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February, 2001, Vol. 124, No. 2

The job market in 2000: slowing down as the year ended

Jennifer L. Martel and David S. Langdon

The Nation’s current economic expansion entered its 10th year in 2000, be-
coming the longest expansionary period on record. However, by the end of the year, signs emerged that the rate of expansion was slowing.

In the first half of the year, the Federal Reserve continued to raise interest rates as part of a policy designed to slow the economy and keep inflation in check.¹   The Federal Reserve aimed to bring the economy in for a "soft landing." Real gross domestic product (GDP) was relatively strong during the first half of the year, growing at an annual rate of 4.8 percent in the first quarter and 5.6 percent in the second quarter. By the third quarter, however, the rate of growth slowed to 2.2 percent. ²  The deceleration in real GDP primarily reflected downturns in inventory investment and in Federal Government spending, and a deceleration in nonresidential fixed investment.³ 

Nonfarm payroll employment continued to grow in 2000, at an average over-the-year rate of 2.3 percent in first half of the year, 2.0 percent in the third quarter, and 1.6 percent in the fourth quarter. Most of the job growth in 2000 occurred in the service-producing industries. Mining employment also increased, in response to rising oil prices. Employment in construction slowed over the year, affected by the rise in interest rates. Manufacturing employment fell overall, although some industries related to information technology saw their payrolls increase. (See table 1.)

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Footnotes
1 See the statements from the February, March, and May 2000 Federal Open Market Committee meetings, available on the Internet at http://www.federalreserve.gov/fomc (last accessed December 2000).
2 At the time this article was written, fourth-quarter GDP data were not yet available.
3 Gross Domestic Product: Third Quarter 2000 (Final), Bureau of Economic Analysis, December 21, 2000. http://www.bea.doc.gov/bea/newsrel/gdp300f.htm (last accessed in January 2001).