Economic Report President

than it did in the 1960s (Table 1-2). Moreover, growth over the 1980sexpansion partly reflects how far below potential output the economywas at the start of that expansion, which followed a deep recession,rather than a particularly strong underlying growth trend. Finally,growth in aggregate income matters for some purposes, but productivitygrowth is what matters for real wages and a rising standard of livingover the longer term. And productivity growth has continued relativelystrong well into this expansion—it has not exhibited the declinethat often occurs late in expansions. Nevertheless, the rate of productivitygrowth over this expansion remains well below that achieved inthe 1960s, before the productivity slowdown.TABLE 1-2.—Economic Growth Indicators in Three Long Expansions[Average annual percent change]ItemFromtroughFrompreviouspeak 11961-69Real GDP ............................................................................................................ 4.8 4.3Civilian noninstitutional population ...................................................................... 1.5 1.5Civilian labor force ....................................................................................................... 1.7 1.7Nonfarm business sector productivity .......................................................................... 3.0 2.81982-90Real GDP ............................................................................................................ 3.7 2.6Civilian noninstitutional population ............................................................................. 1.2 1.2Civilian labor force ....................................................................................................... 1.6 1.6Nonfarm business sector productivity .......................................................................... 1.3 1.01991-present 2Real GDP ............................................................................................................ 3.0 2.6Civilian noninstitutional population ...................................................................... 1.0 1.0Civilian labor force ....................................................................................................... 1.2 1.1Nonfarm business sector productivity .......................................................................... 1.5 1.41Peaks of 1960 II, 1980 I, and 1990 III.2Through 1998 III.Note.—Based on seasonally adjusted data, except population.Sources: Department of Commerce (Bureau of Economic Analysis), Department of Labor (Bureau of Labor Statistics), andNational Bureau of Economic Research.Relatively slow productivity growth continues to prevent the kind ofwage and income growth that produced a doubling in living standardsbetween 1948 and 1973. As discussed in Chapter 3, however, the sustainedtight labor market that this expansion has created in the pastfew years has brought benefits to the vast majority of American workers,including groups that had fallen behind over the past two decadesor so, such as low-wage workers and minorities. A labor market likethat of today has numerous benefits. It increases the confidence of joblosers that they will be able to return to work; it lures discouragedworkers back into the labor force; it enhances the prospects of thosealready at work to get ahead; it enables those who want or need toswitch jobs to do so without a long period of joblessness; and it lowers26