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February 1984, Vol. 107, No. 2
Employment in durable goods
anything but durable in 1979-82
The 1979-82 period was one of economic volatility, as the Nation underwent two recessions separated by a mild and brief expansionary period lasting but 1 yearthe shortest on record. The brevity of the recovery reflected the uncertainty of prevailing economic conditionsparticularly high interest rates and unrelenting inflationwhich made consumers and businesses alike hesitant to make major purchases. As a result, job growth was quite limited during this period. The effect of the 1981-82 recession on the already weakened economy was especially disruptive in the cyclically sensitive manufacturing sector.
Durable goods manufacturing industries (along with construction) have historically borne the brunt of economic reversals, because of consumers' willingness to forgo purchases of large manufactured items during recessionary periods. In an attempt to offset eroding sales and profits, employers typically cut back first on hours of work and then on jobs, with the sharpest reductions taking place among those firms whose products are relatively high priced, are of a type which customers can postpone buying, and involve significant financial outlays for production as well as for research and development (for example, autos, large appliances, and furniture). During the 1980-82 period, prospects were bleakest in the severely depressed auto and steel industries which, for most of the 20th century, have been among the pacesetters for the U.S. economy.
This excerpt is from an article published in the February 1984 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
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