Economic Report of the President

and construction helped to reduce the adult male unemployment ratebelow that of adult females.Unemployment duration lengthened significantly in 1980. In thelast quarter of 1979, before the recession began, 48 percent of theunemployed had been looking for work for less than 5 weeks, andonly 8.5 percent, or 524,000 people, had been without jobs for 27weeks or more. By the last quarter of 1980 about 1.1 million people,or 14 percent of the unemployed, had been looking for work for 27weeks or more. Many of these workers were eligible for up to 39weeks of unemployment compensation, with additional benefits iftheir job loss was due to foreign competition or if their firms orunions provided supplemental unemployment benefits.During the 4 years of economic expansion from 1976 to 1979 thecivilian labor force grew at an average annual rate of 2.8 percent.The rise in unemployment during 1980 dampened this growth to 1.3percent. After increasing by about 1 percentage point per yearduring the last half of the 1970s, the female labor force participationrate grew by about one-half, rising to 51.6 percent in 1980. The malelabor force participation rate of 77.4 percent was down slightly overthe year.PRICE DEVELOPMENTSInflation dominated the economic news in 1980 as it did in 1979.The implicit price deflator for GNP rose 10.0 percent over the 4quarters of 1980, substantially faster than the 8.1 percent rate of increasein the deflator during 1979 (Table 18). The producer priceindex for finished goods increased 11.7 percent from December 1979to December 1980, following a 12.6 percent rise during the preceding12 months. For the 12 months ending in November 1980, theCPI increased 12.6 percent, the same as over the correspondingperiod in 1979. These measures all reflected energy pricesurges early in the year and farm price increases late in the year. Themost disappointing news, however, was the acceleration in variousprice measures which exclude the direct effects of such special factorsas energy and food. As explained in Chapter 1, such measures areoften used as a proxy for the "underlying" rate of inflation. After remainingsurprisingly stable during most of 1979 in the face of verylarge oil-price increases, these measures showed significant increasesin 1980.The spring decline in aggregate demand brought rapid changes inthe prices of certain sensitive industrial commodities. Sharp decreaseswere registered by producer prices of nonferrous metals aswell as lumber and wood products. These price reductions had animportant—if temporary—moderating influence on producer pricemeasures. Excluding food and energy, producer prices of crude ma-148