E C O N O M I C R E P O R T O F T H E P R E S I D E N T

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PageLIST OF TABLES1-1. Growth in GNP, Business Sector Output per Hour, andNumber of Employees for Selected Periods ........................... 412-1. Growth of Real GDP and its Components During1998 and 1999...................................................................... 532-2. The Late-Expansion Economy and the Current Expansion..... 782-3. Accounting for the Productivity Acceleration in the 1990s ..... 832-4. Accounting for Growth in Real GDP, 1960-2007................... 852-5. Administration Forecast .......................................................... 873-1. Cost of Internet Access in 1999............................................... 1113-2. Information Technology Investment per Worker in the 15Most Information Technology-Intensive Industries, 1996..... 1134-1. Share of Women Employed in Selected Occupations in1950 and 1999...................................................................... 1395-1. Contrasting American Families Then and Now....................... 1665-2. Educational Distribution of Women with Children................ 1795-3. Share of Women with Children Who Worked in PreviousYear, by Education................................................................. 1807-1. Number of Communities Adopting Unit-Based PricingResidential Solid Waste Collection Programs ........................ 262LIST OF CHARTS1-1. Growth in Income per Capita and Business SectorOutput per Hour .................................................................. 231-2. Growth in Real Compensation per Hour(Nonfarm Business Sector).................................................... 261-3. Growth in Mean Real Family Income by Quintile .................. 271-4. Real Private Investment in Equipment as a Share ofReal GDP ............................................................................. 291-5. Trade as a Share of GDP During Expansions .......................... 311-6. Contributions to Economic Growth During Expansions ........ 321-7. Federal Budget Receipts and Outlays ...................................... 331-8. Structural Federal Budget Balances During Expansions........... 331-9. Growth in Nonfarm Business Sector Output per HourDuring Expansions................................................................ 351-10. Core Inflation Rates During Expansions................................. 361-11. Capacity Utilization in Manufacturing DuringLong Expansions................................................................... 372-1. Unemployment Rate............................................................... 512-2. Inflation Rate .......................................................................... 51Contents | 17
Page2-3. Net Worth and the Personal Consumption Rate..................... 552-4. Inventory-to-Sales Ratio (Manufacturing and Trade) .............. 562-5. Federal Budget Surplus............................................................ 572-6. Growth of Real Compensation per Hour(Nonfarm Business Sector).................................................... 622-7. Capacity Utilization (Manufacturing) ..................................... 632-8. Equity Prices ........................................................................... 652-9. Yields on Treasury Securities.................................................... 662-10. Cumulative Real Returns in the Top Six BullMarkets Since 1802............................................................... 682-11. Real Stock and Bond Returns Since 1801 ............................... 692-12. Net National Saving and Net Domestic Investment................ 722-13. Gross National Saving............................................................. 732-14. Fluctuations in Output, Inflation, and Unemployment .......... 762-15. Labor Productivity (Nonfarm Business Sector) ....................... 792-16. Sources of Revisions to Real GDP Growth.............................. 822-17. The Phillips Curve, Productivity, and the NAIRU ................. 913-1. Household Adoption of Selected Technologies Since 1900 ..... 1003-2. Contribution of Computers and TelecommunicationsPurchases to GDP Growth.................................................... 1053-3. Real Private Direct Investment in CommunicationsEquipment ............................................................................ 1093-4. Households with Access to E-Mail at Home, by Income......... 1113-5. Real Net Stock of Information Technology Equipmentin the Private Sector .............................................................. 1123-6. Real Inventory-to-Sales Ratios for Selected ProductCategories ............................................................................. 1153-7. Business-to-Business E-Commerce.......................................... 1173-8. Patents Granted Since 1900........................................................ 1224-1. Composition of Employment by Major Sector Since 1900 ..... 1304-2. High School Graduation Rates of 25- to 29-Year-Oldsby Race and Ethnicity ............................................................... 1334-3. College Completion Rates of 25- to 29-Year Olds byRace and Ethnicity................................................................ 1334-4. Median Weekly Earnings of Male Workers by EducationalAttainment................................................................................. 1354-5. Ratios of Median Weekly Earnings of Male College Graduatesto Earnings of High School Graduates and Dropouts ........... 1364-6. Ratios of Median Annual Earnings of Female Workers toEarnings of Males.................................................................. 13918 | Economic Report of the President
Page 1 and 2: E C O N O M I CR E P O R TO F T H E
Page 3 and 4: C O N T E N T SPageECONOMIC REPORT
Page 5 and 6: ECONOMIC REPORT OF THE PRESIDENTTo
Page 7 and 8: my State of the Union address, I pr
Page 9 and 10: hard-pressed families—with additi
Page 11 and 12: LETTER OF TRANSMITTALCOUNCIL OF ECO
Page 13 and 14: PageSources of Business Cycle Moder
Page 15: PageHeterogeneity in Abatement Bene
Page 19 and 20: PageLIST OF BOXES2-1. The CPI-U-RS,
Page 21 and 22: These successes notwithstanding, th
Page 23 and 24: $33,740, Americans today can acquir
Page 25 and 26: those in the highest decile rose 0.
Page 27 and 28: Data on poverty also show progress.
Page 29 and 30: Over the years, government support
Page 31 and 32: asis, the current expansion also sh
Page 33 and 34: The current expansion, by contrast,
Page 35 and 36: InflationAccelerating inflation pos
Page 37 and 38: it was argued, must be shifting the
Page 39 and 40: is that the direction of technologi
Page 41 and 42: Challenges for the FutureThis chapt
Page 43 and 44: in the new labor market. The chapte
Page 45 and 46: disruptive in some cases. Finally,
Page 47 and 48: C H A P T E R 2Macroeconomic Policy
Page 49 and 50: Chapter 2 | 51
Page 51 and 52: usiness cycle has changed over the
Page 53 and 54: cent over the four quarters of 1999
Page 55 and 56: framework that continues to pay dow
Page 57 and 58: The labor force participation rate
Page 59 and 60: Box 2-1.—continuedof no substitut
Page 61 and 62: feed directly into the index. Moreo
Page 63 and 64: funds rate (the interest rate that
Page 65 and 66: nesses with below-investment-grade
Page 67 and 68:
From 1989 to 1999, corporate earnin
Page 69 and 70:
ital includes the value of intellec
Page 71 and 72:
of gross personal saving to GDP has
Page 73 and 74:
The beginnings and ends of U.S. bus
Page 75 and 76:
introduced in 1913 and Social Secur
Page 77 and 78:
Of course, it is premature to decla
Page 79 and 80:
Box 2-3.What Did We Learn from the
Page 81 and 82:
TABLE 2-3.— Accounting for the Pr
Page 83 and 84:
future extrapolates long-term trend
Page 85 and 86:
Over the past 6 years, the CPI-U-RS
Page 87 and 88:
work enables job hunters to work wh
Page 89 and 90:
Chart 2-17 shows how this could hap
Page 91 and 92:
of professional economic forecaster
Page 93 and 94:
Administration’s forecast is used
Page 95 and 96:
Innovations during the 20th century
Page 97 and 98:
transformations the Internet and e-
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Another industry that saw major cha
Page 101 and 102:
One example is the “lean” produ
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Box 3-1. Measuring the Economy in a
Page 105 and 106:
Box 3-2. Implementing Local Competi
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of fiber optic cable deployed by te
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How Information Technology IsChangi
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total investment in information tec
Page 113 and 114:
For e-retailers, the Internet repla
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suppliers for surplus quantities of
Page 117 and 118:
However, the same technology that d
Page 119 and 120:
value of each network to its users.
Page 121 and 122:
many possible uses but that depends
Page 123 and 124:
Maintaining CompetitionAnother way
Page 125 and 126:
Similarly, by reducing barriers to
Page 127 and 128:
Formal education was a far less imp
Page 129 and 130:
The Transformation of the Labor Mar
Page 131 and 132:
Americans has risen almost 10-fold
Page 133 and 134:
diploma (Chart 4-5). That same year
Page 135 and 136:
ensuring equal opportunity for all
Page 137 and 138:
those of men (again looking at full
Page 139 and 140:
Box 4-1. The Role of Government Pol
Page 141 and 142:
severe disabilities. For example, a
Page 143 and 144:
Box 4-2.—continuedOther policy in
Page 145 and 146:
equirements of jobs. To right this
Page 147 and 148:
uild and maintain a world-class ele
Page 149 and 150:
Class Size Reduction. Average class
Page 151 and 152:
During this Administration, the Fed
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years ago. In 2000, 13.1 million st
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through a period of unpaid training
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The first major mandatory training
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a 30-year low, labor force particip
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ConclusionTwo key developments—th
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TABLE 5-1.—Contrasting American F
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opened up for women to work and as
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The increased prevalence of single-
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to an increasing share of the popul
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Box 5-1.—continuedAlthough most f
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For the past 50 years, the median i
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gle mothers the median rose from $1
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TABLE 5-3.— Share of Women with C
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income growth over the last 30 year
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consumption patterns have changed,
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Increases in the Minimum WageThe mi
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Box 5-4.The National Strategy to Re
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or older, and of those 85 or older,
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of single-parent families increased
Page 191 and 192:
caregivers for the elderly say thei
Page 193 and 194:
would allow all workers who get tim
Page 195 and 196:
C H A P T E R 6Opportunity and Chal
Page 197 and 198:
Meanwhile innovations in transporta
Page 199 and 200:
But to look at U.S. trade only in t
Page 201 and 202:
Data from the U.S. computer industr
Page 203 and 204:
net indebtedness of about 18 percen
Page 205 and 206:
capital flows. Coupled with other d
Page 207 and 208:
forces to play themselves out. In t
Page 209 and 210:
The Benefits of a Global EconomyThe
Page 211 and 212:
Domestic production can expand when
Page 213 and 214:
In short, increased globalization b
Page 215 and 216:
key sectors such as finance, teleco
Page 217 and 218:
international trade is not a zero-s
Page 219 and 220:
As these data suggest, not all WTO
Page 221 and 222:
For example, preferential U.S. trad
Page 223 and 224:
By contrast, in 1998 output fell on
Page 225 and 226:
Box 6-3.The New International Finan
Page 227 and 228:
The key objective of the initiative
Page 229 and 230:
Chapter 6 | 233
Page 231 and 232:
demand for exports. It would be a m
Page 233 and 234:
integrating with the world economy
Page 235 and 236:
The past century of experience in a
Page 237 and 238:
242 | Economic Report of the Presid
Page 239 and 240:
Box 7-1.—continuedand energy pric
Page 241 and 242:
Box 7-2.—continuedproviding usefu
Page 243 and 244:
Incentive-Based Approaches to Addre
Page 245 and 246:
compliance costs may fall by less t
Page 247 and 248:
Box 7-4.—continuedroughly 5 to 15
Page 249 and 250:
so a system of multipollutant tradi
Page 251 and 252:
sulfur dioxide trading program. The
Page 253 and 254:
coastal zone. Trades can occur with
Page 255 and 256:
Permit Trading: Phasedown of Leaded
Page 257 and 258:
To address the problems associated
Page 259 and 260:
Box 7-5. Individual Quotas for Fish
Page 261 and 262:
A landmark international agreement
Page 263 and 264:
However, the country could cut ener
Page 265 and 266:
Quantitative Restrictions on Tradin
Page 267 and 268:
comprehensive domestic trading syst
Page 269 and 270:
Box 7-9.—continuedthe use of ener
Page 271 and 272:
C O N C L U S I O NA Century of Cha
Page 273 and 274:
More than 40 percent of the work fo
Page 275 and 276:
growth and are credited with helpin
Page 277 and 278:
have much to gain from continuing t
Page 279 and 280:
Appendix AREPORT TO THE PRESIDENT O
Page 281 and 282:
Council Members and Their Dates of
Page 283 and 284:
previously served as the New Centur
Page 285 and 286:
(antidumping, countervailing duties
Page 287 and 288:
with a number of developing countri
Page 289 and 290:
Michael Treadway provided editorial
Page 291:
Appendix BSTATISTICAL TABLES RELATI
Page 294 and 295:
POPULATION, EMPLOYMENT, WAGES, AND
Page 296 and 297:
AGRICULTURE:PageB-95. Farm income,
Page 298 and 299:
NATIONAL INCOME OR EXPENDITURETABLE
Page 300 and 301:
TABLE B-2.—Real gross domestic pr
Page 302 and 303:
TABLE B-3.—Quantity and price ind
Page 304 and 305:
TABLE B-5.—Contributions to perce
Page 306 and 307:
TABLE B-6.—Chain-type quantity in
Page 308 and 309:
TABLE B-7.—Chain-type price index
Page 310 and 311:
TABLE B-8.—Gross domestic product
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Year orquarterGrossdomesticproductT
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TABLE B-12.—Gross product of nonf
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TABLE B-14.—Personal consumption
Page 318 and 319:
TABLE B-16.—Private gross fixed i
Page 320 and 321:
TABLE B-18.—Government consumptio
Page 322 and 323:
TABLE B-20.—Private inventories a
Page 324 and 325:
Year orquarterTABLE B-22.—Foreign
Page 326 and 327:
TABLE B-24.—Relation of gross dom
Page 328 and 329:
Year orquarterTABLE B-26.—Nationa
Page 330 and 331:
TABLE B-27.—Sources of personal i
Page 332 and 333:
TABLE B-28.—Disposition of person
Page 334 and 335:
TABLE B-30.—Gross saving and inve
Page 336 and 337:
TABLE B-31.—Median money income (
Page 338 and 339:
TABLE B-33.—Civilian population a
Page 340 and 341:
TABLE B-34.—Civilian employment a
Page 342 and 343:
TABLE B-36.—Unemployment by demog
Page 344 and 345:
TABLE B-38.—Civilian labor force
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TABLE B-40.—Civilian unemployment
Page 348 and 349:
TABLE B-42.—Unemployment by durat
Page 350 and 351:
TABLE B-44.—Employees on nonagric
Page 352 and 353:
TABLE B-45.—Hours and earnings in
Page 354 and 355:
Year orquarterOutput per hourof all
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PRODUCTION AND BUSINESS ACTIVITYTAB
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TABLE B-51.—Industrial production
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Year or monthTABLE B-53.—New cons
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TABLE B-55.—Manufacturing and tra
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Year or monthTotalTABLE B-57.—Man
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Year ormonthTABLE B-59.—Consumer
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TABLE B-60.—Consumer price indexe
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TABLE B-62.—Changes in consumer p
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TABLE B-63.—Producer price indexe
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TABLE B-65.—Producer price indexe
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TABLE B-66.—Changes in producer p
Page 378 and 379:
TABLE B-68.—Components of money s
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TABLE B-69.—Aggregate reserves of
Page 382 and 383:
Year andmonthBills(new issues) 13-m
Page 384 and 385:
TABLE B-72.—Credit market borrowi
Page 386 and 387:
TABLE B-73.—Mortgage debt outstan
Page 388 and 389:
TABLE B-75.—Consumer credit outst
Page 390 and 391:
TABLE B-77.—Federal budget receip
Page 392 and 393:
TABLE B-79.—Federal receipts, out
Page 394 and 395:
TABLE B-81.—Federal and State and
Page 396 and 397:
TABLE B-83.—State and local gover
Page 398 and 399:
TABLE B-85.—Interest-bearing publ
Page 400 and 401:
End of monthTABLE B-87.—Estimated
Page 402 and 403:
TABLE B-89.—Corporate profits by
Page 404 and 405:
TABLE B-91.—Sales, profits, and s
Page 406 and 407:
Year or monthTABLE B-93.—Common s
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AGRICULTURETABLE B-95.—Farm incom
Page 410 and 411:
TABLE B-97.—Farm output and produ
Page 412 and 413:
Year ormonthTABLE B-99.—Indexes o
Page 414 and 415:
Year orquarterExportsINTERNATIONAL
Page 416 and 417:
TABLE B-102.—U.S. international t
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TABLE B-104.—U.S. international t
Page 420 and 421:
TABLE B-106.—Industrial productio
Page 422 and 423:
PeriodTABLE B-108.—Foreign exchan
Page 424:
TABLE B-110.—Growth rates in real
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