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August 1985, Vol. 108, No. 8
Employment rose in the first half of 1985
as the recovery entered its third year
Employment continued to increase in the first half of 1985, but, as is typical in later stages of recoveries, the pace of job growth slackened. Two and one-half years after the 1981-82 recession trough, total employment was up by 7.6 million or 7.7 percent. This gain was substantially greater than the 6.1-percent average in the first 2½ years of recovery from earlier postwar recessions.1 Nonfarm payroll employment rose by an even larger amount 8.6 million over the recovery period. (See note on survey differences in box.) The service-production sector and construction accounted for all the growth in nonfarm payroll employment in the first half of 1985. In contrast, after showing strong job gains in the first year and a half of recovery, manufacturing employment slowed and then declined during the first half of 1985. The unemployment rate, which fell sharply throughout 1983 and most of 1984, has shown little movement since last fall.
This article summarizes employment and unemployment developments in the first half of 1985 and compares the performance of key labor market indicators in the ninth and tenth quarters of this recovery with similar periods in earlier postwar recoveries. Changes during the first half of 1985 refer to movements in seasonally adjusted data from the fourth quarter of 1984 to the second quarter of 1985.
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1 The National Bureau of Economic Research designates business cycle peaks and troughs. Two of the eight postwar recoveries did not last for 10 quarters (those following the 1958 and 1980 recessions) and therefore are excluded from the analysis in this article.
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