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November 2009, Vol. 132, No. 11
The U.S. economy to 2018: from recession to recovery
Ian D. Wyatt and Kathryn J. Byun
Ian D. Wyatt and Kathryn J. Byun are economists in the Division of Industry Employment Projections, Office of Occupational Statistics and Employment Projections, Bureau of Labor Statistics. E-mail: email@example.com and firstname.lastname@example.org
Real GDP growth is projected to average 2.4 percent annually over the next decade, near its previous 10-year trend of 2.5 percent, while productivity growth is expected to slow; an increased personal savings rate, slower growth in personal consumption expenditures, rising medical expenses, and the continuation of the trade deficit also will characterize the coming decade.
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In the summer of 2009, U.S. payroll employment continued to fall as a result of the recession that began more than a year and a half earlier in December 2007. The recession has been one of the most severe since World War II, with the unemployment rate jumping from 4.7 percent in November 2007 to 10.2 percent in October 2009. However, as with other business cycles, the Bureau of Labor Statistics (BLS) projects that the economy will return to a path of long-run growth over the next decade.
Although the recession has had a short-run impact on the economy, the BLS expects that the accompanying slowdown in the growth of both productivity and the labor force also will have an important long-run impact on the economy over the projection period. During the next decade, the massive baby-boomer generation will be leaving the labor force, moving from the prime working-age years to retirement age. As a result, the BLS projects a 0.8-percent average annual growth of the labor force from 2008 to 2018, 0.3 percentage point lower than the historical rate of 1.1 percent posted from 1998 to 2008. Productivity, as measured by output per hour, is projected to grow at 1.8 percent annually during 2008–18, lower than the exceptionally high 2.6-percent growth from 1998 to 2008, but consistent with average annual growth since 2004 and the 1.7-percent growth rate between 1988 and 1998. These levels of productivity and labor force growth contribute to BLS projections of real growth in the U.S. gross domestic product (GDP) from $11.7 trillion in 2008 to $14.7 trillion in 2018, an annual growth rate of 2.4 percent over the 2008–18 period. 1
This excerpt is from an article published in the November 2009 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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1 All figures in this article, except growth rates and dollar values, are real values using year-2000 dollars.
U.S. economy to 2016: slower growth as boomers begin to retire, The.—Nov. 2007.
U.S. economy to 2014, The.—Nov. 2005.
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