The Heritage Foundation

WebMemo #380 on Taxes

December 5, 2003

December 5, 2003 | WebMemo on Taxes

The Beat Goes On: Unemployment Drops

For the first time since March the unemployment rate is below 6 percent. Widespread evidence suggests this economic growth -- now at four consecutive months -- will continue throughout 2004 and probably 2005.

October's job numbers were revised upwards to137, 000 from 126,000. While November's initial reports of 57,000 new jobs will likely see a similar revision, the most significant news is that the unemployment rate has dropped below 6 percent, to 5.9 percent.

 

Unemployment Rates

 

The latest job report also shows important gains in the area where no improvement has been seen before: Unemployment is down for African Americans, women and teenagers.

 

Other positive signs include:

 

Business investment has grown significantly in the last six months and at the especially brisk pace of 14 percent in the last three months. This means businesses are investing in new equipment and people.

 

Business activity is strong for both manufacturing and service sectors. Manufacturing activity is at its highest levels in 20 years and the service sector is soaring; which is significant because it accounts for 80 percent of the economy.

 

Business productivity growth soared at 9.4 percent in the Third Quarter - growth not seen in 20 years. (For more see Strong Economic Growth Continues by Rea S. Hederman, Jr.)

About the Author

William W. Beach Director, Center for Data Analysis and Lazof Family Fellow
Center for Data Analysis

Alison Acosta Fraser Senior Fellow and Director of Government Finance Programs
Domestic and Economic Policy

Rea S. Hederman, Jr. Director, Center for Data Analysis and Lazof Family Fellow
Center for Data Analysis