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Economic growth.

The economy's need for workers originates in the demand for goods and services, which is measured by the gross domestic product, or GDP. The GDP is a measure of goods and services produced in the United States. Domestic and international consumers--including individuals, businesses, and governments--purchase items included in the GDP. These purchases fall into five categories:

* Personal consumption expenditures. This category includes purchases by individuals of goods (such as automobiles, homes, clothes, and food) and services (such as transportation, education, and healthcare).

* Gross private domestic investment. Major business purchases, such as buildings and factories, machinery, software, and computers, make up these investments.

* Government purchases. This category includes goods and services purchased by Federal, State, and local governments.

Exports. Exports are goods and services produced in the United States and purchased by individuals, businesses, and governments in foreign countries.

* Imports. Imports are goods and services produced abroad and purchased by U.S. citizens, business, and governments. Because gdP measures production in the United States, the value of imports is subtracted from the other four categories of GDP.

Changes in the level and composition of the GDP will affect industry production and employment levels. Similarly, 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.

Personal consumption expenditures are expected to increase slightly, to nearly 70 percent of GDP. Exports and investment are each expected to significantly increase their share of GDP, while government expenditures continue to decline.
GDP distribution by major category, 1990, 2000, and projected 2010

(Percent)

 1990 2000 Projected 2010

Personal consumption expenditures 66.7 67.8 68.5
Gross private domestic investment 13.5 19.2 23.0
Exports 8.6 12.3 18.6
Imports -9.4 -16.6 -25.6
Government 20.7 17.0 15.1

Note: Table made from bar graph.


Growth in personal consumption expenditures is expected to continue at 3.5 percent annually, about the same pace maintained for several decades. Other GDP components, however, are not as stable. Investments will grow more slowly than over the last 10 years but faster than during the 1980-90 decade. Imports and exports each will increase by just under 8 percent annually.
Annual average growth rate of major GDP demand category,
1980-90, 1990-2000, and projected 2000-10

(Percent)

 1980-90 1990-2000 Projected 2000-10

Personal consumption
 expenditures 3.4 3.4 3.5
Gross private
 domestic investment 3.3 6.9 5.2
Exports 5.6 7.0 7.8
Imports 6.8 9.3 7.9
Government 3.1 1.3 2.1
Total, GDP 3.2 3.2 3.4

Note: Table made from bar graph.


The services component of personal consumption expenditures is projected to have healthy annual average growth of 3.1 percent between 1990 and 2010. This growth will be driven, in part, by a large increase in spending for telephone services, which is expected to grow 7.6 percent annually as people buy information technology and telecommunications services.
Annual average growth of services components
of personal consumption expenditures, projected 2000-10

(Percent)

Household operation, telephone 7.6
Recreation services 6.0
Other household operation services 3.5
Personal business services 3.2
Household operation, electricity 2.9
Medical services 2.7
Transportation services 2.4
Housing services 2.3
Household operation, natural gas -0.6
Other services 3.0
Total, all services 3.1

Note: Table made from bar graph.


Growth in goods consumption will be strong, at an expected annual average of 5.1 percent. The dominant component will be purchases of personal computers, which are expected to increase by an average of 22.1 percent annually through 2010. This growth is a result of increased demand for personal computers, emergence of portable devices, increased purchases of laptop computers, and inclusion of computer technology in other devices.
Annual average growth of goods components
of personal consumption expenditures, projected 2000-10

(Percent)

Personal computers 22.1
Drugs and medicines 8.5
Software 7.4
Furniture 5.1
Clothing and shoes 4.3
New light vehicles 3.5
Other motor vehicles and parts 3.1
Ophthalmic products 3.1
Food and beverages 2.3
Gasoline and motor oil 2.2
Fuel oil and coal 1.1
Tobacco products 0.8
Other goods 5.1
Total, all goods 4.1

Note: Table made from bar graph.


Business investment has climbed steadily since 1980, including, after 1990, enormous investment in computers and software. This increase is expected to continue over the projections decade, with expected 2010 investments in computers approaching $1.2 trillion (in 1996 dollars) and software approaching $613 billion (in 1996 dollars). Comparatively, all other investments combined are expected to be about $1.15 trillion (in 1996 dollars) in 2010.
Gross private domestic investment,
by selected components, 1980, 1990, and projected 2010

(Billions of chained [1996] dollars)

 1980 1990 2000 Projected 2010

Computers 1.2 14.2 290.3 1,195.2
Software 10.6 45.9 187.6 613.0
All other investment 643.5 847.3 1,295.0 1,145.6

Note: Table made from bar graph.


Although investment in computers is expected to increase substantially by 2010, the rate of increase is expected to slow--dropping from 35.2 to 15.2 percent annually--from the previous 10 years. Similarly, the growth of investment in software will decrease from 15.1 to 12.6 percent annually.
Annual average growth rate of selected components of
gross private domestic investment, 1980-90, 1990-2000,
and projected 2000-10

(Percent)

 1980-1990 1990-2000 Projected 2000-10

Computers 28.1 35.2 15.2
Software 15.8 15.1 12.6
All other investments 2.8 4.3 -1.2
Total, all investments 3.3 6.9 5.2

Note: Table made from bar graph.
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Article Details
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Publication:Occupational Outlook Quarterly
Article Type:Statistical Data Included
Geographic Code:1USA
Date:Dec 22, 2001
Words:964
Previous Article:Industry employment.
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