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Winter 2005-06 Vol. 49, Number 4

Economic growth

The economy’s need for workers originates in the demand for the goods and services that they provide. So, in order to project employment, BLS estimates the production of final—or complete—goods and services produced in the United States for each year of the projections decade. This measure is called gross domestic product (GDP). Then, BLS estimates the size—in inflation-adjusted dollars—of the five major categories of production. The categories are the following:

  • Personal consumption expenditures. This includes the things that individuals buy, including goods (such as automobiles, clothes, and food) and services (such as education, healthcare, and rental payments).
  • Gross private domestic investment. This includes business investment in equipment and software, the construction of factories and office buildings, the construction of residential structures, and changes in business inventories.
  • Government purchases. Government purchases include goods and services bought by Federal, State, and local governments.
  • Exports. These are goods and services produced in the United States and purchased in foreign countries.
  • Imports. Imports are goods and services produced abroad and purchased in the United States. Because GDP measures production in the United States, the value of imports is subtracted from the other four categories of GDP.

Finally, BLS breaks down these major categories into more detailed ones, such as the production of medical services, automobiles, and food and beverages.

Changes in the level and composition of production will affect industry employment levels. For example, an increased level of business investment in microcomputers will increase employment in the computer industry and in all those industries, such as electronic components, that provide inputs to the computer industry. In turn, occupations that those industries employ also will grow.

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U.S. Department of Labor
Bureau of Labor Statistics

Last Updated: March 13, 2006