President

Box 1-2 — continued2006 as shown in the chart. Countries showing the largest increases in oilconsumption tended to be those showing the largest growth rates duringthe past 4 years. In addition, U.S. exports grew rapidly to those countriesthat have recently signed and implemented free trade agreements withthe United States (as discussed in Chapter 3).An increase in real output growth among our trading partners of about1 percent can be expected to increase our exports by about 1 percent aswell. The cumulative 9 percent higher growth among our trading partners(2.1 percent for each of 4 years) could thus have generated as muchas $120 billion per year of exports. In comparison, the $40-per-barrel oilprice increase added about $150 billion per year to the Nation’s bill foroil imports (at 3.7 billion barrels of oil per year).The current account deficit (the excess of imports and income flowsto foreigners over exports and foreign income of Americans) averaged5.5 percent of GDP during the first three quarters of 2007, down fromits 2006 average of over 6 percent. The decline in the current accountdeficit reflects strong export growth and moderate import growth, althoughdomestic investment continues to exceed domestic saving, with foreignersfinancing the gap between the two.EmploymentNonfarm payroll employment increased by 1.14 million jobs during 2007,an average pace of about 95,000 jobs per month. The unemployment raterose slightly over the same period, ticking up 0.6 percentage point to 5.0percent. The average unemployment rate in 2007 was 4.6 percent, equal tothe 2006 average. Both the 2007 average and the December 2007 level ofthe unemployment rate were below the prevailing rates in each of the threedecades of the 1970s, 1980s, and 1990s.The service-providing sector accounted for all of the year’s job gains, asconstruction employment fell due to continued weakness in the housingmarket and manufacturing employment continued its downtrend for thetenth consecutive year. (Despite the job losses, manufacturing outputcontinues to increase because of rapid productivity growth.) Employment inmining (which includes oil drilling) rose 5.5 percent during 2007. The goodsproducingsector has accounted for a diminishing share of total employmentin each of the past five decades. Education and health services (whichconstituted 13 percent of employment at the end of 2007) added the largestnumber of jobs, accounting for 47 percent of total job growth.Chapter 1 | 37