Employment up, unemployment stable in the first half of 1986, (EXCERPT), Monthly Labor Review Online, August 1986

Employment up, unemployment
stable in the first half of 1986

Susan E. Shank

Employment rose at a steady, though unspectacular, pace in the first 6 months of 1986. However, as the economy moved into the fourth year of recovery following the 1981-82 recession, the number of unemployed persons and the unemployment rate were little changed. Civilian employment increases slowed during 1985 and the first half of 1986 from the very robust gains evident in the 2 years immediately after the recession trough. Similarly, the civilian jobless rate, which had dropped sharply during the first 2 years of the recovery, declined only moderately in 1985 and then leveled off at about 7 percent in early 1986.

Job gain during the first half of 1986 took place entirely in the service-producing sector and construction. In contrast, manufacturing employment declined, and the number of mining jobs dropped precipitously—due mainly to the steep fall in oil prices and the consequent layoffs in oil and gas extraction. Most of these developments represented a continuation of the patterns evident during 1985 and reflected both the long-term trend toward the service-producing sector and cyclical developments. The weakness in the goods-producing sector has been especially pronounced in the 1980's, as employment has declined in absolute numbers, augmenting the longer-term decline in relative terms. This sector failed to regain all the jobs lost during the 1980-82 recessions, and its second quarter 1986 employment level (25 million) was about 1.7 million below the July 1979 all-time high.¹

This article summarizes labor market developments in the first half of 1986 and compares them to earlier periods in the current economic expansion, as well as to long-term trends. The data are from two sources: household interviews and employer reports.² Changes during the first half of 1986 refer to movements in seasonally adjusted data from the fourth quarter of 1985 to the second quarter of 1986. References to the last 3½ years cover the period from fourth quarter 1982 to second quarter 1986, and the last 1½ years pertain to 1985 and the first half of 1986.

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Footnotes

1 Business cycle peaks and troughs are designated by the National Bureau of Economic Research. The three most recent recessions extended from the following peak-to-trough dates: November 1973 to March 1975, January 1980 to July 1980, and July 1981 to November 1982.

2 The Current Population Survey (household survey) is a monthly sample survey of about 59,500 households and provides information on the labor force, employment, and unemployment by demographic and economic characteristics. The Current Employment Statistics program (establishment survey) is a monthly survey of more than 250,000 nonagricultural establishments and provides information on the number of persons on business payrolls.

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