ECONOMIC REPORT OF THE PRESIDENT

Percent
11
Figure 2-1
Unemployment Rate, 1975–2015
10
9
8
7
6
5
Dec-2015
4
3
1975 1980 1985 1990 1995 2000 2005 2010 2015
Note: Shading denotes recession.
Source: Bureau of Labor Statistics, Current Population Survey.
in stock markets around the world, and further sharp declines in oil prices in
early 2016, underscore the risks facing the U.S. economy; in particular, in the
energy-producing and export-intensive sectors. And yet, the labor market
continues to recover with the unemployment rate declining to 4.9 percent
in January 2016, its lowest level since February 2008.
The economic recovery in recent years has differed across labor and
output measures. The labor market continued to strengthen and, by the
end of 2015, the unemployment rate had fallen to half its recessionary peak,
but real output growth, at 1.8 percent during the four quarters of 2015, was
slower than its pace in recent years. As a consequence, labor productivity—measured
as real output-per-hour—in the nonfarm sector has grown
more slowly than its long-term trend thus far during this business cycle. The
labor force participation rate has fallen largely due to the baby-boom cohorts
moving into retirement, but some of the decline represents the continuation
of the decades-long downward trend in the participation of prime-age males
as well as the decline in participation of prime-age females since 2000.
While real GDP grew moderately during 2015, the quarterly pace of
economic growth was uneven. First-quarter growth (0.6-percent annual
rate) was held down by a labor dispute at the West coast ports and unusually
52 | Chapter 2