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

those in the highest decile rose 0.3 percent. The premium earned by collegegraduates over high school graduates increased from about 40 percent to 70percent. Moreover, the dispersion of earnings increased even forworkers with similar education and demographic characteristics. Finally,the poverty rate of 13.5 percent at the cyclical peak in 1990 was considerablyhigher than at the peak in 1973.The Return to Broad-Based Growth in aRecord-Breaking ExpansionThe expansion that began hesitantly in 1991 found its stride and has beensustained. It will in all likelihood have become the longest expansion in U.S.history—107 months free of recession—in February 2000. Since the beginningof 1993, payroll employment has increased by more than 20 million jobs. Boostedby higher employment and faster productivity growth, output growth has beenstrong, with GNP per capita rising at an average rate of 2.7 percent per yearbetween the first quarter of 1993 and the third quarter of 1999. Participation inthe labor force has increased to a record 67 percent of the working-age population,yet the annual unemployment rate has declined to 4.2 percent—a level notseen in 30 years. After remaining sluggish in the early years of the expansion,output per hour has accelerated, to an average annual growth rate of 2.8 percentbetween the fourth quarter of 1995 and the third quarter of 1999. In response,solid real compensation gains have been recorded (Chart 1-2).26 | Economic Report of the President