Strong job growth continues, unemployment declines in 1997 (EXCERPT), Monthly Labor Review Online, Feb. 1998

Strong job growth continues, unemployment declines in 1997

Randy E. Ilg and Angela Clinton

The labor market continued to improve in 1997 as job growth accelerated from the previous year and unemployment declined. Total nonfarm payroll employment increased by more than 3 million workers and the unemployment rate fell to 4.7 percent in the fourth quarter of 1997, the lowest level in nearly 28 years. During this sixth year of job market expansion, earnings growth accelerated and real average hourly earnings of private production or nonsupervisory workers posted their largest increases in 21 years.
This article summarizes labor market developments for 1997 and describes the economic context in which these developments occurred. Unless otherwise noted, the data presented are quarterly averages, and 1997 changes represent the difference between the fourth quarters of 1996 and 1997.
Overview
The U.S. economy expanded at a solid pace in 1997. The gross domestic product, or GDP, adjusted for inflation grew by 3.8 percent over the year, much faster than in 1996. (See table 1.) Almost every sector of the economy showed improvement in 1997. For most of the year, consumers reacted to a strong job market and rising personal incomes by increasing their expenditures on goods and services. The consumer confidence index advanced by nearly 17 percent to record levels by yearend. Consumers also benefited from modest price increases; in 1997, the Consumer Price Index for All Urban Consumers (CPI-U) rose by just 1.9 percent, a very small advance by historical standards. The housing market also continued to show strength in 1997, although the pace of new home sales slowed somewhat from 1996.

This excerpt is from an article published in the February 1998 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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