Economic growth
T
he economy’s need for workers originates
in the demand for the goods and services
they provide. So, as a first step in projecting
employment, BLS estimates the final demand for
goods and services produced in the United States, a
measure called gross domestic product (GDP).
Then, BLS estimates the size of the five major
categories that make up demand. The categories are
the following:
◆ Personal consumption expenditures. These include
purchases by individuals of goods (such as automobiles, clothes, and food) and services (such as education, healthcare, and rent).
◆ Gross private domestic investment. This includes
business investment in equipment and software, the
construction of factories and office buildings, the
construction of residential structures, and changes in
business inventories.
◆ Government purchases. Government purchases
include goods and services bought by Federal, State,
and local governments.
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36 Occupational Outlook Quarterly Winter 2003-04
◆ Exports.
These are goods and services produced in the
United States and purchased in foreign countries.
◆ Imports. Imports are goods and services produced
abroad and purchased in the United States. Because
GDP measures production in the United States, the
value of imports is subtracted from the other four
categories of GDP.
Finally, BLS breaks down these major categories into
more detailed ones, such as the demand for clothing.
Most charts in this section show changes in the level
and composition of demand. These changes affect industry
employment levels. For example, an increased level of
business investment in microcomputers will increase
employment in the computer industry and in all those
industries, such as electronic components, that provide
inputs to the computer industry. In turn, occupations that
those industries employ also will grow.
One chart shows a measure of productivity—the
amount an employee produces per hour of work—over
time. Here, productivity is calculated by first measuring
total nonfarm output. This includes all of the goods and
services purchased—and all of the additional goods
and services used to make them. This total output is
divided by total labor hours. Productivity as shown
here concentrates on the output produced by labor
and may differ from other BLS measures.
A final chart in this section shows production from
an industry standpoint. It shows how much of total
output each industry sector generates.
GDP in 1982,1992, 2002, and projected 2012
(Billions of chained 1996 dollars)
12,638
9,440
6,880
$4,919
Measuring economic growth
Unlike previous charts, the charts in this section show
annual rates of growth instead of change over the
entire projections decade. Annual rates are used here,
in part, because they are the measure used for other
economic indicators, including inflation.
To show changes in demand more accurately,
dollar amounts in this section are given in 1996 chainweighted dollars rather than in current dollars. This
means that amounts have been adjusted for changing
prices over time. The last chart in this section is the
only one based on current dollars.
1982
1992
2002
Projected
2012
The steady growth in the amount of goods and
services demanded (gross domestic product, or
GDP) is due, in large part...
Productivity, 1982-2002 and projected 2002-12
(Nonfarm business output per hour in billions of chained 1996 dollars)
50
50
40
40
30
30
20
20
Projected
2012
1982
1992
2002
…to continually accelerating productivity.
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Occupational Outlook Quarterly Winter 2003-04 37
Economic growth
Annual growth rate by major GDP demand category, 1982-92, 1992-2002,
and projected 2002-12
(Percent)
8.7
7.5
5.9
3.4% 3.2%
3.0%
7.4
5.7
5.5
5.2
5.0
3.9
3.4 3.7
3.0
2.8
2.0
Total GDP
Personal
consumption
expenditures
Gross private
domestic
investment
Exports
Imports
1982-92
1.6
Government
1992-2002
Projected 2002-12
Imports are projected to increase by an average of 5.2 percent annually between 2002
and 2012, significantly slower than their rate of increase during the previous decade.
Percent distribution of GDP by major demand category, 1992, 2002,
and projected 2012
67
70
69
1992
2002
22
13
Projected 2012
20
17
9
11
15
18
16
Imports
Personal
consumption
expenditures
Gross private
domestic
investment
Exports
Government
-10
-16
-20
Gross private domestic investment, which includes business investment and residential construction, is expected to increase its share of the GDP significantly, to about
22 percent in 2012. Personal consumption expenditures are projected to decrease
their share slightly but are projected to still make up about 69 percent of GDP in
2012. Imports are shown as negative—and subtracted from the other components—
because they are not produced in the United States.
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38 Occupational Outlook Quarterly Winter 2003-04
Numeric growth in goods components of personal consumption
expenditures, projected 2002-12
Growth rate
(percent)
$469 12.8%
(Billions of chained 1996 dollars)
Computers and software
Video and audio goods
212
Drugs
11.2
128
6.0
Clothing
116
2.5
Food and beverages
114
1.2
Household goods, appliances and furniture
Motor vehicles, parts, and fuel
100
2.3
79
All other goods
1.4
175
4.9
Total, all goods = 2.7%
Of all goods components, consumer spending on computers and software is
expected to have the largest and the fastest growth, much faster than the annual
2.7-percent overall growth rate for goods.
Numeric growth in services components of personal consumption
expenditures, projected 2002-12
(Billions of chained 1996 dollars)
Growth rate
(Percent)
Medical care and insurance
$341
Housing and household operation
277
Personal business
196
Telephone
84
3.0%
2.2
3.0
4.5
Transportation
69
2.5
Recreation
65
2.4
Education
All other services
36
2.2
148
5.1
Total, all services = 2.8%
High growth is expected for medical care and insurance as the population
ages. All other services, which includes legal services and religious and welfare
activities, is projected to grow by 5.1 percent annually over the projections
decade.
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Occupational Outlook Quarterly Winter 2003-04 39
Economic growth
Business investment in equipment and software, 1982, 1992, 2002,
and projected 2012
(Billions of chained 1996 dollars)
1,822
1982
1992
2002
Projected 2012
1,118
591
$470
$14
350
284
$186
$59
2
Software
216
21
Investment in other equipment
Computers
Business investment in computers has risen dramatically since 1982, with
investment in software also increasing significantly. Growth in these investments is expected to continue over the projections decade, as businesses
continue to invest in information technology.
Annual growth rate, business investment in computers and
software 1982-1992, 1992-2002, and projected 2002-12
(Percent)
30
25
20
16%
12%
10%
5
Software
1982-1992
Computers
1992-2002
5
7
Investment in other
equipment
Projected 2002-12
Although investment in computers and software is projected to
continue increasing substantially, the rates of increase are
expected to slow. The annual growth rate for computer investment is projected to drop from 30 percent between 1992 and
2002 to 20 percent during the 2002-12 decade. The rate of
growth for investment in software is expected to fall from 12
percent to 10 percent annually.
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40 Occupational Outlook Quarterly Winter 2003-04
Percent distribution of output by industry sector, projected 2012
Education and health services, except Federal Government
10
Information
Manufacturing
21
6
Retail trade 6
Wholesale trade 6
14 Financial activities
Construction 4
Transportation and warehousing
4
Leisure and hospitality
4
3
Special industries (no employment)
13
3
Professional and business services
2 2 11 1
State and local government, except education and hospitals
Other services
Federal Government
Mining
Agriculture, forestry, fishing, and hunting
Utilities
As this chart shows, three industry sectors—manufacturing, financial activities, and
professional and business services—are projected to account for almost half of all
output in 2012. However, their high productivity enables them to reach this level of
output with less than one-third of total industry employment.
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Occupational Outlook Quarterly Winter 2003-04 41