Jobs in a changing American economy: there have been dramatic shifts in the share of manufacturing and service industry jobs since the end of World War II. Understanding past patterns of employment growth can help us understand employment patterns going forward.

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Economic Analysis

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Jobs in a changing American economy: there have been dramatic shifts in the share of manufacturing and service industry jobs since the end of World War II. Understanding past patterns of employment growth can help us understand employment patterns going forward.

ECONOMIES TRANSFORM OVER TIME. Our economy certainly has, and continues to do so. One recent transformation in the United States was the emergence of the so-called new economy during the late 1990s, when productivity accelerated. We hear about the new economy much less these days than before the high-tech bust and the recession. But is this because our economy has reverted back to its old form or because the new economy never happened? * One cannot help but be a skeptic about the new economy hypothesis. Productivity growth rates have hit impressive levels since November 2001, the official end of the last recession, yet job cuts continued through 2003 and, in some manufacturing industries, even through early 2004. * When employment finally increased in September 2003 for nonfarm businesses as a whole, it did so at a snail's pace. A much-anticipated resurgence in jobs finally showed up in the March payroll survey. Employment grew in March by 337,000 and then in April by 288,000--levels that are characteristic of a typical (and sustainable) recovery. We expect an increase of 200,000 to 300,000 job...

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