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Employment Growth in the Current Economic Expansion, August 27, 2003 1 (August 27, 2003)

handle is hein.tera/crser0076 and id is 1 raw text is: Order Code RS21602 August 27, 2003 CRS Report for Congress Received through the CRS Web Employment Growth in the Current Economic Expansion Brian W. Cashell Specialist in Quantitative Economics Government and Finance Division Summary Although real gross domestic product (GDP) surpassed its previous peak in the fourth quarter of 2001, total employment still had not regained its previous peak as of July 2003. For that reason, the economy is said by some to be experiencing a jobless recovery. It is not unusual for the production of goods and services to increase ahead of employment in the early stages of an economic expansion. But in the case of the current expansion, the lag is longer than usual. One explanation for the longer lag hinges on the relationship between employment and productivity growth. The increase in productivity growth may have temporarily reduced the unemployment rate below the rate at which inflation might be expected to accelerate. If that is true, and if that rate has since rebounded, then it is unlikely that the current expansion will be able to sustain the combination of low unemployment and inflation that characterized the latter stages of the 1990s economic expansion. This report will be updated as economic events warrant. The current economic expansion, which began in November 2001 , has been one of relatively sluggish employment growth. Although real gross domestic product (GDP) surpassed its previous peak in the fourth quarter of 2001, total employment still had not regained its previous peak as of July 2003. For that reason, the economy is said by some to be experiencing a 'jobless recovery, not unlike the beginning of the economic expansion of the 1990s.2 The dates of business cycle turning points (i.e., the ends of economic expansions and contractions) are determined by the business cycle dating committee of the National Bureau of Economic Research. 2 For a more detailed comparison of the current expansion with past experience and an examination of the outlook for the labor market, see: CRS Report RL32047, The 'Jobless Recovery' From the 2001 Recession. A Comparison to Earlier Recoveries and Possible Explanations, by Marc Labonte and Linda Levine. Congressional Research Service ** The Library of Congress

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