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August 1983, Vol. 106, No. 8
Employment on the rise
in the first half of 1983
After going through a long and deep recession, the U.S. economy began to turn up in the first half of 1983, with particularly strong growth registered in the second quarter. The civilian unemployment rate, which had reached a post-World War II high of 10.8 percent in December 1982, gradually declined to 10.0 percent by June 1983. The number of nonfarm jobs increased by 1.1 million over the same period, after having declined by 2.8 million in the prior year and a half. These labor force developments coincided with other indicators pointing to improvement in the economy. Housing starts were up considerably from the lackluster performance shown throughout most of 1981 and 1982. The index of industrial production increased steadily from its November 1982 low of 134.9 to 144.3 in May. And consumer spending, an essential element in any recovery, began to show signs of strength.
It is important to note, however, that not all economic indicators could be interpreted in a positive manner. Compared to current price inflation, short- and long-term interest rates were still very high and, coupled with a 72-percent rate of manufacturing capacity utilization gave credence to many analysts' contentions and to survey results of business intentions that nonfarm expenditures on plant and equipment, essential to the enhancement of long-term growth prospects, were likely to decline in real terms once again in 1983.1 In addition, the continuing strong showing of the dollar relative to other currencies weakened U.S. export competitiveness.
Measures of economic activity are most meaningful when examined in an historical context. Accordingly, the first part of this article presents an overview of how the recent situation compared with that of other recoveries. This is followed by a more detailed discussion of the employment and unemployment situation in early 1983.
This excerpt is from an article published in the August 1983 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
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1 See Congressional Budget Office, The Outlook for Economic Recovery (U.S. Government Printing Office, 1983). According to the Commerce Department's latest survey, business capital outlays in 1983 will average 3.1 percent less than in 1982, after adjustment for inflation. However, as the year progresses outlays are expected to pick up. See Eileen Alt Powell, "Plant and Equipment Outlays to Pick Up. U.S. Says, but 1983 Total Will Fall 3.1%." The Wall Street Journal, June 10, 1983, p. 3.
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