...............
...............

3.5
4.0
2.2
3.4
.5

3.1
3.5
1.7
3.4
.1

7.1
6.8
1.9
5.0
3.0

7.1
7.1
1.7
5.2
3.0

3.4
2.6
−.2
1.5
2.6

3.9
3.5
.0
1.8
2.9

3.7
6.7
5.7
8.1
7.0

3.3
5.9
5.8
7.8
6.8

2.1
3.7
2.5
3.7
1.4

1.7
3.0
2.7
3.5
1.3

.2
2.6
3.4
4.5
6.5

.2
2.3
4.0
4.3
6.7

1.6
2.5
2.7
4.0
4.6

1.3
2.3
3.2
4.0
4.5

1970
1971
1972
1973
1974

...............
...............
...............
...............
...............

2.0
4.2
3.2
3.1
−1.6

1.5
4.1
3.3
3.1
−1.5

.0
3.8
6.5
7.0
−1.4

−.1
3.8
6.7
7.3
−1.4

−2.0
−.4
3.2
3.8
.2

−1.6
−.3
3.2
4.0
.1

7.7
6.3
6.3
8.5
9.6

7.2
6.4
6.5
8.2
9.8

1.8
1.8
3.0
2.1
−1.3

1.4
1.9
3.2
1.8
−1.1

5.6
2.0
3.0
5.2
11.4

5.6
2.2
3.1
4.9
11.4

4.4
4.2
3.6
5.2
9.6

4.5
4.3
3.2
3.6
10.2

1975
1976
1977
1978
1979

...............
...............
...............
...............
...............

3.4
3.2
1.7
1.1
.0

2.7
3.3
1.6
1.3
−.3

−1.0
6.6
5.6
6.3
3.4

−1.7
7.0
5.6
6.6
3.2

−4.3
3.3
3.8
5.1
3.3

−4.2
3.5
3.9
5.2
3.5

10.2
8.6
7.9
8.7
9.8

10.0
8.5
8.1
8.9
9.6

1.0
2.7
1.4
1.7
.3

.8
2.5
1.5
1.8
.2

6.5
5.3
6.2
7.5
9.7

7.2
5.0
6.4
7.5
9.9

9.8
5.3
6.0
7.1
8.5

10.8
5.6
6.3
6.7
8.4

1980
1981
1982
1983
1984

...............
...............
...............
...............
...............

−.2
2.1
−.8
3.6
2.7

−.2
1.4
−1.0
4.5
2.0

−1.1
2.8
−3.0
5.4
8.7

−1.0
2.1
−3.2
6.5
8.2

−.9
.7
−2.3
1.7
5.8

−.8
.7
−2.2
1.9
6.1

10.8
9.6
7.2
4.1
4.3

10.8
9.8
7.1
4.2
4.2

−.2
.2
1.2
.0
.3

−.2
.4
1.1
.0
.2

11.0
7.4
8.0
.5
1.6

11.0
8.2
8.2
−.3
2.2

8.9
9.2
5.7
3.4
2.9

9.6
9.6
6.2
3.1
2.9

1985
1986
1987
1988
1989

...............
...............
...............
...............
...............

2.3
3.0
.6
1.5
.9

1.6
3.0
.5
1.6
.7

4.6
3.7
3.5
4.3
3.7

4.2
3.9
3.6
4.6
3.5

2.3
.7
2.9
2.8
2.7

2.6
.8
3.1
2.9
2.8

4.8
5.2
3.8
5.1
2.7

4.6
5.2
3.7
4.9
2.6

1.4
3.3
.3
1.4
−1.6

1.2
3.3
.3
1.2
−1.6

2.5
2.1
3.2
3.5
1.7

2.9
2.1
3.2
3.2
1.9

2.4
1.6
2.2
3.1
3.7

3.0
1.7
2.2
3.0
3.6

1990
1991
1992
1993
1994

...............
...............
...............
...............
...............

2.0
1.6
4.2
.3
1.1

1.9
1.7
4.0
.4
1.2

1.5
−.8
4.0
3.1
5.0

1.5
−.8
3.9
3.4
4.8

−.5
−2.3
−.2
2.8
3.8

−.4
−2.4
−.2
3.0
3.6

6.2
4.9
5.2
2.2
1.6

6.1
5.1
5.3
2.0
1.7

1.2
1.2
2.7
−.3
−.5

1.0
1.4
2.7
−.5
−.4

4.1
3.3
1.0
1.9
.4

4.1
3.3
1.2
1.6
.5

3.6
3.2
1.8
2.1
1.8

3.7
3.4
1.9
2.1
1.9

1995
1996
1997
1998
1999

...............
...............
...............
...............
...............

.2
2.9
1.9
2.7
2.9

.5
2.7
1.6
2.7
2.8

2.9
4.6
5.3
4.8
5.1

3.2
4.5
5.2
5.0
5.2

2.7
1.6
3.4
2.1
2.2

2.7
1.8
3.5
2.2
2.3

2.0
3.4
3.2
6.0
4.8

2.1
3.4
3.1
5.9
4.6

−.4
.7
1.0
4.6
2.6

−.3
.7
.9
4.5
2.5

1.9
.5
1.3
3.3
1.8

1.6
.7
1.4
3.2
1.8

1.8
1.6
1.5
.6
.9

1.7
1.4
1.7
.7
1.1

2000
2001
2002
2003

...............
...............
...............
...............

2.9
2.5
4.3
4.5

2.8
2.5
4.4
4.4

3.9
.3
1.8
3.8

3.8
.4
1.8
3.8

1.0
−2.1
−2.4
−.7

1.0
−2.0
−2.5
−.6

7.1
4.2
3.2
4.1

7.1
4.0
3.3
4.1

3.6
1.3
1.5
1.8

3.6
1.1
1.6
1.7

4.0
1.6
−1.1
−.4

4.2
1.5
−1.1
−.4

1.8
2.0
.9
1.3

1.9
1.9
1.0
1.1

2000: I .............
II ...........
III ..........
IV ..........

−1.4
8.0
−.9
4.2

−1.7
7.4
−.8
3.7

.3
7.5
−.8
2.0

−.1
7.5
−.8
2.2

1.7
−.5
.1
−2.1

1.6
.1
.0
−1.5

14.5
1.7
8.1
2.9

14.7
1.0
8.2
2.4

10.3
−1.6
4.2
.0

10.5
−2.2
4.3
−.5

16.0
−5.9
9.1
−1.2

16.7
−6.0
9.1
−1.3

3.4
1.8
1.3
1.4

3.3
1.8
1.4
1.3

2001: I .............
II ...........
III ..........
IV ..........

−.5
5.1
1.4
7.2

−.4
5.5
1.5
6.6

−1.1
.8
−3.1
1.8

−1.1
1.2
−2.9
1.2

−.6
−4.1
−4.4
−5.0

−.7
−4.1
−4.3
−5.1

6.8
2.5
2.2
3.1

6.7
2.2
2.1
3.1

3.1
−.8
1.2
3.7

3.0
−1.0
1.1
3.7

7.4
−2.5
.8
−3.8

7.2
−3.1
.6
−3.3

2.7
3.0
1.0
1.3

2.6
2.7
.7
1.5

2002: I .............
II ...........
III ..........
IV ..........

5.9
1.7
4.8
1.2

6.9
1.1
4.5
1.6

3.5
2.1
3.8
1.2

4.0
1.7
3.6
1.4

−2.3
.4
−1.0
.0

−2.7
.6
−.9
−.2

4.9
3.4
1.6
1.3

5.5
3.4
1.5
1.2

3.5
−.1
−.7
−.6

4.1
−.1
−.8
−.6

−1.0
1.7
−3.1
.0

−1.4
2.3
−2.9
−.3

−.3
1.4
.7
1.4

−.3
1.8
1.0
1.3

2003: I .............
II ...........
III ..........
IV ..........

3.9
7.6
8.5
2.4

3.7
6.7
9.0
3.1

2.2
5.6
9.3
4.2

2.4
5.3
9.3
4.6

−1.6
−1.9
.7
1.7

−1.3
−1.4
.3
1.4

5.5
6.1
5.6
4.0

5.3
5.7
6.1
4.4

1.7
5.4
3.1
3.3

1.5
5.0
3.6
3.6

1.6
−1.4
−2.6
1.6

1.6
−1.0
−2.7
1.2

2.1
.8
.7
.8

1.9
.5
.6
.3

2004: I .............
II ...........
III ..........

3.9
2.9
2.4

3.7
3.9
1.8

5.3
3.9
4.5

5.7
4.2
4.2

1.3
1.0
2.0

2.0
.3
2.4

2.8
5.2
4.0

2.0
5.9
3.6

−.8
.5
2.1

−1.6
1.1
1.8

−1.1
2.3
1.5

−1.6
1.9
1.8

2.1
3.3
.9

2.0
2.9
1.6

1 Output

refers to real gross domestic product in the sector.
at work of all persons engaged in the sector. See footnote 2, Table B-49.
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. See footnote 4, Table B-49.
5 Current dollar output divided by the output index.
Note.—Percent changes are based on original data and may differ slightly from percent changes based on indexes in Table B-49.
Source: Department of Labor, Bureau of Labor Statistics.
2 Hours

3 Wages

269

PRODUCTION AND BUSINESS ACTIVITY
TABLE B–51.—Industrial production indexes, major industry divisions, 1959–2004
[1997=100; monthly data seasonally adjusted]
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 .........................
1994 .........................
1995 .........................
1996 .........................
1997 .........................
1998 .........................
1999 .........................
2000 .........................
2001 .........................
2002 .........................
2003 .........................
2004 p .......................
2003: Jan ..................
Feb ..................
Mar .................
Apr ..................
May .................
June ................
July .................
Aug .................
Sept ................
Oct ..................
Nov ..................
Dec ..................
2004: Jan ..................
Feb ..................
Mar .................
Apr ..................
May .................
June ................
July .................
Aug .................
Sept ................
Oct p ................
Nov p ...............
Dec p ...............

Total
industrial
production 1
28.4
29.0
29.2
31.7
33.5
35.8
39.4
42.8
43.8
46.2
48.3
46.7
47.4
51.9
56.2
56.0
51.0
55.0
59.2
62.4
64.3
62.6
63.4
60.2
61.8
67.3
68.2
68.9
72.4
76.0
76.7
77.4
76.2
78.4
80.9
85.3
89.4
93.2
100.0
105.8
110.6
115.4
111.3
111.0
110.9
115.5
110.9
111.0
110.6
109.5
109.6
109.9
110.6
110.5
111.3
111.6
112.7
112.9
113.2
114.4
114.1
114.7
115.5
115.1
115.9
116.0
115.7
116.6
116.8
117.8

Manufacturing
Total 1
26.2
26.7
26.8
29.1
30.9
33.0
36.6
39.9
40.7
42.9
44.8
42.8
43.5
48.0
52.4
52.2
46.7
50.9
55.3
58.6
60.4
58.2
58.8
55.7
58.3
64.0
65.1
66.6
70.3
73.9
74.5
75.0
73.6
76.2
78.9
83.7
88.1
92.2
100.0
106.6
112.2
117.3
112.3
111.9
111.9
117.2
111.8
111.6
111.5
110.4
110.5
111.1
111.5
111.3
112.4
112.7
113.9
113.9
114.1
115.5
115.6
116.4
117.1
116.9
117.8
118.3
117.7
118.8
118.9
119.7

Durable

Nondurable

Other
(non-NAICS) 1

Mining

Utilities

.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
38.9
43.7
43.4
37.6
41.1
45.2
48.8
51.1
48.9
49.4
45.2
47.3
54.1
55.4
56.3
59.5
63.8
64.5
64.6
62.6
65.9
69.6
75.7
82.1
89.1
100.0
110.5
120.1
129.4
123.1
122.8
124.4
133.1
123.9
123.1
122.3
121.3
121.8
123.0
124.0
123.9
126.0
126.5
128.2
128.4
129.0
130.7
130.8
131.6
132.4
132.3
133.7
134.4
134.1
135.7
135.9
137.1

.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
61.2
64.1
64.4
59.7
65.2
69.6
72.1
72.5
70.3
70.9
69.9
73.1
76.5
76.9
79.2
83.4
86.2
86.7
88.1
87.8
90.0
91.3
94.5
96.2
96.4
100.0
101.5
102.2
102.8
99.4
99.6
98.1
100.1
98.2
98.7
99.0
98.0
97.7
97.6
97.7
97.5
97.7
97.8
98.6
98.3
98.1
98.9
99.1
99.8
100.3
100.2
100.7
100.7
100.2
101.0
100.9
101.2

...........................
...........................
...........................
...........................
...........................
...........................
...........................
...........................
...........................
...........................
...........................
...........................
...........................
67.2
69.3
69.7
66.4
68.4
75.0
77.6
79.2
82.0
83.9
84.9
87.2
91.3
94.8
96.7
102.2
101.8
100.4
99.1
95.2
93.1
93.8
93.1
93.0
92.3
100.0
106.5
109.9
112.2
105.7
100.5
99.5
103.3
99.7
100.1
100.9
98.7
99.3
101.3
99.3
98.5
98.0
98.9
100.1
99.8
99.8
102.9
102.6
103.4
104.5
103.5
104.0
105.9
104.0
103.7
103.8
105.0

.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
99.0
99.5
98.1
95.7
96.4
98.6
101.7
104.8
106.7
109.5
104.1
98.6
105.0
102.9
95.4
96.2
98.7
97.5
99.0
96.8
94.6
94.6
96.8
96.7
98.3
100.0
98.5
93.6
95.8
96.7
92.6
92.2
91.5
92.6
92.6
92.3
92.0
91.5
92.1
92.1
92.1
92.8
92.3
92.4
92.2
92.9
92.1
92.1
92.2
91.6
91.2
92.3
91.9
89.4
89.5
91.4
91.8

.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
56.1
59.3
59.1
60.2
62.9
65.4
67.1
68.6
69.1
70.1
67.9
68.4
72.4
74.0
74.6
78.2
82.6
85.2
86.8
88.9
88.9
92.0
93.9
97.2
100.0
100.0
102.6
105.5
108.6
108.1
111.4
111.9
114.9
112.3
114.7
111.5
110.3
111.1
108.2
111.7
112.7
111.2
111.5
112.2
114.9
115.8
117.7
113.1
113.3
116.2
113.8
113.3
111.1
114.8
114.5
114.4
117.5

1 Total industry and total manufacturing series include manufacturing as defined in the North American Industry Classification System
(NAICS) plus those industries—logging, and newspaper, periodical, book and directory-publishing—that have traditionally been considered to
be manufacturing and included in the industrial sector.
Note.—Data based on the North American Industry Classification System; see footnote 1.
Source: Board of Governors of the Federal Reserve System.

270

TABLE B–52.—Industrial production indexes, market groupings, 1959–2004
[1997=100; monthly data seasonally adjusted]

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 .............
1994 .............
1995 .............
1996 .............
1997 .............
1998 .............
1999 .............
2000 .............
2001 ............
2002 ............
2003 ............
2004 p ...........
2003: Jan ......
Feb ......
Mar .....
Apr ......
May .....
June ....
July .....
Aug .....
Sept ....
Oct ......
Nov .....
Dec .....
2004: Jan ......
Feb ......
Mar .....
Apr ......
May .....
June ....
July .....
Aug .....
Sept ...
Oct p ...
Nov p ...
Dec p ...

Total
industrial
production
28.4
29.0
29.2
31.7
33.5
35.8
39.4
42.8
43.8
46.2
48.3
46.7
47.4
51.9
56.2
56.0
51.0
55.0
59.2
62.4
64.3
62.6
63.4
60.2
61.8
67.3
68.2
68.9
72.4
76.0
76.7
77.4
76.2
78.4
80.9
85.3
89.4
93.2
100.0
105.8
110.6
115.4
111.3
111.0
110.9
115.5
110.9
111.0
110.6
109.5
109.6
109.9
110.6
110.5
111.3
111.6
112.7
112.9
113.2
114.4
114.1
114.7
115.5
115.1
115.9
116.0
115.7
116.6
116.8
117.8

Final products

Nonindustrial supplies

Consumer goods
Total

27.1
28.1
28.3
30.7
32.4
34.3
37.6
41.2
42.9
44.9
46.4
44.7
45.1
49.0
52.7
52.6
49.5
52.9
57.2
60.7
62.7
62.4
63.8
62.4
63.5
68.8
70.6
71.6
74.8
78.6
79.4
80.1
79.1
80.9
83.5
87.1
90.6
94.0
100.0
105.6
108.4
111.7
109.1
107.7
108.6
113.3
107.6
108.4
108.2
107.2
107.3
107.7
108.5
108.4
109.3
109.2
110.5
110.5
110.8
112.3
111.7
112.3
113.1
112.4
113.7
113.8
113.5
114.8
114.8
115.7

Total
33.4
34.7
35.4
37.8
39.8
42.1
45.4
47.7
48.9
51.8
53.7
53.1
56.2
60.7
63.5
61.6
59.2
64.0
68.0
70.1
69.1
66.5
67.0
66.8
69.2
72.4
73.1
75.6
78.7
81.8
82.1
82.5
82.4
84.8
87.8
91.8
94.6
96.6
100.0
103.5
105.5
107.7
106.5
108.0
108.3
111.2
107.8
108.5
108.3
107.2
107.3
107.6
108.4
107.8
108.7
108.5
109.6
109.7
109.9
111.3
110.4
110.7
111.3
110.2
110.8
111.4
110.7
111.9
111.9
112.7

Automotive
products
24.3
27.9
25.4
30.8
33.7
35.3
43.5
43.4
38.1
45.4
45.6
38.4
48.9
52.7
57.3
49.5
47.6
54.3
61.4
61.0
55.0
42.3
43.7
42.4
49.2
55.1
55.2
59.2
63.1
66.5
69.1
64.7
60.5
70.8
78.2
87.6
90.2
93.1
100.0
106.6
116.9
119.7
116.0
126.3
132.3
134.9
132.4
129.8
129.0
127.6
127.2
130.1
133.7
130.8
139.0
135.3
136.2
136.4
137.1
138.4
136.3
135.9
133.8
130.6
130.9
135.3
133.1
137.8
137.3
137.9

Materials

Equipment

Other Nondura- durable Total 1 Business
ble
goods goods

Defense
and
space

21.6
21.8
22.4
24.4
26.3
28.7
32.5
35.9
36.3
38.9
41.5
40.2
42.6
48.7
52.0
48.9
42.8
48.1
53.7
56.2
56.5
52.4
52.8
48.9
53.0
59.2
59.3
62.7
66.0
69.5
70.2
70.1
68.1
71.2
77.5
84.9
89.8
94.2
100.0
107.2
111.6
116.1
109.9
112.1
111.3
115.7
112.3
110.1
109.6
108.8
109.7
110.8
111.1
111.5
111.6
112.4
113.7
113.8
115.8
116.1
115.6
116.0
116.5
116.3
115.9
116.3
114.7
115.2
115.3
116.2

48.6
49.9
50.7
58.7
63.3
61.3
67.8
79.7
90.9
91.1
86.7
73.4
66.0
64.2
69.9
72.0
73.2
70.9
63.5
63.9
68.9
82.0
89.2
106.6
107.1
121.6
136.3
144.7
147.6
148.3
148.5
142.7
132.1
122.6
115.8
108.8
105.8
101.8
100.0
103.7
100.7
90.1
98.1
99.2
106.4
111.3
104.2
105.2
105.0
104.7
105.2
105.9
106.6
107.7
108.3
108.1
108.4
107.0
106.0
107.1
108.2
109.9
111.1
110.7
112.8
112.7
113.5
114.0
115.2
116.6

38.7
39.9
41.3
43.2
45.1
47.4
49.4
51.8
54.4
56.6
58.5
59.5
61.2
65.1
67.1
67.1
66.0
70.1
72.7
75.2
74.8
74.9
75.2
76.5
77.4
78.9
79.9
81.8
84.7
87.5
87.2
88.7
90.0
90.7
91.9
94.2
96.5
97.7
100.0
102.2
102.2
103.8
103.9
103.9
103.3
106.0
102.4
104.3
104.2
103.2
103.1
102.9
103.3
103.0
102.7
102.9
104.0
104.1
103.9
105.6
104.8
105.1
106.2
105.3
106.1
106.1
105.8
106.6
106.6
107.5

19.0
19.6
19.3
21.5
22.7
24.0
27.2
31.7
33.7
34.6
35.6
33.0
30.9
33.8
38.5
40.3
36.6
38.3
42.8
47.6
53.2
55.5
58.1
55.3
54.5
62.5
65.7
64.6
67.8
72.7
74.2
75.5
72.9
73.7
75.6
78.4
83.2
89.2
100.0
109.6
114.2
119.7
113.9
105.6
107.9
117.2
106.0
106.8
106.7
105.7
105.9
106.6
107.4
108.4
109.4
109.6
111.2
111.1
111.8
113.2
113.5
115.0
116.3
116.6
119.6
118.6
119.2
120.6
120.7
121.9

1 Includes other items, not shown separately.
Note.—See footnote 1 and Note, Table B–51.
Source: Board of Governors of the Federal Reserve System.

271

14.1
14.5
14.1
15.3
16.1
18.0
20.6
23.9
24.3
25.4
27.0
26.1
24.8
28.2
32.6
34.4
30.4
32.2
37.3
42.1
47.5
48.3
49.7
45.4
45.3
52.3
54.4
53.5
56.7
62.0
63.9
66.0
64.8
67.3
69.9
73.9
79.9
87.3
100.0
110.9
117.4
125.8
116.8
107.6
108.9
119.2
107.3
108.0
107.8
106.5
106.6
107.3
108.0
109.1
110.3
110.5
112.5
112.6
113.7
115.2
115.3
116.7
118.2
118.7
121.9
120.7
121.1
122.8
122.5
123.6

Total

Construction

Business

Total

Nonenergy

Energy

28.7
28.9
29.5
31.3
33.0
35.2
37.4
39.7
41.4
43.7
46.1
45.4
46.8
52.3
55.9
55.4
49.7
53.0
57.6
60.8
62.7
60.1
60.8
58.6
61.7
67.2
68.9
71.2
75.5
78.0
78.7
79.9
78.0
80.2
83.0
87.0
90.3
93.8
100.0
105.7
109.9
114.3
109.5
108.6
107.6
112.6
108.1
107.8
107.3
106.1
106.6
106.6
107.1
107.4
107.4
108.0
109.2
109.4
110.1
111.5
111.3
112.1
112.8
112.6
113.0
113.0
112.8
113.3
113.2
114.2

39.9
39.0
39.3
41.7
43.7
46.3
49.2
51.2
52.6
55.3
57.7
55.7
57.4
65.2
70.7
69.0
58.5
63.0
68.7
72.6
74.4
68.8
67.6
61.4
65.7
71.5
73.3
75.8
80.5
82.3
81.9
81.1
76.6
79.8
83.4
89.5
91.4
95.5
100.0
105.2
107.9
110.2
105.1
104.2
101.8
107.1
102.4
101.2
100.4
99.5
100.6
101.2
101.0
101.8
101.8
103.0
104.3
104.3
104.6
104.9
105.8
106.5
107.3
107.0
107.9
108.3
107.6
108.4
108.2
108.6

23.7
24.5
25.2
26.8
28.5
30.6
32.6
35.1
37.0
39.2
41.7
41.9
43.1
47.5
50.4
50.3
46.4
49.3
53.5
56.4
58.3
56.9
58.3
57.6
60.4
65.6
67.4
69.6
73.7
76.5
77.6
79.5
78.5
80.3
82.9
86.2
89.9
93.2
100.0
105.8
110.6
115.8
111.1
110.3
109.9
114.7
110.3
110.4
110.0
108.8
108.9
108.7
109.4
109.5
109.7
109.9
111.1
111.4
112.3
114.1
113.5
114.3
114.9
114.7
114.9
114.8
114.9
115.2
115.2
116.4

28.9
29.3
29.3
31.9
34.0
36.7
40.9
44.6
44.1
47.1
49.9
48.1
48.8
53.8
58.6
58.5
52.1
56.7
60.7
63.7
65.4
62.9
63.3
58.5
60.0
65.8
65.7
65.7
69.2
73.0
73.5
74.0
73.0
75.4
78.0
83.1
88.0
92.3
100.0
106.1
113.1
119.6
114.1
115.2
114.6
118.8
115.3
114.9
114.1
113.2
113.2
113.4
114.1
113.8
114.8
115.3
116.1
116.6
116.8
117.6
117.6
118.1
118.9
118.8
119.2
119.3
118.9
119.5
120.1
121.2

..........
..........
..........
..........
..........
..........
..........
..........
37.5
40.3
42.8
40.3
41.0
45.9
50.9
50.8
43.6
48.6
52.7
56.1
57.6
54.2
54.4
49.0
52.4
58.5
58.6
59.8
63.7
67.8
68.2
68.3
66.9
70.3
73.4
79.5
85.1
90.1
100.0
107.7
116.6
124.7
117.6
119.1
118.5
124.6
119.2
118.4
117.9
116.6
116.8
117.3
117.8
117.4
118.9
119.5
120.8
121.1
121.1
122.5
123.0
123.6
124.3
124.6
125.2
125.8
125.5
126.3
126.6
127.5

51.3
52.1
52.4
54.2
57.4
59.8
62.5
66.5
68.8
71.9
75.6
79.3
80.0
83.0
85.1
84.7
84.0
85.8
88.5
89.6
92.0
92.7
93.6
89.6
86.8
92.3
91.8
88.2
90.3
93.4
94.3
96.2
96.3
95.4
95.6
97.2
98.6
100.1
100.0
100.5
100.2
101.6
100.4
100.4
99.8
99.6
100.5
101.1
99.6
99.5
99.0
98.8
99.7
99.9
99.7
99.7
99.5
100.3
100.9
100.5
99.3
99.8
100.8
99.6
99.6
98.6
98.2
98.3
99.4
100.7

TABLE B–53.—Industrial production indexes, selected manufacturing industries, 1967–2004
[1997=100; monthly data seasonally adjusted]
Durable manufacturing

Year or
month

Primary
metal

Fabricated
metal
products

Machinery

Nondurable manufacturing

Computer and
electronic
products

Transportation
equipment

Total

Selected
hightechnology 1

Apparel

Paper

Total

Motor
vehicles
and
parts

Printing
and
support

Chemical

Plastics
and
rubber
products

Food

Total

Iron
and
steel
products

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 ...........
1994 ...........
1995 ...........
1996 ...........
1997 ...........
1998 ...........
1999 ...........
2000 ...........
2001 ..........
2002 ..........
2003 ..........
2004 p .........
2003: Jan ....
Feb ...
Mar ...
Apr ....
May ..
June ..
July ...
Aug ...
Sept ..
Oct ....
Nov ...
Dec ...

..........
..........
..........
..........
..........
108.4
126.1
129.2
100.4
106.4
107.4
114.2
116.7
102.4
102.6
72.7
74.2
81.5
75.3
73.4
79.2
88.6
86.7
85.6
80.3
82.2
86.2
92.7
93.8
96.0
100.0
101.6
101.4
98.1
88.7
90.3
87.4
92.6
90.5
88.6
84.4
85.2
84.4
87.5
84.9
84.5
84.9
89.6
91.2
92.9

..........
..........
..........
..........
..........
116.0
139.1
148.5
110.5
114.4
111.8
119.9
124.0
105.0
109.0
67.3
67.5
74.6
69.2
67.4
77.0
89.5
86.4
85.3
78.0
81.6
86.5
93.3
94.8
97.1
100.0
99.8
100.5
99.5
90.0
92.0
93.3
101.5
98.8
93.8
85.3
93.9
86.6
96.6
89.9
87.0
88.4
97.1
98.2
104.4

..........
..........
..........
..........
..........
67.4
74.4
73.1
63.2
67.7
73.5
77.1
80.5
75.9
75.4
67.6
68.2
74.3
75.2
74.7
76.1
80.1
79.4
78.3
74.8
77.0
80.0
87.1
92.3
95.8
100.0
103.1
104.0
108.1
100.0
97.6
93.5
96.5
95.7
94.5
93.8
92.4
92.2
92.0
93.1
92.5
93.3
93.6
94.2
94.5

..........
..........
..........
..........
..........
60.7
70.2
73.6
64.2
67.0
73.2
78.9
83.2
79.2
78.5
65.7
59.3
69.2
69.4
68.4
69.7
76.8
79.6
77.6
72.9
72.7
78.1
85.5
91.5
94.8
100.0
102.5
100.3
105.4
93.1
88.3
86.4
96.5
86.3
86.7
86.2
85.1
85.5
85.5
85.6
85.6
86.1
85.7
89.2
90.0

..........
..........
..........
..........
..........
3.3
3.8
4.2
3.7
4.4
5.6
6.9
8.5
10.2
11.8
13.3
15.2
18.9
20.3
21.1
23.8
26.2
26.9
29.2
30.3
34.2
37.7
44.8
58.1
74.3
100.0
128.5
169.7
224.9
227.3
222.2
251.5
288.2
237.6
240.7
243.0
242.9
245.9
248.3
251.2
256.3
260.0
264.1
264.7
263.5

0.8
.8
.9
.9
.9
1.0
1.3
1.5
1.3
1.7
2.2
2.8
3.6
4.4
5.2
6.0
7.2
9.5
10.1
10.4
12.5
14.5
15.4
17.1
18.4
22.3
26.3
33.9
48.0
67.3
100.0
139.2
202.2
288.4
293.6
289.9
340.8
405.9
311.8
321.4
326.4
327.9
332.7
337.1
341.6
349.5
355.1
360.9
362.3
362.3

..........
..........
..........
..........
..........
58.5
66.8
61.6
55.8
62.4
67.8
72.2
73.1
64.9
62.6
57.4
63.3
71.7
75.5
77.3
80.0
84.9
86.7
83.9
80.6
83.6
86.0
89.9
90.0
91.7
100.0
108.9
114.7
109.4
105.2
109.3
111.1
115.5
111.7
109.7
108.9
107.7
107.6
109.2
111.4
109.8
115.0
113.2
114.4
114.7

.............
.............
.............
.............
.............
51.5
59.0
50.6
44.1
56.4
64.1
66.8
61.2
45.0
43.9
39.6
50.5
60.6
62.9
62.9
65.2
69.6
68.9
64.7
61.9
70.4
77.8
89.4
92.0
92.7
100.0
105.2
116.7
115.9
105.7
115.7
119.9
124.4
121.2
118.1
116.8
115.1
115.0
117.5
120.4
117.7
125.8
123.0
123.8
124.5

..........
..........
..........
..........
..........
98.9
101.9
94.9
92.8
98.0
104.2
107.2
101.6
103.1
102.6
103.9
107.0
108.5
104.3
105.5
106.1
104.2
99.1
97.1
97.6
99.6
102.0
104.0
104.2
101.3
100.0
94.6
90.6
86.2
73.9
62.1
52.4
48.8
57.4
55.7
55.0
54.1
53.5
52.3
51.1
49.7
49.7
50.0
50.3
50.0

..........
..........
..........
..........
..........
62.6
67.7
70.6
61.1
67.5
70.4
73.6
74.6
74.4
75.5
74.2
79.1
83.1
81.4
84.8
87.6
91.1
92.1
92.0
92.2
94.5
95.5
99.7
101.1
98.0
100.0
100.8
101.6
99.4
93.8
94.1
93.4
94.9
95.8
93.5
95.6
93.2
93.4
94.0
92.9
92.5
92.9
91.6
92.3
93.2

..........
..........
..........
..........
..........
46.8
49.2
47.7
44.6
47.8
51.8
54.8
56.4
56.9
58.3
62.7
67.4
73.4
76.3
80.2
86.1
88.9
89.2
92.6
89.7
94.6
94.9
95.9
97.3
98.0
100.0
101.2
102.0
102.7
96.4
91.1
87.3
87.8
89.2
89.1
87.6
87.2
86.6
86.5
86.6
86.7
87.4
86.7
87.2
87.2

............
............
............
............
............
53.0
58.0
60.3
53.0
59.3
64.5
67.7
69.2
65.4
66.4
62.1
66.4
70.3
69.8
73.0
78.7
83.2
84.8
86.7
86.5
87.7
88.8
91.1
92.5
94.4
100.0
101.7
103.7
105.3
103.4
107.9
107.2
110.2
106.9
108.0
107.9
107.1
105.9
106.6
106.6
107.0
107.6
107.6
108.2
107.5

..........
..........
..........
..........
..........
37.5
42.1
41.1
35.1
38.8
45.7
47.2
46.6
41.4
43.9
43.1
46.9
54.2
56.3
58.6
64.9
67.8
70.1
72.0
71.3
76.7
82.1
88.9
91.2
94.2
100.0
103.6
109.0
110.2
103.8
105.5
102.6
104.0
104.0
103.7
103.8
101.7
102.0
101.4
101.6
102.4
102.1
102.5
103.1
102.3

..........
..........
..........
..........
..........
64.4
64.6
65.2
64.0
69.2
70.5
72.6
71.9
73.2
74.2
77.0
77.9
79.4
82.3
83.5
85.3
87.5
87.7
90.4
92.1
93.8
96.3
96.9
99.3
97.3
100.0
104.4
105.5
107.3
107.4
109.4
109.6
111.3
109.0
109.1
109.9
109.4
109.3
109.9
109.8
109.2
109.5
109.4
110.0
110.3

2004: Jan ....
Feb ...
Mar ...
Apr ....
May ..
June ..
July ...
Aug ...
Sept ..
Oct p
Nov p
Dec p

87.9
90.7
91.5
90.0
90.8
92.1
93.4
93.2
94.2
94.9
94.5
97.3

96.3
99.9
100.6
96.4
97.5
98.9
100.7
100.7
104.9
106.3
104.5
110.3

95.0
95.3
95.1
96.2
96.6
96.9
97.1
97.6
96.9
97.2
97.0
97.1

91.5
94.3
94.1
95.2
96.5
96.4
99.1
96.6
97.3
98.6
98.9
99.7

266.9
272.4
276.0
278.5
285.1
288.7
292.9
295.4
298.0
300.9
303.1
306.7

370.7
381.1
385.9
392.6
401.9
406.8
411.5
415.7
418.4
421.7
429.0
436.3

115.0
116.4
115.4
115.6
114.5
113.0
113.2
115.8
114.7
117.8
117.8
118.8

125.2
127.0
125.3
125.0
123.1
121.0
120.5
124.5
123.1
127.4
126.3
126.9

49.8
50.2
50.5
50.9
50.0
49.3
47.9
47.5
47.7
47.2
47.2
47.9

92.7
93.2
93.3
94.6
95.2
95.2
96.5
95.2
95.2
95.8
95.3
96.4

87.7
87.9
88.2
87.8
87.1
87.9
87.0
86.9
88.8
87.6
87.8
88.0

106.8
107.5
108.6
110.0
110.3
110.3
110.9
111.8
110.5
112.0
111.6
111.5

102.6
103.1
102.9
104.2
105.0
104.9
105.0
104.4
103.2
104.5
104.2
104.2

110.0
110.4
110.8
110.8
112.1
111.3
111.9
111.9
111.5
111.9
112.0
112.3

1 Computers and office equipment, communications equipment, and semiconductors and related electronic components.
Note.—See footnote 1 and Note, Table B–51.
Source: Board of Governors of the Federal Reserve System.

272

TABLE B–54.—Capacity utilization rates, 1959–2004
[Percent 1; monthly data seasonally adjusted]
Manufacturing
Year or month

Total
industry 2

1959 ...............

................

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

...............
...............
...............
...............
...............
...............
...............
...............
...............
...............

................
................
................
................
................
................
................
87.0
87.3
87.3

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

...............
...............
...............
...............
...............
...............
...............
...............
...............
...............

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999

Stage-of-process
Primary
and
semifinished

Durable
goods

Nondurable
goods

Other
(nonNAICS) 2

Mining

Utilities

81.6

................

................

................

................

................

................

83.0

81.1

80.1
77.3
81.4
83.5
85.6
89.5
91.1
87.2
87.0
86.5

................
................
................
................
................
................
................
87.5
87.3
86.9

................
................
................
................
................
................
................
86.3
86.5
86.1

................
................
................
................
................
................
................
................
................
................

................
................
................
................
................
................
................
81.2
83.6
86.8

................
................
................
................
................
................
................
94.5
95.1
96.8

................
................
................
................
................
................
................
81.1
83.4
85.6

79.8
77.9
81.5
83.8
87.8
91.0
91.4
85.0
86.8
88.0

80.5
77.2
81.6
83.4
84.6
88.8
91.1
88.2
87.0
85.4

81.1
79.4
84.5
88.2
84.9
75.5
79.4
83.2
84.9
85.0

79.3
77.7
83.2
87.5
84.1
73.3
77.9
82.2
84.4
84.2

77.4
75.0
81.7
88.3
84.2
71.2
75.9
80.9
84.0
84.5

82.1
81.6
85.2
86.6
84.1
76.0
81.0
84.1
84.9
83.6

................
................
85.7
84.6
82.7
77.1
77.4
83.4
85.1
85.3

89.3
88.0
90.9
92.0
91.2
89.3
89.8
89.8
89.8
91.1

96.3
94.7
95.2
94.5
87.7
84.7
85.3
85.5
84.2
85.5

85.1
84.2
88.5
90.7
91.3
83.9
87.2
89.2
88.6
89.4

81.3
81.5
88.0
92.2
87.2
74.9
80.0
84.6
86.1
86.0

77.8
75.2
79.3
82.8
79.9
73.2
76.1
79.1
81.9
81.9

...............
...............
...............
...............
...............
...............
...............
...............
...............
...............

80.9
79.9
73.8
74.7
80.4
79.5
78.8
81.3
84.3
83.6

78.8
77.2
71.2
73.5
79.4
78.5
78.6
81.2
84.1
83.2

77.8
75.5
66.7
68.6
76.8
76.0
75.5
77.7
82.1
81.3

79.5
78.8
76.7
79.8
82.5
81.0
82.1
85.1
86.5
85.4

87.2
87.7
86.8
87.4
89.5
91.3
89.4
90.2
88.3
86.2

91.7
91.5
83.7
78.3
84.6
83.3
76.4
79.4
83.5
84.6

85.3
84.4
80.5
79.8
83.0
83.2
82.4
84.0
86.2
86.7

89.2
89.5
81.8
78.5
84.8
83.3
78.8
83.0
86.7
87.6

78.9
77.2
70.5
74.3
81.0
80.2
80.1
83.0
85.9
84.6

79.6
78.2
73.9
73.5
77.7
77.2
77.3
78.8
81.7
81.2

...............
...............
...............
...............
...............
...............
...............
...............
...............
..............

82.4
79.6
80.3
81.3
83.5
83.7
82.7
83.7
82.9
82.2

81.6
78.3
79.4
80.3
82.6
82.8
81.4
82.8
81.8
81.1

78.9
74.9
76.7
78.4
81.6
82.0
80.9
82.4
81.2
80.8

84.7
82.5
82.8
82.4
83.9
83.8
82.1
83.0
82.0
80.6

84.2
81.3
80.6
82.3
82.9
82.6
80.9
85.3
86.9
87.1

86.9
84.9
84.4
85.6
87.6
87.9
90.1
91.1
88.9
86.1

86.1
86.9
85.3
87.7
88.9
90.0
90.5
89.1
91.2
92.5

89.1
86.1
85.7
85.4
87.3
88.3
88.0
89.3
86.6
86.4

82.3
79.4
80.9
83.1
86.3
86.4
85.2
85.7
84.3
84.6

80.5
78.1
78.3
78.2
79.2
79.2
78.3
80.1
80.4
78.4

2000 ..............
2001 ..............
2002 ..............
2003 ..............
2004 p ............

82.0
76.6
75.3
75.5
78.0

80.6
74.5
73.5
73.7
76.7

80.5
71.8
70.3
70.6
74.1

79.7
76.9
77.1
76.8
78.9

87.8
83.2
80.7
82.4
86.8

90.1
89.8
85.5
86.6
86.6

92.4
88.9
87.6
84.9
85.1

87.8
85.3
83.4
84.7
85.6

84.7
78.0
77.6
77.3
79.7

77.5
73.0
71.1
71.5
74.6

2003: Jan ........
Feb .......
Mar .......
Apr .......
May ......
June ......

75.4
75.5
75.2
74.6
74.7
74.9

73.6
73.5
73.4
72.8
72.8
73.3

70.7
70.2
69.7
69.1
69.3
69.9

76.4
76.9
77.3
76.6
76.4
76.4

81.4
82.0
82.8
81.3
82.0
83.9

86.2
86.4
86.3
86.2
85.9
86.5

86.4
88.0
85.3
84.2
84.5
82.1

84.5
84.7
85.1
84.5
84.0
84.7

77.6
77.6
76.9
76.0
76.5
76.3

71.0
71.2
71.2
70.8
70.6
71.2

July .......
Aug .......
Sept ......
Oct .......
Nov ......
Dec ......

75.4
75.3
75.8
76.0
76.7
76.8

73.5
73.4
74.1
74.3
75.0
75.0

70.4
70.2
71.3
71.5
72.3
72.4

76.6
76.5
76.8
76.9
77.5
77.4

82.4
81.9
81.7
82.6
83.8
83.6

86.7
86.8
87.5
87.0
87.2
87.0

84.7
85.2
83.9
84.0
84.3
86.2

84.7
84.7
85.3
84.8
84.8
85.1

76.9
76.9
77.2
77.7
78.4
78.9

71.5
71.3
72.1
72.0
72.8
72.5

2004: Jan ........
Feb .......
Mar .......
Apr .......
May ......
June ......

76.9
77.7
77.4
77.7
78.2
77.8

75.1
75.9
75.9
76.3
76.7
76.5

72.6
73.4
73.3
73.7
74.0
73.8

77.3
77.9
78.1
78.6
79.1
79.0

83.7
86.3
86.1
86.7
87.6
86.7

87.8
87.1
87.1
87.1
86.6
86.2

86.7
87.9
84.4
84.4
86.4
84.5

85.5
85.1
85.3
85.8
85.8
85.7

79.0
79.9
79.3
79.5
80.1
79.7

72.7
73.6
73.5
74.0
74.4
74.0

July .......
Aug .......
Sept .....
Oct p .....
Nov p .....
Dec p .....

78.3
78.3
78.0
78.5
78.6
79.2

77.0
77.2
76.8
77.4
77.4
77.8

74.4
74.6
74.3
75.1
75.0
75.5

79.4
79.4
79.0
79.6
79.6
79.8

87.2
88.7
87.0
86.7
86.7
87.7

87.3
86.9
84.6
84.7
86.6
87.0

84.0
82.3
84.8
84.5
84.3
86.5

86.7
86.2
84.3
84.5
85.8
86.4

79.7
79.7
79.7
79.8
79.8
80.6

74.9
75.1
74.8
75.8
75.7
76.1

Total 2

1 Output

as percent of capacity.
2 See footnote 1 and Note, Table B–51.
Source: Board of Governors of the Federal Reserve System.

273

Crude

Finished

TABLE B–55.—New construction activity, 1964–2004
[Value put in place, billions of dollars; monthly data at seasonally adjusted annual rates]
Private construction
Year or month

Total
new
construction

Total
Total 2

New
housing
units 3

Public construction

Nonresidential buildings and other
construction

Residential
buildings 1
Total

Lodging

Total

Office

Commercial 4

Manufacturing

Federal

State
and
local

Other 5

1964
1965
1966
1967
1968
1969

.....................
.....................
.....................
.....................
.....................
.....................

75.1
81.9
85.8
87.2
96.8
104.9

54.9
60.0
61.9
61.8
69.4
77.2

30.5
30.2
28.6
28.7
34.2
37.2

24.1
23.8
21.8
21.5
26.7
29.2

24.4
29.7
33.3
33.1
35.2
39.9

............
............
............
............
............
............

..........
..........
..........
..........
..........
..........

............
............
............
............
............
............

............
............
............
............
............
............

..............
..............
..............
..............
..............
..............

20.2
21.9
23.8
25.4
27.4
27.8

3.7
3.9
3.8
3.3
3.2
3.2

16.5
18.0
20.0
22.1
24.2
24.6

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................

105.9
122.4
139.1
153.8
155.2
152.6
172.1
200.5
239.9
272.9

78.0
92.7
109.1
121.4
117.0
109.3
128.2
157.4
189.7
216.2

35.9
48.5
60.7
65.1
56.0
51.6
68.3
92.0
109.8
116.4

27.1
38.7
50.1
54.6
43.4
36.3
50.8
72.2
85.6
89.3

42.1
44.2
48.4
56.3
61.1
57.8
59.9
65.4
79.9
99.8

............
............
............
............
............
............
............
............
............
............

..........
..........
..........
..........
..........
..........
..........
..........
..........
..........

............
............
............
............
............
............
............
............
............
............

............
............
............
............
............
............
............
............
............
............

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............

27.9
29.7
30.0
32.3
38.1
43.3
44.0
43.1
50.1
56.6

3.1
3.8
4.2
4.7
5.1
6.1
6.8
7.1
8.1
8.6

24.8
25.9
25.8
27.6
33.0
37.2
37.2
36.0
42.0
48.1

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989

.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................

273.9
289.1
279.3
311.9
370.2
403.4
433.5
446.6
462.0
477.5

210.3
224.4
216.3
248.4
300.0
325.6
348.9
356.0
367.3
379.3

100.4
99.2
84.7
125.8
155.0
160.5
190.7
199.7
204.5
204.3

69.6
69.4
57.0
95.0
114.6
115.9
135.2
142.7
142.4
143.2

109.9
125.1
131.6
122.6
144.9
165.1
158.2
156.3
162.8
175.1

............
............
............
............
............
............
............
............
............
............

..........
..........
..........
..........
..........
..........
..........
..........
..........
..........

............
............
............
............
............
............
............
............
............
............

............
............
............
............
............
............
............
............
............
............

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............

63.6
64.7
63.1
63.5
70.2
77.8
84.6
90.6
94.7
98.2

9.6
10.4
10.0
10.6
11.2
12.0
12.4
14.1
12.3
12.2

54.0
54.3
53.1
52.9
59.0
65.8
72.2
76.6
82.5
86.0

1990
1991
1992
1993
1994
1995
1996
1997
1998
1999

.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................
.....................

476.8
432.6
463.7
491.0
539.2
557.8
615.9
653.4
705.7
766.1

369.3
322.5
347.8
375.1
419.0
427.9
476.6
502.7
551.4
596.3

191.1
166.3
199.4
225.1
258.6
247.4
281.1
289.0
314.6
350.6

132.1
114.6
135.1
150.9
176.4
171.4
191.1
198.1
224.0
251.3

178.2 ............ .......... ............ ............ ..............
156.2 ............ .......... ............ ............ ..............
148.4 ............ .......... ............ ............ ..............
150.0
4.6 20.0
34.4
23.4
67.7
160.4
4.7 20.4
39.6
28.8
66.9
180.5
7.1 23.0
44.1
35.4
70.9
195.5
10.9
26.5
49.4
38.1
70.6
213.7
12.9
32.8
53.1
37.6
77.3
236.8
14.8
40.4
55.7
40.5
85.4
245.8
16.0
45.1
59.4
32.6
92.8

107.5
110.1
115.8
116.0
120.2
129.9
139.3
150.7
154.3
169.7

12.1
12.8
14.4
14.4
14.4
15.8
15.3
14.1
14.3
14.0

95.4
97.3
101.5
101.5
105.8
114.2
123.9
136.6
140.0
155.7

2000
2001
2002
2003

.....................
.....................
.....................
.....................

828.2
858.3
871.3
915.7

642.6
652.5
651.7
690.0

374.5
388.3
421.9
476.1

265.0
279.4
298.8
345.9

268.2
264.2
229.8
213.9

16.3
14.5
10.5
9.9

52.4
49.7
35.3
30.4

64.1
63.6
59.2
57.7

31.8
29.5
16.4
14.2

103.6
106.8
108.4
101.6

185.5
205.8
219.6
225.7

14.2
15.1
16.6
17.6

171.4
190.7
203.1
208.2

2003: Jan .............
Feb ..............
Mar .............
Apr ..............
May .............
June ............

898.6
891.7
890.0
892.9
901.0
906.8

671.5
667.9
671.2
672.3
678.3
677.8

456.6
455.6
457.2
458.9
461.5
465.1

325.9
325.0
326.2
326.6
330.0
334.5

214.8
212.3
214.0
213.4
216.8
212.7

9.4
9.4
10.1
9.6
13.9
9.8

30.6
29.2
29.2
29.3
28.8
30.5

56.8
54.5
56.8
57.4
58.4
59.0

13.6
13.6
14.2
14.0
14.9
14.7

104.5
105.8
103.8
103.1
100.9
98.8

227.1
223.8
218.7
220.6
222.7
229.0

17.4
17.4
16.4
18.0
18.2
17.9

209.7
206.4
202.4
202.6
204.5
211.1

July .............
Aug .............
Sept ............
Oct ..............
Nov .............
Dec .............

909.4
922.0
930.8
942.2
947.7
948.9

681.1
691.7
701.2
714.1
721.1
727.0

472.5
481.0
487.6
495.6
504.2
511.3

341.5
350.2
358.2
366.4
375.6
381.7

208.6
210.8
213.6
218.6
216.9
215.7

9.4
9.6
9.6
10.0
9.4
9.3

30.1
30.2
30.5
32.5
32.1
31.5

59.0
60.4
57.9
58.1
57.0
56.7

13.9
14.3
14.8
14.9
14.4
13.6

96.1
96.3
100.8
103.0
104.0
104.6

228.4
230.2
229.5
228.0
226.6
222.0

17.6
18.2
18.1
17.6
16.8
16.3

210.8
212.0
211.5
210.4
209.8
205.7

2004: Jan .............
Feb ..............
Mar .............
Apr ..............
May .............
June ............

946.5
952.2
973.9
986.4
992.8
996.4

724.0
732.1
738.7
747.5
756.4
758.9

513.9
516.4
522.2
525.9
535.5
538.5

383.5
384.9
391.1
397.8
407.5
409.8

210.1
215.7
216.5
221.6
220.9
220.4

8.7
10.1
11.1
11.4
11.2
11.9

29.2
32.0
32.2
33.1
32.4
33.1

56.9
56.8
56.4
58.9
60.0
61.3

13.8
13.8
13.9
13.4
14.3
13.0

101.6
102.9
103.0
104.8
103.1
101.1

222.6
220.1
235.2
238.9
236.3
237.4

17.1
15.6
17.1
17.8
17.2
16.9

205.4
204.5
218.1
221.1
219.2
220.5

July .............
Aug .............
Sept ............
Oct p ............
Nov p ...........

1,005.1
1,007.9
1,013.6
1,016.9
1,013.3

767.1
777.0
782.2
781.7
777.1

543.3
552.7
557.3
556.7
554.7

411.7
419.5
418.0
417.7
415.0

223.8
224.3
224.9
225.0
222.3

12.3
12.7
13.0
13.3
13.0

32.8
32.3
31.6
31.2
30.5

63.5
63.6
63.3
62.8
62.9

14.3
14.4
14.5
14.7
14.4

100.9
101.2
102.5
103.0
101.5

238.0
231.0
231.4
235.2
236.3

17.7
17.9
17.3
17.0
17.5

220.3
213.1
214.1
218.2
218.7

1 Includes

farm residential buildings.
residential improvements, not shown separately.
single- and multi-family units.
4 Including farm.
5 Health care, educational, religious, public safety, amusement and recreation, transportation, communication, power, highway and street,
sewage and waste disposal, water supply, and conservation and development.
2 Includes
3 New

Note.—Data beginning 1993 reflect reclassification.
Source: Department of Commerce, Bureau of the Census.

274

TABLE B–56.—New private housing units started, authorized, and completed, and houses sold, 1959–
2004
[Thousands; monthly data at seasonally adjusted annual rates]
New housing units started

New housing units authorized 1

Type of structure

Type of structure

Year or month
Total

1 unit

2 to 4
units 2

5 units
or more

1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

..............................
..............................
..............................
..............................
..............................
..............................
..............................
..............................
..............................
..............................
..............................

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

1,234.0
994.7
974.3
991.4
1,012.4
970.5
963.7
778.6
843.9
899.4
810.6

283.0
257.5
338.7
471.5
590.8
108.3
86.7
61.2
71.7
80.7
85.1

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

..............................
..............................
..............................
..............................
..............................
..............................
..............................
..............................
..............................
..............................

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

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

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989

..............................
..............................
..............................
..............................
..............................
..............................
..............................
..............................
..............................
..............................

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

1990 ..............................
1991 ..............................
1992 ..............................
1993 ..............................
1994 ..............................
1995 ..............................
1996 ..............................
1997 ..............................
1998 ..............................
1999 ..............................
2000 ..............................
2001 .............................
2002 .............................
2003 .............................
2004 p ...........................
2003: Jan ......................
Feb ......................
Mar .....................
Apr ......................
May .....................
June ....................
July ......................
Aug ......................
Sept .....................
Oct ......................
Nov ......................
Dec ......................
2004: Jan ......................
Feb ......................
Mar .....................
Apr ......................
May .....................
June ....................
July ......................
Aug ......................
Sept .....................
Oct ......................
Nov p ...................
Dec p ...................

Total

1 unit

2 to 4
units

5 units
or more

New
housing
units
completed

New
houses
sold

450.0
422.5
325.1
376.1
527.3
571.2

1,208.3
998.0
1,064.2
1,186.6
1,334.7
1,285.8
1,240.6
971.9
1,141.0
1,353.4
1,322.3

938.3
746.1
722.8
716.2
750.2
720.1
709.9
563.2
650.6
694.7
624.8

77.1
64.6
67.6
87.1
118.9
100.8
84.8
61.0
73.0
84.3
85.2

192.9
187.4
273.8
383.3
465.6
464.9
445.9
347.7
417.5
574.4
612.4

................
................
................
................
................
................
................
................
................
1,319.8
1,399.0

................
................
................
................
560
565
575
461
487
490
448

84.9
120.5
141.2
118.2
68.0
64.0
85.8
121.7
125.1
122.0

535.9
780.9
906.2
795.0
381.6
204.3
289.2
414.4
462.0
429.0

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

646.8
906.1
1,033.1
882.1
643.8
675.5
893.6
1,126.1
1,182.6
981.5

88.1
132.9
148.6
117.0
64.3
63.9
93.1
121.3
130.6
125.4

616.7
885.7
1,037.2
820.5
366.2
199.8
309.5
442.7
487.3
444.8

1,418.4
1,706.1
2,003.9
2,100.5
1,728.5
1,317.2
1,377.2
1,657.1
1,867.5
1,870.8

485
656
718
634
519
549
646
819
817
709

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

109.5
91.2
80.1
113.5
121.4
93.5
84.0
65.1
58.7
55.3

330.5
287.7
319.6
522.0
543.9
576.0
542.0
408.7
348.0
317.6

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

710.4
564.3
546.4
901.5
922.4
956.6
1,077.6
1,024.4
993.8
931.7

114.5
101.8
88.3
133.6
142.6
120.1
108.4
89.3
75.7
67.0

365.7
319.4
365.8
570.1
616.8
656.6
583.5
421.1
386.1
339.8

1,501.6
1,265.7
1,005.5
1,390.3
1,652.2
1,703.3
1,756.4
1,668.8
1,529.8
1,422.8

545
436
412
623
639
688
750
671
676
650

1,192.7
1,013.9
1,199.7
1,287.6
1,457.0
1,354.1
1,476.8
1,474.0
1,616.9
1,640.9
1,568.7
1,602.7
1,704.9
1,847.7
1,953.4

894.8
840.4
1,029.9
1,125.7
1,198.4
1,076.2
1,160.9
1,133.7
1,271.4
1,302.4
1,230.9
1,273.3
1,358.6
1,499.0
1,608.4

37.6
35.6
30.9
29.4
35.2
33.8
45.3
44.5
42.6
31.9
38.7
36.6
38.5
33.5
41.4

260.4
137.9
139.0
132.6
223.5
244.1
270.8
295.8
302.9
306.6
299.1
292.8
307.9
315.2
303.7

1,110.8
948.8
1,094.9
1,199.1
1,371.6
1,332.5
1,425.6
1,441.1
1,612.3
1,663.5
1,592.3
1,636.7
1,747.7
1,889.2
2,018.2

793.9
753.5
910.7
986.5
1,068.5
997.3
1,069.5
1,062.4
1,187.6
1,246.7
1,198.1
1,235.6
1,332.6
1,460.9
1,569.2

54.3
43.1
45.8
52.3
62.2
63.7
65.8
68.5
69.2
65.8
64.9
66.0
73.7
82.5
92.3

262.6
152.1
138.4
160.2
241.0
271.5
290.3
310.3
355.5
351.1
329.3
335.2
341.4
345.8
356.6

1,308.0
1,090.8
1,157.5
1,192.7
1,346.9
1,312.6
1,412.9
1,400.5
1,474.2
1,604.9
1,573.7
1,570.8
1,648.4
1,678.7
1,844.3

534
509
610
666
670
667
757
804
886
880
877
908
973
1,086
1,183

1,856
1,657
1,728
1,637
1,748
1,850
1,893
1,835
1,922
1,983
2,054
2,067
1,934
1,895
2,000
1,963
1,979
1,817
1,985
2,018
1,905
2,065
1,807
2,004

1,534
1,325
1,396
1,363
1,393
1,505
1,536
1,494
1,537
1,644
1,670
1,657
1,565
1,521
1,624
1,615
1,654
1,520
1,661
1,685
1,549
1,662
1,483
1,678

42
31
34
32
27
28
36
32
45
29
37
29
30
30
33
36
56
25
64
67
31
41
38
35

280
301
298
242
328
317
321
309
340
310
347
381
339
344
343
312
269
272
260
266
325
362
286
291

1,816
1,866
1,754
1,798
1,846
1,871
1,892
1,964
1,943
2,015
1,920
1,979
1,913
1,913
1,975
2,006
2,097
1,945
2,066
1,969
1,998
2,018
2,028
2,032

1,421
1,369
1,361
1,387
1,394
1,465
1,483
1,518
1,526
1,558
1,504
1,546
1,488
1,516
1,551
1,544
1,610
1,546
1,586
1,556
1,559
1,557
1,549
1,567

88
79
73
85
85
76
80
83
90
82
94
77
96
78
93
99
96
83
113
82
80
93
89
100

307
418
320
326
367
330
329
363
327
375
322
356
329
319
331
363
391
316
367
331
359
368
390
365

1,648
1,678
1,615
1,664
1,732
1,658
1,681
1,579
1,697
1,731
1,709
1,736
1,714
1,729
1,782
1,944
1,928
1,865
1,876
1,914
1,777
1,833
1,730
1,946

1,001
932
1,006
1,027
1,093
1,194
1,156
1,189
1,127
1,141
1,086
1,120
1,155
1,165
1,270
1,176
1,244
1,198
1,095
1,158
1,211
1,263
1,097
1,098

1 Authorized by issuance of local building permits in: 19,000 permit-issuing places beginning 1994; 17,000 places for 1984–93; 16,000
places for 1978–83; 14,000 places for 1972–77; 13,000 places for 1967–71; 12,000 places for 1963–66; and 10,000 places prior to 1963.
2 Monthly data derived.
Note.—Data beginning 1999 for new housing units started and completed and for new houses sold are based on new estimation methods
and are not directly comparable with earlier data.
Source: Department of Commerce, Bureau of the Census.

275

TABLE B–57.—Manufacturing and trade sales and inventories, 1965–2004
[Amounts in millions of dollars; monthly data seasonally adjusted]
Year
or
month
SIC: 5

Total manufacturing and
trade
Sales 1

Inventories 2

Ratio 3

Manufacturing

Merchant
wholesalers

Sales 1

Inven3
tories 2 Ratio

Retail
trade

Sales 1

InvenInven3
14
3
tories 2 Ratio Sales
tories 2 Ratio

Retail
and food
services
sales

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 ...................
NAICS: 5
1992 ...................
1993 ...................
1994 ...................
1995 ...................
1996 ...................
1997 ...................
1998 ...................
1999 ...................
2000 ...................
2001 ...................
2002 ...................
2003 ...................

80,283
87,187
90,820
98,685
105,690
108,221
116,895
131,081
153,677
177,912
182,198
204,150
229,513
260,320
297,701
327,233
355,822
347,625
369,286
410,124
422,583
430,419
457,735
497,157
527,039
545,909
542,815
567,176

120,929
136,824
145,681
156,611
170,400
178,594
188,991
203,227
234,406
287,144
288,992
318,345
350,706
400,931
452,640
508,924
545,786
573,908
590,287
649,780
664,039
662,738
709,848
767,222
815,455
840,594
834,609
842,809

1.51
1.57
1.60
1.59
1.61
1.65
1.62
1.55
1.53
1.61
1.59
1.56
1.53
1.54
1.52
1.56
1.53
1.67
1.56
1.53
1.56
1.55
1.50
1.49
1.52
1.52
1.53
1.48

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
224,619
236,698
242,686
239,847
250,394

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
334,749
322,654
338,109
369,374
391,212
405,073
390,950
382,510

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
1.57
1.63
1.65
1.65
1.54

15,611
16,987
19,576
21,012
22,818
24,167
26,492
29,866
38,115
47,982
46,634
50,698
56,136
66,413
79,051
93,099
101,180
95,211
99,225
112,199
113,459
114,960
122,968
134,521
143,760
149,506
148,306
154,150

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
122,631
129,654
127,428
130,075
142,452
147,409
153,574
163,903
178,801
187,009
195,833
200,448
208,302

1.17
1.22
1.32
1.29
1.31
1.38
1.38
1.35
1.23
1.22
1.24
1.27
1.30
1.31
1.26
1.32
1.28
1.36
1.28
1.23
1.28
1.32
1.29
1.30
1.28
1.29
1.33
1.32

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
138,017
146,581
153,718
154,661
162,632

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
219,047
237,234
239,688
243,211
251,997

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
1.55
1.54
1.58
1.56
1.54
1.52

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............

541,227
568,073
610,669
655,227
687,472
724,126
743,702
787,531
835,194
819,061
822,013
856,998

840,242
867,378
930,681
989,067
1,008,623
1,049,527
1,081,988
1,142,277
1,200,666
1,146,151
1,163,690
1,185,477

1.53
1.50
1.47
1.48
1.46
1.42
1.44
1.41
1.41
1.44
1.40
1.37

242,002
251,708
269,843
289,973
299,766
319,558
324,984
335,991
350,715
330,875
324,313
333,260

379,183
380,102
400,335
425,217
430,816
443,804
449,231
463,646
481,396
452,236
444,188
438,584

1.57
1.51
1.44
1.44
1.43
1.37
1.39
1.35
1.35
1.42
1.37
1.33

144,302
150,833
161,133
176,227
186,649
194,541
198,319
211,631
228,630
225,123
228,524
240,442

193,056
201,184
218,119
234,268
237,186
254,763
267,689
284,396
301,618
287,913
288,990
295,435

1.31
1.31
1.29
1.30
1.28
1.27
1.32
1.30
1.29
1.32
1.25
1.21

154,923
165,533
179,693
189,028
201,058
210,027
220,399
239,910
255,849
263,063
269,177
283,295

268,003
286,092
312,227
329,582
340,621
350,960
365,068
394,235
417,652
406,002
430,512
451,458

1.67
1.68
1.66
1.72
1.67
1.64
1.62
1.59
1.59
1.58
1.56
1.56

171,875
183,537
198,496
208,496
221,299
231,530
243,119
263,733
281,385
289,667
296,965
313,057

2003: Jan ...........
Feb ............
Mar ...........
Apr ............
May ...........
June ..........
July ...........
Aug ...........
Sept ..........
Oct ............
Nov ...........
Dec ...........

841,137
834,035
846,826
835,212
834,777
847,864
861,215
861,750
866,568
872,916
881,130
890,488

1,165,801
1,172,125
1,175,129
1,176,553
1,172,888
1,172,512
1,172,316
1,166,882
1,172,959
1,176,942
1,181,672
1,185,477

1.39
1.41
1.39
1.41
1.41
1.38
1.36
1.35
1.35
1.35
1.34
1.33

329,665
325,591
330,764
322,608
323,920
328,643
337,248
331,676
337,598
339,825
341,454
348,485

444,220
446,088
445,180
445,207
444,049
442,666
440,767
439,632
438,294
438,680
438,126
438,584

1.35
1.37
1.35
1.38
1.37
1.35
1.31
1.33
1.30
1.29
1.28
1.26

235,248
235,557
237,727
233,464
232,952
236,636
238,762
239,756
241,798
246,703
248,767
251,526

288,572
289,251
290,483
290,534
289,247
288,886
289,037
288,848
290,808
292,068
292,968
295,435

1.23
1.23
1.22
1.24
1.24
1.22
1.21
1.20
1.20
1.18
1.18
1.17

276,224
272,887
278,335
279,140
277,905
282,585
285,205
290,318
287,172
286,388
290,909
290,477

433,009
436,786
439,466
440,812
439,592
440,960
442,512
438,402
443,857
446,194
450,578
451,458

1.57
1.60
1.58
1.58
1.58
1.56
1.55
1.51
1.55
1.56
1.55
1.55

304,711
301,347
307,262
308,132
307,397
312,329
315,123
320,843
317,017
317,127
321,973
321,470

2004: Jan ...........
Feb ............
Mar ...........
Apr ............
May ...........
June ..........
July ...........
Aug ...........
Sept ..........
Oct ............
Nov p .........

894,394
902,285
931,224
930,732
938,211
940,345
948,939
954,299
957,635
971,108
974,728

1,187,402
1,197,124
1,205,977
1,214,579
1,222,744
1,236,066
1,248,260
1,257,121
1,257,095
1,262,619
1,274,898

1.33
1.33
1.30
1.30
1.30
1.31
1.32
1.32
1.31
1.30
1.31

348,477
348,157
362,925
362,569
364,705
368,804
372,105
375,537
371,479
377,457
379,029

440,029
442,798
444,579
446,699
449,946
454,310
458,681
461,975
462,377
466,386
469,679

1.26
1.27
1.22
1.23
1.23
1.23
1.23
1.23
1.24
1.24
1.24

253,664
259,109
266,509
269,017
269,823
270,235
272,479
275,213
277,498
281,832
283,672

296,016
299,712
301,311
301,989
306,229
309,744
314,354
317,681
319,510
323,091
326,756

1.17
1.16
1.13
1.12
1.13
1.15
1.15
1.15
1.15
1.15
1.15

292,253
295,019
301,790
299,146
303,683
301,306
304,355
303,549
308,658
311,819
312,027

451,357
454,614
460,087
465,891
466,569
472,012
475,225
477,465
475,208
473,142
478,463

1.54
1.54
1.52
1.56
1.54
1.57
1.56
1.57
1.54
1.52
1.53

323,918
326,996
333,818
331,131
335,920
333,543
336,944
336,059
341,461
345,033
345,259

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 1965–81, ratio of December inventories to monthly
average sales for the year; and for earlier years, weighted averages. Monthly ratios are inventories at end of month to sales for month.
4 Food services included on SIC basis and excluded on NAICS basis. See last column for retail and food services sales.
5 Effective in 2001, data classified based on North American Industry Classification System (NAICS). Data on NAICS basis available beginning 1992. Earlier data based on Standard Industrial Classification (SIC).
Data include semiconductors.
Note.—Earlier data are not strictly comparable with data beginning 1967 for wholesale and retail trade.
Source: Department of Commerce, Bureau of the Census.

276

TABLE B–58.—Manufacturers’ shipments and inventories, 1965–2004
[Millions of dollars; monthly data seasonally adjusted]
Shipments 1
Year or month

SIC: 3
1965 ..................
1966 ..................
1967 ..................
1968 ..................
1969 ..................

Inventories 2
Durable goods industries

Nondurable goods industries

Durable
goods
industries

Nondurable
goods
industries

40,995
44,870
46,486
50,229
53,501

22,193
24,617
25,233
27,624
29,403

18,802
20,253
21,253
22,605
24,098

68,207
77,986
84,646
90,560
98,145

42,189
49,852
54,896
58,732
64,598

13,298
15,464
16,423
17,344
18,636

18,055
21,908
24,933
27,213
30,282

10,836
12,480
13,540
14,175
15,680

26,018
28,134
29,750
31,828
33,547

10,487
11,197
11,760
12,328
12,753

3,825
4,226
4,431
4,852
5,120

11,706
12,711
13,559
14,648
15,674

Total

Total

Total

Materials
and
supplies

Work
in
process

Finished
goods

Total

Materials
and
supplies

Work
in
process

Finished
goods

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

..................
..................
..................
..................
..................
..................
..................
..................
..................
..................

52,805
55,906
63,027
72,931
84,790
86,589
98,797
113,201
126,905
143,936

28,156
29,924
33,987
39,635
44,173
43,598
50,623
59,168
67,731
75,927

24,649
25,982
29,040
33,296
40,617
42,991
48,174
54,033
59,174
68,009

101,599
102,567
108,121
124,499
157,625
159,708
174,636
188,378
211,691
242,157

66,651
66,136
70,067
81,192
101,493
102,590
111,988
120,877
138,181
160,734

19,149
19,679
20,807
25,944
35,070
33,903
37,457
40,186
45,198
52,670

29,745
28,550
30,713
35,490
42,530
43,227
46,074
50,226
58,848
69,325

17,757
17,907
18,547
19,758
23,893
25,460
28,457
30,465
34,135
38,739

34,948
36,431
38,054
43,307
56,132
57,118
62,648
67,501
73,510
81,423

13,168
13,686
14,677
18,147
23,744
23,565
25,847
27,387
29,619
32,814

5,271
5,678
5,998
6,729
8,189
8,834
9,929
10,961
12,085
13,910

16,509
17,067
17,379
18,431
24,199
24,719
26,872
29,153
31,806
34,699

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989

..................
..................
..................
..................
..................
..................
..................
..................
..................
..................

154,391
168,129
163,351
172,547
190,682
194,538
194,657
206,326
224,619
236,698

77,419
83,727
79,212
85,481
97,940
101,279
103,238
108,128
118,458
123,158

76,972
84,402
84,139
87,066
92,742
93,259
91,419
98,198
106,161
113,540

265,215
283,413
311,852
312,379
339,516
334,749
322,654
338,109
369,374
391,212

174,788
186,443
200,444
199,854
221,330
218,193
211,997
220,799
242,468
257,513

55,173
57,998
59,136
60,325
66,031
63,904
61,331
63,562
69,611
72,435

76,945
80,998
86,707
86,899
98,251
98,162
97,000
102,393
112,958
122,251

42,670
47,447
54,601
52,630
57,048
56,127
53,666
54,844
59,899
62,827

90,427
96,970
111,408
112,525
118,186
116,556
110,657
117,310
126,906
133,699

36,606
38,165
44,039
44,816
45,692
44,106
42,335
45,319
49,396
50,674

15,884
16,194
18,612
18,691
19,328
19,442
18,124
19,270
20,559
21,653

37,937
42,611
48,757
49,018
53,166
53,008
50,198
52,721
56,951
61,372

1990 ..................
1991 ..................
1992 ..................
NAICS: 3
1992 ..................
1993 ..................
1994 ..................
1995 ..................
1996 ..................
1997 ..................
1998 ..................
1999 ..................

242,686
239,847
250,394

123,776
121,000
128,489

118,910
118,847
121,905

405,073
390,950
382,510

263,209
250,019
238,105

73,559
70,834
69,459

124,130
114,960
104,424

65,520
64,225
64,222

141,864
140,931
144,405

52,645
53,011
54,007

22,817
22,815
23,532

66,402
65,105
66,866

242,002
251,708
269,843
289,973
299,766
319,558
324,984
335,991

126,572
133,712
147,005
158,568
164,883
178,949
185,966
193,895

115,430
117,996
122,838
131,405
134,883
140,610
139,019
142,096

379,183
380,102
400,335
425,217
430,816
443,804
449,231
463,646

238,416
239,040
253,444
267,696
272,787
281,249
290,874
296,645

69,823
72,752
78,680
85,612
86,365
92,364
93,614
97,835

104,341
102,114
106,676
106,777
110,651
109,991
115,328
114,230

64,252
64,174
68,088
75,307
75,771
78,894
81,932
84,580

140,767
141,062
146,891
157,521
158,029
162,555
158,357
167,001

53,126
54,231
57,114
60,699
59,066
60,121
58,139
60,951

23,438
23,426
24,491
25,842
26,500
28,527
27,075
28,786

64,203
63,405
65,286
70,980
72,463
73,907
73,143
77,264

2000
2001
2002
2003

..................
..................
..................
..................

350,715
330,875
324,313
333,260

197,807
181,201
177,617
179,220

152,908
149,674
146,696
154,041

481,396
452,236
444,188
438,584

306,682
283,722
271,789
262,947

106,018
96,251
89,408
83,759

111,270
102,304
97,383
96,874

89,394
85,167
84,998
82,314

174,714
168,514
172,399
175,637

61,268
59,499
59,071
58,395

30,065
28,503
30,418
31,048

83,381
80,512
82,910
86,194

2003: Jan ...........
Feb ..........
Mar ..........
Apr ..........
May .........
June .........

329,665
325,591
330,764
322,608
323,920
328,643

177,331
173,992
175,475
173,512
173,783
176,782

152,334
151,599
155,289
149,096
150,137
151,861

444,220
446,088
445,180
445,207
444,049
442,666

270,964
270,765
269,454
269,285
268,449
266,154

88,916
88,703
87,948
87,443
87,129
86,243

97,287
97,432
97,009
97,851
97,810
96,243

84,761
84,630
84,497
83,991
83,510
83,668

173,256
175,323
175,726
175,922
175,600
176,512

60,248
60,758
60,258
60,741
60,539
59,786

30,606
30,994
31,422
30,859
30,596
31,166

82,402
83,571
84,046
84,322
84,465
85,560

July ..........
Aug ..........
Sept .........
Oct ..........
Nov .........
Dec .........

337,248
331,676
337,598
339,825
341,454
348,485

181,761
177,187
182,379
183,740
184,074
187,978

155,487
154,489
155,219
156,085
157,380
160,507

440,767
439,632
438,294
438,680
438,126
438,584

264,638
262,949
261,678
262,351
261,414
262,947

85,203
84,068
83,637
84,013
83,523
83,759

96,383
96,258
95,533
96,225
95,973
96,874

83,052
82,623
82,508
82,113
81,918
82,314

176,129
176,683
176,616
176,329
176,712
175,637

58,920
59,117
59,396
59,121
59,096
58,395

31,502
31,452
31,293
31,655
31,952
31,048

85,707
86,114
85,927
85,553
85,664
86,194

2004: Jan ...........
Feb ..........
Mar ..........
Apr ..........
May .........
June .........

348,477
348,157
362,925
362,569
364,705
368,804

186,115
188,798
197,139
195,512
194,389
196,708

162,362
159,359
165,786
167,057
170,316
172,096

440,029
442,798
444,579
446,699
449,946
454,310

263,276
264,550
265,607
267,206
269,308
271,849

84,039
84,796
85,836
87,216
88,046
89,017

97,424
97,768
97,578
97,849
98,078
98,974

81,813
81,986
82,193
82,141
83,184
83,858

176,753
178,248
178,972
179,493
180,638
182,461

59,050
59,771
59,728
59,838
59,767
59,917

31,517
31,690
32,087
32,299
31,467
32,126

86,186
86,787
87,157
87,356
89,404
90,418

July ..........
Aug ..........
Sept .........
Oct ..........
Nov p ........

372,105
375,537
371,479
377,457
379,029

197,698
201,398
199,341
200,030
199,799

174,407
174,139
172,138
177,427
179,230

458,681
461,975
462,377
466,386
469,679

274,834
277,119
278,013
280,101
282,291

89,972
90,650
91,382
92,714
93,555

100,638
100,591
99,816
100,605
101,757

84,224
85,878
86,815
86,782
86,979

183,847
184,856
184,364
186,285
187,388

60,702
60,760
60,568
61,142
61,131

31,675
31,647
30,975
31,465
31,519

91,470
92,449
92,821
93,678
94,738

1 Annual

data are averages of monthly not seasonally adjusted figures.
adjusted, end of period. Data beginning 1982 are not comparable with data for earlier data.
in 2001, data classified based on North American Industry Classification System (NAICS). Data on NAICS basis available beginning 1992. Earlier data based on Standard Industrial Classification (SIC).
Data include semiconductors.
Source: Department of Commerce, Bureau of the Census.
2 Seasonally
3 Effective

277

TABLE B–59.—Manufacturers’ new and unfilled orders, 1965–2004
[Amounts in millions of dollars; monthly data seasonally adjusted]
New
orders 1

Unfilled
orders 2

Durable goods
industries

Year or month
Total

Total

Capital
goods,
nondefense

Nondurable
goods
industries

Total

Unfilled orders—shipments
ratio 2

Durable
goods
industries

Nondurable
goods
industries

Total

Durable
goods
industries

Nondurable
goods
industries

SIC: 3
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 ................
NAICS: 3
1992 ................
1993 ................
1994 ................
1995 ................
1996 ................
1997 ................
1998 ................
1999 ................
2000 ................
2001 ................
2002 ................
2003 ................

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
228,270
239,572
244,507
238,805
248,212

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
122,076
126,055
125,583
119,849
126,308

..................
..................
..................
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
23,982
26,094
31,108
32,988
33,331
30,471
31,524

18,851
20,258
21,265
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
106,194
113,516
118,924
118,957
121,905

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
387,196
393,515
430,426
474,154
508,849
531,131
519,199
492,893

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
372,097
376,699
408,688
452,150
487,098
509,124
495,802
469,381

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
15,099
16,816
21,738
22,004
21,751
22,007
23,397
23,512

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
3.96
4.15
4.08
3.51

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
4.47
4.41
4.43
4.46
4.85
5.15
5.07
4.30

0.79
.75
.73
.69
.69
.76
.76
.86
.91
.62
.82
.74
.71
.81
.82
.75
.69
.62
.69
.64
.68
.70
.83
.76
.77
.76
.79
.75

................
246,668
266,641
285,542
297,282
314,986
317,345
329,770
346,789
322,944
316,744
329,167

..................
128,672
143,803
154,137
162,399
174,377
178,327
187,674
193,881
173,270
170,048
175,126

..................
40,681
45,175
51,011
54,066
60,697
62,133
64,392
69,278
58,336
53,991
57,445

..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................

................
................
................
................
................
................
................
................
................
................
................
................

450,965
425,665
434,594
447,338
488,815
513,166
496,471
505,941
550,005
517,590
485,816
506,298

................
................
................
................
................
................
................
................
................
................
................
................

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............

4.90
4.40
4.06
3.89
4.18
4.06
3.81
3.77
4.08
4.25
4.12
4.00

............
............
............
............
............
............
............
............
............
............
............
............

2003: Jan .........
Feb .........
Mar ........
Apr .........
May ........
June .......
July ........
Aug ........
Sept .......
Oct .........
Nov ........
Dec ........
2004: Jan .........
Feb .........
Mar ........
Apr .........
May ........
June .......
July ........
Aug ........
Sept .......
Oct .........
Nov p ......

322,157
320,664
325,614
317,095
318,144
324,098
330,551
329,401
333,957
341,856
338,726
344,868
341,868
345,778
363,146
359,124
360,561
364,818
370,838
369,574
369,578
372,953
377,424

169,823
169,065
170,325
167,999
168,007
172,237
175,064
174,912
178,738
185,771
181,346
184,361
179,506
186,419
197,360
192,067
190,245
192,722
196,431
195,435
197,440
195,526
198,194

55,261
53,417
54,838
55,845
55,367
57,351
58,188
57,229
60,225
61,672
57,862
60,219
58,564
60,967
64,726
63,908
62,996
63,934
69,879
65,015
67,076
64,911
69,549

..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................

................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................

483,871
484,649
485,178
485,534
485,829
487,360
485,959
490,036
492,006
500,307
503,869
506,298
506,184
510,535
517,585
521,211
524,365
527,537
533,792
535,310
540,244
542,976
548,786

................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................
................

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............

4.01
4.09
4.07
4.11
4.11
4.07
3.94
4.09
4.00
4.05
4.06
4.00
3.99
4.00
3.90
3.94
3.97
3.94
3.92
3.90
3.96
3.95
4.02

............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............

1 Annual data are averages of monthly not seasonally adjusted figures.
2 Unfilled orders are seasonally adjusted, end of period. Ratios are unfilled orders at end of period to shipments for period (excludes industries with no unfilled orders). Annual ratios relate to seasonally adjusted data for December.
3 Effective in 2001, data classified based on North American Industry Classification System (NAICS). Data on NAICS basis available beginning 1992. Earlier data based on the Standard Industrial Classification (SIC).
Data on SIC basis include semiconductors. Data on NAICS basis do not include semiconductors.

Note.—For data beginning 1992 on NAICS basis, since there are no unfilled orders for manufacturers’ nondurable goods, manufacturers’
nondurable new orders and nondurable shipments are the same (see Table B–58).
Source: Department of Commerce, Bureau of the Census.

278

PRICES
TABLE B–60.—Consumer price indexes for major expenditure classes, 1959–2004
[For all urban consumers; 1982-84=100, except as noted]

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 ...........................
1994 ...........................
1995 ...........................
1996 ...........................
1997 ...........................
1998 ...........................
1999 ...........................
2000 ...........................
2001 ...........................
2002 ...........................
2003 ...........................
2004 ...........................
2003: Jan ....................
Feb ...................
Mar ...................
Apr ...................
May ..................
June ..................
July ...................
Aug ...................
Sept ..................
Oct ....................
Nov ...................
Dec ...................
2004: Jan ....................
Feb ...................
Mar ...................
Apr ...................
May ..................
June ..................
July ...................
Aug ...................
Sept ..................
Oct ....................
Nov ...................
Dec ...................

Food and
beverages

All items
(CPI-U)

Total 1

Food

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
148.2
152.4
156.9
160.5
163.0
166.6
172.2
177.1
179.9
184.0
188.9
181.7
183.1
184.2
183.8
183.5
183.7
183.9
184.6
185.2
185.0
184.5
184.3
185.2
186.2
187.4
188.0
189.1
189.7
189.4
189.5
189.9
190.9
191.0
190.3

............
............
............
............
............
............
............
............
35.0
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
144.9
148.9
153.7
157.7
161.1
164.6
168.4
173.6
176.8
180.5
186.6
178.1
178.9
179.2
179.0
179.4
180.2
180.3
180.9
181.3
182.2
182.9
184.1
184.3
184.5
184.9
185.0
186.5
186.8
187.2
187.3
187.2
188.4
188.6
188.9

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
144.3
148.4
153.3
157.3
160.7
164.1
167.8
173.1
176.2
180.0
186.2
177.5
178.3
178.6
178.4
178.8
179.6
179.7
180.4
180.7
181.7
182.4
183.6
183.8
184.1
184.4
184.5
186.1
186.3
186.8
186.8
186.7
187.9
188.2
188.5

Apparel

45.0
45.7
46.1
46.3
46.9
47.3
47.8
49.0
51.0
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
131.9
133.7
133.4
132.0
131.7
132.9
133.0
131.3
129.6
127.3
124.0
120.9
120.4
118.1
120.6
123.6
123.9
122.5
119.5
116.2
117.2
122.0
124.8
123.1
119.0
115.8
118.6
123.5
124.3
123.4
120.1
115.9
116.5
121.2
124.1
123.0
118.8

Housing

............
............
............
............
............
............
............
............
30.8
32.0
34.0
36.4
38.0
39.4
41.2
45.8
50.7
53.8
57.4
62.4
70.1
81.1
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
144.8
148.5
152.8
156.8
160.4
163.9
169.6
176.4
180.3
184.8
189.5
182.3
183.2
184.3
184.1
184.5
185.3
185.9
186.1
185.8
185.7
185.1
185.1
186.3
187.0
187.9
188.4
188.9
190.3
190.9
191.2
191.0
191.0
190.8
190.7

Transpor- Medical Entertaintacare
ment
tion
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
120.5
123.8
126.5
130.4
134.3
139.1
143.0
144.3
141.6
144.4
153.3
154.3
152.9
157.6
163.1
155.5
158.9
161.0
159.3
157.2
156.8
156.8
158.3
159.4
157.1
155.7
154.7
157.0
158.8
160.5
161.8
165.2
165.7
164.0
162.9
162.9
166.4
167.2
164.8

1 Includes

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
211.0
220.5
228.2
234.6
242.1
250.6
260.8
272.8
285.6
297.1
310.1
292.6
293.7
294.2
294.6
295.5
296.3
297.6
298.4
299.2
299.9
300.8
302.1
303.6
306.0
307.5
308.3
309.0
310.0
311.0
311.6
312.3
313.3
314.1
314.9

............
............
............
............
............
............
............
............
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
150.1
153.9
159.1
162.5
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............

Recreation 2

Education and
communication 2

Other
goods
and
services

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
90.7
92.7
94.5
97.4
99.6
101.1
102.0
103.3
104.9
106.2
107.5
108.6
106.9
107.2
107.4
107.4
107.6
107.6
107.7
107.7
107.7
107.6
107.8
107.7
107.9
108.4
108.8
109.0
108.8
108.9
108.7
108.5
108.6
108.7
108.7
108.5

.................
.................
.................
.................
.................
.................
.................
.................
.................
.................
.................
.................
.................
.................
.................
.................
.................
.................
.................
.................
.................
.................
.................
.................
.................
.................
.................
.................
.................
.................
.................
.................
.................
.................
85.5
88.8
92.2
95.3
98.4
100.3
101.2
102.5
105.2
107.9
109.8
111.6
109.7
109.7
109.4
109.0
108.6
108.5
108.9
110.1
110.9
110.9
110.8
110.9
111.1
111.2
111.1
110.9
110.6
110.8
110.9
111.7
112.9
112.5
112.7
112.6

..............
..............
..............
..............
..............
..............
..............
..............
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
198.5
206.9
215.4
224.8
237.7
258.3
271.1
282.6
293.2
298.7
304.7
296.5
297.5
297.3
298.1
298.1
298.1
299.2
299.6
299.9
300.2
300.0
300.2
301.4
302.3
303.1
303.6
303.8
304.1
305.1
305.5
306.3
306.8
307.0
307.8

alcoholic beverages, not shown separately.
1997=100.
fuels—gas (piped), electricity, fuel oil, etc.—and motor fuel. Motor oil, coolant, etc. also included through 1982.
Note.—Data beginning 1983 incorporate a rental equivalence measure for homeowners’ costs.
Series reflect changes in composition and renaming beginning in 1998, and formula and methodology changes beginning in 1999.
Source: Department of Labor, Bureau of Labor Statistics.
2 December

3 Household

279

Energy 3

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
104.6
105.2
110.1
111.5
102.9
106.6
124.6
129.3
121.7
136.5
151.4
127.5
135.4
142.6
138.1
134.0
136.5
136.8
140.6
144.6
136.9
133.1
131.8
137.4
140.6
143.1
145.9
154.1
159.7
156.3
155.3
154.3
157.7
158.6
153.7

TABLE B–61.—Consumer price indexes for selected expenditure classes, 1959–2004
[For all urban consumers; 1982-84=100, except as noted]
Food and beverages

Housing

Food
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
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004

Total 1

Total

At
home

Shelter

Away
from
home

Total

Total 2

Fuels and utilities

Owners’
equivaRent of lent rent
primary of pri- Total 2
resimary
dence
residence 3

Fuels

Total

Fuel
oil
and
other
fuels

Gas
(piped)
and
electricity

Furnishings
and
operations

.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................

..............
..............
..............
..............
..............
..............
..............
..............
35.0
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
144.9
148.9
153.7
157.7
161.1
164.6
168.4
173.6
176.8
180.5
186.6

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
144.3
148.4
153.3
157.3
160.7
164.1
167.8
173.1
176.2
180.0
186.2

31.2
31.5
31.8
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
144.1
148.8
154.3
158.1
161.1
164.2
167.9
173.4
175.6
179.4
186.2

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
41.0
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
145.7
149.0
152.7
157.0
161.1
165.1
169.0
173.9
178.3
182.1
187.5

..............
..............
..............
..............
..............
..............
..............
..............
30.8
32.0
34.0
36.4
38.0
39.4
41.2
45.8
50.7
53.8
57.4
62.4
70.1
81.1
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
144.8
148.5
152.8
156.8
160.4
163.9
169.6
176.4
180.3
184.8
189.5

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
81.0
90.5
96.9
99.1
104.0
109.8
115.8
121.3
127.1
132.8
140.0
146.3
151.2
155.7
160.5
165.7
171.0
176.3
182.1
187.3
193.4
200.6
208.1
213.1
218.8

38.2
38.7
39.2
39.7
40.1
40.5
40.9
41.5
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
105.3
111.8
118.3
123.1
127.8
132.8
138.4
143.3
146.9
150.3
154.0
157.8
162.0
166.7
172.1
177.5
183.9
192.1
199.7
205.5
211.0

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
102.5
107.3
113.2
119.4
124.8
131.1
137.4
144.8
150.4
155.5
160.5
165.8
171.3
176.8
181.9
187.8
192.9
198.7
206.3
214.7
219.9
224.9

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
122.8
123.7
127.5
130.8
128.5
128.8
137.9
150.2
143.6
154.5
161.9

..........
..........
..........
..........
..........
..........
..........
..........
21.4
21.7
22.1
23.1
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
111.7
111.5
115.2
117.9
113.7
113.5
122.8
135.4
127.2
138.2
144.4

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
88.8
88.1
99.2
99.8
90.0
91.4
129.7
129.3
115.5
139.5
160.5

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
119.2
119.2
122.1
125.1
121.2
120.9
128.0
142.4
134.4
145.0
150.6

...............
...............
...............
...............
...............
...............
...............
...............
42.0
43.6
45.2
46.8
48.6
49.7
51.1
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
121.0
123.0
124.7
125.4
126.6
126.7
128.2
129.1
128.3
126.1
125.5

2003: Jan ...............
Feb ................
Mar ...............
Apr ................
May ...............
June ..............
July ...............
Aug ...............
Sept ..............
Oct ................
Nov ...............
Dec ...............
2004: Jan ...............
Feb ................
Mar ...............
Apr ................
May ...............
June ..............
July ...............
Aug ...............
Sept ..............
Oct ................
Nov ...............
Dec ...............

178.1
178.9
179.2
179.0
179.4
180.2
180.3
180.9
181.3
182.2
182.9
184.1
184.3
184.5
184.9
185.0
186.5
186.8
187.2
187.3
187.2
188.4
188.6
188.9

177.5
178.3
178.6
178.4
178.8
179.6
179.7
180.4
180.7
181.7
182.4
183.6
183.8
184.1
184.4
184.5
186.1
186.3
186.8
186.8
186.7
187.9
188.2
188.5

176.7
177.6
177.7
177.3
177.8
178.9
178.9
179.7
180.1
181.5
182.4
184.1
184.0
184.0
184.3
184.1
186.6
186.8
187.1
186.7
186.1
187.9
188.1
188.5

179.9
180.7
181.0
181.1
181.5
181.9
182.3
182.6
182.8
183.3
183.8
184.3
184.9
185.5
185.8
186.2
186.7
187.0
187.8
188.4
188.9
189.4
189.6
189.9

182.3
183.2
184.3
184.1
184.5
185.3
185.9
186.1
185.8
185.7
185.1
185.1
186.3
187.0
187.9
188.4
188.9
190.3
190.9
191.2
191.0
191.0
190.8
190.7

210.9
211.6
212.1
212.1
212.8
213.0
213.8
214.3
213.8
214.7
214.2
214.1
215.2
216.0
217.8
218.4
218.7
219.2
220.0
220.3
220.2
220.6
219.9
219.8

203.3
203.7
204.1
204.5
204.9
205.1
205.6
206.1
206.6
206.9
207.5
207.9
208.3
208.8
209.2
209.7
210.2
210.7
211.2
211.9
212.4
212.8
213.2
213.9

218.5
218.7
218.9
218.9
219.1
219.1
219.6
220.1
220.7
221.4
221.9
222.2
222.6
222.9
223.3
223.9
224.3
224.7
225.1
225.7
226.1
226.5
226.8
227.2

146.1
148.3
154.5
153.1
153.7
159.1
159.4
159.2
159.6
155.0
152.9
153.6
156.3
156.9
155.2
155.6
158.1
165.5
166.6
167.7
166.7
162.8
165.6
165.7

129.5
131.9
138.5
136.8
137.5
143.4
143.6
143.0
143.4
138.2
135.7
136.5
139.2
139.5
137.6
138.0
140.4
148.5
149.5
150.5
149.3
144.9
147.8
148.0

136.6
156.3
169.0
147.9
137.0
132.2
130.5
130.7
130.5
131.4
134.8
137.0
149.9
155.1
152.5
149.6
150.4
150.7
151.1
157.4
161.6
177.3
186.6
183.7

135.6
136.9
143.5
143.0
144.5
151.3
151.6
151.0
151.5
145.6
142.6
143.3
145.5
145.5
143.5
144.2
146.8
155.8
156.9
157.6
156.0
150.0
152.7
153.0

127.4
127.7
127.1
127.2
126.3
126.2
126.1
125.5
125.2
125.1
124.9
124.7
125.3
125.7
125.7
125.6
125.4
125.6
125.2
124.8
125.0
126.1
125.8
125.5

1 Includes
2 Includes

alcoholic beverages, not shown separately.
other items, not shown separately.
1982=100.

3 December

See next page for continuation of table.

280

TABLE B–61.—Consumer price indexes for selected expenditure classes, 1959–2004—Continued
[For all urban consumers; 1982-84=100, except as noted]
Transportation

Medical care

Private transportation
Year or month

Total

New vehicles
Total 2
Total 2

New
cars

Used
cars
and
trucks

Motor
fuel

Motor
vehicle
maintenance
and
repair

Public
transportation

Total

Medical
care
commodities

Medical
care
services

1959 ................................

29.8

30.8

52.3

52.2

26.8

23.7

26.0

21.5

21.5

46.8

18.7

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

................................
................................
................................
................................
................................
................................
................................
................................
................................
................................

29.8
30.1
30.8
30.9
31.4
31.9
32.3
33.3
34.3
35.7

30.6
30.8
31.4
31.6
32.0
32.5
32.9
33.8
34.8
36.0

51.6
51.6
51.4
51.1
50.9
49.8
48.9
49.3
50.7
51.5

51.5
51.5
51.3
51.0
50.9
49.7
48.8
49.3
50.7
51.5

25.0
26.0
28.4
28.7
30.0
29.8
29.0
29.9
..............
30.9

24.4
24.1
24.3
24.2
24.1
25.1
25.6
26.4
26.8
27.6

26.5
27.1
27.5
27.8
28.2
28.7
29.2
30.4
32.1
34.1

22.2
23.2
24.0
24.3
24.7
25.2
26.1
27.4
28.7
30.9

22.3
22.9
23.5
24.1
24.6
25.2
26.3
28.2
29.9
31.9

46.9
46.3
45.6
45.2
45.1
45.0
45.1
44.9
45.0
45.4

19.5
20.2
20.9
21.5
22.0
22.7
23.9
26.0
27.9
30.2

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

................................
................................
................................
................................
................................
................................
................................
................................
................................
................................

37.5
39.5
39.9
41.2
45.8
50.1
55.1
59.0
61.7
70.5

37.5
39.4
39.7
41.0
46.2
50.6
55.6
59.7
62.5
71.7

53.1
55.3
54.8
54.8
58.0
63.0
67.0
70.5
75.9
81.9

53.0
55.2
54.7
54.8
57.9
62.9
66.9
70.4
75.8
81.8

31.2
33.0
33.1
35.2
36.7
43.8
50.3
54.7
55.8
60.2

27.9
28.1
28.4
31.2
42.2
45.1
47.0
49.7
51.8
70.1

36.6
39.3
41.1
43.2
47.6
53.7
57.6
61.9
67.0
73.7

35.2
37.8
39.3
39.7
40.6
43.5
47.8
50.0
51.5
54.9

34.0
36.1
37.3
38.8
42.4
47.5
52.0
57.0
61.8
67.5

46.5
47.3
47.4
47.5
49.2
53.3
56.5
60.2
64.4
69.0

32.3
34.7
35.9
37.5
41.4
46.6
51.3
56.4
61.2
67.2

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989

................................
................................
................................
................................
................................
................................
................................
................................
................................
................................

83.1
93.2
97.0
99.3
103.7
106.4
102.3
105.4
108.7
114.1

84.2
93.8
97.1
99.3
103.6
106.2
101.2
104.2
107.6
112.9

88.5
93.9
97.5
99.9
102.6
106.1
110.6
114.4
116.5
119.2

88.4
93.7
97.4
99.9
102.8
106.1
110.6
114.6
116.9
119.2

62.3
76.9
88.8
98.7
112.5
113.7
108.8
113.1
118.0
120.4

97.4
108.5
102.8
99.4
97.9
98.7
77.1
80.2
80.9
88.5

81.5
89.2
96.0
100.3
103.8
106.8
110.3
114.8
119.7
124.9

69.0
85.6
94.9
99.5
105.7
110.5
117.0
121.1
123.3
129.5

74.9
82.9
92.5
100.6
106.8
113.5
122.0
130.1
138.6
149.3

75.4
83.7
92.3
100.2
107.5
115.2
122.8
131.0
139.9
150.8

74.8
82.8
92.6
100.7
106.7
113.2
121.9
130.0
138.3
148.9

1990
1991
1992
1993
1994
1995
1996
1997
1998
1999

................................
................................
................................
................................
................................
................................
................................
................................
................................
................................

120.5
123.8
126.5
130.4
134.3
139.1
143.0
144.3
141.6
144.4

118.8
121.9
124.6
127.5
131.4
136.3
140.0
141.0
137.9
140.5

121.4
126.0
129.2
132.7
137.6
141.0
143.7
144.3
143.4
142.9

121.0
125.3
128.4
131.5
136.0
139.0
141.4
141.7
140.7
139.6

117.6
118.1
123.2
133.9
141.7
156.5
157.0
151.1
150.6
152.0

101.2
99.4
99.0
98.0
98.5
100.0
106.3
106.2
92.2
100.7

130.1
136.0
141.3
145.9
150.2
154.0
158.4
162.7
167.1
171.9

142.6
148.9
151.4
167.0
172.0
175.9
181.9
186.7
190.3
197.7

162.8
177.0
190.1
201.4
211.0
220.5
228.2
234.6
242.1
250.6

163.4
176.8
188.1
195.0
200.7
204.5
210.4
215.3
221.8
230.7

162.7
177.1
190.5
202.9
213.4
224.2
232.4
239.1
246.8
255.1

2000
2001
2002
2003
2004

................................
................................
................................
................................
................................

153.3
154.3
152.9
157.6
163.1

149.1
150.0
148.8
153.6
159.4

142.8
142.1
140.0
137.9
137.1

139.6
138.9
137.3
134.7
133.9

155.8
158.7
152.0
142.9
133.3

129.3
124.7
116.6
135.8
160.4

177.3
183.5
190.2
195.6
200.2

209.6
210.6
207.4
209.3
209.1

260.8
272.8
285.6
297.1
310.1

238.1
247.6
256.4
262.8
269.3

266.0
278.8
292.9
306.0
321.3

2003: Jan ........................
Feb ........................
Mar ........................
Apr .........................
May ........................
June .......................
July ........................
Aug ........................
Sept .......................
Oct .........................
Nov ........................
Dec ........................

155.5
158.9
161.0
159.3
157.2
156.8
156.8
158.3
159.4
157.1
155.7
154.7

151.8
155.3
157.3
155.5
153.1
152.6
152.4
154.1
155.4
153.0
151.7
150.8

139.7
139.2
139.3
138.7
138.1
137.3
136.7
136.8
136.4
136.5
137.5
138.0

136.7
136.0
136.1
135.5
134.9
134.2
133.5
133.6
133.1
133.5
134.3
134.8

148.3
148.4
148.5
148.4
147.9
147.4
145.7
143.3
139.0
135.1
132.0
131.0

126.3
140.4
148.1
140.6
131.3
130.1
130.6
139.0
147.1
136.6
131.2
127.8

193.7
194.5
194.3
194.6
194.9
195.1
196.0
195.7
196.2
196.9
197.2
198.0

202.2
203.6
206.1
207.2
211.6
214.4
216.7
213.8
211.2
211.3
207.9
205.6

292.6
293.7
294.2
294.6
295.5
296.3
297.6
298.4
299.2
299.9
300.8
302.1

260.3
260.4
261.4
261.6
261.8
262.1
263.6
264.1
264.9
264.7
264.0
265.0

300.8
302.3
302.6
303.1
304.2
305.2
306.4
307.2
308.2
309.1
310.6
311.9

2004: Jan ........................
Feb ........................
Mar ........................
Apr .........................
May ........................
June .......................
July ........................
Aug ........................
Sept .......................
Oct .........................
Nov ........................
Dec ........................

157.0
158.8
160.5
161.8
165.2
165.7
164.0
162.9
162.9
166.4
167.2
164.8

153.2
154.9
156.6
157.9
161.5
161.9
160.0
159.1
159.4
162.9
163.6
161.3

138.0
138.3
137.9
137.6
137.4
137.2
135.9
134.9
134.9
135.9
137.9
138.8

134.7
134.8
134.6
134.3
134.4
134.2
133.0
132.0
131.9
133.0
134.9
135.5

130.8
131.0
131.2
131.3
131.8
130.6
132.1
133.8
136.5
136.8
136.7
137.3

136.7
143.1
150.5
155.9
170.5
173.3
165.2
162.0
161.2
173.1
171.9
161.2

198.2
198.2
198.5
198.6
199.0
199.7
200.3
200.8
200.7
201.7
202.9
203.3

206.3
208.1
209.9
211.5
210.7
212.3
214.4
209.7
205.3
206.5
208.6
205.4

303.6
306.0
307.5
308.3
309.0
310.0
311.0
311.6
312.3
313.3
314.1
314.9

265.5
266.7
267.3
268.5
269.1
269.6
269.9
270.0
270.9
271.7
271.2
270.8

313.8
316.6
318.4
319.2
319.8
321.0
322.3
323.1
323.7
324.8
326.0
327.3

Note.—See Note, Table B-60.
Source: Department of Labor, Bureau of Labor Statistics.

281

TABLE B–62.—Consumer price indexes for commodities, services, and special groups, 1960–2004
[For all urban consumers; 1982-84=100, except as noted]
Commodities
Year or month

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
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004

All
items
(CPI-U)

All
commodities

Commodities
less
food

Services

All
services

Special indexes

Services
less
medical
care
services

All
items
less
food

All
items
less
energy

All items

All
items All items
less
less
food
medical
and
care
energy

CPI-U- CPI-U- C-CPIRS
U
X1
(Dec. (Dec.
(Dec.
1982= 1977= 1999=
97.6) 1 100) 2 100) 3

...............................
...............................
...............................
...............................
...............................
...............................
...............................
...............................
...............................
...............................
...............................
...............................
...............................
...............................
...............................
...............................
...............................
...............................
...............................
...............................
...............................
...............................
...............................
...............................
...............................
...............................
...............................
...............................
...............................
...............................
...............................
...............................
...............................
...............................
...............................
...............................
...............................
...............................
...............................
...............................
...............................
...............................
...............................
...............................
...............................

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
148.2
152.4
156.9
160.5
163.0
166.6
172.2
177.1
179.9
184.0
188.9

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
133.8
136.4
139.9
141.8
141.9
144.4
149.2
150.7
149.7
151.2
154.7

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
127.9
129.8
132.6
133.4
132.0
134.0
139.2
138.9
136.0
136.5
138.8

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
163.1
168.7
174.1
179.4
184.2
188.8
195.3
203.4
209.8
216.5
222.8

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
158.4
163.5
168.7
173.9
178.4
182.7
188.9
196.6
202.5
208.7
214.5

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
149.0
153.1
157.5
161.1
163.4
167.0
173.0
177.8
180.5
184.7
189.4

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
154.1
158.7
163.1
167.1
170.9
174.4
178.6
183.5
187.7
190.6
194.4

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
156.5
161.2
165.6
169.5
173.4
177.0
181.3
186.1
190.5
193.2
196.6

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
144.7
148.6
152.8
156.3
158.6
162.0
167.3
171.9
174.3
178.1
182.7

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
148.2
152.4
156.9
160.5
163.0
166.6
172.2
177.1
179.9
184.0
188.9

...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
104.3
114.1
126.7
138.6
146.8
152.9
159.0
164.3
167.3
173.0
179.3
187.0
196.3
203.4
208.5
213.7
218.2
223.5
229.5
234.4
237.7
242.7
250.8
257.8
261.9
267.9
275.1

...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
102.0
104.3
105.6
107.7
110.0

2003: Jan ........................
Feb .......................
Mar .......................
Apr .......................
May ......................
June ......................
July .......................
Aug .......................
Sept ......................
Oct .......................
Nov .......................
Dec .......................
2004: Jan ........................
Feb .......................
Mar .......................
Apr .......................
May ......................
June ......................
July .......................
Aug .......................
Sept ......................
Oct .......................
Nov .......................
Dec .......................

181.7
183.1
184.2
183.8
183.5
183.7
183.9
184.6
185.2
185.0
184.5
184.3
185.2
186.2
187.4
188.0
189.1
189.7
189.4
189.5
189.9
190.9
191.0
190.3

150.0
152.0
153.1
152.2
150.9
150.4
150.0
150.9
152.0
151.4
150.9
150.4
151.1
152.3
153.7
154.3
156.0
155.8
154.5
154.2
154.9
157.1
157.2
155.8

135.8
138.3
139.8
138.6
136.5
135.5
134.9
135.9
137.3
136.1
135.0
133.8
134.7
136.3
138.0
138.9
140.6
140.3
138.2
137.7
138.8
141.4
141.4
139.3

213.1
214.0
215.1
215.1
215.9
216.8
217.6
218.0
218.1
218.4
217.9
217.9
219.1
219.9
221.0
221.5
221.9
223.3
224.1
224.5
224.5
224.5
224.6
224.6

205.5
206.4
207.4
207.5
208.2
209.1
209.8
210.3
210.3
210.5
209.9
209.9
211.0
211.7
212.7
213.2
213.6
215.0
215.8
216.2
216.1
216.0
216.1
216.0

182.4
183.9
185.2
184.7
184.3
184.5
184.6
185.3
186.0
185.6
184.9
184.4
185.5
186.6
188.0
188.6
189.6
190.3
189.9
189.9
190.4
191.4
191.5
190.6

189.0
189.7
190.2
190.2
190.3
190.3
190.5
190.8
191.0
191.7
191.6
191.5
191.9
192.7
193.7
194.1
194.3
194.4
194.5
194.7
195.2
196.0
196.0
195.8

191.8
192.5
193.0
193.1
193.2
193.0
193.2
193.5
193.6
194.3
193.9
193.6
194.0
194.9
196.1
196.5
196.5
196.6
196.6
196.8
197.4
198.2
198.1
197.8

175.9
177.3
178.4
178.0
177.7
177.9
178.0
178.7
179.2
179.1
178.5
178.2
179.1
180.1
181.3
181.8
182.9
183.5
183.2
183.2
183.6
184.6
184.7
183.9

181.7
183.1
184.2
183.8
183.5
183.7
183.9
184.6
185.2
185.0
184.5
184.3
185.2
186.2
187.4
188.0
189.1
189.7
189.4
189.5
189.9
190.9
191.0
190.3

264.5
266.6
268.2
267.6
267.2
267.5
267.8
268.8
269.6
269.4
268.7
268.4
269.7
271.2
272.9
273.8
275.4
276.3
275.8
276.0
276.6
278.0
278.2
277.1

106.4
107.2
107.9
107.7
107.5
107.6
107.7
108.0
108.3
108.2
107.8
107.6
108.1
108.7
109.4
109.7
110.1
110.4
110.3
110.3
110.6
111.1
111.1
110.7

1 CPI-U-X1 is a rental equivalence approach to homeowners’ costs for the CPI-U for years prior to 1983, the first year for which the official
index incorporates such a measure. CPI-U-X1 is rebased to the December 1982 value of the CPI-U (1982-84=100) and is identical with CPI-U
data from December 1982 forward. Data prior to 1967 estimated by moving the series at the same rate as the CPI-U for each year.
2 CPI research series using current methods (CPI-U-RS) introduced in June 1999. Data for 2004 are preliminary. All data are subject to revision annually.
3 Chained consumer price index introduced in August 2002. Data for 2003 and 2004 are subject to revision.
Note.—See Note, Table B-60.
Source: Department of Labor, Bureau of Labor Statistics.

282

TABLE B–63.—Changes in special consumer price indexes, 1960–2004
[For all urban consumers; percent change]
All items
(CPI-U)
Year or month

Dec.
to
Dec.1

All items less
food

Year
to
year

Dec.
to
Dec.1

All items less
energy

Year
to
year

Dec.
to
Dec.1

All items less food
and energy

Year
to
year

Dec.
to
Dec.1

Year
to
year

All items less
medical care
Dec.
to
Dec.1

Year
to
year

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
1994
1995
1996
1997
1998
1999

........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................

1.4
.7
1.3
1.6
1.0
1.9
3.5
3.0
4.7
6.2
5.6
3.3
3.4
8.7
12.3
6.9
4.9
6.7
9.0
13.3
12.5
8.9
3.8
3.8
3.9
3.8
1.1
4.4
4.4
4.6
6.1
3.1
2.9
2.7
2.7
2.5
3.3
1.7
1.6
2.7

1.7
1.0
1.0
1.3
1.3
1.6
2.9
3.1
4.2
5.5
5.7
4.4
3.2
6.2
11.0
9.1
5.8
6.5
7.6
11.3
13.5
10.3
6.2
3.2
4.3
3.6
1.9
3.6
4.1
4.8
5.4
4.2
3.0
3.0
2.6
2.8
3.0
2.3
1.6
2.2

1.0
1.3
1.0
1.6
1.0
1.6
3.5
3.3
5.0
5.6
6.6
3.0
2.9
5.6
12.2
7.3
6.1
6.4
8.3
14.0
13.0
9.8
4.1
4.1
3.9
4.1
.5
4.6
4.2
4.5
6.3
3.3
3.2
2.7
2.6
2.7
3.1
1.8
1.5
2.8

1.7
1.0
1.0
1.3
1.3
1.6
2.2
3.4
4.5
5.4
6.0
4.6
2.9
4.0
9.8
9.4
6.7
6.4
7.2
11.4
14.5
10.9
6.5
3.5
4.3
3.8
1.7
3.5
4.1
4.6
5.3
4.5
3.5
3.1
2.7
2.8
2.9
2.3
1.4
2.2

1.3
.7
1.3
1.9
1.3
1.9
3.4
3.2
4.9
6.5
5.4
3.4
3.5
8.2
11.7
6.6
4.8
6.7
9.1
11.1
11.7
8.5
4.2
4.5
4.4
4.0
3.8
4.1
4.7
4.6
5.2
3.9
3.0
3.1
2.6
2.9
2.9
2.1
2.4
2.0

1.7
1.0
1.3
1.3
1.6
1.6
3.1
2.7
4.4
5.8
6.1
4.2
3.3
6.2
9.8
8.9
5.6
6.4
7.8
10.0
11.6
10.0
6.7
3.6
4.7
3.9
3.9
4.1
4.4
4.7
5.2
4.6
3.2
3.2
2.7
3.0
2.8
2.5
2.3
2.0

1.0
1.3
1.3
1.6
1.2
1.5
3.3
3.8
5.1
6.2
6.6
3.1
3.0
4.7
11.1
6.7
6.1
6.5
8.5
11.3
12.2
9.5
4.5
4.8
4.7
4.3
3.8
4.2
4.7
4.4
5.2
4.4
3.3
3.2
2.6
3.0
2.6
2.2
2.4
1.9

1.3
1.3
1.3
1.3
1.6
1.2
2.4
3.6
4.6
5.8
6.3
4.7
3.0
3.6
8.3
9.1
6.5
6.3
7.4
9.8
12.4
10.4
7.4
4.0
5.0
4.3
4.0
4.1
4.4
4.5
5.0
4.9
3.7
3.3
2.8
3.0
2.7
2.4
2.3
2.1

1.3
.3
1.3
1.6
1.0
1.9
3.4
2.7
4.7
6.1
5.2
3.2
3.4
9.1
12.2
6.7
4.5
6.7
9.1
13.4
12.5
8.8
3.6
3.6
3.9
3.5
.7
4.3
4.2
4.5
5.9
2.7
2.7
2.6
2.5
2.5
3.3
1.6
1.5
2.6

1.3
1.0
1.0
1.0
1.3
1.6
3.1
2.1
4.2
5.4
5.9
4.1
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
2.5
2.7
2.8
2.3
1.5
2.1

2000
2001
2002
2003
2004

........................
........................
........................
........................
........................

3.4
1.6
2.4
1.9
3.3

3.4
2.8
1.6
2.3
2.7

3.5
1.3
2.6
1.5
3.4

3.6
2.8
1.5
2.3
2.5

2.6
2.8
1.8
1.5
2.2

2.4
2.7
2.3
1.5
2.0

2.6
2.7
1.9
1.1
2.2

2.4
2.6
2.4
1.4
1.8

3.3
1.4
2.2
1.8
3.2

3.3
2.7
1.4
2.2
2.6

Percent change from preceding month
Unadjusted
2003: Jan .................
Feb ................
Mar ................
Apr .................
May ................
June ...............
July ................
Aug ................
Sept ...............
Oct .................
Nov ................
Dec ................
2004: Jan .................
Feb ................
Mar ................
Apr .................
May ................
June ...............
July ................
Aug ................
Sept ...............
Oct .................
Nov ................
Dec ................

0.4
.8
.6
−.2
−.2
.1
.1
.4
.3
−.1
−.3
−.1
.5
.5
.6
.3
.6
.3
−.2
.1
.2
.5
.1
−.4

Seasonally
adjusted
0.3
.5
.4
−.3
−.1
.1
.2
.4
.3
−.1
−.2
.2
.5
.3
.5
.2
.6
.3
−.1
.1
.2
.6
.2
−.1

Unadjusted
0.4
.8
.7
−.3
−.2
.1
.1
.4
.4
−.2
−.4
−.3
.6
.6
.8
.3
.5
.4
−.2
0
.3
.5
.1
−.5

Seasonally
adjusted

Unadjusted

0.4
.5
.5
−.4
−.1
.1
.2
.4
.3
−.2
−.3
.1
.5
.3
.5
.3
.5
.4
−.1
0
.2
.6
.2
−.1

1 Changes from December to December are based on unadjusted indexes.
Note.—See Note, Table B-60.
Source: Department of Labor, Bureau of Labor Statistics.

283

0.2
.4
.3
0
.1
0
.1
.2
.1
.4
−.1
−.1
.2
.4
.5
.2
.1
.1
.1
.1
.3
.4
0
−.1

Seasonally
adjusted
0.1
.2
.1
.1
.2
.1
.2
.2
.1
.2
.1
.2
.2
.2
.4
.3
.3
.2
.1
.1
.3
.3
.2
.1

Unadjusted
0.2
.4
.3
.1
.1
−.1
.1
.2
.1
.4
−.2
−.2
.2
.5
.6
.2
0
.1
0
.1
.3
.4
−.1
−.2

Seasonally
adjusted
0.1
.1
.1
.1
.2
.1
.2
.1
.1
.2
0
.1
.2
.2
.4
.3
.2
.1
.1
.1
.3
.2
.2
.2

Unadjusted
0.5
.8
.6
−.2
−.2
.1
.1
.4
.3
−.1
−.3
−.2
.5
.6
.7
.3
.6
.3
−.2
0
.2
.5
.1
−.4

Seasonally
adjusted
0.3
.6
.5
−.3
−.1
.2
.1
.4
.3
−.1
−.2
.2
.4
.3
.4
.2
.7
.3
−.1
0
.2
.6
.2
−.1

TABLE B–64.—Changes in consumer price indexes for commodities and services, 1929–2004
[For all urban consumers; percent change]
All items
(CPI-U)
Year

Dec.
to
Dec.1

1929 .......................

0.6

1933 .......................

.8

Commodities

Year
to
year
0

Total
Dec.
to
Dec.1

Food

Year
to
year

Medical
care 2

Services

Dec.
to
Dec.1

Total

Year
to
year

Dec.
to
Dec. 1

Medical care

Year
to
year

Dec.
to
Dec. 1

Year
to
year

Dec.
to
Dec. 1

Energy 3

Year
to
year

Dec.
to
Dec. 1

Year
to
year

........... ...........

2.5

1.2 ........... ........... ........... ...........

........... ...........

........... ...........

−5.1 ........... ...........

6.9

−2.8 ........... ........... ........... ...........

........... ...........

........... ...........

0

−1.4

−0.7

−2.0

−2.5

−2.5

0

0

1.2

1.2

1.0

0

........... ...........

1940
1941
1942
1943
1944
1945
1946
1947
1948
1949

.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................

.7
9.9
9.0
3.0
2.3
2.2
18.1
8.8
3.0
−2.1

.7
5.0
10.9
6.1
1.7
2.3
8.3
14.4
8.1
−1.2

1.4
13.3
12.9
4.2
2.0
2.9
24.8
10.3
1.7
−4.1

.7
6.7
14.5
9.3
1.0
3.0
10.6
20.5
7.2
−2.7

2.5
15.7
17.9
3.0
0
3.5
31.3
11.3
−.8
−3.9

1.7
9.2
17.6
11.0
−1.2
2.4
14.5
21.7
8.3
−4.2

.8
2.4
2.3
2.3
2.2
.7
3.6
5.6
5.9
3.7

.8
.8
3.1
2.3
2.2
1.5
1.4
4.3
6.1
5.1

0
1.2
3.5
5.6
3.2
3.1
9.0
6.4
6.9
1.6

0
0
3.5
4.5
4.3
3.1
5.1
8.7
7.1
3.3

0
1.0
3.8
4.6
2.6
2.6
8.3
6.9
5.8
1.4

1.0
0
2.9
4.7
3.6
2.6
5.0
8.0
6.7
2.8

...........
...........
...........
...........
...........
...........
...........
...........
...........
...........

...........
...........
...........
...........
...........
...........
...........
...........
...........
...........

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959

.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................

5.9
6.0
.8
.7
−.7
.4
3.0
2.9
1.8
1.7

1.3
7.9
1.9
.8
.7
−.4
1.5
3.3
2.8
.7

7.8
5.9
−.9
−.3
−1.6
−.3
2.6
2.8
1.2
.6

.7
9.0
1.3
−.3
−.9
−.9
1.0
3.2
2.1
0

9.8
7.1
−1.0
−1.1
−1.8
−.7
2.9
2.8
2.4
−1.0

1.6
11.0
1.8
−1.4
−.4
−1.4
.7
3.2
4.5
−1.7

3.6
5.2
4.4
4.2
2.0
2.0
3.4
4.2
2.7
3.9

3.0
5.3
4.5
4.3
3.1
2.0
2.5
4.3
3.7
3.1

4.0
5.3
5.8
3.4
2.6
3.2
3.8
4.8
4.6
4.9

2.4
4.7
6.7
3.5
3.4
2.6
3.8
4.3
5.3
4.5

3.4
5.8
4.3
3.5
2.3
3.3
3.2
4.7
4.5
3.8

2.0
5.3
5.0
3.6
2.9
2.2
3.8
4.2
4.6
4.4

...........
...........
...........
...........
...........
...........
...........
...........
−0.9
4.7

...........
...........
...........
...........
...........
...........
...........
...........
0
1.9

1960
1961
1962
1963
1964
1965
1966
1967
1968
1969

.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................

1.4
.7
1.3
1.6
1.0
1.9
3.5
3.0
4.7
6.2

1.7
1.0
1.0
1.3
1.3
1.6
2.9
3.1
4.2
5.5

1.2
0
.9
1.5
.9
1.4
2.5
2.5
4.0
5.4

.9
.6
.9
.9
1.2
1.1
2.6
1.9
3.5
4.7

3.1
−.7
1.3
2.0
1.3
3.5
4.0
1.2
4.4
7.0

1.0
1.3
.7
1.6
1.3
2.2
5.0
.9
3.5
5.1

2.5
2.1
1.6
2.4
1.6
2.7
4.8
4.3
5.8
7.7

3.4
1.7
2.0
2.0
2.0
2.3
3.8
4.3
5.2
6.9

3.7
3.5
2.9
2.8
2.3
3.6
8.3
8.0
7.1
7.3

4.3
3.6
3.5
2.9
2.3
3.2
5.3
8.8
7.3
8.2

3.2
3.1
2.2
2.5
2.1
2.8
6.7
6.3
6.2
6.2

3.7
2.7
2.6
2.6
2.1
2.4
4.4
7.2
6.0
6.7

1.3
−1.3
2.2
−.9
0
1.8
1.7
1.7
1.7
2.9

2.3
.4
.4
0
−.4
1.8
1.7
2.1
1.7
2.5

1970
1971
1972
1973
1974
1975
1976
1977
1978
1979

.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................

5.6
3.3
3.4
8.7
12.3
6.9
4.9
6.7
9.0
13.3

5.7
4.4
3.2
6.2
11.0
9.1
5.8
6.5
7.6
11.3

3.9
2.8
3.4
10.4
12.8
6.2
3.3
6.1
8.8
13.0

4.5
3.6
3.0
7.4
11.9
8.8
4.3
5.8
7.2
11.3

2.3
4.3
4.6
20.3
12.0
6.6
.5
8.1
11.8
10.2

5.7
3.1
4.2
14.5
14.3
8.5
3.0
6.3
9.9
11.0

8.1
4.1
3.4
6.2
11.4
8.2
7.2
8.0
9.3
13.6

8.0
5.7
3.8
4.4
9.2
9.6
8.3
7.7
8.6
11.0

8.1
5.4
3.7
6.0
13.2
10.3
10.8
9.0
9.3
10.5

7.0
7.4
3.5
4.5
10.4
12.6
10.1
9.9
8.5
9.8

7.4
4.6
3.3
5.3
12.6
9.8
10.0
8.9
8.8
10.1

6.6
6.2
3.3
4.0
9.3
12.0
9.5
9.6
8.4
9.2

4.8
3.1
2.6
17.0
21.6
11.4
7.1
7.2
7.9
37.5

2.8
3.9
2.6
8.1
29.6
10.5
7.1
9.5
6.3
25.1

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989

.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................
.......................

12.5
8.9
3.8
3.8
3.9
3.8
1.1
4.4
4.4
4.6

13.5
10.3
6.2
3.2
4.3
3.6
1.9
3.6
4.1
4.8

11.0
6.0
3.6
2.9
2.7
2.5
−2.0
4.6
3.8
4.1

12.3
8.4
4.1
2.9
3.4
2.1
−.9
3.2
3.5
4.7

10.2
4.3
3.1
2.7
3.8
2.6
3.8
3.5
5.2
5.6

8.6
7.8
4.1
2.1
3.8
2.3
3.2
4.1
4.1
5.8

14.2
13.0
4.3
4.8
5.4
5.1
4.5
4.3
4.8
5.1

15.4
13.1
9.0
3.5
5.2
5.1
5.0
4.2
4.6
4.9

10.1
12.6
11.2
6.2
5.8
6.8
7.9
5.6
6.9
8.6

11.3
10.7
11.8
8.7
6.0
6.1
7.7
6.6
6.4
7.7

9.9
12.5
11.0
6.4
6.1
6.8
7.7
5.8
6.9
8.5

11.0
10.7
11.6
8.8
6.2
6.3
7.5
6.6
6.5
7.7

18.0
11.9
1.3
−.5
.2
1.8
−19.7
8.2
.5
5.1

30.9
13.6
1.5
.7
1.0
.7
−13.2
.5
.8
5.6

1990
1991
1992
1993
1994
1995
1996
1997
19