Economic Report President

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The Administration is especially concerned about those whosecareers are interrupted by corporate restructuring, changes in governmentpolicies, or turbulence in global markets. The Administration haspushed to expand assistance programs for these dislocated workers,helping to nearly triple funding for these programs to $1.4 billionbetween 1993 and 1999. Under the <strong>Economic</strong> Dislocation and WorkerAdjustment Assistance Act (EDWAA), one of the funding streams consolidatedunder the WIA, the Administration provides grants to Stateand local programs. They in turn decide who most needs assistanceand how best to provide services, which can include on-site rapidresponse for announced plant closings, job search counseling and support,literacy courses, vocational education, and financial assistanceduring training. In addition, the Trade Adjustment Assistance (TAA)program, including a special transitional adjustment assistance provisionunder the legislation implementing the North American FreeTrade Agreement (NAFTA-TAA), continues to help those workerswhose jobs may be affected by competition from imports.Workers are considered dislocated if they have lost their jobs and areunlikely to return to their previous industries or occupations. Includedare those who have lost their jobs as a result of massive layoffs, plantclosure, natural disaster, or Federal action. Farmers and ranchershurt by general economic conditions, as well as the long-term unemployedwith limited opportunities in their original occupations, mayalso qualify. (Note that the definition of “dislocated” is more narrowthan that of “displaced” workers, discussed above.) In program year1998, over 600,000 of these dislocated workers will have participatedin the EDWAA program. In the program year that ended in June 1997,71 percent of dislocated workers leaving the program were employedand had earnings, on average, of $10.39 per hour, or 94 percent of theirprevious wages. The Administration’s strong and continued support forthis program has also generated new funding for assisting tradeimpactedworkers not formerly covered by TAA or NAFTA-TAA and forbuttressing the training system with innovative approaches for targetedgroups.The lifetime learning tax credit, enacted in 1997, targets adults whowant to go back to school, change careers, or take a course or two toupgrade their skills, as well as college juniors and seniors and graduateand professional degree students. The 20 percent credit applies tothe first $5,000 of a family’s qualified education expenses through2002, and to the first $10,000 thereafter.Information about job openings and potential workers is especiallyimportant in a rapidly changing economy. America’s Labor Market InformationSystem, an Internet-based system that shares data on availablejobs (America’s Job Bank) and workers (America’s Talent Bank), hasbeen designed to meet this need. America’s Job Bank (located on theWorld Wide Web at http://www.ajb.dni.us/) posts roughly 700,000 jobs on128
any given day and received over 6 million “hits” (individual job searches)in July 1998 alone. America’s Talent Bank (http://www.atb.org) was fullyintegrated with the job bank in May 1998, and as of July a total of112,000 résumés had been posted with the service. In addition, workersand employers can obtain information about the wages and employmentprospects of certain occupations across the country using America’sCareer InfoNet (http://www.acinet.org/acinet/).These policies help ensure that all workers can find employment followinga job loss, or improve their training and skills in order to moveup in the labor market. This Administration is committed to makingsure that the labor market benefits all workers, and that the benefitsof the current economic expansion are enjoyed by all.129
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EconomicReportof thePresidentTransm
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C O N T E N T SPageECONOMIC REPORT
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ECONOMIC REPORT OF THE PRESIDENTTo
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Once we have saved Social Security,
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THE ANNUAL REPORTOF THECOUNCIL OF E
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C O N T E N T SPageCHAPTER 1. MEETI
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PageCHAPTER 5. REGULATION AND INNOV
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Page2-3. Accounting for Growth in R
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Page6-5. Terms of Trade ...........
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CHAPTER 1Meeting Challenges and Bui
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Box 1-1.—The Dating of Business C
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Chart 1-1 Core Inflation and Unempl
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expansion prematurely. In fact, the
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the duration of the typical unemplo
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throughout that decade of peace and
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all individuals aged 65 and older r
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extent that it would reduce Social
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the vulnerability of the internatio
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access. Even so, international agre
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eliminated entirely, because the go
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Nevertheless, adjustment assistance
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CHAPTER 2Macroeconomic Policyand Pe
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Then the chapter explores two other
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target Federal funds rate brought t
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high of 66.8 percent in the third q
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the third-quarter deceleration and
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(that is, excluding food and energy
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probably would have increased by ab
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Equities clearly involve risk as we
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highest level in at least 40 years
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attributed to the lesser liquidity
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971231 980106 980112 980116 980122
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about the potential impact of large
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With respect to leverage, the degre
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noted earlier, investment-grade bor
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Chart 2-8 Corporate Profits and Net
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is attributable to the strong econo
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productivity; the latter is in turn
Page 77 and 78: the year 2000, mistaking it instead
Page 79: Box 2-2.—continuedare not expecte
Page 82 and 83: construct an accurate forecasting m
Page 84 and 85: is estimated as the location where
Page 86 and 87: the recent surge in productivity re
Page 88 and 89: Box 2-3.—continuedhowever. Import
Page 90 and 91: Chart 2-12 Three Measures of Core I
Page 92 and 93: a level of capacity utilization tha
Page 94 and 95: Box 2-4.—continuedChanges to be i
Page 96 and 97: Nonfarm manufacturing and trade inv
Page 98 and 99: has been for the past 3 years. But
Page 100 and 101: who have traditionally not fared as
Page 102 and 103: Box 3-1.—continuedas well as full
Page 104 and 105: and been replaced by younger, more
Page 106 and 107: Particularly interesting, however,
Page 108 and 109: Chart 3-5 Median Hourly Wages of Me
Page 110 and 111: In fact, in 1990 immigrants and nat
Page 112 and 113: Box 3-2.—continuedsome firms may
Page 114 and 115: Box 3-3.—continuedmaximum of $3,7
Page 116 and 117: willing to hire welfare recipients
Page 118 and 119: participation. The renewed increase
Page 120 and 121: TANF grants in reserve at the Treas
Page 122 and 123: JOB DISPLACEMENTWorkers are conside
Page 124 and 125: evidence finds that the percentage
Page 126 and 127: their non-labor market activities.
Page 130 and 131: CHAPTER 4Work, Retirement, and theE
Page 132 and 133: Chart 4-1 Life Expectancy at Age 65
Page 134 and 135: Population aging is not just an Ame
Page 136 and 137: Box 4-1.—continuedfor couples and
Page 138 and 139: earlier retirement, by increasing l
Page 140 and 141: uyouts may also have contributed to
Page 142 and 143: Box 4-2.—Social Security RulesThe
Page 144 and 145: available with the same hourly pay,
Page 146 and 147: Box 4-4.—Types of Pension PlansUn
Page 148 and 149: worker—declined. More of these ol
Page 150 and 151: survey) was about 13 percent higher
Page 152 and 153: well-being is that families have di
Page 154 and 155: Chart 4-9 Living Arrangements of El
Page 156 and 157: mentioned earlier in this chapter a
Page 158 and 159: Box 4-7.—The Federal Role in Empl
Page 160 and 161: inequality among retirees who have
Page 162 and 163: whether minorities and women are li
Page 164 and 165: TABLE 4-4.—Poverty Rates Among th
Page 166 and 167: TABLE 4-6.—Family Holdings of Fin
Page 168 and 169: variety of reasons, including the f
Page 170 and 171: the number of patents granted in th
Page 172 and 173: The United States has a decades-lon
Page 174 and 175: matter, depending on various condit
Page 176 and 177: company Roche Holdings, Ltd. Some o
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The antitrust authorities’ linkin
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espective Writings and Discoveries.
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Box 5-3.—Cooperative Innovation a
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machine owned by another. The disti
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companies begin to offer DSL servic
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and compete for customers on the ba
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In another part of the Internet mar
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technology at hand. But incentive-b
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the flexibility to choose lower cos
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In contrast to both performance and
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The SO 2 experience reveals several
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Box 5-7.—The Partnership for a Ne
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Consumers’ investment in energy e
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clean-energy projects in developing
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Chart 5-2 Energy Efficiency and Pri
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equipment, and more than 90 percent
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Box 5-9.—Is There an Environmenta
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larger coal plants. In 1994 these t
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around the country, and seven other
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other social goals. The fund would
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greater opportunity, faster growth,
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Chart 6-1 Net Capital Flows to Deve
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Box 6-1.—The Explosive Growth of
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Recent Financial LiberalizationIn m
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and investment (although openness t
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Box 6-2.—Market-Based (Arm’s-Le
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conditionality in the face of unsou
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Box 6-4.—Sovereign Spreads in Eme
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social safety nets in the crisis co
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Box 6-5.—Moral Hazard in Financia
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Empirical studies confirm that, by
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withdrew $26 billion in 1997. Altho
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America, and these linkages partly
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8.5 percent of GDP in 1998. Indones
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sary revenues to meet these extra i
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which is considered a monetary asse
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ates at home, they sought higher re
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Chart 6-3 Real Value of the Dollar
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The increase in the trade deficit a
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Chart 6-6 Current Account BalanceTh
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Chart 6-7 Economic Growth and Trade
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investment. The U.S. gross investme
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Chart 6-10 Current Account Deficit
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with other countries to strengthen
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REFORM OF THE INTERNATIONAL FINANCI
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about their macroeconomic and finan
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decisions respond to market signals
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Other measures recommended by the w
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ADOPTION OF MEASURES TO REFORM THEI
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Another way to improve global surve
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Issues Posed by Hedge Funds and Oth
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the best investment opportunities,
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egulation of inflows to banks alone
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complement the role of official fin
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emerging markets will take time to
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Box 7-1.—continuedpartner; a stro
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Chart 7-1 European Short-Term Inter
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members agreed in a separate Growth
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Box 7-2.—continuedthrough an auto
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advantages of EMU to U.S. residents
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Box 7-3.—How Does the Dollar Rank
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connection between the currency in
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as an economic superpower early in
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Appendix AREPORT TO THE PRESIDENT O
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Council Members and Their Dates of
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The Chair and Members work as a tea
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countries. The Council heads the U.
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Chief of Staff and General CounselM
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affiliations. They are Christopher
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C O N T E N T SNATIONAL INCOME OR E
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B-71. Aggregate reserves of deposit
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General NotesDetail in these tables
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TABLE B-1.—Gross domestic product
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TABLE B-2.—Real gross domestic pr
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TABLE B-4.—Percent changes in rea
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TABLE B-5.—Contributions to perce
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TABLE B-6.—Chain-type quantity in
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TABLE B-7.—Chain-type price index
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TABLE B-9.—Real gross domestic pr
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Year orquarterGrossdomesticproductT
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YearBased on1972 SIC:TABLE B-13.—
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TABLE B-15.—Output, costs, and pr
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TABLE B-17.—Real personal consump
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TABLE B-19.—Real private gross fi
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TABLE B-21.—Real government consu
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TABLE B-23.—Real inventories and
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TABLE B-25.—Real exports and impo
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TABLE B-27.—Relation of national
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TABLE B-28.—National income by ty
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TABLE B-29.—Sources of personal i
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TABLE B-31.—Total and per capita
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TABLE B-32.—Gross saving and inve
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POPULATION, EMPLOYMENT, WAGES, AND
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TABLE B-35.—Civilian population a
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TABLE B-37.—Civilian employment b
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TABLE B-39.—Civilian labor force
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TABLE B-41.—Civilian employment/p
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TABLE B-43.—Civilian unemployment
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TABLE B-45.—Unemployment insuranc
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TABLE B-46.—Employees on nonagric
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TABLE B-48.—Employment cost index
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Year orquarterTABLE B-50.—Changes
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Year or monthTABLE B-52.—Industri
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TABLE B-54.—Capacity utilization
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Year or monthTABLE B-56.—New hous
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TABLE B-58.—Manufacturers’ ship
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PRICESTABLE B-60.—Consumer price
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TABLE B-61.—Consumer price indexe
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TABLE B-63.—Changes in special co
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TABLE B-65.—Producer price indexe
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YearandmonthMONEY STOCK, CREDIT, AN
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TABLE B-70.—Components of money s
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TABLE B-72.—Bank credit at all co
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TABLE B-73.—Bond yields and inter
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TABLE B-74.—Credit market borrowi
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TABLE B-76.—Mortgage debt outstan
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GOVERNMENT FINANCETABLE B-78.—Fed
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TABLE B-80.—Federal receipts and
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TABLE B-82.—Federal Government re
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TABLE B-84.—Federal and State and
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TABLE B-86.—State and local gover
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TABLE B-88.—Maturity distribution
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CORPORATE PROFITS AND FINANCETABLE
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TABLE B-92.—Corporate profits of
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TABLE B-94.—Relation of profits a
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Year or monthTABLE B-96.—Business
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End of yearTotalassetsTABLE B-98.
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YearFarm population,April 1Number(t
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YearTABLE B-102.—U.S. exports and
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TABLE B-103.—U.S. international t
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TABLE B-105.—U.S. international t
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TABLE B-107.—International invest
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TABLE B-109.—Civilian unemploymen
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TABLE B-111.—International reserv
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Economic Report President

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