THE WHITE HOUSE
Office of the Press Secretary
PRESIDENT CLINTON AND VICE PRESIDENT GORE: THE LONGEST PEACETIME ECONOMIC EXPANSION IN HISTORY
Today's Strong Jobs Report Means That We Have the Longest Peacetime Economic Expansion In American History. The President's Council of Economic Advisers (CEA) now believes that December will be the 93rd month of the current expansion, making it the longest peacetime expansion on record. The current expansion -- which officially began in March 1991 -- is now longer than the economic expansion of the 1980s, which lasted 92 months (from Nov. '82 to July '90). As today's report from the CEA shows, the current expansion is different from previous ones in many respects:
Inflation Has Declined During This Economic Expansion. As measured by the core Consumer Price Index, the rate of inflation over the past year -- the eighth year of the expansion -- is lower than the inflation rate in the first year of the expansion (about 2.5 percent vs. about 4 percent). This is an important difference because the expansions in the 1960s and 1980s were both choked off by the price acceleration in the later part of the expansion.
This Economic Expansion Has Been Investment-Led, Instead of Government-Led. During the current economic expansion, the contribution of investment to growth has been almost twice as great as it was in the expansions during the 1960s and 1980s. Indeed, in the past six years, productive business investment has grown at a 12-percent average annual rate -- the fastest in more than three decades. In the 1980s, government spending provided a larger contribution to growth than investment. In the 1990s, according to the CEA report, "federal government spending has provided no stimulus..."
Productivity Growth Has Increased During This Economic Expansion. In previous economic expansion in the 1960s and 1980s, the rate of productivity growth declined late in the expansions. During this economic expansion, the rate of productivity growth has continued to be relatively strong well into the eighth year of the expansion -- increasing 1.9 percent over the past year, about 50 percent higher than the trend rate of productivity growth.
Real Hourly Wages Are Rising During This Economic Expansion. During the 1980s expansion, real hourly wages fell as the expansion lengthened. During the current economic expansion, hourly wages have risen by more than 5 percent, adjusted for inflation. Over the past year, real hourly wages have increased about 2.5 percent -- the fastest real wage growth in 20 years.
As The Economy Continues to Grow Strongly, Employers Are Hiring Additional Workers, Helping Many People Previously Left Behind During Economic Expansions:
Wages Are Rising for Lowest-Paid Workers. Since 1996, male and female workers in the lowest-paid 10 percent of workers have increased their earnings by about 6 percent, adjusted for inflation.
Real Wages Are Rising for African Americans and Hispanics. The real wages of African Americans and Hispanics have risen rapidly in the past two years, up about 5.8 percent for African American men, 4.0 percent for Hispanic men, 6.2 percent for African American women, and 2.6 percent for Hispanic women since 1996.
More People Are Finding Work Than Ever Before And They Are Finding it Faster Than Before. The average length of unemployment among workers searching for a job has declined by about one quarter since 1994, from 18.8 to 14.1 weeks. The number of workers who are not employed and who have not looked for work in the past month because they do not think they could find a job -- so-called discouraged workers -- has shrunk by one-third in the past four years.
Record-Low Unemployment for African Americans and Hispanics. Under President Clinton and Vice President Gore, the African-American unemployment rate has fallen from 14.2 percent in 1992 to 8.9 percent in 1998 -- its lowest annual level on record (data first collected in 1972). And the Hispanic unemployment rate has dropped from 11.6 percent in 1992 to 7.2 percent in 1998 -- its lowest annual level ever.