The Job Market Remains Strong in 1999

Abstract

The U.S. economy entered its 9th year of expansion in 1999. By the end of the year, 106 months of uninterrupted recovery from the 1990–91 recession had passed, equaling the lengthy expansion of the 1960s— the longest on record. Gross domestic product increased 4.3 percent in 1999, with the strength due, in large part, to exceptionally robust consumer spending. (See table 1.) Most indicators of labor market performance evidenced continued strength in 1999. Over the year, total nonfarm payroll employment increased by 2.7 million, to 129.6 million in the fourth quarter, and the unemployment rate declined to 4.1 percent by year’s end, a 30-year low. With employment continuing to grow and unemployment continuing to inch down, concerns about the economy overheating and resultant inflationary pressures prompted the Federal Reserve to raise interest rates several times in the second half of the year. As the year progressed, wage growth remained tepid, and by the end of the year, consumer prices were up by only 2.6 percent from a year earlier. The service-producing industries provided the overwhelming majority of employment growth in 1999. Job growth in construction also was healthy, buoyed by low interest rates and strong consumer confidence, although the rise in mortgage interest rates in the second half of the year dampened employment in homebuilding a bit. Manufacturing continued to lose jobs in 1999, as export growth remained sluggish in the wake of recent economic turmoil in several Asian economies. However, the rate of job loss in manufacturing was slower than in the previous year. Workers in most major demographic groups benefited from the healthy labor market in 1999, as unemployment rates fell to their lowest levels in decades. Almost half of the employment growth over the year occurred in the higher paying managerial and professional specialty occupations. Men, women, whites, blacks, and Hispanics all reported increases in real earnings. This article provides snapshots of several important developments or issues related to the U.S. economy and labor market in 1999. The primary sources of data are the Current Employment Statistics (CES) survey of establishments and the Current Population Survey (CPS) of households. Both of these surveys are conducted monthly; however, quarterly averages are used in the analysis that follows, unless otherwise noted, and over-the-year changes are based on comparisons of fourth-quarter 1998 and 1999 data, unless otherwise noted.