Economic Report of the President

slowly at the start of the expansion (Chart 2-5). An increase in the rate of growthof exports during the last year has moved their behavior closer to that of the1990s expansion. The decline in exports during the most recent recession wasparticularly large relative to previous ones, as economic growth among majorU.S. trading partners slowed more than in most past business cycles; in contrast,exports continued to rise during the 1990-1991 recession. Thus both recentrecessions and expansions show anomalous behavior, though in different ways.Labor MarketThe behavior of the labor market was unusual in the most recent recessionand the last two expansions. Before 1990, on average, payroll employmentstarted to decline about three quarters before a business cycle trough—that is,employment on average has continued to rise in the early part of recessions(Chart 2-6). In an average expansion, employment begins to grow at the start ofthe expansion and reaches its previous peak three quarters after the trough. Inthe expansion of the 1990s, however, employment continued to fall for twoquarters after the business cycle trough and did not reach its previous peak valueuntil another six quarters had passed. In the most recent expansion, employmentcontinued to fall for seven quarters after the recession had ended and appears tobe on track to reach its prerecession level by early 2005. Though both of the54 | Economic Report of the President