Academic journal article Monthly Labor Review

Labor Market Completes Sixth Year of Expansion in 1988

Academic journal article Monthly Labor Review

Labor Market Completes Sixth Year of Expansion in 1988

Article excerpt

Both civilian and nonagricultural employment continued to rise; the 5.3-percent unemployment rate in the fourth quarter was the lowest since the second quarter of 1974

Wayne J. Howe and William Parks II are economists in the Office of Employment and Unemployment Statistics, Bureau of Labor Statistics. The authors are grateful to James Markey, Diane Herz, and

Thomas Nardone for their assistance in gathering data for the articl >;e.

Labor market performance by most measures remained healthy in 1988, as employment gains continued and the civilian unemployment rate fell to a 14-year low. The economy completed its sixth year of expansion, the second longest period of sustained growth since World War II and the longest peacetime expansion.

Following are highlights of employment and unemployment developments in 1988:

* Employment growth continued during the year, as measured by both the Current Employment

Statistics survey (CES >;)- a survey of more than 300,000 business establishments-and the Current

Population Survey (CPS) -a survey of nearly 56,000 households. The establishment survey showed an increase of 3.7 million persons, or 3.5 percent, while the household survey showed an increase of 2.4 million persons, or 2.1 percent. (See box on page 4.)

* The goods-producing sector showed significant job gains for the second straight year. Within that sector, both construction and manufacturing registered over-the-year increases. >; The service-producing sector continued to grow at a rapid pace, with services and wholesale trade increasing the fastest.

* After declining early in 1988, the civilian worker unemployment rate fluctuated around 5.5 percent for much of the year before edging to 5.3 percent in the fourth quarter. The rate was then six-tenths of a percentage point below that of a year earlier and at its lowest mark since the second quarter of 1974. All major age and sex groups benefited from the unemployment decline.

>;* All three major racial and ethnic groups shared in 1988's job market improvements. Each group recorded a drop in its unemployment rate, and employment growth, particularly strong for Hispanics, continued.

* The number of persons working part time for economic reasons declined in 1988, but their proportion of total employment still remained above what it was prior to the recessions early in the decade. The number of discouraged workers showed little change over the year.

Industry developments

No >;nagricultural payroll employment, as measured by the Bureau of Labor Statistics' business establishment survey, continued to show a healthy employment gain throughout 1988. At 107.3 million in the fourth quarter of 1988, nonfarm employment increased by about 3.7 million over the year. (See table 1.) (All over-the-year comparisons are made using fourth-quarter averages, unless otherwise noted.) This marks the second straight year in which nonfarm job growth exceeded 3 million.

As has typically been the >;case, employment rose at a faster rate in the service-producing sector than it did in the goods-producing sector, accounting for 4 of 5 of the net job gains during 1988. Services and wholesale trade had the fastest rates of employment growth in this sector. (See chart 1.) In addition, following declines in 1985 and 1986, the goods-producing sector showed a significant job gain for the second straight year. Both construction and manufacturing continued to expand, while the number of mining jobs declined. >;

The service-producing sector continued to add jobs at about the same rapid pace that has prevailed throughout the 6-year expansion, with employment in the sector increasing by 2.9 million, or 3.7 percent. The services division recorded the largest over-the-year employment gain, adding 1.3 million jobs, or almost 4 of every 10 additional jobs. …

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