Economic Report 

to the 

Metro Council 

2000-2030 Regional Forecast 

Employment 

Population 

Housing 

Income 

for Portland-Vancouver Metropolitan 

Area 

Released: March 2002 

Revised: September 2002

Mike Burton 

Executive Officer 

Planning Department 

Andy Cotugno 

Director 

Prepared by: 

Data Resource Center 

Dennis Yee 

Chief Economist 

People Places 

Open Spaces 
Metro 

Planning that 

protects the nature of 

our region 

“It’s better to plan for 

growth than ignore 

it.” 

Planning is Metro’s 

top job. Metro 

provides a regional 

forum where cities, 

counties and citizens 

can resolve issues 

related to growth – 

things such as 

protecting streams 

and open spaces, 

transportation and land-use choices and increasing the region’s recycling efforts. Open 

spaces, salmon runs and forests don’t stop at city limits or county lines. Planning ahead 

for a healthy environment and stable economy supports livable communities now and 

protects the nature of our region for the future. 

Metro serves 1.3 million people who live in Clackamas, Multnomah and Washington 

counties and the 24 cities in the Portland metropolitan area. Metro provides 

transportation and land-use planning services garbage disposal and recycling and waste 

reduction programs. 

Metro manages regional parks and greenspaces and the Oregon Zoo. It also oversees 

operation of the Oregon Convention Center, Civic Stadium, the Portland Center for the 

Performing Arts and the Portland Metropolitan Exposition (Expo) Center, all managed by 

the Metropolitan Exposition-Recreation Commission. 

For more information about Metro or to schedule a speaker for a community group, call 

(503) 797-1510 (public affairs) or (503) 797-1540 (council). 

Metro’s web site: 

www.metro-region.org
Table of Contents

Executive Summary 

Introduction....................................................................................................................... 1 

Summary Regional Forecast Tables: High, Mid & Low ................................................. 3 

Summary Regional Forecast, Region, UGB, and UGR Need .......................................... 4 

2000-2030 Regional Forecast 

Introduction....................................................................................................................... 5 

Context of this Forecast and Past Regional Forecasts ...................................................... 6 

Policy and Economic Assumptions .................................................................................. 6 

Alternate Regional Forecasts ............................................................................................ 8 

Forecast Methodology Summary...................................................................................... 9 

Report Organization........................................................................................................ 10 

2000-2030 Regional Forecast 

U.S. Economy in Review................................................................................................ 13 

National Forecast Overview ........................................................................................... 15 

Global Setting ................................................................................................................. 17 

Long-range U.S. Macroeconomic Outlook...................................................................... 20 

Portland-Vancouver Economic Forecast 

Recent Trends ................................................................................................................. 23 

Regional Expectations .................................................................................................... 24 

Forecast Summary for the Portland-Vancouver Region................................................. 25 

Comparison of Population and Employment Demand Projections ................................ 26 

Regional Population Trends............................................................................................ 26 

Industry Details and Long-term Forecast Outlook ......................................................... 28 

Alternate Regional Growth Scenarios 

Introduction..................................................................................................................... 35 

Regional Growth Alternatives ........................................................................................ 35 

U.S. Economic and Demographic Summary Details...................................................... 40 

Early Risks to the Regional Forecast.............................................................................. 40 

Appendix A: Regional Economic Forecast Details 

Table 1: Total Population of Selected Metropolitan 

 Areas, Counties, States and U.S................................................................................. A-1 

Table 2: Components of Population Change for the Portland-Vancouver, OR-WA 

 Multnomah, Clackamas, Washington, Yamhill and Clark counties)......................... A-2 

Table 3: Population by Age for the Portland-Vancouver, OR-WA.............................. A-3 

Table 4: Households by Age of Head for the Portland-Vancouver, OR-WA ...............A-4 

Table 5: Employment for Portland-Vancouver, OR-WA and U.S. .............................. A-5 

Table 6: Total Employment Portland-Vancouver, OR-WA ......................................... A-9 

Table 7: Wage and Salary Employment Portland-Vancouver, OR-WA .................... A-10 

Table 8: Total Employment for Yamhill County, OR ................................................ A-11 

Table 9: Wage and Salary Employment for Yamhill County, OR. ............................ A-12
Table 10: Personal Income by Major Source, Portland-Vancouver, OR-WA............ A-13 

Table 11: Personal Income, Total and Per Capita, Portland-Vancouver, OR-WA 

 Consumer Price Index, All Earners ......................................................................... A-14 

Table 12: Average Weekly and Hourly Earnings, Average Work Hours Per Week, 

 Manufacturing Industries Only................................................................................ A-15 

Table 13: Residential Authorized Permits, Housing Price Statistics...........................A-16 

Table 14: Alternate Forecasts for Portland-Vancouver, OR-WA............................... A-17 

Table 6: Total Employment Portland-Vancouver, OR-WA ......................................... A-9 

Table 7: Wage and Salary Employment Portland-Vancouver, OR-WA .................... A-10 

Table 8: Total Employment for Yamhill County, OR ................................................ A-11 

Table 15: Employment Assumptions – 

 By Standardized Metroscope Industry Classifications. ........................................... A-25 

Appendix B: U.S. Economic Forecast Details 

DRI-WEFA, The U.S. Economy, The 25-Year Focus, Winter Issue 2002 

Part 1: Forecast Overview.................................................................................................. 1 

Part 2: The Four Scenarios: The Trend Projection ......................................................... 11 

Part 3: The Four Scenarios: The Optimistic and Pessimistic Projections....................... 35 

(Note: DRI-WEFA produces a fourth scenario known as the “cyclical projection”. This 

scenario is not used in the production of the Metro Regional Forecast) 

Appendix C: Forecast Review Committees 

Appendix D: Model Documentation Summary 

Paper delivered at the Pacific Northwest Regional Economic Conference, 1998 
 

Executive Summary 

2000-2030 Regional Forecast

The National View: Winter 2002 

It’s official – the U.S. is in a recession since March 2001, according to the private economic think 

tank: National Bureau of Economic Research. 

There’s little worry of inflation. Interest rates are low; but so are consumer confidence and business 

activity. The National Association of Purchasing Manager’s Index (NAPM) still points to contraction. 

Low confidence and downbeat industrial output spell negative GDP growth for the U.S for the first 

part of 2002. 

After a year, the recession may be coming to an end. . . 

1. Consumer confidence is on the rise – but still under pre-recession levels 

2. NAPM index is on the rise too – the level is presently near 50 – indicative of positive growth just 

around the corner 

3. Surplus capacity utilization and industrial production are showing early signs of acceleration 

4. Very favorable interest rates for stimulating additional domestic investments which could lead to a 

recovery in computers and software production 

5. Timely tax cuts prior to 9/11 and huge federal spending are stimulating GDP 

Favorable Economic Factors Unfavorable Economic Factors

Early & deep interest rate cuts 

Unusually well timed Federal spending initiatives 

and tax cuts 

Low fuel prices 

Decline in U.S. imports 

Steady housing demand 

Strong consumer auto purchases 

Vulnerable capital goods cycle – weak domestic 

investment outlook 

Global recession 

Weak U.S. exports 

Weak state & local budgets 

Poor business profits 

Inventories overstocked 

The Regional Perspective. 

The region is in its worst condition in over a decade. 

The average number of unemployed rose to near 60,000 with peak unemployment reaching 75,000 in 

November and December 2001. 

The manufacturing sector is in full retreat – that’s not good news for a region that has proportionally 

more industrial jobs than other areas of the country. 

Regional mainstays high tech, transportation equipment, machinery, metals, and food processors, are 

hurting. Quarterly job figures in manufacturing are off 6 percent from over a year ago on a 

seasonalized annual basis.

A weak Pacific Rim has also hurt regional exports. Japan is in its 3rd recession in a decade.

Despite weak economic fundamentals, population and migration are still holding up well. Population 

rose 1.5 percent last year, which is below historical norms, but that figure is still high compared with 

growth in the early half of the 1980’s. 

When can we expect the Portland region to rebound? 

The good news is: Probably by mid-summer. But at the start the rebound will be slow...so the region 

probably won’t feel like its out of the recession until the first quarter of 2003. 

The U.S. should be well on its way to a recovery, so the region can count on a boost from higher U.S. 

business activity. High-tech will be on its way up, and that should help fuel regional growth. 

A mild recovery overseas – especially in Japan – will aid in bolstering exports and the regional 

economy, too.
 2 

Executive Summary – continued

2000-2030 Regional Forecast

Regional Long-term Forecast Outlook: 2000 to 2030 

Regional forecast presumes policy neutral position. Policies in effect today will be in force in the 

future. Regulation of the land supply assumed to not restrict underlying market growth trends. 

Population growth in last half of 1990’s grew more rapidly than expected. Nearly 40,000 more

residents by 2000 than previous 1995-2020 Regional Forecast1

. 

20 year population expected to rise 1.6% A.P.R. as compared to 2.0 percent annual average since 1970. 

Population in 2022 expected to hit 2.65 million residents living in the region. 5 county region 

expected to reach 3 million mark by 2030. 

Population table (left) shows growth tapering off during 

the forecast to 1.4 % per year between 2010 to 2030. 

Migration represents one-half of future population growth. 

Despite more people in this forecast, the number of 

households or the housing unit need forecast is actually 

30,000 lower than the previous regional forecast. 

Household size was revised upwards by Census. Future 

household sizes expected to hold up higher than in 

previous forecast assumption. 

Population growth helps fuel population-dependent 

industries reach 4 and 4.5 percent growth rates in mid1990’s. 

Employment growth in near term expected to rebound and 

as a result so too will population (see charts below). 

Long-run employment prospects are expected to be 

favorable for the region. Job growth expected to exceed 

U.S. growth rates. 

Manufacturing jobs are expected to grow at an average of 

0.8 percent a year – fueled primarily by high tech 

developments. Nonmanufacturing jobs expected to average 2.0 percent a year. Total is 1.9 percent 

average annual growth as compared to 3.0 percent during the last 30 years. 

Annual Growth Rate Charts 

 

1

 Source: Metro Data Resource Center, 2015 Regional Forecast, January 1996 

Population 

change in 

decade 

Avg. 

Growth 

in decade

1850-60 16,046 9.2%

1860-70 13,811 6.4%

1870-80 25,123 6.3%

1880-90 69,510 8.5%

1890-00 39,891 2.8%

1900-10 157,733 7.0%

1910-20 71,192 2.0%

1920-30 83,767 1.9%

1930-40 50,538 1.0%

1940-50 210,702 3.4%

1950-60 116,332 1.5%

1960-70 194,697 2.1%

1970-80 248,584 2.1%

1980-90 179,969 1.3%

1990-00 396,554 2.4%

2000-10 359,451 1.8%

2010-20 337,200 1.4%

2020-30 384,200 1.4%

Regional Nonfarm Employment

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

70 75 80 85 90 95 00 05 10 15 20 25 30

Regional Population, total

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

70 75 80 85 90 95 00 05 10 15 20 25 30
 3 

Executive Summary – continued

2000-2030 Regional Forecast

for Various Geographies 

Exhibit 1 

5-County Regional Forecast Tables 

(Multnomah, Clackamas, Washington, Yamhill and Clark counties) 

Total Employment 

(thousands) 

Wage & Salary Jobs 

(thousands) 

Self-Employed 

(thousands) 

 High Mid Low High Mid Low High Mid Low

2000 1,210.2 1,210.2 1,210.2 958.0 958.0 958.0 252.2 252.2 252.2 

2005 1,344.3 1,314.2 1,290.0 1,068.5 1,043.5 1,023.9 275.9 270.7 266.1 

2010 1,518.3 1,477.2 1,431.0 1,202.4 1,168.7 1,138.0 315.9 308.5 293.0 

2015 1,677.3 1,625.2 1,525.7 1,321.6 1,273.1 1,209.3 355.7 352.0 316.5 

2020 1,873.4 1,788.9 1,609.1 1,459.8 1,387.7 1,267.8 413.6 401.2 341.3 

2025 2,115.9 1,972.7 1,709.4 1,627.7 1,515.5 1,335.8 488.2 457.2 373.6 

2030 2,399.9 2,151.6 1,814.2 1,823.8 1,641.5 1,406.0 576.1 510.1 408.2 

Population, total 

(thousands) 

Household, total 

(thousands) 

Personal Income 

(million $ 1996) 

 High Mid Low High Mid Low High Mid Low

2000 1,874.5 1,874.5 1,874.5 725.4 725.4 725.4 53,088 53,088 53,088 

2005 2,087.8 2,049.2 1,991.4 811.1 799.6 785.9 59,154 57,131 56,400 

2010 2,299.6 2,233.9 2,079.6 894.1 876.7 840.1 65,982 64,429 65,650 

2015 2,453.6 2,394.1 2,120.3 956.3 946.9 876.7 76,568 72,874 72,250 

2020 2,701.4 2,571.1 2,177.2 1,049.8 1021.6 915.1 90,101 84,819 76,714 

2025 3,026.2 2,768.2 2,275.2 1,171.6 1104.2 966.4 105,294 98,272 80,641 

2030 3,391.5 2.955.3 2,385.8 1,308.7 1178.8 1,022.6 123,614 110,939 82,264 

Per Capita Income 

($ 1996 ) 

Portland CPI 

(1982-84=100)

Median Home Price 

(nominal $)

 High Mid Low High Mid Low High Mid Low

2000 28,320 28,320 28,320 178.0 178.0 178.0 166,000 166,000 166,000 

2005 28,300 27,900 28,300 211.0 208.2 205.9 199,200 195,200 186,900 

2010 28,700 28,800 31,600 246.8 243.6 223.6 274,700 256,100 222,700 

2015 31,200 30,400 34,100 284.9 277.7 253.9 328,800 308,300 242,800 

2020 33,400 33,000 35,200 335.9 314.4 298.3 403,500 365,000 252,500 

2025 34,800 35,500 35,400 400.1 356.8 355.1 520,700 434,800 273,200 

2030 36,400 37,500 34,500 481.4 406.0 425.5 682,300 510,600 301,200 

Table Notes: 

Total employment includes wage & salary jobs, proprietors and other self-employed individuals. 

Personal income includes wages and salary, other labor income, transfer payments, dividends, interest 

and rent, farm and nonfarm proprietors income, and residents adjustment less social insurance 

contributions. 

Portland CPI is the Bureau of Labor Statistics all items urban consumer price index for the PortlandVancouver metropolitan area 

Median Home Price derived from RMLS median sales price statistics 
 4 

Executive Summary – continued

2000-2030 Regional Forecast

for Various Geographies 

Exhibit 2 

4-County Forecast Table 

(Multnomah, Clackamas, Washington, and Clark counties) 

Total Employment Total Population Total Household 

2000 1,172,900 1,789,460 696,669 

2005 1,273,400 1,956,300 759,600 

2010 1,433,100 2,134,300 832,800 

2015 1,577,300 2,287,000 899,600 

2020 1,736,900 2,455,700 970,500 

2025 1,916,000 2,643,700 1,049,000 

2030 2,089,800 2,821,000 1,118,900 

Table Notes: 

Total employment includes wage and salary plus proprietors. Excludes military employment. 

Exhibit 3 

Metro UGB Forecast Table 

(data tables include Multnomah, Clackamas, Washington, and Clark county) 

Total Employment 1/ Total Population 2/ Total Household 3/

2000 953,134 1,305,574 520,395 

2005 1,028,500 1,419,000 563,200 

2010 1,148,300 1,540,000 613,000 

2015 1,256,500 1,643,800 658,400 

2020 1,376,200 1,758,500 706,700 

2025 1,510,500 1,886,300 760,000 

2030 1,640,900 2,006,900 807,600 

Table Notes (source: Metro Urban Growth Report, August 2002): 

A capture rate represents a Metro policy determination to accommodate with the Metro UGB a fraction of 

expected regional growth. There are two pertinent capture rates assumed in the UGR: 1) households 

(housing units) and 2) employment (jobs). The numerator represents the number of households or jobs in 

the Metro UGB. The denominator represents a four-county total. The ratio is the capture rate for the future. 

1. Assumes a 75 percent job capture rate 

2. Assumes a 68 percent population capture rate 

3. Assumes a 68 percent household capture rate 

Exhibit 4 

Metro UGB Employment, Population and Household Demand Table 

Total Employment Total Population Total Household 

2000 953,134 1,305,574 520,395 

2022 1/2 1,428,134 1,821,300 732,600 

Change 475,000 515,700 212,200 

Table Notes: “Change” values have been rounded 

Figures in Exhibit 4 are interpolated from the forecast data shown in Exhibit 3. 

The total employment figures include self-employed and also do not yet subtract out the effects of 

redevelopment and infill. (An adjusted change without self-employed totals 355,000 jobs.) 
 5 

2000-2030 Regional Forecast

Introduction 

Purpose. 

In order to maintain a sound and vibrant regional economy, planning for future land 

needs is essential. State law mandates that Urban Growth Boundaries (UGB) in Oregon 

are periodically updated, and the inventory of buildable residential land inside UGB’s are 

replenished up to a 20 year supply at the time of periodic review. And as a matter of 

general practice, Metro also maintains an inventory of up to 20 years of industrial and 

commercial land at its periodic review of the Metro UGB. The basis for future land need 

and demand is derived from a regional forecast of employment and household change. 

The regional forecast is, in part, the supporting evidence for Metro’s UGB decision 

which is due to be finalized in December 2002. This demand, represented by the current 

regional forecast, provides the technical information for a baseline estimate of a 20 year 

need for both residential and employment land2

. Metro is now in the process of 

completing its studies and analyses for its 2002-2022 periodic review UGB decision3. 

The Metro regional forecast presents the technical underpinnings for estimates of future 

employment and future residential land need. National economic assumptions drive a 

regional forecast that is derived from a regional economic model of the PortlandVancouver region. Overall regional control totals for aggregate demand for employment 

land are derived from sector-by-sector employment forecasts. Commercial and industrial 

land demand (need) are derived from sector level employment forecasts and by 

projections of employment density and floor-to-area-ratios (FAR) for each sector4. 

Future residential land demand (need) is determined from housing unit forecasts created 

from the Metro regional forecast. Future regional population is estimated using an agecohort model, with the final result a forecast of population by age. U.S. Census “middleseries” age-specific birth and age-specific mortality rates are the initial basis for 

projecting natural population growth. These age-specific rates are benchmarked to 

regional vital statistics data to create composite regional age-specific birth and death rates 

used in estimating natural increases in regional population5

. The migration component is 

 

2

 Additional high and low growth scenarios for the region will accompany this baseline forecast to cover a 

range of uncertainty in the forecast. 

3

 Additional information is needed from other tasks under periodic review to make a final determination of 

UGB land need, e.g., alternatives analysis, Metroscope data on capture rates and refill rates, policy inputs 

with respect to matters of urban form, regional transportation plan assumptions. 

4

 FAR projections and employment density assumptions are derived by Metro’s other economic model – 

Metroscope. In fact, Metroscope is a comprehensive land use allocation model that interacts with Metro’s 

regional transportation model as well as the regional economic model. 

5

 Regional birth and death rates fluctuate a tad from year-to-year. We chose as initial rates a set of 

composite rates that minimized the difference between actual and model fitted births and deaths between 

1990 and 2000. We adjusted the national fertility and mortality assumptions to correspond to regional 
 6 

estimated net of in- and outflows and is linked to the employment forecast. The 

completed population forecast is then converted to an estimate of the number of 

households and dwelling units. A vacancy rate of 5 percent is assumed for converting the 

number of households to dwelling units. 

The Context of this Forecast and Past Regional Forecasts. 

The last officially adopted regional forecast and growth allocation was completed in 1995 

and the results published in a two volume set: The 2015 Regional Forecast, and The 2015 

Regional Forecast and Urban Development Patterns, January 1996 and February 1996, 

respectively. This Economic Report updates the first of these documents. 

A regional forecast was prepared in December 2000 and presented to the Metro Council. 

That forecast was never officially adopted and remains as an “unpublished report”.6

This Report summarizes our recent review of the Portland-Vancouver metropolitan area 

as of February 2002. This review includes development of a new regional economic 

forecast consistent with a winter 2002, long-term U.S macroeconomic outlook. The U.S. 

outlook is prepared by DRI-WEFA. The Regional Forecast is the sole responsibility of 

Metro and not WEFA. 

The regional forecast is developed by Metro Staff using an econometric model of the five 

county regional area (Multnomah, Clackamas, Washington, Yamhill in Oregon and Clark 

county Washington). The forecast results are reviewed by a panel of regional economic 

observers and peer reviewers. Comments from professional reviewers are factored into 

consideration in the final draft of the Regional Forecast. 

Policy and Economic Assumptions. 

No economic forecast can be prepared free of policy assumptions. Implicitly we maintain 

an assumption of status quo for regional and state policies. In terms of economic 

assumptions, the DRI-WEFA U.S. forecast sets the overall tone of anticipated 

macroeconomic conditions for the next 20 year period. The Metro regional forecast 

implicitly adopts these assumptions for the Metro region for its next 20 year growth 

cycle7. 

Before estimating future employment and population increases, a set of overarching 

conditions are presumed to be pre-set assumptions for the region and the U.S. These 

assumptions are often overlooked, but are fundamental to the forecast. For example, the 

 

differences in these rates. These differences were not large, but we felt it was reasonable to make the 

adjustments in order to better replicate regional trends. 

6

 Metro Data Resource Center, Economic Report to the Metro Council – 2000-2025, December 2000 

7

 Although business cycles are not dead and there have been at least 10 downturns in the Metro region, the 

current regional forecast plays out the present recession and attempts to forecast regional growth at its longrun expected growth rate. In the near term, population and economic growth in the region is slow or 

negative. Subsequently, as the U.S. economy emerges from the current 2001-2 recession, the region is 

expected to do so as well, but with a one-quarter lag. The recovery will initially show about a year or two 

of above average growth rates as the region climbs out of recession, but after this initial growth peak, the 

regional forecast gradually tapers off to the region’s long-run average growth path. This growth path is 

determined by the national forecast obtained from DRI-WEFA as well as demographic trends. 
 7 

regional forecast assumes that Americans are free to go where they please without undue 

restrictions (this has implications on migration trends and business start ups), that 

Americans are protected by the U.S. Constitution and the rule of law (this implies that 

people and businesses can reasonably expect certain behavior from others and can plan 

for the future on this basis), that America’s fundamental economic system continues to be 

based on a system of free enterprise (this presupposes a sense of economic stability and 

conditions as opposed to a socialist regime that has a different set of economic 

implications), that Americans have the right to the pursuit of happiness. These 

fundamentals we hold to be true in the regional forecast as well as the U.S. forecast. 

Additional macroeconomic assumptions with respect to fiscal policy, monetary policy, 

and so forth are also explicitly folded into the national forecast. And, in the course of 

assuming the national forecast, these national assumptions become implicit policies for 

the region too. 

At the regional level we assume a policy-neutral set of conditions over the course of the 

next 20 years. In other words, the policies that are in force today are presumed to be 

similar in the future. In terms of regional planning for the UGB, this means that future 

regional land use policies are assumed to be more of the same. In other words, future 

policies will have similar impact to that which exists today. 

The region in the past, and arguably in the present, has enjoyed land demand and supply 

conditions that pretty much do not suffer from peculiar economic distortions. 

Additionally, the forecast presumes that the market for all goods and services in the 

region is no more constrained than that of the rest of the nation. What this translates into 

for the regional forecast is that regardless of future policies, the regional markets 

(whether for labor, land or goods and services) in the Metro region are able to determine 

market equilibriums, and the condition of these markets are competitive with other cities 

on the west coast. In short, the regional forecast presumes future policies will do no harm 

to observable economic trends8

. The State’s periodic review process and Metro code are 

intended to provide periodic replenishment of the available land inventory by balancing 

the desire for economic vitality with land and environmental conservation. 

The economic trends for the region are based in part on past economic relationships, 

clusters, inter-industry linkages and the outlook for the nation. Our attempts to peer into a 

mist-shrouded future are based on these assumptions. The economic relationships 

between the U.S. economy, world economy and regional economy are intertwined and 

implicitly included in the regional forecast by virtue of the economic equations 

formulated in the regional economic model. Economic clusters that exist in the region are 

also considered. Inter-industry linkages, that is the relationships among different sectors 

of the region, are folded into the calculations of the regional forecast by inter-industry 

demand variables (behaves as an input-output parameter among industry sectors). 

The future forecast for the region is based on an outlook of global and national conditions 

that are expected to materialize over the next 20 years, as well as economic relationships 

 

8

 Policies today may encourage economic trends such as economic development. Other policies today may 

tend to redirect or dampen economic growth, but are in place to mitigate externalities that an open and 

competitive market may not have the mechanisms to properly control, such as environmental externalities. 
 8 

that have formed over the past decades. The set of U.S. and worldwide assumptions 

derive from the DRI-WEFA U.S. forecast. To highlight, the regional outlook includes 

these most recent updates: 

U.S. Census 2000 population data (updated from 1991-99 Portland State University 

intercensal estimates) 

New immigration trend information for the 1990’s 

Updated demographic assumptions of future households, migration, birth and death 

rates 

Revised employment data from the state employment departments 

New and revised U.S. Bureau of Economic Analysis income and wage data 

9/11 economic impacts 

Macroeconomic recession assumptions from DRI-WEFA 

Global macroeconomic and industry detailed growth assumptions from DRI-WEFA 

The DRI-WEFA national forecast 

is a trended forecast. This means 

that after the current recession is 

played out for the U.S., an 

expected growth rate is assumed 

by DRI-WEFA that presumably 

models an average growth path 

which bisects the peaks and 

valleys associated with recessions 

and a business cycle. The chart 

(right) of real U.S. GDP from 

DRI-WEFA exemplifies the trended approach of the national and regional forecast. 

Alternate Regional Forecasts. 

Three regional population and job growth scenarios are packaged together in this regional 

outlook report. This report includes a baseline (mid-growth scenario), high (optimistic 

scenario) and low (pessimistic scenario) growth projections. A baseline growth forecast is 

prepared first. This baseline regional forecast represents a middle growth scenario and is 

representative of the region’s most likely economic and population trends. The baseline 

regional forecast is characterized by playing out the current business cycle and with 

regional growth tapering off in later years. Future growth beyond this point assumes a 

trend projection based on “averaging out” peak growth periods with future downturns in 

order to model the region’s fundamental economic growth path. 

The baseline assumes that the economy suffers no major mishaps between now and the 

end of the forecast horizon in 2030. The baseline scenario is based on economic and 

demographic characteristics that represents neither an extremely high or low set of 

assumptions. This trended scenario assumes the absence of major economic disruptions. 

Such disruptions include large oil price shocks, unanticipated policy swings, or 

excessively rapid changes in supply or demand. 

U.S Gross Domestic Product

(inflation adjusted)

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

70 75 80 85 90 95 00 05 10 15 20 25 30
 9 

Separate high and low regional growth scenarios are prepared for the region. These 

alternative growth forecasts are constructed based on respective high and low growth 

national forecasts taken from DRI-WEFA’s national model of U.S. growth. Additionally, 

more optimistic or pessimistic regional demographic parameters are assumed in 

coordination with the corresponding alternate growth scenario. For example, the high 

growth regional scenario assumes greater migration rates than the baseline or low growth 

scenario. The high and low growth regional forecasts produced in conjunction with the 

baseline provides an alternate range of growth projections that the region could achieve 

given the range of assumptions. The alternative forecasts bracket growth and offers a 

different timeline for when a certain level of growth could be achieved given each set of 

assumptions. 

Both the optimistic and pessimistic growth scenarios have been constructed in a way that 

assumes economic and demographic factors on the extreme ends of the spectrum. In the 

case of the optimistic scenario, demographic factors were adjusted to reflect faster 

population growth parameters than the baseline assumption set. Economic factors were 

assumed to change more rapidly than in the baseline trend projection. Output is projected 

to climb much faster and economic variables exhibit more rapid growth. 

Conversely, the pessimistic scenario switches the demographic factors to a slower setting. 

For example, birth rates are lower, life expectancy is lower, and net migration is much 

less than the baseline. Economic variables were reset to weaker settings. Productivity and 

output are assumed to increase at a slower rate than either the baseline and the optimistic 

scenario. 

In terms of the economic growth path that eventually might materialize, we characterize 

the range between the high and low scenarios as approximately accounting for 90 percent 

of all possible outcomes. Therefore, there is only a 10 percent chance of growth 

exceeding or underperforming beyond the growth bands of the respective optimistic and 

pessimistic scenarios. 

Forecast Methodology Summary. 

The Metro Regional Forecast is prepared using a state-of-the-art econometric model with 

over 100 endogenous equations and 200 exogenous and identity/accounting equations 

and variables. Stochastic behavioral equations describe each significant industry category 

in the manufacturing and nonmanufacturing sectors. Income equations for every major 

income category are modeled. Wage equations for aggregate groupings of industries 

project future wage rates. Inter-industry linkages between different parts of the regional 

economy are expressed with feedbacks and interactions that represent the mix of regional 

economic relationships and growth patterns. The equations for employment, income, 

wages and population are compiled together to describe the growth rate anticipated for 

the Portland-Vancouver area economy. 

Specifically, inter-industry demand variables (IDV) are employed in each employment 

equation to reflect the implicit input-output associations which exist among each regional 

industry. Industries with significant traded demand, typically sectors in manufacturing 
 10 

and some traded-sector nonmanufacturing classifications (e.g., transportation & 

warehousing and creative services) include additional industry demand drivers, for 

example, variables that proxy specified industry-level national demand. Non-traded 

industries, typically classified in nonmanufacturing sectors, include demand variables 

triggered by growth in population and income related variables. Productivity assumptions 

and projected wage rate increases are employed in each industry employment equation to 

reflect the labor force and price variations that co-determine employment demand from 

the factor input side. Employment equations represent the heart of the Metro Regional 

Economic Model and describe in the greatest possible detail the structure of the regional 

economy. 

Population change is estimated by five-year age groups. A cohort-component method of 

projecting future population changes in the region is employed. Population statistics are 

projected for individual five-year age cohorts. The Metro Regional Economic Model 

includes estimates of fertility and the number of births. Mortality rates are also assumed 

and the number of deaths in each age cohort is estimated in each forecast year. The 

difference between births and deaths from these projections represents the expected 

natural increase in the regional population. Adding in a forecast of migration (net of 

inflows and outflows of residents) by age cohort, we are able to arrive at an estimate of 

population in future years. A net-migration forecast is prepared using a stochastic 

equation which models the relationship identified between migration and relative 

economic growth comparisons. Essentially, migration levels increase when economic 

growth in the region increase on a relative basis significantly faster than the economies of 

California, Washington and the U.S. population growth in the region is tied directly into 

the Regional Forecast by the amount of migration and the ability of the region to draw in 

migrants based on the strength of regional economic growth. 

Future growth assumptions also include economic growth projections for the U.S. and the 

global economy. National variables include components of gross domestic product 

(consumption and investment trends), fiscal and monetary variables, exchange rates, 

inflation, productivity, housing variables, and labor force data. These future year growth 

expectations provide the backdrop for Metro’s Regional Economic Forecast. 

Report Organization. 

The regional forecast begins in year 2002 through 2030. Year 2001 data through the 3rd

quarter represents the last actual data point with the 4th quarter still a preliminary 

estimate. The geographic coverage of the Regional Forecast is a five-county PortlandVancouver metropolitan area that includes Multnomah, Clackamas, Washington and 

Yamhill counties in Oregon plus Clark county, Washington. For purposes of comparison 

and additional geographic coverage, less detailed “satellite models” also forecast 

individually the employment, income, and population for Columbia, Yamhill, and the 

Salem MSA (Marion and Polk counties). These other county projections are separate 

from the detailed Portland-Vancouver MSA (five counties). Subtracting the Yamhill 

county forecast from the five-county Regional Forecast, an officially adopted Regional 

Forecast with just the four-county area is employed for Urban Growth reporting 

purposes. 
 11 

The U.S. economic forecast and most other assumptions in this report are based on data 

released through the month of October 2001. Regional and national statistics which are 

usually tabulated on a monthly or quarterly frequency have been seasonally adjusted 

using the Census X-11 method. U.S. historical data are also through the 3rd quarter. 

Regional income data which comes annually from the U.S. Bureau of Economic Analysis 

(BEA) reflect historical data through 1999. Monthly current employment statistics (CES) 

from the State of Oregon include data through October 2001. Annual population statistics 

are updated to 2001 based on Census 2000 enumerations and county population estimates 

derived from Portland State University, Center for Population Research and Census 

(CPRC) and Washington State Office of Financial Management (OFM). Other historical 

data series (e.g., self employment, wages and components of personal income) used in 

this report are at least through 1999. 

Detailed statistical information describing the baseline regional forecast is tabulated in 

the Appendix of this report. The main text of this report provides a summary description 

of the assumptions, results and conclusions contained in the baseline regional forecast. 

Details of the high and low growth regional forecast scenarios are also included in the 

Appendix which compares the three alternative forecast scenarios for selected economic 

variables. 

DRI-WEFA’s detailed explanation of its U.S. long-term economic outlook is also found 

in the Appendix of this report. A brief description of the DRI-WEFA U.S. forecast is 

incorporated into the main text of the report. Additional forecast tables are included in the 

appendix which offer more detailed information about the U.S. macroeconomic trend and 

the optimistic and pessimistic national scenarios. Excerpts of the DRI-WEFA 25-year 

focus of the U.S. economy is included. 

Additional forecast years beyond 2030 were prepared as part of this regional forecast, but 

the reliability of these projections is significantly diminished from the prior year 

projections. The later forecast years, beyond 2030, were developed as a convenience for 

extreme long-range facility planning efforts and to address questions about potential 

future growth patterns in 2040 and 2060. 
 

to the 

Portland-Vancouver Metropolitan Area 

Economic & Demographic Projections 

Employment 

Population & Households 

Income & Wages 

The Regional Forecast information contained herein is based on 

U.S. macroeconomic assumption obtained from DRI-WEFA from its 

winter 2002 U.S. Economy economic outlook. The U.S. economic 

outlook includes DRI-WEFA’s estimate of the effects from 

September 11th on U.S. growth. The DRI-WEFA U.S. outlook is 

provided to Metro as is. The Regional Forecast is then developed 

based on the assumptions in the WEFA U.S. Outlook and Metro’s 

econometric model (MARIO – Metro Area Region IntegratedIndustry Outlook model). MARIO translates the national 

assumptions through a modeled economic structure of the PortlandVancouver OR-WA metropolitan area to produce the 2000-2030 

Regional Forecast. The Regional Forecast is then reviewed by an 

independent panel of regional forecasters, demographers, city 

planners and economic observers. The Metro Data Resource 

Center bears responsibility for the content of the Regional Forecast. 

All information is based on data sources believed to be accurate 

and reliable; however, users are cautioned that economic conditions 

may change and unforeseen circumstances may materially impact 

the accuracy of the Regional Forecast in future years. 
 13 

2000-2030 Regional Forecast 

U.S. Economy in Review. 

It’s official! – the National 

Bureau of Economic Research 

(NBER) last November 

determined that the U.S. 

economy peaked in business 

activity in March 2001. With 

that announcement9

, the current 

U.S. recession began and the 

longest uninterrupted expansion 

since World War II ended –

exactly 10 years after it had begun (March 1991). 

Inflation-adjusted GDP estimates 

finally confirm the NBER’s 

declaration. In the fourth quarter of 

2001, real GDP in the U.S. fell 1.3 

percent. Signs of a slowdown were 

appearing long before. Producers 

began cutting production in 

2000Q4. Investments in domestic 

plant and equipment began 

declining in 2001Q1. Employment 

cuts soon followed as one after another economic driver stalled. Weak consumer 

confidence and fears of more unemployment caused consumers to retrench as 

consumption fell to 1.0 percent growth in the fourth quarter. 

Every recession in the U.S. starts out differently and this one has been no different. The 

primary reason for the decline in U.S. output can be traced to the steep deceleration in 

manufacturing and investment spending. 

Steep draw-downs in retail 

and industrial inventories 

combined with cutbacks in 

industrial production 

Severe fall-offs in capital 

investments 

Struggling economies in 

Japan, Canada and Mexico 

hit U.S. shores just as the 

nation’s own domestic 

industries began to decline 

 

9

 The Business-Cycle Peak of March 2001, Business Cycle Dating Committee, NBER, Nov. 26, 2001. The 

NBER bases its recession determination on industrial production, employment, real income, and wholesaleretail trade activity when as a group these indicators show “significant decline”. 

Gross Domestic Product

(inflation adjusted)

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

98q1 99q1 00q1 01q1 02q1 03q1 04q1

Investment in Information Processing Equip.

(inflation adjusted)

-30.0%

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

98q1 99q1 00q1 01q1 02q1 03q1 04q1

Manufacturing Employment

Durable

-12.0%

-10.0%

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

98q1 99q1 00q1 01q1 02q1 03q1 04q1
 14 

Now a worldwide recession and Japan in its third recession in 10 years have severely 

hampered U.S. exports. A relatively strong U.S. dollar has not helped U.S. exports, which 

have fallen more steeply than imports. 

The impact of this recession has been uneven across different geographic regions of the 

country and industry sectors. The Pacific Northwest has been hit the hardest by this 

recession. Employment in nonmanufacturing sectors has held steady with only narrow 

declines in many industries. Oregon’s unemployment rate (7.3%) is the worst in the U.S. 

U.S. unemployment in total has risen only modestly since the recession – to 5.8 percent 

from 4.0 percent a year ago. The manufacturing sector has endured the brunt of the 

current recession. On an annualized basis, U.S. manufacturing jobs fell 6.3 percent in the 

last quarter. High-technology manufacturing employment is down almost 10 percent. 

Transportation equipment is off nearly 6 percent. For the most part, durable producers are 

hurting much more than nondurable manufacturers. 

Unlike previous recessions, many other national variables remain in good standing. 

Interest rates have been falling as the Federal Reserve (FED) and Chairman Alan 

Greenspan had attempted to stave off the recession with earlier cuts in interest rates. 

Since mid-2000, there have been 11 consecutive interest rate cuts. More recently, the 

FED has signaled a change in its interest rate bias to a neutral position – neither expecting 

to cut nor raise rates in the immediate future. 

Along with a favorable interest rate climate, inflation has remained in check for much of 

the latter decade thanks to a balanced budget and an acceleration in productivity. Low 

real energy prices have also aided in taming inflation. 

Favorable Economic Factors Unfavorable Economic Factors 

Early & deep interest rate cuts 

Unusually well-timed Federal spending 

initiatives and tax cuts 

Low fuel prices 

Decline in U.S. imports 

Steady housing demand 

Strong consumer auto purchases 

Vulnerable capital goods cycle 

Global recession 

Steep drop in U.S. exports 

Weak state & local budgets 

Poor business profits 

Inventory draw downs 

Housing demand and consumer purchases of automobiles – now a strength – could easily 

become a negative factor. Higher housing prices could easily tilt U.S. housing production 

down. And auto purchases could be at risk if consumers decide to not buy as many cars 

as rebate incentives evaporate. 

On the other hand, businesses will soon have to restock store shelves and bolster their 

inventories as economic spirits begin to lift. Inventory growth would accelerate GDP. 
 15 

National Forecast Overview. 

The main question for most everyone has been “when can we expect the U.S. economy to 

rebound?”. Estimates by most economic observers believe a turn-around could begin as 

soon as the start of summer, while others think it might not happen until early autumn. 

Most recessions have, on average, a peak to trough timeline of between 12 and 15 

months. If indeed the U.S. economy fell into recession in March 2001, the U.S. should 

begin climbing out of its doldrums in the next few months –which would place the 

recovery in about June 2002. 

Monetary conditions are in place for a recovery, but there are concerns that the rebound 

could be weaker than normal and slower to develop. However, over the long-run, U.S. 

economic growth is expected to be robust – more in line with growth during the 1990’s 

than the low growth, low productivity, high interest, and inflationary 1970’s and 80’s. A 

couple of factors will tend to undercut a sharp recovery in the near term. 

Housing starts and sales have remained at relatively high levels, so expectations are 

mild for a strong run-up in additional housing starts. Low interest rates help, but the 

FED is unlikely to cut any deeper anytime soon. 

U.S. domestic auto sales have remained relatively strong throughout the downturn. 

Price rebates have stimulated strong demand despite the recession. A sharp rise in 

auto purchases in late-2001 may restrain auto sales growth in the near future, just as a 

recovery is beginning. 

As a consequence, these two large 

sectors of the economy are not 

expected to offer much bounce to 

an early recovery. The U.S. will 

have to look to other sectors of the 

economy for leadership during the 

recovery. 

And so. . .once again, consumers 

will have to step it up in order to 

boost U.S. GDP. Nascent signs are 

emerging to suggest the consumers 

are ready and willing, but there are 

worries that high consumer debt 

levels may hamper a stronger 

recovery. 

Consumers will have to lead, 

before conditions ripen enough for 

producers to gain the confidence to 

gear up production. 

U.S. Business Inventories

(inflation adjusted - $billions)

-75

-50

-25

0

25

50

75

100

125

Q1

98

Q1

99

Q1

00

Q1

01

Q1

02

Q1

03

Q1

04

Federal Reserve Funds Rate Target

(percent)

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

1/00 3/00 5/00 7/00 9/00 11/00 1/01 3/01 5/01 7/01 9/01 11/01 1/02

The Federal Reserves cuts the Fed fund 

rate below 2% for the first time in 40 years
 16 

A couple of other factors favor a recovery in the near future. The first was the “economic 

stimulus” in the fall of 2001. 

Though this “tax rebate” was not 

initially billed as an economic 

stimulus, the refunds came at a very 

serendipitous time in the business 

cycle. For all intents and purposes, 

its timing and size has acted as a 

positive stimulus. 

Second, in hindsight it is clear 

producers and retailers saw a 

recession in the making in late 

2000. Inventory accumulation began slowing in 2000, and by 2001 everyone was 

slashing inventories. As we begin 2002, manufacturers and retailers alike will have to 

rebuild their depleted inventories, which should add an additional bump of about 1⁄2 

percent to domestic GDP growth. Stronger consumer demand in the second quarter will 

provide all the signal needed to boost inventories. 

The U.S. macroeconomic forecast 

predicts consumer spending will 

bounce back in the second quarter 

of 2002 and accelerate to 4.1 

percent by the 2003 Q1. 

Investments in fixed plant and 

equipment will lag behind 

consumption by another quarter 

before accelerating up to 11 percent 

by the end of 2003. 

A one quarter lag in nonresidential fixed investments is further reflected in industrial 

production, where output will not ramp up until the third quarter of 2002. Industrial 

production peaks in 2003 before settling into a trend growth path between 2 and 3 percent 

growth per year. 

Consumer confidence will be a key 

indicator of where the U.S. economy is 

in the business cycle. Consumer 

confidence hit bottom in September 

with the terrorist attacks on New York 

and Washington D.C. Since October the 

University of Michigan consumer 

sentiment index has been steadily rising, 

with a relatively large percentage jump 

in December 2001. 

Consumer Sentiment Index (1966:2 = 100)

50

60

70

80

90

100

110

120

Jan90Jan91Jan92Jan93Jan94Jan95Jan96Jan97Jan98Jan99Jan00Jan01

Consumer Expenditures

(inflation adjusted)

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

Q1

98

Q1

99

Q1

00

Q1

01

Q1

02

Q1

03

Q1

04

Industrial Production - total

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

Q1

98

Q1

99

Q1

00

Q1

01

Q1

02

Q1

03

Q1

04
 17 

As this index continues to rise, and 

with expectations for employment 

gains just over the horizon, the U.S. 

recovery should begin to be felt as 

soon as summer arrives. However, 

it may still be a long wait – perhaps 

2003 - before a complete thawing 

and the U.S. economy returns to 

warmer conditions. Economic 

conditions surely will begin to 

improve, but employment growth 

won’t likely return to anywhere near pre-recession levels until mid-2003. 

Global Setting. 

World trade is important to the U.S. 

economy. U.S exports currently 

contribute about 12 percent to the total 

Gross Domestic Product. Over the 

long-haul, the national forecast calls 

for exports to grow faster than other 

components of GDP. By 2030 the 

share of exports to U.S. GDP rises 

above 22 percent. International trade 

very much is expected to favor the 

U.S.. 

The U.S. carries a significant 

current account deficit, due to its 

own export deficit. However, due 

to the strength of the U.S. economy 

and the confidence this generates 

with respect to the rest of the 

world, the value of the U.S. dollar 

is expected remain relatively 

strong. This tends to dampen 

exports, but not by an inordinate 

amount, and exports are still 

expected to grow. The rest of the world will continue to expand and to drive up demand 

for U.S. goods, especially services. In the long-run, a flat or somewhat declining 

exchange rate will tend to help U.S. manufacturers export their goods to the world. 

U.S. Nonfarm Employment

(millions)

124

126

128

130

132

134

136

138

Q1

98

Q1

99

Q1

00

Q1

01

Q1

02

Q1

03

Q1

04

U.S. Foreign Exchange Rate Index

(trade weighted to 18 largest trading partners)

0

20

40

60

80

100

120

140

160

70 75 80 85 90 95 00 05 10 15 20 25 30

Share of Exports/GDP

0%

5%

10%

15%

20%

25%

60 65 70 75 80 85 90 95 00 05 10 15 20 25
 18 

DRI-WEFA World Economy Forecast. 

This section reprinted from DRI-WEFA Global Forecast, February 2002. 

DRI-WEFA World Market Overview

Recovery is in the air, at least in North America and Europe. Parts of Asia will follow along, but 

much of the region is struggling with the consequences of not following through on economic 

reforms. The region also has its share of political crises, many related to the war on terrorism. 

China, Russia, and most of the other former states of the Soviet Union continue unscathed from 

the high-tech collapse that pushed Europe and North America into recession. Japan and much of 

Latin America will continue to struggle with largely domestic political and economic problems. 

Projected Growth Rates of Real GDP 

 (Percent)

Average

2001 2002 2003 2004-06

United States 1.1 1.0 4.0 3.0

Canada 1.4 1.1 3.9 3.3

Japan -0.4 -1.1 1.8 2.1

W. European Big 4 (a) 1.6 1.3 3.2 2.5

Mexico -0.3 1.8 4.6 5.6

S. American 7 (b) 0.6 -0.4 2.7 4.0

Middle-Income Asia (c) 5.4 5.5 6.5 6.8

World 1.4 1.4 3.7 3.4

a. France, Germany, Italy, and the United Kingdom. 

b. Argentina, Brazil, Chile, Columbia, Ecuador, Peru, and Venezuela. 

c. China, India, Indonesia, Malaysia, Philippines, Thailand, 

 Fiji, Maldives, Papua New Guinea, and Vanuatu. 

Canada: Turning Around. The Canadian economy is probably now in the early stages of recovery from a mild recession. 

While recent indicators have been decidedly mixed, the first quarter of 2002, unlike the previous two quarters, is expected 

to show slight positive growth. Fiscal and monetary policies will be supplementary to the recovering U.S. economy as 

drivers of recovery in Canada. While the interest rate reductions of 2001 will provide stimulus over the next few quarters, 

the reductions have not been as significant in Canada as in the United States. It will probably be the third quarter before 

growth will be back up to potential, and 2005 before the output gap is eliminated. The Canadian economy is expected to 

grow 1.1% in 2002 and 3.9% in 2003. 

Eurozone: Gaining Confidence. There are increasing signs that Eurozone economic activity is beginning to pick up 

gradually. Nevertheless, GDP may have contracted modestly in the fourth quarter of 2001, following minimal growth in the 

previous two quarters, as the negative economic repercussions of the September 11 terrorist attacks on the United States 

had an increased impact. Even before the attacks, the slowdowns in the U.S. economy, in particular, and elsewhere in the 

global economy had already had a substantial dampening effect on Eurozone activity. Following the terrorist attacks, the 

slowdowns in the manufacturing and service sectors intensified, while business and consumer confidence weakened 

further. Encouragingly, though, the latest data are generally showing modest improvement, and confidence is growing, 

showing that the downturn has bottomed out. Indeed, the service sector now appears to be expanding again. 

On the assumption that the U.S. economy starts to recover in early 2002, we believe Eurozone activity should pick up 

modestly as the first half of 2002 progresses. Growth should gain increasing momentum in the second half, supported by 

low inflation and interest rates, modest real wage increases, and some fiscal stimulus in several countries. Inventories 

have also been reduced significantly. Even so, Eurozone GDP growth will be limited to 1.3% in 2002, after an estimated 

1.6% expansion in 2001. Growth is then projected to accelerate to 3.0% in 2003. 

Mexico: Both Victim and Beneficiary of Spillover. The Mexican economy suffered a sharp deterioration in 2001, 

primarily the result of adverse external conditions. The U.S. recession buffeted Mexico's exporting sector, which had been 

the one of the country's most dynamic. Meanwhile, declining oil prices also hurt, as the government found itself unable to 

increase fiscal spending to stimulate the faltering economy. In addition to negative external factors, Congress approved 

only a partial fiscal reform that will not give the government the extra resources it needs. We do not expect any of the 

aforementioned factors to improve significantly in the first half of 2002, and some will remain negative through the entire 

year. Nevertheless, the recovery of the U.S. economy in the second half of 2002 will allow the Mexican economy—and 

especially its exporting sector—to rebound. As a result, GDP should expand 2.0% in 2002, a clear improvement from the 

0.4% contraction in 2001. 
 19 

DRI-WEFA Forecast Summary of the U.S. Economy.

This section reprinted from DRI-WEFA U.S. Executive Summary, January 2002. 

 2001:2 2001:3 2001:4 2002:1 2002:2 2002:3 2000 2001 2002 2003 2004 2005 

 –––––– –––––– –––––– –––––– –––––– –––––– –––– –––– –––– –––– –––– –––– 

Composition of Real GDP (Annual percent change) 

Gross Domestic Product 0.3 -1.3 -0.9 -0.2 1.7 3.0 4.1 1.0 0.6 3.7 3.7 3.0 

 Final Sales 0.7 -0.5 -0.8 -2.2 1.0 2.8 4.3 2.0 0.0 3.4 3.7 3.1 

Gross National Product 0.3 -1.3 -0.8 0.2 1.9 3.1 4.1 1.1 0.8 3.4 3.4 3.0 

Total Consumption 2.5 1.0 2.2 -1.9 2.7 3.6 4.8 2.8 1.4 3.7 3.3 2.9 

 Durable Goods 7.0 0.9 19.4 -24.6 6.7 5.1 9.5 5.6 -1.0 7.6 5.0 2.9 

 Nondurable Goods 0.3 0.6 -1.8 0.8 2.0 4.2 4.7 1.5 1.1 3.6 3.4 2.9 

 Services 2.8 1.2 0.9 2.0 2.3 3.0 4.0 2.9 2.0 3.0 2.9 2.9 

Nonres. Fixed Investment -14.6 -8.5 -8.9 -4.2 -4.9 2.9 9.9 -2.8 -5.2 5.5 8.5 6.1 

 Equipment and Software -15.4 -8.8 -6.1 -2.9 -3.8 6.5 11.1 -4.5 -3.7 8.3 10.5 7.7 

 Computers -30.3 -26.8 3.1 4.6 9.6 8.4 39.1 -2.2 -1.0 16.3 19.1 20.0 

 Software -3.7 4.3 2.3 6.9 10.7 9.7 12.1 2.8 6.3 10.6 10.6 10.7 

 Communications Equipment -41.2 -25.8 -2.5 -2.4 -3.9 9.8 28.7 -18.4 -7.8 5.2 8.9 8.0 

 Light Vehicles -2.6 -17.1 7.9 -6.9 -17.8 8.1 0.6 -7.7 -4.8 8.9 7.4 2.7 

 Other -12.6 -4.1 -15.0 -7.4 -8.4 3.5 4.5 -3.8 -7.2 6.3 10.2 5.5 

Private Nonres. Structures -12.2 -7.5 -16.2 -7.9 -7.8 -6.4 6.2 2.2 -9.4 -2.3 2.6 1.2 

 Buildings and Other -19.1 -0.8 -19.3 -6.1 -3.6 -5.2 5.1 -2.0 -8.5 -2.5 3.8 1.3 

Residential Fixed Investment 5.9 2.4 -2.7 -7.8 -3.2 0.4 0.8 1.6 -2.3 0.5 0.7 1.8 

Exports -11.9 -18.8 -21.7 -8.4 -1.3 4.7 9.5 -5.3 -9.0 9.2 9.7 8.1 

Imports -8.4 -13.0 -6.0 -1.5 6.3 9.5 13.4 -2.6 -1.2 8.1 6.7 5.5 

Federal Government 1.8 3.6 3.8 6.2 7.6 5.3 1.7 2.2 5.0 3.0 2.0 1.4 

State and Local Governments 6.6 -1.3 2.5 2.4 2.6 3.0 3.2 3.6 2.2 1.7 1.7 1.7 

Source: U.S. Economic Outlook, DRI-WEFA, January 2002 

The approaching new year is a good time to look at what may go right in the economic arena during 2002. One sector 

worth looking at is high technology. Spending on high-tech equipment ran out of control in 2000, and we project only a 

slow recovery in 2002. The good news is that, even at its low, high-tech spending will still account for 47% of total 

spending on equipment and software and 4% of GDP. This direct spending—still much higher than in most other countries 

and higher than in the United States until the late-1990s boom—will continue to crank out productivity gains. A lot of 

recent (and future) innovations from Web access, e-commerce, and medical/biotech, for example, are free or priced below 

user value. That is bad news for innovator profits, and for “real” growth (which does not capture ideas), but the innovations 

generate a nice consumer surplus for users that in many cases also boosts productivity. 

Cyclically, housing is much stronger now than during the average recession, and the inventory correction will be over 

sooner because it started sooner. We estimate that reversal of the inventory shrinkage will add 0.6 percentage point to 

GDP growth in 2002. Travel is already showing some early rebound, with dining out, sporting events, and flying all 

showing gains. As people make more reasonable risk calculations, consumer spending will rise further from today’s 

depressed levels. Leisure industry employment could show an early turnaround, beating overall employment, which 

generally lags. 

 

The federal government’s boost to the economy is large and unusually well-timed. The large tax cuts voted before 

September 11 have now been enhanced by billions in new spending. The failure of Congress to enact a stimulus bill will 

do little to hold back the recovery. While the parties’ contending bills would have provided some temporary income 

support to the unemployed, the added growth would be small, and unnecessary, in our baseline forecast. 

The interest rate cuts began early, and rates are now down to extremely low levels. Inflation seems neither too hot nor too 

cold, meaning it is low enough for undistorted economic decisions and financial market confidence, but high enough to 

ease relative price adjustments. 

Adding it all up, the U.S. economy is not out of the business cycle trough just yet, with the new year expected to bring a 

third consecutive quarterly decline in real GDP. By year-end 2002, though, real GDP should be forging ahead at a 4% 

annualized rate. 
 20 

Long-range U.S. Macroeconomic Outlook. 

Recessions make up only a small “blip” in economic trends. There have been 10 

recessions since World War II. On average, U.S. recessions have lasted between 12 to 15 

months, with the most severe lasting as long as 18 months. Even with recessions 

sprinkled over the last 55 years, real GDP rose an average of 3.5 percent a year. Despite 

fears of global terrorism and the tragic aftermath of 9/11, the current recession will have 

very little impact over the long-run. The U.S. economy is expected to bounce back, 

perhaps a little more tired and more cautious, but eventually it will have vigor and vitality 

to similar before the recession. 

A recession, although hurtful to selected segments of the economy that bear the brunt of 

its force, is not always a bad thing. Recessions serve to root out weak firms and sagging 

industries. They weed out poor business practices and reveal ill-conceived business 

ventures. In the end, it leaves the economy stronger and better able to forge ahead, 

populated with healthier companies. 

In peering into a hazy long range horizon necessary for regional planning, it is useful to 

view economic and population forecasting not in terms of ‘Did the forecast accurately 

predict all growth?’, but rather, to think instead about when we might achieve a certain 

level of growth, plus or minus 2 or 3 years. This turns forecasting on a different axis, and 

allows planning to proceed, without getting diverted by questions about the “right 

number”. Planning may be viewed as the accommodation of growth up to a certain range, 

with policies that speed into implementation sooner when growth is faster and growth 

management strategies deferred when the economy is growing more slowly. 

The current U.S. recession is expected to bottom-out in the 2nd or 3rd quarter of 2002. 

U.S. Gross Domestic Product (GDP) is anticipated to accelerate through 2003-04, before 

moderating and tapering off to a more sustainable long run rate – absent of any additional 

business cycles. The DRI-WEFA national forecast calls for long-term inflation adjusted 

U.S. GDP to settle into an annual growth rate of between 3.0 and 3.5 percent. 

The fundamental underpinnings for the long run growth path of the U.S. depend on the 

projected growth rate of the labor force and increases in productivity. 

U.S. long-run growth fundamentals: 

 Annual Average Growth Rates

 History (1970-00) 25 Year Forecast 

Gross Domestic Product 3.1 percent 3.2 percent 

Productivity 1.0 percent 2.1 percent 

Labor Force 1.7 percent 1.2 percent 

Source: DRI-WEFA, Winter 2002 U.S. Economy outlook as derived by Metro Data Resource 

Center 
 21 

The national forecast from DRI-WEFA calls for annual productivity rates to double, 

increasing to 2.1% from its historical rate of 1.0%. Productivity increases are assumed, as 

more and more U.S. and international firms continue to take advantage of automation and 

information processing resources. The current U.S. forecast view continues to incorporate 

significant amounts of “New Economy” growth into the long run macroeconomic 

forecast. Unlike the technology wave in prior decades, which replaced manual and less 

efficient means of producing goods and services, this second wave of information 

technology is creating innovation of a different sort. In the new economy paradigm, new 

technology assumes the form of new ideas and new products, which lift the overall 

wealth of the nation. 

The significant increases in industrial plant and equipment growth forecasted for the 

investment in the computers and software category support this view. Over the long haul, 

the national outlook for high-technology investments is very robust – with an annualized 

growth rate of 6.8 percent per year. This is slower than the break-neck pace of hightechnology investments of the 1990’s, which saw rates shoot up to 22 percent and 

average over 16 percent a year. This projected investment in high-technology and other 

innovation will help to bolster productivity in the long run. This allows the nation to 

create more goods and services at lower costs. 

At the same time, employment in high-technology represents a bright spot in the 

manufacturing sector. Most other manufacturing industries are expected to slowly shed 

employment as more labor intensive production processes are shipped overseas. In 

addition, corporate outsourcing is expected to continue along its present path as more 

employment functions are reclassified into services. Higher 

productivity rates allow firms to do 

more with fewer people. With the 

exception of the current recession, 

employment growth in the 

technology sector continues to see 

expansion on the order of under 0.5 

percent per year. For the whole of 

manufacturing, employment over 

the long-haul is expect to decline an 

average of -0.6 percent annually. 

 

The next fundamental is the growth in the labor force. The U.S. labor force is not 

expected to grow as rapidly in the next 30 years as it has in the last. This slower rate of 

increase tends to dampen potential GDP growth. One factor which offsets the potential 

decline is immigration from abroad, which is expected to be higher than previously 

assumed. Retention of older workers in the workforce also serves to ameliorate the effect 

of the slowing of labor force growth. 

An economy’s growth rate can fluctuate year-to-year with the rise and fall of the business 

cycle, but the long range trend of GDP growth is not likely to waver too far from its 

U.S. Manufacturing Employment

0

5

10

15

20

25

70 75 80 85 90 95 00 05 10 15 20 25 30
 22 

expected trend. Changes in monetary or fiscal policy, an unforeseen global recession, 

changes in capacity utilization, investments and inventory fluctuations are likely to cause 

economic growth to change as some of these factors play out in the current economic 

malaise. But these variables are transitory and will tend to fade into the background in the 

long-run. Determinants of the long-run are primarily the labor force and its productivity. 

U.S Gross Domestic Product

(inflation adjusted)

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

70 75 80 85 90 95 00 05 10 15 20 25 30

U.S Productivity

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

70 75 80 85 90 95 00 05 10 15 20 25 30

U.S Labor Force

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

70 75 80 85 90 95 00 05 10 15 20 25 30

U.S. Foreign Exchange Rate Index

(trade weighted to 18 largest trading partners)

0

20

40

60

80

100

120

140

160

70 75 80 85 90 95 00 05 10 15 20 25 30

30 Year Treasury Bond Rates

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

70 75 80 85 90 95 00 05 10 15 20 25 30

Consumer Price Index (Inflation)

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

70 75 80 85 90 95 00 05 10 15 20 25 30

Consumer Confidence Index (right axis)

Consumer Consumption (left axis)

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

70 75 80 85 90 95 00 05 10 15 20 25 30

0

20

40

60

80

100

120

U.S. Housing Starts (in millions)

0.00

0.50

1.00

1.50

2.00

2.50

3.00

70 75 80 85 90 95 00 05 10 15 20 25 30
 23 

Portland-Vancouver Economic Forecast 

(5 counties – Multnomah, Clackamas, Washington, Yamhill and Clark) 

Recent Trends. 

Economic conditions in the region during the past year have been much worse than the 

U.S. as a whole. In fact, Oregon brings up the rear in state unemployment rates with an 

unemployment rate of 7.5 percent10. And it’s not just Oregon; the entire Northwest is 

suffering. In Washington State unemployment hit 7.1 percent. Things were so bad in 

November 2001 that for a brief while the Portland metro regional unemployment topped 

the State’s unemployment rate. 

Nonfarm employment growth 

slowed in 1998-99, before seeing 

a modest rebound in 2000. In 

2001, the previous year’s brief 

growth spurt turned negative. 

Employment news has not been 

this bad since 1991. Total 

nonfarm employment lost 

ground in 2001 as annual job 

figures for the region fell 0.34 

percentage points (or a net loss 

of 3,200 jobs). The average number of unemployed rose to near 60,000, with peak 

unemployment soaring to 75,000 unemployed workers in November and December 2001. 

The last four years of economic expansion – dating back to 1991 – have been much more 

turbulent than the previous six. Regional nonfarm job growth slowed for consecutive 

years in 1998 and 1999, with growth reaching only 1.8 and 1.4 percent, respectively. The 

roots for this region’s economic slowdown can be traced to the world-wide hightechnology slump happening then. The region’s higher proportion of manufacturing – 

especially its concentration of high technology – made the region more susceptible to the 

so-called “Asian Flu”. And the region’s proportionally greater exposure to the Pacific 

Rim caused growth in the late 1990’s to decelerate. 

In 2000 employment growth exhibited a mini-rebound across the board. Manufacturing 

jobs edged up 1.5 percent and nonmanufacturing rose 2.5 percent. As 2001 drew nearer, 

it seemed at first possible that the region would be able to skirt the latest recession, as it 

had in 1990-91, but events unraveled and the terrorist attacks on September 11th were the 

last straw for an economy that was on the brink of a downturn. Even by mid-2001, most 

economic pundits were still hopeful that a regional bounce could be possible by 

September. Those hopes were destroyed. 

 

10 Seasonally adjusted. Source: Local Area Unemployment Statistics, Bureau of Labor Statistics, 

www.bls.gov/web/lauhsthl.htm

Unemployment Rates

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

7.5

8.0

Jan

2000

Mar

2000

May

2000

Jul

2000

Sep

2000

Nov

2000

Jan

2001

Mar

2001

May

2001

Jul

2001

Sep

2001

Nov

2001

(percent)

Portland

U.S.

Oregon
 24 

The greatest weaknesses in the region’s current economic state lies in its manufacturing 

sector. Employment declines appeared across almost every major industry group. Overall 

manufacturing jobs fell by 2.3 percent in 2001 with the steepest declines in transportation 

equipment, machinery, metals, and food processing. 

Regional Expectations. 

The conditions that created the recession in the region may provide the possibility as well 

as the initial surge for a strong rebound in 2003 and 2004. However, until then, the 

regional economy will have to wait. We anticipate the recession to continue to exert its 

power over employment and regional growth through much of 2002. Prospects for a rapid 

rebound in 2002 are quite slim for the region, as a rebound for the nation is not expected 

until mid-2002. We anticipate a recovery for the region after the U.S., and growth rates to 

rebound more sharply as compared to the U.S. 

This recession has been one that has been marked by a slumping high-technology 

industry. Negative returns triggered by the collapse in Internet companies and rapid 

decline in information processing and software investments started what will be a three 

year decline in the non-electrical machinery and “second-dip” in the region’s electronics 

and instrument industry. High-technology, which had been a mainstay for the region’s 

rapid rise during the mid-1990’s, has become this region’s Achilles heel. For this reason, 

the regional economy has dipped lower than that of the U.S., but we anticipate a stronger 

resurgence in the region’s high-tech sector than for the nation as a whole. 

Moreover, this region’s greater 

dependence on manufacturing firms 

to supply employment opportunities 

has turned into a manufacturers 

recession, with retail and other 

service sector industries being 

dragged down by the producer 

sector’s weaknesses. As the region 

recovers, what was once a source of 

weakness will again become a 

source of strength for the region’s 

future. 

Despite current weakness in the 

economy, regionwide population 

estimates through this period have 

been surprisingly strong. 

Population growth had been 

slowing since 1998 with the 

regional economy winding down. 

High-Tech Manufacturing Employment

(Portland-Vancouver MSA)

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

Q1

98

Q1

99

Q1

00

Q1

01

Q1

02

Q1

03

Q1

04

Population, total

Portland-Vancouver Metropolitan Area

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05
 25 

Forecast Summary for the Portland-Vancouver Region

Annual Avg

 1999 2000 2001 2002 2003 2004 2005 2006-22 

 (percentage growth rates) –––– –––– –––– –––– –––– –––– –––– ––––––– 

Population 1.8 1.6 1.5 1.6 1.7 2.0 1.7 1.5 

Crude Birth Rate (per 1,000) 14.64 14.66 15.17 15.00 14.83 14.78 14.75 14.3 

Crude Death Rate (per 1,000) 7.24 7.35 7.47 7.48 7.49 7.46 7.47 8.5 

Labor Force Participation Rate (%) 69.0 69.1 69.1 68.9 68.6 68.4 68.4 69.7 

Personal Income, nominal 5.6 7.5 3.5 2.0 6.4 6.3 6.5 5.5 

 Wage Disbursements 6.4 7.8 2.7 1.4 5.2 6.7 6.8 5.3 

 Social Insurance Contrib. 6.7 4.7 1.8 0.9 4.8 6.3 6.2 5.6 

 Other Labor Income 3.5 4.8 2.5 1.1 5.4 5.9 6.5 6.1 

 Transfer Payments 5.0 4.8 8.6 12.5 11.6 2.1 0.0 6.3 

 Proprietors’ Income 7.4 4.1 2.0 2.2 8.1 4.4 4.8 6.5 

 Div., Interest & Rent 3.6 9.3 3.6 -1.6 5.5 8.1 5.1 5.3 

Housing Price – Median avg. 2.6 3.8 2.3 0.6 3.2 4.7 5.8 4.0 

CPI all items – Portland 3.3 3.1 2.7 3.2 3.6 3.3 3.2 2.7 

Total Employment 1.7 2.5 0.6 -0.4 2.4 3.2 3.2 2.0 

Proprietors 2.9 6.5 0.8 -0.4 1.7 2.5 2.4 2.6 

Nonfarm – Wage & Salary, total 1.4 2.4 -0.3 -0.4 2.7 3.5 3.4 1.9 

Manufacturing, total -2.5 1.5 -2.3 -1.3 2.7 3.6 3.5 0.7 

 Food Processing -6.3 -1.5 -4.9 -1.7 0.6 1.3 0.3 -1.2 

 Textile & Apparels -10.9 -10.7 3.8 -0.7 6.2 5.0 1.5 -3.0 

 Lumber & Wood -4.6 1.5 -2.2 0.8 -0.3 -1.8 0.4 -2.8 

 Paper -2.9 9.6 -1.3 -0.6 0.1 1.4 0.8 -1.1 

 Printing 4.6 1.8 -0.3 3.4 2.9 2.3 2.0 0.6 

 Metals -2.3 -1.0 -4.6 -2.7 3.1 2.8 2.3 -0.3 

 Machinery -10.4 -4.5 -6.4 0.0 3.2 3.1 4.1 1.3 

 Electronic Equipment -1.3 8.4 5.0 -1.3 3.5 6.4 5.9 1.3 

 Transport. Equipment 7.2 -3.4 -20.7 -5.4 3.6 3.0 3.5 0.8 

 Other Nondurables -6.3 -0.6 -5.4 -3.8 1.2 2.7 4.1 2.3 

 Other Durables 2.2 1.1 3.2 -1.7 3.4 2.7 2.7 1.6 

Nonmanufacturing 2.2 2.5 0.0 -0.2 2.6 3.3 3.4 2.1 

 Construction -0.5 0.6 -1.4 0.4 4.0 3.2 3.6 1.6 

 Trans., Comm., Util. 2.2 2.2 -1.1 -0.5 1.2 2.7 2.9 1.5 

 Wholesale Trade -2.1 -0.3 -2.5 -0.9 4.1 4.3 3.9 1.6 

 Retail Trade 3.0 2.0 0.0 -0.4 2.0 4.0 4.0 1.8 

 Fin., Ins., R.E. -0.7 -2.6 0.1 -0.1 0.3 2.3 3.4 1.4 

 Health Services 1.5 -0.1 1.8 2.1 3.5 3.4 3.0 2.6 

 Other Services 3.6 5.2 0.7 -0.5 4.6 4.9 3.9 2.8 

 State & Local Gov. 5.4 5.2 1.1 -0.6 0.2 -.01 1.9 1.5 

 Federal Gov. - Civilian -1.7 5.5 -3.6 1.4 -0.5 -0.7 -0.2 0.9

With the recession upon the region, population still grew 1.6 percent in 2000 and 1.5 

percent in 2001. The last time population growth came anywhere close to 1 percent was 

back in the mid-1980’s – which was a particularly weak period for the region. Stimulus 

from relatively moderate population increases in the last two years has helped bolster 

regional employment in industries that are strongly dependent on population growth, such 

as retail, services and government. This relatively strong employment growth, compared 
 26 

to our neighboring states, has in turn attracted more than 300,000 new residents since 

199011. 

Regional Population Trends. 

The latest Census figures for population in the Portland region have been released, and 

now show almost 37,000 more residents in 2000 than originally estimated. Higher levels 

of in-migration account for this larger population total. Migrants tend to be younger and 

of working age, which in turn raises the employment totals. The demographic 

composition of the region’s population is also not exactly as we had anticipated. The 

downward trend in household size (i.e., persons per household) seems to have stabilized 

during the decade of the 1990’s, instead of falling as previously expected. The region’s 

 

11 We estimate from population figures from the Census and Portland State University that the change in 

population for 1990 to 2000 was close to 450,000 persons, and migration accounted for about 300,000 of 

those residents, representing two-thirds of the region’s population increase. 

Comparison of Population and Employment Demand Projections. 

(5 counties – Multnomah, Clackamas, Washington, Yamhill and Clark) 

POPULATION EMPLOYMENT 

 Old Forecast New Forecast Diff. Old Forecast New Forecast Diff. 

2000 1,837,600 1,874,450 36,850 2000 1,147,300 1,208,900 61,600 

2005 1,993,300 2,049,200 55,900 2005 1,274,900 1,320,600 45,700 

2010 2,152,800 2,233,900 81,100 2010 1,406,400 1,483,800 77,400 

2015 2,315,400 2,394,600 79,200 2015 1,537,900 1,631,700 93,800 

2020 2,475,000 2,571,100 96,100 2020 1,673,700 1,795,400 121,700 

2025 2,768,200 2025 1,979,200 

2030 2,955,300 2030 2,158,100 

Employment figures includes proprietors or self employed workers.

Manufacturing Emp.* Non-manufacturing Emp.* 

 Old Forecast New Forecast Diff. Old Forecast New Forecast Diff. 

2000 138,900 145,500 6,600 2000 780,600 812,500 31,900 

2005 145,300 154,700 9,400 2005 870,000 888,800 18,800 

2010 149,700 165,900 16,200 2010 961,700 1,002,700 41,000 

2015 153,600 168,900 15,300 2015 1,015,200 1,104,200 89,000 

2020 157,300 172,800 15,500 2020 1,142,600 1,214,900 72,300 

2025 177,200 2025 1,338,200 

2030 182,900 2030 1,458,500 

* Employment figures in these two table above include only wage and salary jobs. 

HOUSEHOLDS PER CAPITA INCOME ($1996) 

 Old Forecast New Forecast Diff. Old Forecast New Forecast Diff. 

2000 736,000 725,400 -10,600 2000 26,600 28,400 1,800 

2005 812,100 799,600 -12,500 2005 28,100 27,900 -200 

2010 891,500 876,700 -14,800 2010 29,300 28,800 -500 

2015 972,000 946,900 -25,100 2015 30,500 30,400 -100 

2020 1,052,000 1,021,600 -30,400 2020 31,800 33,000 1,200 

2025 1,104,200 2025 35,500 

2030 1,177,800 2030 37,500 

Source: 1995-2015 Regional Forecast (old forecast used in Sept. 1999 Urban Growth Report) 

 2000-2030 Regional Forecast (new forecast for Dec. 2002 Urban Growth Report ) 
 27 

average household size in 1990 

was 2.57 people. Today, it is 

estimated to be near that same 

level. However, the new forecast 

returns to the longer run secular 

trend of declining household sizes, 

but assumes a less precipitous 

drop-off. As a consequence, the 

number of new households formed 

in the future as a result of 

regionwide population growth is 

actually less than previously predicted. Household sizes by 2020 are expected to stabilize 

at around 2.5 persons per household, as compared to 2.4 persons per household in the 

previous regional forecast. 

Population growth from decade to decade has fluctuated up and down with major 

migrations of Americans, coming west over the Oregon Trail in the mid-1800’s and 

moving to the north and west soon after World War II. More recently, in the 1990’s 

people moved to the Portland area in search of a better place to live or a greater number 

of job opportunities. This was especially true for high-tech workers. 

During the 1990’s, about two-thirds of new 

residents had never lived in the Portland area 

before. Net in-migration will still be a force 

driving population growth in the future, but a 

lesser one. Only about half of the region’s 

population increase during the next 20 years will 

come from migration; the remainder will be from 

residents having children and grandchildren. 

The shape of future population growth in the 

region will depend on the quality of life here in the 

region and the ability to generate good paying jobs 

for future workers. We anticipate population 

growth to shadow the future employment trends 

for the region. Regional population growth is 

expected to average about 1.6 percent per year 

through 2030, as compared to about 2 percent from 

1970 to 2000. Population will increase more rapidly in the near term as current conditions 

favor an economic rebound, which will attract greater number of migrants. Over the longhaul, though, the average growth rate per year will start to taper off as regional economic 

growth moderates. 

Population 

at end of 

period 

Avg. 

Growth 

in decade 

1850-60 16,046 9.2% 

1860-70 29,857 6.4% 

1870-80 54,980 6.3% 

1880-90 124,490 8.5% 

1890-00 164,381 2.8% 

1900-10 322,114 7.0% 

1910-20 393,306 2.0% 

1920-30 477,073 1.9% 

1930-40 527,611 1.0% 

1940-50 738,313 3.4% 

1950-60 854,645 1.5% 

1960-70 1,049,342 2.1% 

1970-80 1,297,926 2.1% 

1980-90 1,477,895 1.3% 

1990-00 1,874,449 2.4% 

Source: U.S. Census and PSU 

Persons per Household

2.44

2.46

2.48

2.50

2.52

2.54

2.56

2.58

2.60

2.62

2.64

90 95 00 05 10 15 20 25 30
 28 

Industry Details and Long-term Forecast Outlook. 

The Regional Economy. The regional economy is approaching a crossroad. The current 

land supply situation is becoming tighter as more buildable land inside the UGB is 

absorbed by businesses and housing, but as yet is not a limiting factor. This forecast 

assumes that current land market conditions and regional transportation accessibility do 

not interrupt growth trends that are evident today. 

Total nonfarm employment for the region is expected to rise an average of 1.9 percent per 

year as compared to 1.1 percent in the U.S.. This is somewhat slower employment growth 

than in the previous 30 years, which saw 3 percent average growth in the region. To a 

great extent, slower labor force growth is the culprit behind slower job growth. As the 

labor force participation rate of women eventually reaches and exceeds male participation 

rates in the future, the rate of growth of the work force slows with the slowdown in labor 

force participation. 

Productivity is projected to rise 

steadily over the next 30 years, but 

productivity is a “two-edged 

sword”. On the one hand, 

productivity helps lift corporate 

profits, wages and salaries without 

causing additional inflation, but it 

also tends to cut into employment. 

On the other hand, when 

productivity can also bolster output 

and create new demand, this type 

of innovation makes employees more productive and valuable and has the effect of 

bolstering employment growth. 

In older manufacturing situations, productivity does indeed reduce the need for more 

employment. When new machinery and innovative processes simply replace human 

activity without a corresponding 

increase in the demand for 

additional goods or services, then 

the need for labor is reduced and 

employment growth in that 

industry stalls. In this region, 

traditional industries such as food 

processing, metals, and other 

resource extractive industries are 

projected to improve their 

productivity by replacing people 

with machinery. Output may stay the same or increase, but projected employment 

declines. 

U.S Productivity

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

70 75 80 85 90 95 00 05 10 15 20 25 30

High-Tech Wage & Salary Employment

(in thousands)

0

10

20

30

40

50

60

70

80

90

100

72 75 78 81 84 87 90 93 96 99 02 05 08 11 14 17 20 23 26 29
 29 

On the other hand, when productivity and innovation can boost output and create new 

demand, the need for workers – particularly skilled ones – will become increasingly 

significant in these industries. The “New Economy” presupposes that high-tech industries 

such as computers, information processing, software, telecommunications and 

biotechnology firms will lead employment growth. The regional firms are well situated to 

take advantage of computer, information processing and software developments. These 

regional industries are one of two classifications in manufacturing that will see 

employment actually increase from today’s levels. 

The combined high-tech industries in the region employed approximately 60,000 workers 

in 2001. The ranks of the high-tech workforce in the region are expected to swell to 

94,000 by 2030. This represents an addition of two high-tech companies the size of Intel 

today. Possibly, some of this growth will be from an agglomeration of smaller firms, but 

in order to facilitate this level of growth the region may perhaps attract another major 

high-tech player. However, the majority of industry growth will likely be attributed to the 

internal expansion and vitality of existing firms in the region. 

The total number of regional jobs, including self-employed workers, is about 61,000 

higher in 2000 in the new forecast than was previously forecasted. Job growth in hightech electronics and semiconductors, construction, and the service sector showed the 

widest deviations. This is to be expected, given that the old forecast was completed 

before the wave of high-tech expansion and construction. Unanticipated service sector 

job growth can be attributed to faster-than-predicted population increases, and the 

economic downstream effect of more high-tech workers in the region. This new forecast 

incorporates these latest trends. 

Nondurable Manufacturing.

Industries which are included in 

nondurable manufacturing are 

Food Processing (SIC 20), 

Textile and Apparel (SIC 22 & 

23), Paper (SIC 26), Printing and 

Publishing (SIC 27). Except for 

printing and publishing, the 

major nondurable industries are 

expected to see falling 

employment levels during the 

next 25 years. A combination of anticipated productivity gains, overseas competition, 

limited supplies, and relocation of production capacity abroad spells an overall trend to 

declining jobs. 

Our view on the printing and publishing industry assumes job growth to continue in this 

industry but at a slower pace than during the last 30 years. Employment growth is 

expected to achieve an average rate of 1.4 percent per year as compared to 3.4 percent in 

the decades before. 

Manufacturing Employment

0

20

40

60

80

100

120

140

160

180

200

70 75 80 85 90 95 00 05 10 15 20 25 30

0

5

10

15

20

25

Durable - Region

Non-dur - Region

US

thousands millions
 30 

Durable Manufacturing. Industries classified in this category include Lumber & Wood 

Products (SIC 24), Metals (SIC 33 & 34), Machinery & Computer equipment (SIC 35), 

Electrical Machinery, Semiconductors and Instruments (SIC 36 & 38), and 

Transportation Equipment (SIC 37). The resource based industries (lumber and paper) are 

projected to experience steady decreases in employment as productivity and competition 

from other regional sources erode the region’s competitiveness. 

The business cycle for metals and transportation is not dead. Transportation equipment in 

the near term is expected to remain weak because of travel fears. However a delayed 

rebound is expected even after the travel industry recovers and the global recession 

retreats due to the weakness in the airline market. The region’s metals industry, include 

primarily aluminum makers and scrap metal re-producers, is projected to remain flat in 

employment. Long-term, regional employment in this sector is projected to be about the 

same level of employment as today. However, the path into the future for both industrial 

sectors is likely to suffer through wide swings in employment with fluctuating global 

change. 

Nonmanufacturing Employment Trends. The steady shift in focus of the workforce to 

nonmanufacturing is expected to continue. Job growth in the nonmanufacturing sector is 

projected to exceed 2 percent per year on average. The nonmanufacturing sector created 

over 800,000 jobs in 2000 as compared to 300,000 in 1970. This total is expected to 

reach 1.46 million by 2030. 

The largest component continues to be the service sector, which employs almost 280,000 

workers. A fast growing segment of the service sector includes business services, 

computer software development and health services. Health services alone comprises 

more than 22 percent of service sector jobs. With the average age of the U.S. population 

growing older, more resources are expected to be diverted towards health care. A 

generally older population will tend to have greater accumulated wealth and is more 

likely to purchase more services than today. Regional job growth in total services is 

projected to reach an average of 2.8 percent growth per year. 

Business services, and temporary help services in particular, is likely to be a relatively 

fast growth segment as more and more firms out-source temporary help as well as 

ancillary business functions such as accounting, printing, and human resources. 

Software development is expected to be another strong growth segment in services. With 

long-run investments in computer and business equipment steadily growing, software to 

manage and control these new devices will be aided by the advancement in technology. 

The transportation services sector is expected to see relatively stronger growth than its 

companion communication and utility sector workforce. While the transportation sector 

continues to press its comparative advantage as a regional distribution hub in Portland, 

the communication and utility sector is expected to see limited expansion opportunities. 

Overall, the transportation, communication and utilities industry (TCU) is projected to 

growth at near the region’s rate of population growth (1.5 percent APR). 
 31 

The retail and wholesale trade sectors in the region are expected to also increase at about 

the rate of population growth. Retail trade employment is forecasted to grow an average 

of 1.9 percent APR while wholesale trade is expected to grow a bit slower at 1.7% APR. 

The region’s proximity to Asian markets and as distribution hub for the Northwest will 

play a key role in aiding wholesale trade employment to continue to add to job growth in 

the region. 

The region’s finance sector has been weakened in the wake of mergers and acquisition in 

the banking community that has led to a significant number of corporate headquarter jobs 

relocating to other states. The prospects for well-paying corporate level finance positions 

have diminished and as a result the forecast reflects significantly slower job growth in the 

finance, insurance, and real estate sector. The cyclical weakness in the region has 

hampered job growth in the insurance and real estate sectors. These industry segments 

tend to ebb and flow with changes in population and income. Right now, these factors are 

down. Over the long haul, we expect these economic factors to rebound. In total, the 

average percent rate of growth is expected to run about 1.4 percent per year. 

The construction sector has historically been an early indicator of business cycle turning 

points. In fact, construction employment has been very weak for several years leading up 

to the current recession. This is clearly another factor that has lead this region to having 

one of the highest unemployment rates of metropolitan areas in the nation. The regional 

forecast calls for construction jobs to rebound after the recovery and for growth to be 

moderate instead of a sharp rebound. The forecast anticipates the region’s construction 

industry to experience job growth similar to the average in population – 1.6 percent. 

Employment in state and local government is projected to increase by a small margin 

slower than population growth. The assumption is that tight state and local budgets will 

limit job growth in government. 

Non-manufacturing Employment

0

200

400

600

800

1,000

1,200

1,400

1,600

70 75 80 85 90 95 00 05 10 15 20 25 30

0

20

40

60

80

100

120

140

160

180

Region

US

thousands millions
 32 

 

Total Non-Farm Wage & Salary Employment

400.0

600.0

800.0

1000.0

1200.0

1400.0

1600.0

1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025

Employment (in thousands)

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

180.0

200.0

Employment (in millions)

2025 Forecast

2017 Forecast

U.S. Forecast

Total Manufacturing Employment

75.0

100.0

125.0

150.0

175.0

200.0

1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025

Employment (in thousands)

0.0

5.0

10.0

15.0

20.0

25.0

Employment (in millions)

2025 Forecast

2017 Forecast

U.S. Forecast

Food Processing Employment

0.0

2.0

4.0

6.0

8.0

10.0

12.0

1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025

Employment (in thousands)

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80

2.00

Employment (in millions)

2025 Forecast

2017 Forecast

U.S. Forecast

Textile & Apparel Employment

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025

Employment (in thousands)

0.00

0.50

1.00

1.50

2.00

2.50

Employment (in millions)

2025 Forecast

2017 Forecast

U.S. Forecast

Lumber & Wood Products Employment

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025

Employment (in thousands)

0.00

0.20

0.40

0.60

0.80

1.00

1.20

2025 Forecast

Employment (in millions)

2017 Forecast

U.S. Forecast

Paper & Allied Products Employment

0.0

2.0

4.0

6.0

8.0

10.0

1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025

Employment (in thousands)

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

2025 Forecast

Employment (in millions)

2017 Forecast

U.S. Forecast

Printing & Publishing Employment

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025

Employment (in thousands)

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80

Employment (in millions)

2025 Forecast

2017 Forecast

U.S. Forecast

Metals Industry Employment

0.0

5.0

10.0

15.0

20.0

25.0

1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025

Employment (in thousands)

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

Employment (in millions)

2025 Forecast

2017 Forecast

U.S. Forecast
 33 

Electrical Machinery, Semiconductors & Instruments 

Employment

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025

Employment (in thousands)

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

Employment (in millions)

2025 Forecast

2017 Forecast

U.S. Forecast

Transportation Equipment Employment

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025

Employment (in thousands)

0.00

0.50

1.00

1.50

2.00

2.50

Employment (in millions)

2025 Forecast

2017 Forecast

U.S. Forecast

Other Durable Goods Employment

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025

Employment (in thousands)

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2025 Forecast

2017 Forecast

U.S. Forecast

Other Nondurable Goods Employment

0.0

2.0

4.0

6.0

8.0

10.0

12.0

1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025

Employment (in thousands)

0.00

0.50

1.00

1.50

2.00

2.50

3.00

Employment (in millions)

2025 Forecast

2017 Forecast

U.S. Forecast

Transportation, Communications, Utilities 

Employment

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025

Employment (in thousands)

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

Employment (in millions)

2025 Forecast

2017 Forecast

U.S. Forecast

Wholesale Trade Employment

0.0

20.0

40.0

60.0

80.0

100.0

120.0

1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025

Employment (in thousands)

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

Employment (in millions)

2025 Forecast

2017 Forecast

U.S. Forecast

Retail Trade Employment

0.0

50.0

100.0

150.0

200.0

250.0

300.0

1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025

Employment (in thousands)

0.0

5.0

10.0

15.0

20.0

25.0

30.0

2025 Forecast

Employment (in millions)

2017 Forecast

U.S. Forecast

Finance, Insurance & Real Estate Employment

0.0

20.0

40.0

60.0

80.0

100.0

120.0

1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025

Employment (in thousands)

0.0

2.0

4.0

6.0

8.0

10.0

12.0

Employment (in millions)

2025 Forecast

2017 Forecast

U.S. Forecast
 34 

Health Services Employment

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025

Employment (in thousands)

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

Employment (in millions)

2025 Forecast

2017 Forecast

U.S. Forecast

Other Services Employment

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.0

450.0

1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025

Employment (in thousands)

0.0

10.0

20.0

30.0

40.0

50.0

60.0

2025 Forecast

Employment (in millions)

2017 Forecast

U.S. Forecast

State & Local Government Employment

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025

Employment (in thousands)

0.0

5.0

10.0

15.0

20.0

25.0

2025 Forecast

Employment (in millions)

2017 Forecast

U.S. Forecast
 35 

Alternate Regional Growth Scenarios 

Introduction. 

Regional forecasts are constructed based on numerous assumptions. Prior sections of this 

economic report focused on the mid-growth or baseline regional growth forecast and its 

assumptions. The baseline forecast represents, in our opinion and those of peer review 

panels, the most likely and reasonable growth projection for the Portland region over the 

next 20+ years. Knowing that forecasts can change as world events unfold, we have 

prepared seperate high and a low growth scenarios. For policy makers, these two 

scenarios delineate a range of possibilities in case economic and demographic conditions 

change drastically from the baseline assumptions. 

We have prepared two alternative forecasts: a pessimistic scenario and an optimistic 

scenario. Each scenario begins with the regional baseline forecast and tilts all the 

economic drivers in one direction or another. The pessimistic scenario assumes economic 

and population will grow much more slowly. The pessimistic regional scenario 

incorporates DRI-WEFA’s pessimistic U.S. growth projections in which all the key 

economic variables are “dialed” to a lower growth setting, and also assumes the Census 

Bureau’s high mortality and low fertility assumptions. The optimistic regional scenario 

assumes DRI-WEFA’s optimistic U.S. growth projections and the Census Bureau’s low 

mortality and high fertility assumptions. 

The high and low growth scenarios that have been developed for the region represent 

extreme bandwidths for regional growth. It is estimated that over the next 20+ years of 

the forecast that there is over a 90 percent probabililty that regional growth will fall 

within the range of these two scenarios. However, the baseline regional forecast remains 

as the best approximation of the region’s most apparent growth trend. 

The Regional Growth Alternatives. 

Regional Overview. The low growth (pessimistic scenario) forecast for the region is 

characterized by substantially slower employment growth than its baseline counterpart. 

Total wage and salary employment growth comes in at an anemic 1.3 percent APR over 

the duration of the forecast. Manufacturing employment within the region stalls and in 

particular high technolgy jobs grow at very low levels (0.5 percent APR in pessimistic, 1 

percent in the baseline, 1.5 percent in optimistic). Other regional industries suffer 

significant job losses as industrial production nationwide is assumed to contract in many 

resource and labor intensive industrial sectors. As a result of this national pessimissm, the 

consumer sector takes a significant beating as consumption falls well below historic rates. 

Not only is the economic sector battered by weaker regional economic performances, the 

population and labor trends for the pessimistic scenario assumes much slower increases 

too. The pessimistic scenario restricts labor force growth because of lower net migration 

into the region and lower birth rates and lower life expectancies. These factors combine 

to slow the future rate of population growth. In turn, the lower demographic factors force 
 36 

employment growth in population serving industries to cut back employment growth too. 

Generally, in the traded sector industries, a dimmer outlook for national growth dampens 

regional economic activity relative to the base trend. Overall, the potential output for the 

region is significantly diminished as compared to the region’s baseline forecast. 

Other economic factors in the low growth regional scenario also grow more slowly – 

including the housing stock, housing values appreciate much less, and the ability of 

governments to generate revenue from taxes is lower (but demand for government 

services may be less in some areas but more in others, such as welfare and other low 

income aid.) because personal income in the region will also be substantially less. 

In the case of the regional high growth (optimistic scenario) forecast, economic and 

demographic assumptions are “dialed up at a higher rate”. National economic conditions 

are all assumed to favor more rapid economic expansion worldwide. This U.S. forecast is 

characterized by higher GDP, lower inflation, lower interest rates, lower exchange rates, 

lower oil prices and at the same time employment and industry production rates are to 

grow more rapidly. Demographic conditions in the optimistic case is characterized by a 

greater migration rates that corresponds to greater overall population, labor force, and 

employment growth. The national outlook that drives the high scenario assumes annual 

U.S. population growth averages 1.3 percent per year (1.0 percent in the baseline trend, 

0.5 percent for the pessimistic scenario). 

Because the optimistic scenario assumes a higher growth trend for the U.S., the region 

shares in the greater bounty. Birth rates are higher, life expectancies are higher, and 

regional migration hits greater heights which in turn drives up regional population 

growth. The region’s population growth averages 2 percent per year during the forecast 

(1.5 percent in the baseline trend, 0.8 percent for the pessimistic scenario). The higher 

population trend pushes the adult population higher which directly affects the regional 

labor force. More people in the labor force and better economic conditions lead to higher 

job growth in the region. Regionwide wage and salary employment growth averages 2.2 

percent in the optimistic case (1.8 percent in the baseline trend, 1.3 percent for the 

pessimistic scenario). 

Population Comparisons. Total population in the baseline scenario for the five county 

region12 grows from 1,874,400 residents in 2000 (source: Census sf1) to 2,647,000 by 

year 2022. In comparison, the optimistic scenario grows to 2,822,300; whereas the 

pessimistic scenario reaches a level of 2,212,100 residents in the same period of time. 

The difference between scenarios as compared to the baseline is a matter of minus 4 

years for the optimistic regional scenario and plus 10 years in the pessimistic regional 

scenario13. 

The baseline population growth trend is characteristic of birth, death and migration trends 

consistent with emerging trends in the region and of national demographic expectations. 

 

12 Includes Multnomah, Clackamas, Washington, Yamhill and Clark counties 

13 In other words, the optimistic scenario reaches the 2022 population mark in the baseline trend 4 years 

sooner and in the case of the pessimistic scenario, over 10 years later. 
 37 

Regional population trends assumed in the optimistic case are characteristic of migration 

patterns experienced in the Portland region during a sustained period of very high inmigration levels. The variation in migration levels in the optimistic scenario mimic those 

experieced during the late-1980’s and 1990’s in the Portland region, but over the entire 

forecast, the average growth rate in the optimistic case is below the regional trend rate in 

the 1990’s (history: 2.4 percent, forecast: 2.0 percent). In addition, we assume higher 

fertility and life expectancies for residents living in the region. 

A population rate that mimics national growth rates is assumed in the pessimistic 

scenario. This scenario represents an extremely low population rate for the region and is 

highly uncharaceteristic of past trends. At no point in history has the region ever 

experienced over 20 years of repressive population trends as exhibited in this pessimistic 

regional scenario. The only period in regional history that saw population growth slow to 

near 1 percent APR was the 10-year period that included the 1930 era Depression. 

Clearly, the region is unlikely to experience 20 years of depression-style population 

growth and so this scenario represents the lower bounds of this region’s population 

trends. 

Bandwidth Forecasts for Selected Regional Population Characteristics

In the pessimistic scenario, we wanted to characterize what could be a lower bound of 

population if we assumed very little regional in-migration, low natural increases in 

regional population and how these factor would impact regional employment growth. The 

population growth rate in the pessimistic scenario is similar to the growth rate that DRIWEFA has forecasted for the U.S. in its baseline trend projection. 

Similarly, the optimistic scenario for the region is as equally unlikely, but is illustrative of 

a higher bound of this region’s population trend. It is improbable that this region would 

achieve 20 years in a row of population growth that copied what this region experienced 

Population Growth Scenarios

1,000

1,500

2,000

2,500

3,000

3,500

4,000

70 75 80 85 90 95 00 05 10 15 20 25 30

high

low

mid

Crude Birth Rates

(births per 1,000)

10

11

12

13

14

15

16

17

18

70 75 80 85 90 95 00 05 10 15 20 25 30

high

low

mid

Crude Death Rates

(births per 1,000)

6

7

7

8

8

9

9

10

10

70 75 80 85 90 95 00 05 10 15 20 25 30

high

low

mid

Net Migration Scenarios

-30

-20

-10

0

10

20

30

40

50

70 75 80 85 90 95 00 05 10 15 20 25 30

high

low

mid
 38 

during the 1990’s. It is also unlikely that another $12 billion of high-tech investments 

would be repeating itself in next 20 years – especially so soon after the 1990’s boom. 

Economic Comparisons. In part, employment growth drives off of population because 

of the labor force characteristics derived from each growth alternative. Labor force 

conditions in the optmistic scenario call for growth to average 2.1 percent per year (1.6 

percent in the base, 1 percent in pessimistic). Because at the national level, the adult 

population is expected to grow faster in the optimistic case, more working age adults are 

expected to migrate into the region seeking jobs. Also, faster internal population growth 

from natural increases will also add to the region’s labor force. The expectation in the 

high growth scenario calls for regional employment to rise an average of 2.2 percent per 

year (1.8 percent in the baseline trend, 1.3 percent for the pessimistic scenario). 

Wage and salary employment growth is expected to exceed the change in the labor force 

in part due to the expectation that labor force participation rates will continue to edge up 

modestly in all scenarios 

In the optmistic case, regional income growth is expected to rise more sharply than the 

baseline trend scenario. However, because population growth rises farily rapidly and the 

inflation rate in the high growth scenario is greater, the region forecast exhibits a quirky 

situation in which per capita income growth in real dollars is slower in the optimistic case 

than the base case. Otherwise, in current dollars, regional per capita income grows and is 

higher in the optimistic case. 

In all cases, wage and salary disbursements still represent over half of all earned and 

unearned income. Interestingly, the amount of transfer payments coming to the region in 

the optimistic case is less than transfer payments received in the baseline forecast. This 

results from the region achieving greater economic prosperity in the high growth case as 

to offset income transfers to medicare/medicaid recipients, unemployment benefits, and 

social security, aid for dependent children and welfare payments. 

Home prices appreciate more rapidly (average 4.8 percent per year in the optimistic, 3.8 

percent in base case, 2.0 percent in pessimistic) in the optmistic case. Higher housing 

prices are indicative of an economy that exhibits hefty gains in population, employment 

and income as in the optmistic scenario. More population fuels the labor force which in 

turn leads to employment gains. Robust employment and relatively greater productivity 

in the future combine to boost the rate of income growth. More income and more people 

add up to more demand for housing. In the short run, production of housing falls behind 

the demand for housing, home prices appreciate in the short run because of deficts. 

However, over the long run the consistently higher demand shifts the demand curve 

higher resulting in higher home prices. The opposite occurs in the pessimistic scenario for 

the region. Thus, a lower reving regional economy generates less housing demand, and so 

home prices don’t appreciate as readily. 
 39 

Bandwidth Forecasts for Selected Regional Economic Characteristics

National Overview. Regional growth is directly affected by the national outlook. The 

regional baseline forecast is derived from DRI-WEFA’s trend outlook for the U.S. The 

optimistic and pessimistic regional alternatives derive from DRI-WEFA’s respective 

optimistic and pessimistic national scenarios. 

A U.S. economic outlook that presents a much more robust forecast creates economic 

incentives and downstream benefits for regional industries and households. In the case of 

the DRI-WEFA optimistic U.S. forecast, higher GDP, productivity, employment, and 

other favorable economic conditions spur a faster pace of regional activity. Conversely, a 

U.S. forecast that is more constrained in its outlook for the U.S. will have an opposite 

effect on regional economic activity. 

Wage & Salary Job Growth Scenarios

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

70 75 80 85 90 95 00 05 10 15 20 25 30

high

low

mid

Labor Force Growth Scenarios

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

90 95 00 05 10 15 20 25 30

high

low

mid

Manufacturing Job Growth Scenarios

0

50

100

150

200

250

70 75 80 85 90 95 00 05 10 15 20 25 30

high

low

mid

Non-Manufacturing Job Growth Scenarios

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

70 75 80 85 90 95 00 05 10 15 20 25 30

high

low

mid

Consumer Price Index

0

100

200

300

400

500

600

90 95 00 05 10 15 20 25 30

high

low

mid

Single Family Median Home Price

0

100

200

300

400

500

600

700

800

70 75 80 85 90 95 00 05 10 15 20 25 30

high

low

mid

Personal Income, Nominal $

0

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

300,000,000

350,000,000

400,000,000

90 95 00 05 10 15 20 25 30

high

low

mid

Per Capita Income, Nominal $

0

20,000

40,000

60,000

80,000

100,000

120,000

90 95 00 05 10 15 20 25 30

high

low

mid
 40 

The following table highlights major sectors of the U.S. economy as well as demographic 

and economic factors which affect the pace of long-run economic activity for the region. 

U.S. Economic and Demographic Summary Details. 

(Average Annual Percent Change) 

 History 30-Year Forecast 

 1970-00 Optimistic Baseline Pessimistic

Population and Labor Force 

 Total Population 1.0% 1.3% 1.1% 0.5% 

 Labor Force 1.7 1.1 1.0 0.8 

 Total Wage & Salary Jobs 2.1 1.1 1.0 0.5 

 Manufacturing -0.1 -0.3 -0.7 -0.9 

 Non-manufacturing 2.6 1.3 1.2 0.7 

GDP Components ($1996) 

 Gross Domestic Product 3.1 3.6 3.1 2.6 

 Consumption 3.3 3.6 3.1 2.7 

 Investment, total 4.3 5.0 4.0 3.5 

 Technology (equipment & software) 14.6 6.6 6.1 5.7 

 Governnment, Federal 0.7 1.5 1.3 1.4 

 Governnment, State & Local 2.6 2.1 1.7 1.5 

Personal Income ($1996) 2.6 3.5 3.0 2.7 

Output and Productivity 

 Output 2.9 3.5 3.0 2.4 

 Productivity 0.8 2.6 2.4 1.9 

Inflation and Prices 

 CPI 5.2 2.5 3.1 3.9 

 GDP price deflator 4.4 2.3 2.8 3.6 

 Oil Price ($/ barrel) 14.2 2.5 2.6 4.0 

Global Conditions 

 Global GDP 2.4 2.5 2.4 2.3 

 Exchange Rate 0.3 -0.3 -0.1 0.0 

Source: DRI-WEFA, Winter U.S. forecast as compiled by Metro DRC 

Early Risks to the Regional Forecast. 

The regional forecast assumes that the U.S. economy is in a mild recession, but that the 

monetary and fiscal boosts succeed in turning it around in early 2002. The regional 

forecast also assumes that, by spring 2002, consumers have shaken off their fears of 

flying and large crowds. Finally, it assumes that there are no further direct terrorist 

attacks on the United States, and that military action ends with the defeat of the Taliban, 

the rout of al Quaeda, and stability in the middle east. Any or all of these assumptions 

could prove too rosy. 
 41 

On the other hand, the regional forecast could be overly pessimistic. Businesses may 

have overreacted to the plunge in spending that followed the September 11 attacks. This 

scenario carries its own risks. If activity is about to turn around on its own, the huge 

amount of monetary and fiscal stimulus in the pipeline could prove excessive. Rather 

than grease the wheels of the recovery, it would set up the conditions for a return of 

inflation and speculative investment. Nonetheless, in our estimation there is more 

downside risk than upside growth potential at this juncture of the business cycle. 

See Appendix Sections for further details : 

Appendix A: Table 14: “Alternate Forecasts for the Portland-Vancouver, OR-WA” 

for a summary table of key variables in the regional forecast.

Appendix B: “A Range of Possiblities: The Optimistic and Pessimistic Projections” 

for DRI-WEFA’s description of the national alternatives. 
 

Appendix A: 

Regional Economic Forecast Details 
Table 1

PortlandVanc. ORWA

Pct. 

Chg. Salem

Pct. 

Chg. Yamhill

Pct. 

Chg. Columbia

Pct. 

Chg. Oregon

Pct. 

Chg. California

Pct. 

Chg.

U.S. 

(in mil.)

Pct. 

Chg.

1970 1,049.3 186.7 40.2 28.8 2,091.0 20,039.0 205.1

1971 1,075.8 2.5% 192.6 3.2% 41.5 3.1% 29.9 3.8% 2,151.0 2.9% 20,346.0 1.5% 207.7 1.3%

1972 1,072.5 -0.3% 194.3 0.9% 42.2 1.8% 30.1 0.7% 2,197.3 2.2% 20,585.0 1.2% 209.9 1.1%

1973 1,092.6 1.9% 200.1 3.0% 43.4 2.9% 30.2 0.4% 2,241.9 2.0% 20,869.0 1.4% 211.9 1.0%

1974 1,117.5 2.3% 205.0 2.4% 44.0 1.4% 31.2 3.2% 2,285.0 1.9% 21,174.0 1.5% 213.9 0.9%

1975 1,145.8 2.5% 207.5 1.2% 44.9 2.0% 31.8 2.1% 2,329.7 2.0% 21,538.0 1.7% 216.0 1.0%

1976 1,171.7 2.3% 214.7 3.5% 45.7 1.8% 32.4 1.9% 2,378.3 2.1% 21,936.0 1.8% 218.0 1.0%

1977 1,203.6 2.7% 219.7 2.3% 47.2 3.3% 33.3 2.8% 2,446.7 2.9% 22,352.0 1.9% 220.2 1.0%

1978 1,234.8 2.6% 231.6 5.4% 51.8 9.6% 33.9 1.8% 2,518.3 2.9% 22,836.0 2.2% 222.6 1.1%

1979 1,266.0 2.5% 237.0 2.3% 53.6 3.5% 34.9 2.9% 2,588.0 2.8% 23,257.0 1.8% 225.1 1.1%

1980 1,297.9 2.5% 249.9 5.4% 55.3 3.3% 35.7 2.1% 2,633.1 1.7% 23,782.0 2.3% 227.7 1.2%

1981 1,314.8 1.3% 256.4 2.6% 56.3 1.8% 36.2 1.4% 2,668.0 1.3% 24,278.0 2.1% 230.0 1.0%

1982 1,325.6 0.8% 252.4 -1.5% 56.6 0.5% 36.2 0.1% 2,664.9 -0.1% 24,805.0 2.2% 232.2 1.0%

1983 1,316.9 -0.7% 250.5 -0.8% 56.2 -0.7% 36.0 -0.6% 2,653.1 -0.4% 25,337.0 2.1% 234.3 0.9%

1984 1,329.6 1.0% 255.0 1.8% 57.0 1.4% 36.2 0.6% 2,666.6 0.5% 25,816.0 1.9% 236.4 0.9%

1985 1,342.3 1.0% 258.1 1.2% 57.6 1.1% 36.1 -0.3% 2,672.7 0.2% 26,403.0 2.3% 238.5 0.9%

1986 1,355.2 1.0% 254.8 -1.3% 57.1 -0.9% 36.1 0.0% 2,683.5 0.4% 27,052.0 2.5% 240.7 0.9%

1987 1,369.5 1.1% 260.3 2.2% 58.4 2.3% 36.1 0.0% 2,701.0 0.7% 27,717.0 2.5% 242.8 0.9%

1988 1,398.6 2.1% 266.3 2.3% 59.8 2.4% 36.8 1.9% 2,741.3 1.5% 28,393.0 2.4% 245.0 0.9%

1989 1,428.4 2.1% 271.8 2.1% 60.7 1.5% 37.3 1.4% 2,790.6 1.8% 29,142.0 2.6% 247.3 0.9%

1990 1,477.9 3.5% 278.0 2.3% 65.6 8.0% 37.6 0.7% 2,842.3 1.9% 29,811.4 2.3% 249.9 1.0%

1991 1,502.0 1.6% 287.9 3.6% 67.9 3.6% 37.8 0.6% 2,918.8 2.7% 30,414.1 2.0% 252.7 1.1%

1992 1,552.0 3.3% 294.5 2.3% 69.2 1.9% 38.8 2.6% 2,973.9 1.9% 30,875.9 1.5% 255.4 1.1%

1993 1,597.4 2.9% 301.0 2.2% 70.9 2.5% 38.8 0.0% 3,034.5 2.0% 31,147.2 0.9% 258.1 1.1%

1994 1,643.4 2.9% 307.2 2.1% 72.8 2.7% 39.4 1.5% 3,087.1 1.7% 31,317.2 0.5% 260.7 1.0%

1995 1,681.1 2.3% 313.4 2.0% 74.6 2.5% 39.7 0.8% 3,141.4 1.8% 31,493.5 0.6% 263.0 0.9%

1996 1,723.9 2.5% 319.1 1.8% 77.5 3.9% 40.1 1.0% 3,195.1 1.7% 31,780.8 0.9% 265.2 0.8%

1997 1,772.7 2.8% 324.4 1.7% 79.2 2.2% 41.5 3.5% 3,243.3 1.5% 32,217.7 1.4% 267.6 0.9%

1998 1,812.0 2.2% 331.6 2.2% 81.9 3.4% 42.3 1.9% 3,282.1 1.2% 32,682.8 1.4% 269.9 0.9%

1999 1,844.6 1.8% 335.4 1.1% 83.1 1.5% 42.7 0.8% 3,316.2 1.0% 33,145.1 1.4% 272.2 0.8%

2000 1,874.5 1.6% 347.2 3.5% 85.0 2.3% 43.6 2.1% 3,421.4 3.2% 33,871.6 2.2% 274.5 0.8%

2001 1,902.5 1.5% 352.6 1.5% 86.4 1.6% 43.5 -0.2% 3,465.8 1.3% 34,456.6 1.7% 276.8 0.8%

2002 1,934.3 1.7% 358.6 1.7% 88.2 2.0% 43.9 1.0% 3,504.5 1.1% 35,127.7 1.9% 279.1 0.8%

2003 1,963.7 1.5% 364.6 1.7% 89.9 1.9% 44.4 1.0% 3,533.7 0.8% 35,771.6 1.8% 281.3 0.8%

2004 2,007.7 2.2% 370.6 1.6% 91.4 1.7% 44.8 1.1% 3,583.0 1.4% 36,549.6 2.2% 283.6 0.8%

2005 2,049.2 2.1% 376.4 1.6% 92.9 1.6% 45.3 1.1% 3,629.6 1.3% 37,337.6 2.2% 285.9 0.8%

2006 2,091.0 2.0% 382.2 1.5% 94.3 1.5% 45.8 1.1% 3,674.9 1.2% 38,087.1 2.0% 288.2 0.8%

2007 2,132.8 2.0% 387.4 1.4% 95.6 1.3% 46.3 1.1% 3,720.5 1.2% 38,904.6 2.1% 290.5 0.8%

2008 2,170.1 1.8% 392.7 1.4% 96.8 1.3% 46.8 1.1% 3,762.3 1.1% 39,715.2 2.1% 292.9 0.8%

2009 2,203.0 1.5% 398.2 1.4% 98.2 1.4% 47.4 1.1% 3,798.8 1.0% 40,469.0 1.9% 295.3 0.8%

2010 2,233.9 1.4% 404.2 1.5% 99.6 1.4% 47.9 1.1% 3,832.8 0.9% 41,159.9 1.7% 297.7 0.8%

2011 2,264.5 1.4% 410.7 1.6% 101.0 1.5% 48.4 1.1% 3,866.8 0.9% 41,818.7 1.6% 300.1 0.8%

2012 2,294.6 1.3% 417.2 1.6% 102.6 1.5% 49.0 1.1% 3,900.8 0.9% 42,447.5 1.5% 302.6 0.8%

2013 2,324.7 1.3% 423.9 1.6% 104.1 1.5% 49.5 1.1% 3,935.0 0.9% 43,082.3 1.5% 305.1 0.8%

2014 2,357.9 1.4% 430.7 1.6% 105.6 1.5% 50.0 1.1% 3,972.6 1.0% 43,678.7 1.4% 307.6 0.8%

2015 2,394.1 1.5% 437.5 1.6% 107.2 1.5% 50.6 1.1% 4,013.5 1.0% 44,251.8 1.3% 310.2 0.8%

2016 2,429.5 1.5% 444.3 1.6% 108.8 1.5% 51.1 1.1% 4,053.4 1.0% 44,827.5 1.3% 312.7 0.8%

2017 2,464.2 1.4% 451.1 1.5% 110.4 1.5% 51.7 1.1% 4,092.7 1.0% 45,420.6 1.3% 315.2 0.8%

2018 2,499.5 1.4% 458.1 1.5% 112.1 1.5% 52.2 1.1% 4,132.5 1.0% 45,972.1 1.2% 317.7 0.8%

2019 2,534.9 1.4% 465.1 1.5% 113.7 1.5% 52.8 1.1% 4,172.4 1.0% 46,526.6 1.2% 320.2 0.8%

2020 2,571.1 1.4% 472.2 1.5% 115.4 1.5% 53.4 1.1% 4,213.2 1.0% 47,139.7 1.3% 322.7 0.8%

2021 2,608.4 1.5% 479.4 1.5% 117.2 1.5% 53.9 1.1% 4,255.0 1.0% 47,680.1 1.1% 325.2 0.8%

2022 2,647.0 1.5% 486.6 1.5% 119.0 1.5% 54.5 1.0% 4,298.2 1.0% 48,187.2 1.1% 327.7 0.8%

2023 2,687.0 1.5% 494.0 1.5% 120.8 1.5% 55.1 1.0% 4,342.6 1.0% 48,754.4 1.2% 330.2 0.7%

2024 2,727.6 1.5% 501.4 1.5% 122.6 1.5% 55.6 1.0% 4,387.7 1.0% 49,342.9 1.2% 332.6 0.7%

2025 2,768.2 1.5% 508.9 1.5% 124.5 1.5% 56.2 1.0% 4,432.6 1.0% 49,893.6 1.1% 335.0 0.7%

Total Population of Selected Metropolitan Areas, Counties, States, and U.S.

In Thousands

A-1

Source: Metro DRC

Metro01.xls 10/7/02
Table 2

Population

Percent 

Change Change Births Deaths

Natural 

Increase Net Migration

Migration 

Share*

1970 1,049.3 12.1 18.0 10.0 8.0 4.1 34%

1971 1,075.8 2.5% 26.5 16.5 10.1 6.4 20.1 76%

1972 1,072.5 -0.3% -3.3 15.2 10.4 4.8 -8.1 244%

1973 1,092.6 1.9% 20.1 15.0 10.5 4.4 15.7 78%

1974 1,117.5 2.3% 24.9 15.9 10.2 5.7 19.2 77%

1975 1,145.8 2.5% 28.3 16.5 10.2 6.3 22.0 78%

1976 1,171.7 2.3% 25.9 16.9 10.3 6.7 19.2 74%

1977 1,203.6 2.7% 31.9 18.3 10.1 8.1 23.8 74%

1978 1,234.8 2.6% 31.2 18.9 10.4 8.6 22.6 73%

1979 1,266.0 2.5% 31.2 20.2 10.5 9.7 21.5 69%

1980 1,297.9 2.5% 32.0 21.1 10.8 10.3 21.7 68%

1981 1,314.8 1.3% 16.8 21.6 10.7 11.0 5.9 35%

1982 1,325.6 0.8% 10.8 20.9 10.4 10.4 0.3 3%

1983 1,316.9 -0.7% -8.7 20.1 10.7 9.4 -18.1 208%

1984 1,329.6 1.0% 12.7 20.0 11.2 8.8 3.9 31%

1985 1,342.3 1.0% 12.8 20.5 11.3 9.2 3.5 28%

1986 1,355.2 1.0% 12.9 20.3 11.2 9.1 3.8 29%

1987 1,369.5 1.1% 14.2 20.3 11.6 8.7 5.6 39%

1988 1,398.6 2.1% 29.1 21.4 11.6 9.8 19.3 66%

1989 1,428.4 2.1% 29.8 22.3 11.6 10.6 19.2 64%

1990 1,477.9 3.5% 49.5 23.8 12.1 11.7 37.8 76%

1991 1,502.0 1.6% 24.1 23.8 11.9 11.9 12.2 51%

1992 1,552.0 3.3% 50.0 23.7 12.3 11.4 38.5 77%

1993 1,597.4 2.9% 45.4 23.6 13.1 10.5 34.9 77%

1994 1,643.4 2.9% 46.0 24.0 13.1 11.0 35.0 76%

1995 1,681.1 2.3% 37.8 24.5 13.2 11.3 26.5 70%

1996 1,723.9 2.5% 42.8 24.8 13.2 11.6 31.2 73%

1997 1,772.7 2.8% 48.8 25.5 13.5 12.0 36.7 75%

1998 1,812.0 2.2% 39.3 26.4 13.6 12.7 26.6 68%

1999 1,844.6 1.8% 32.6 26.8 13.5 13.3 19.3 59%

2000 1,874.5 1.6% 29.9 27.5 13.8 13.7 16.2 54%

2001 1,902.5 1.5% 28.1 28.9 14.2 14.6 13.4 48%

2002 1,934.3 1.7% 31.8 29.0 14.5 14.6 17.3 54%

2003 1,963.7 1.5% 29.4 29.1 14.7 14.4 14.9 51%

2004 2,007.7 2.2% 44.0 29.7 15.0 14.7 29.3 67%

2005 2,049.2 2.1% 41.5 30.2 15.3 14.9 26.6 64%

2006 2,091.0 2.0% 41.8 30.8 15.7 15.2 26.6 64%

2007 2,132.8 2.0% 41.8 31.4 16.0 15.4 26.4 63%

2008 2,170.1 1.8% 37.4 31.9 16.3 15.6 21.8 58%

2009 2,203.0 1.5% 32.9 32.3 16.7 15.6 17.3 53%

2010 2,233.9 1.4% 30.9 32.6 17.1 15.5 15.4 50%

2011 2,264.5 1.4% 30.6 32.9 17.5 15.3 15.3 50%

2012 2,294.6 1.3% 30.2 33.2 18.0 15.2 15.0 50%

2013 2,324.7 1.3% 30.1 33.4 18.4 15.0 15.0 50%

2014 2,357.9 1.4% 33.2 33.8 18.9 14.9 18.3 55%

2015 2,394.1 1.5% 36.3 34.3 19.4 14.9 21.4 59%

2016 2,429.5 1.5% 35.4 34.7 19.9 14.9 20.5 58%

2017 2,464.2 1.4% 34.7 35.2 20.4 14.8 19.9 57%

2018 2,499.5 1.4% 35.3 35.6 20.9 14.7 20.5 58%

2019 2,534.9 1.4% 35.4 36.1 21.4 14.7 20.7 59%

2020 2,571.1 1.4% 36.3 36.6 21.5 15.1 21.2 58%

2021 2,608.4 1.5% 37.3 37.0 21.6 15.4 21.9 59%

2022 2,647.0 1.5% 38.6 37.6 21.7 15.8 22.8 59%

2023 2,687.0 1.5% 39.9 38.1 21.8 16.3 23.7 59%

2024 2,727.6 1.5% 40.6 38.7 21.9 16.7 23.9 59%

2025 2,768.2 1.5% 40.6 39.2 22.7 16.5 24.1 59%

estimates are in thousands * net migration / change

Components of Population Change for Portland-Vancouver, OR-WA

A-2

Source: Metro DRC

Metro01.xls 10/7/02
0 - 4 5 - 9 10 - 14 15 - 19 20 - 24 25 - 29 30 - 34 35 - 39 40 - 44 45 - 49 50 - 54 55 - 59 60 - 64 65 - 69 70 - 74 

1990 108.9 109.8 103.6 95.5 98.2 120.6 136.2 139.1 123.1 89.8 65.5 55.3 55.4 54.8 44.9 1991 111.1 110.8 105.3 97.5 99.5 119.5 135.6 139.8 125.9 94.4 69.0 56.9 55.5 54.8 45.8 1992 114.7 113.2 108.0 101.2 104.5 120.7 135.7 141.0 129.7 101.3 74.7 59.8 55.9 54.6 46.7 1993 117.7 116.0 111.0 105.1 110.0 123.4 136.6 142.3 133.3 107.7 80.6 63.3 56.9 54.6 47.5 1994 120.5 118.9 114.0 108.9 115.2 126.6 138.0 143.7 136.5 113.5 86.5 67.2 58.4 54.8 48.2 1995 122.7 121.3 116.6 112.0 119.0 129.1 138.9 144.5 139.0 118.6 92.3 71.4 60.2 55.3 48.7 1996 124.8 123.7 119.2 115.0 122.7 131.9 140.2 145.4 141.2 123.2 97.8 75.8 62.5 56.0 49.2 1997 127.6 126.5 122.1 118.5 127.5 135.9 142.5 146.9 143.5 127.5 103.3 80.5 65.3 57.1 49.8 1998 130.2 128.9 124.7 121.4 131.0 139.1 144.5 148.1 145.3 131.3 108.4 85.2 68.3 58.5 50.5 1999 132.2 130.7 126.7 123.6 132.9 141.0 145.8 148.9 146.7 134.4 113.0 89.8 71.5 60.0 51.3 2000 132.1 135.0 132.5 127.4 125.4 144.8 148.2 153.8 156.3 149.6 126.9 88.3 61.1 48.5 46.2 2001 136.0 133.3 129.6 126.7 134.6 142.5 146.9 149.4 148.1 138.8 120.5 98.1 77.9 63.6 53.0 2002 138.7 135.2 131.4 128.5 135.4 143.1 147.5 150.0 149.1 141.1 124.2 102.4 81.6 66.0 54.4 2003 140.8 136.9 133.0 130.1 136.7 143.9 148.2 150.5 149.8 142.8 127.4 106.4 85.2 68.5 55.8 2004 144.0 139.9 135.5 132.8 140.5 147.2 150.5 152.1 151.1 144.8 130.6 110.5 89.1 71.4 57.5 2005 147.0 142.6 137.9 135.3 143.5 150.2 152.8 153.6 152.4 146.6 133.6 114.3 92.9 74.4 59.4 2006 149.9 145.4 140.3 137.7 146.5 153.1 155.1 155.3 153.7 148.3 136.3 118.0 96.7 77.5 61.5 2007 152.8 148.2 142.8 140.2 149.4 156.0 157.5 157.1 155.1 150.0 138.8 121.4 100.5 80.7 63.8 2008 155.3 150.7 145.1 142.3 151.3 158.1 159.5 158.7 156.4 151.4 141.0 124.5 104.0 83.9 66.1 2009 157.4 152.8 147.2 144.1 152.5 159.5 161.0 160.0 157.5 152.7 142.9 127.3 107.3 87.1 68.6 2010 159.3 154.8 149.2 145.8 153.5 160.5 162.2 161.1 158.5 153.8 144.7 129.9 110.4 90.2 71.1 2011 161.0 156.8 151.1 147.6 154.6 161.5 163.4 162.3 159.6 155.0 146.3 132.4 113.4 93.3 73.6 2012 162.7 158.7 153.1 149.3 155.8 162.5 164.5 163.5 160.6 156.1 147.8 134.6 116.3 96.3 76.3 2013 164.4 160.5 155.0 151.1 157.1 163.5 165.6 164.6 161.7 157.2 149.3 136.7 119.0 99.2 78.9 2014 166.2 162.6 157.1 153.2 159.1 165.1 167.1 166.0 162.9 158.4 150.7 138.7 121.6 102.1 81.6 2015 168.4 164.8 159.4 155.5 161.6 167.3 168.9 167.6 164.4 159.7 152.2 140.7 124.1 105.0 84.3 2016 170.5 167.0 161.6 157.7 163.9 169.4 170.8 169.2 165.8 161.0 153.7 142.6 126.5 107.7 86.9 2017 172.6 169.1 163.8 159.9 166.1 171.5 172.6 170.9 167.2 162.3 155.1 144.3 128.8 110.3 89.6 2018 174.8 171.3 166.0 162.2 168.4 173.7 174.5 172.6 168.8 163.7 156.5 146.0 130.9 112.9 92.1 2019 177.0 173.5 168.2 164.4 170.8 175.9 176.5 174.3 170.3 165.1 157.9 147.7 133.0 115.3 94.7 2020 179.3 175.7 170.4 166.7 173.2 178.2 178.6 176.2 171.9 166.5 159.3 149.3 134.9 117.6 97.1 2021 181.6 178.0 172.7 169.0 175.7 180.7 180.8 178.1 173.6 168.0 160.7 150.8 136.8 119.9 99.5 2022 184.1 180.3 175.0 171.4 178.3 183.3 183.2 180.2 175.4 169.6 162.2 152.4 138.7 122.0 101.9 2023 186.6 182.8 177.4 173.8 181.0 186.1 185.7 182.4 177.3 171.2 163.7 153.9 140.4 124.1 104.1 2024 189.3 185.3 179.8 176.2 183.7 188.9 188.3 184.7 179.3 172.9 165.2 155.5 142.2 126.1 106.3 2025 191.9 187.8 182.3 178.7 186.4 191.7 191.0 187.0 181.3 174.7 166.8 157.0 143.9 128.1 108.5 

Population by Age for Portland-Vancouver, OR-WA

In ThousandsDetails may not add due to rounding A-3
Table 4

under 25 25 - 34 35 - 44 45 - 54 55 - 64 65 - 74 75-79 85 over TOTAL

Avg. HH 

Size

1990 31.6 125.0 148.0 88.9 66.9 62.4 40.2 12.5 575.5 2.57

1991 30.4 124.5 149.7 94.9 66.6 64.7 42.2 12.9 585.8 2.56

1992 32.0 124.4 152.5 101.9 69.3 65.2 43.4 13.6 602.2 2.58

1993 34.8 126.0 150.9 110.9 71.7 64.5 43.7 13.9 616.5 2.59

1994 38.1 129.5 153.9 114.9 73.6 63.9 43.9 14.3 632.0 2.60

1995 40.8 131.1 156.8 121.8 77.3 65.1 45.2 15.0 653.1 2.57

1996 41.0 133.3 157.0 126.0 81.7 65.5 45.7 15.5 665.6 2.59

1997 42.2 136.0 158.7 134.2 86.1 66.7 46.5 16.1 686.4 2.58

1998 42.9 137.6 159.9 139.7 91.5 68.2 47.3 16.6 703.6 2.58

1999 43.6 138.7 160.9 143.7 96.6 69.5 47.8 17.0 717.8 2.57

2000 44.7 139.2 162.0 146.6 101.3 70.9 48.2 17.4 730.2 2.57

2001 45.8 139.5 163.3 149.1 105.1 72.5 48.7 17.8 741.7 2.57

2002 46.9 139.6 164.5 151.0 108.3 74.3 49.2 18.1 751.8 2.57

2003 47.8 138.8 165.8 153.7 112.8 76.9 50.3 18.6 764.6 2.57

2004 49.9 141.1 168.2 155.9 117.7 79.6 51.2 19.1 782.6 2.57

2005 50.9 142.6 170.2 158.4 122.4 82.9 52.6 19.6 799.6 2.56

2006 51.8 144.3 172.1 161.1 126.6 86.4 54.1 20.1 816.5 2.56

2007 52.5 146.7 176.0 164.0 130.3 89.8 55.5 20.6 835.3 2.55

2008 53.2 148.6 175.0 166.6 134.1 93.3 57.1 21.2 848.9 2.56

2009 54.1 150.2 174.3 169.2 137.3 96.9 58.8 21.7 862.5 2.55

2010 55.1 152.1 174.0 171.6 140.5 100.5 60.7 22.3 876.7 2.55

2011 56.0 154.0 173.7 173.9 143.4 104.2 62.7 22.9 890.7 2.54

2012 56.6 154.9 174.9 175.4 146.4 107.7 64.7 23.5 904.1 2.54

2013 57.2 155.9 176.0 176.9 149.2 111.2 66.8 24.1 917.3 2.53

2014 57.9 157.4 177.5 178.5 151.9 114.6 69.1 24.8 931.6 2.53

2015 58.8 159.3 179.1 180.1 154.6 118.1 71.5 25.5 946.9 2.53

2016 59.6 161.2 180.8 181.7 157.0 121.5 73.9 26.2 961.9 2.53

2017 60.4 163.0 182.4 183.2 159.4 124.8 76.4 27.0 976.6 2.52

2018 61.3 165.0 184.1 184.8 161.6 128.0 78.9 27.8 991.5 2.52

2019 62.1 167.0 185.9 186.4 163.8 131.0 81.5 28.7 1,006.4 2.52

2020 63.0 169.1 187.8 188.1 165.9 134.0 84.1 29.7 1,021.6 2.52

2021 63.9 171.3 189.8 189.8 167.9 136.9 86.7 31.1 1,037.3 2.51

2022 64.8 173.7 191.9 191.5 169.9 139.7 89.3 32.7 1,053.5 2.51

2023 65.8 176.2 194.1 193.4 171.8 142.5 91.8 34.7 1,070.1 2.51

2024 66.7 178.7 196.4 195.2 173.7 145.1 94.4 37.0 1,087.2 2.51

2025 67.7 181.3 198.7 197.1 175.6 147.6 96.9 39.2 1,104.2 2.51

2026 68.6 183.7 201.1 199.1 177.5 150.1 99.4 41.4 1,120.8 2.51

2027 69.4 186.0 203.4 201.0 175.3 152.4 101.8 43.5 1,132.8 2.51

2028 70.2 188.1 205.7 203.0 176.8 154.7 104.1 45.4 1,148.1 2.51

2029 71.0 190.2 208.0 205.0 178.3 156.8 106.5 47.3 1,163.0 2.51

2030 71.8 192.2 210.3 207.0 179.8 159.0 108.7 49.1 1,177.8 2.51

Household by Age of Head for Portland-Vancouver, OR-WA

In Thousands A-4

Source: Metro DRC

Metro01.xls 10/7/02
Table 5

Industry 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Total Nonfarm Employ. /1

Portland-Vancouver /2 891.5 902.2 916.1 944.4 996.2 1,038.8 1,084.5 1,124.8 1,150.1 1,175.1 1,217.0 1,215.8 1,211.3

 %change 4.0% 1.2% 1.5% 3.1% 5.5% 4.3% 4.4% 3.7% 2.3% 2.2% 3.6% -0.1% -0.4%

U.S. (millions) 118.1 117.1 117.2 119.7 123.1 126.1 128.6 131.7 134.8 137.7 140.4 140.8 140.2

 %change 1.4% -0.9% 0.1% 2.1% 2.9% 2.4% 2.0% 2.5% 2.3% 2.1% 2.0% 0.3% -0.5%

Nonfarm Self-Employ.

Portland-Vancouver 168.0 176.3 176.6 178.9 196.5 201.1 208.1 210.8 220.4 232.9 252.2 254.3 253.3

 %change 5.5% 4.9% 0.2% 1.3% 9.8% 2.4% 3.5% 1.3% 4.5% 5.7% 8.3% 0.8% -0.4%

U.S. (millions) 8.7 8.9 8.6 9.0 9.0 8.9 9.0 9.1 9.0 8.8 8.7 8.6 8.5

 %change 1.3% 1.5% -3.1% 4.5% 0.5% -1.1% 0.8% 1.0% -1.1% -1.9% -1.4% -0.9% -1.2%

Wage and Salary Emp. /3

Portland-Vancouver 715.2 717.5 731.5 757.8 792.3 830.5 869.3 906.9 923.0 935.7 958.0 954.8 951.3

 %change 3.6% 0.3% 1.9% 3.6% 4.6% 4.8% 4.7% 4.3% 1.8% 1.4% 2.4% -0.3% -0.4%

U.S. (millions) 109.4 108.3 108.6 110.7 114.1 117.2 119.6 122.7 125.8 128.9 131.8 132.2 131.7

 %change 1.4% -1.1% 0.3% 1.9% 3.1% 2.7% 2.0% 2.6% 2.6% 2.4% 2.2% 0.4% -0.4%

Manufacturing

Portland-Vancouver 121.7 119.8 118.9 121.9 126.7 134.9 139.2 145.0 147.0 142.9 145.5 142.2 140.4

 %change 2.4% -1.6% -0.8% 2.5% 3.9% 6.5% 3.2% 4.2% 1.4% -2.8% 1.8% -2.3% -1.3%

U.S. (millions) 19.1 18.4 18.1 18.1 18.3 18.5 18.5 18.7 18.8 18.6 18.5 17.7 16.9

 %change -1.6% -3.5% -1.6% -0.2% 1.4% 1.1% -0.2% 1.0% 0.7% -1.3% -0.5% -4.2% -4.8%

Nondurable Manuf.

Portland-Vancouver 36.4 36.8 37.2 38.2 39.4 40.3 39.8 39.6 39.2 37.7 38.1 37.2 37.1

 %change 3.1% 1.1% 1.1% 2.6% 3.3% 2.2% -1.3% -0.4% -1.1% -3.7% 0.9% -2.2% -0.3%

 U.S. (millions) 8.0 7.8 7.8 7.9 7.9 7.8 7.7 7.7 7.6 7.4 7.3 7.1 6.9

 %change -0.4% -1.6% -0.1% 0.4% 0.3% -0.4% -1.7% -0.5% -0.8% -2.1% -1.5% -3.7% -2.4%

 Food Processing

 Portland-Vancouver 9.9 9.9 9.7 9.7 9.8 10.1 10.0 9.8 9.7 9.1 8.9 8.5 8.4

 %change 6.1% -0.6% -1.3% -0.3% 0.8% 3.2% -0.8% -1.7% -1.7% -6.3% -1.4% -4.9% -1.6%

 U.S. (millions) 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7

 %change 1.0% 0.4% -0.3% 1.1% -0.1% 0.9% -0.1% -0.4% -0.1% 0.0% -0.2% 0.0% 0.6%

 Textiles & Apparel

 Portland-Vancouver 4.8 4.7 4.6 4.8 5.0 4.9 4.6 4.4 4.3 3.8 3.4 3.5 3.5

 %change 2.8% -2.2% -2.7% 3.6% 4.4% -1.5% -7.0% -3.1% -3.0% -11.5% -10.1% 3.8% -0.8%

 U.S. (millions) 1.7 1.7 1.7 1.7 1.7 1.6 1.5 1.4 1.4 1.2 1.2 1.0 1.0

 %change -3.8% -3.0% 0.3% -1.0% -0.7% -3.2% -6.6% -3.6% -5.4% -8.3% -7.1% -10.3% -7.7%

 Paper & Pulp

 Portland-Vancouver 7.2 6.8 6.9 7.0 7.1 7.1 6.5 6.3 6.3 6.1 6.7 6.7 6.6

 %change 1.1% -5.2% 1.3% 1.7% 1.5% -0.2% -8.1% -3.7% 0.9% -2.9% 9.6% -1.2% -0.6%

 U.S. (millions) 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.6 0.6

 %change 0.1% -1.3% 0.4% 0.2% 0.1% 0.1% -1.3% -0.1% -0.9% -1.3% -1.2% -3.0% -3.1%

 Printing & Publishing

 Portland-Vancouver 8.7 9.6 9.6 9.9 10.0 10.2 9.9 10.1 10.4 10.8 11.1 11.0 11.4

 %change 4.7% 9.6% 0.5% 3.1% 1.1% 1.2% -3.0% 2.2% 3.0% 3.6% 2.8% -0.3% 3.4%

 U.S. (millions) 1.6 1.5 1.5 1.5 1.5 1.5 1.5 1.6 1.6 1.6 1.6 1.5 1.5

 %change 0.9% -2.1% -1.9% 0.7% 1.3% 0.6% -0.3% 0.7% 0.8% -0.8% -0.1% -3.9% -2.7%

 Nondur. Goods, other

Portland-Vancouver 5.8 5.9 6.4 6.8 7.6 8.1 8.8 9.0 8.5 8.0 8.0 7.5 7.2

 %change -1.4% 2.0% 9.2% 6.1% 11.0% 7.0% 9.4% 2.2% -5.5% -6.3% -0.5% -5.4% -3.9%

U.S. (millions) 2.3 2.3 2.3 2.3 2.3 2.3 2.3 2.3 2.3 2.3 2.3 2.2 2.2

 %change 0.4% -1.9% 0.7% 0.7% 0.6% -0.2% -0.7% 0.4% 0.4% -1.0% -0.5% -3.1% -1.8%

Durable Manufacturing

Portland-Vancouver 85.3 83.0 81.7 83.7 87.3 94.6 99.4 105.4 107.8 105.1 107.4 105.0 103.3

 %change 2.0% -2.7% -1.6% 2.5% 4.3% 8.4% 5.1% 6.0% 2.3% -2.4% 2.2% -2.3% -1.6%

 U.S. (millions) 11.1 10.6 10.3 10.2 10.4 10.7 10.8 11.0 11.2 11.1 11.1 10.6 10.0

 %change -2.5% -4.9% -2.7% -0.6% 2.2% 2.3% 1.0% 2.0% 1.8% -0.8% 0.3% -4.5% -6.4%

 Lumber & Wood

 Portland-Vancouver 9.3 8.2 7.8 7.9 7.9 7.8 7.7 8.1 7.9 7.5 7.6 7.5 7.5

 %change -4.6% -11.6% -5.0% 0.8% 0.0% -0.7% -1.2% 4.8% -2.9% -4.6% 1.5% -2.2% 0.8%

 U.S. (millions) 0.7 0.7 0.7 0.7 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8

 %change -3.1% -7.9% 0.7% 4.3% 6.3% 2.0% 1.2% 2.3% 2.3% 2.6% -0.6% -4.8% 1.3%

 Metals

 Portland-Vancouver 18.3 17.1 16.5 16.1 17.1 18.6 19.0 19.8 20.6 20.2 19.9 19.0 18.5

 %change -2.4% -6.6% -3.5% -2.5% 6.3% 9.1% 2.3% 3.9% 4.2% -2.0% -1.3% -4.6% -2.7%

 U.S. (millions) 2.2 2.1 2.0 2.0 2.1 2.1 2.2 2.2 2.2 2.2 2.2 2.1 2.0

 %change -1.9% -4.5% -2.6% -0.1% 3.2% 3.0% 0.5% 1.3% 1.6% -0.2% 0.9% -4.9% -5.2%

Electronics, total

 Portland-Vancouver 40.1 40.5 39.9 41.7 44.2 49.4 54.2 58.0 58.9 56.0 58.7 59.7 59.2

 %change 2.7% 1.1% -1.4% 4.3% 6.1% 11.8% 9.6% 7.1% 1.4% -4.9% 5.0% 1.7% -1.0%

 U.S. (millions) 4.8 4.6 4.4 4.4 4.4 4.5 4.6 4.7 4.8 4.7 4.7 4.5 4.1

 %change -2.5% -4.4% -3.9% -0.8% 1.6% 2.6% 2.1% 2.0% 1.3% -2.5% 0.6% -4.5% -8.7%

 Nonelectrical Mach.

 Portland-Vancouver 14.1 15.1 14.7 16.0 17.0 18.7 19.9 20.9 19.8 17.8 17.0 15.9 15.9

 %change 3.3% 7.4% -2.9% 9.1% 5.7% 10.5% 6.4% 4.8% -5.0% -10.4% -4.5% -6.4% 0.0%

 U.S. (millions) 2.1 2.0 1.9 1.9 2.0 2.1 2.1 2.2 2.2 2.1 2.1 2.0 1.8

 %change -1.4% -4.5% -3.5% 0.1% 3.1% 3.9% 2.3% 2.6% 1.8% -3.1% -0.8% -5.2% -12.4%

 Electrical Mach. & Instr.

 Portland-Vancouver 26.0 25.4 25.2 25.6 27.2 30.7 34.2 37.1 39.0 38.2 41.7 43.8 43.2

 %change 2.4% -2.2% -0.5% 1.5% 6.3% 12.6% 11.6% 8.5% 5.0% -2.2% 9.4% 5.0% -1.3%

 U.S. (millions) 2.7 2.6 2.5 2.4 2.4 2.5 2.5 2.6 2.6 2.5 2.6 2.5 2.3

 %change -3.3% -4.3% -4.2% -1.5% 0.4% 1.5% 1.9% 1.6% 1.0% -2.1% 1.7% -3.9% -5.7%

 Transportation Equip.

 Portland-Vancouver 10.2 10.0 10.1 10.2 10.2 10.6 10.4 11.1 12.2 13.1 12.7 10.1 9.5

 %change 16.3% -1.9% 1.0% 1.2% 0.1% 3.8% -1.8% 6.8% 10.1% 7.2% -3.4% -20.7% -5.4%

 U.S. (millions) 2.0 1.9 1.8 1.8 1.8 1.8 1.8 1.8 1.9 1.9 1.9 1.8 1.6

 %change -3.0% -5.0% -3.1% -4.0% 0.3% 1.6% -0.3% 3.4% 2.6% -0.3% -2.0% -5.4% -6.9%

Employment for Portland-Vancouver, OR-WA and U.S.

In thousands A-5

Source: Metro DRC

Metro01.xls 12/5/02
Industry

Total Nonfarm Employ. /1

Portland-Vancouver /2

 %change

U.S. (millions)

 %change

Nonfarm Self-Employ.

Portland-Vancouver

 %change

U.S. (millions)

 %change

Wage and Salary Emp. /3

Portland-Vancouver

 %change

U.S. (millions)

 %change

Manufacturing

Portland-Vancouver

 %change

U.S. (millions)

 %change

Nondurable Manuf.

Portland-Vancouver

 %change

 U.S. (millions)

 %change

 Food Processing

 Portland-Vancouver

 %change

 U.S. (millions)

 %change

 Textiles & Apparel

 Portland-Vancouver

 %change

 U.S. (millions)

 %change

 Paper & Pulp

 Portland-Vancouver

 %change

 U.S. (millions)

 %change

 Printing & Publishing

 Portland-Vancouver

 %change

 U.S. (millions)

 %change

 Nondur. Goods, other

Portland-Vancouver

 %change

U.S. (millions)

 %change

Durable Manufacturing

Portland-Vancouver

 %change

 U.S. (millions)

 %change

 Lumber & Wood

 Portland-Vancouver

 %change

 U.S. (millions)

 %change

 Metals

 Portland-Vancouver

 %change

 U.S. (millions)

 %change

Electronics, total

 Portland-Vancouver

 %change

 U.S. (millions)

 %change

 Nonelectrical Mach.

 Portland-Vancouver

 %change

 U.S. (millions)

 %change

 Electrical Mach. & Instr.

 Portland-Vancouver

 %change

 U.S. (millions)

 %change

 Transportation Equip.

 Portland-Vancouver

 %change

 U.S. (millions)

 %change

Table 5

2003 2004 2005 2010 2015 2020 2025 70-00 90-00 00-05 05-10 10-15 15-25

1,240.8 1,280.1 1,320.8 1,484.0 1,631.9 1,795.6 1,979.4 3.2% 3.2% 1.7% 2.4% 1.9% 1.9%

2.4% 3.2% 3.2% 2.1% 1.8% 1.9% 1.9%

142.2 145.0 147.2 156.1 163.7 171.7 178.9 2.1% 1.7% 0.9% 1.2% 1.0% 0.9%

1.4% 2.0% 1.5% 1.3% 1.0% 1.0% 0.8%

257.7 264.2 270.7 308.5 352.0 401.2 457.2 4.0% 4.2% 1.4% 2.7% 2.7% 2.6%

1.7% 2.5% 2.4% 2.5% 2.6% 2.5% 2.6%

8.5 8.5 8.6 8.7 8.7 8.8 8.8 1.7% -0.1% -0.3% 0.3% 0.1% 0.1%

0.1% 0.2% 0.4% 0.2% 0.0% 0.1% 0.1%

976.5 1,009.3 1,043.5 1,168.7 1,273.1 1,387.7 1,515.5 3.0% 3.0% 1.7% 2.3% 1.7% 1.8%

2.6% 3.4% 3.4% 2.1% 1.6% 1.8% 1.7% 3.0% 2.0% 1.8% 1.5%

133.7 136.5 138.6 147.4 155.0 162.9 170.1 2.1% 1.9% 1.0% 1.2% 1.0% 0.9%

1.5% 2.1% 1.5% 1.4% 1.0% 1.1% 0.8%

144.3 149.4 154.7 165.9 168.9 172.8 177.2 1.7% -4.9% 1.2% 1.4% 0.4% 0.5%

2.8% 3.6% 3.5% 0.9% 0.4% 0.5% 0.5%

17.0 17.2 17.3 17.5 17.1 16.9 16.8 -0.2% -0.3% -1.3% 0.2% -0.5% -0.2%

0.8% 1.4% 0.6% -0.8% -0.5% 0.1% -0.5%

37.8 38.6 39.3 40.5 40.5 40.7 40.5 0.6% 0.4% 0.6% 0.6% 0.0% 0.0%

1.8% 2.3% 1.8% 0.0% 0.1% 0.1% -0.2%

7.1 7.2 7.3 7.3 7.1 7.0 6.9 -0.4% -0.8% -0.1% -0.1% -0.5% -0.2%

2.5% 2.5% 0.7% -0.7% -0.6% 0.0% -0.6%

8.4 8.5 8.5 8.2 7.7 7.2 6.7 -0.7% -1.0% -0.9% -0.8% -1.2% -1.4%

0.6% 1.2% 0.4% -1.6% -1.3% -1.2% -1.6%

1.7 1.8 1.8 1.7 1.6 1.6 1.6 -0.2% 0.1% 0.8% -0.5% -0.8% -0.2%

1.8% 1.7% 0.0% -1.2% -0.6% 0.0% -0.6%

3.7 3.9 4.0 3.6 3.1 2.6 2.2 -1.8% -3.4% 3.1% -2.0% -3.1% -3.3%

6.3% 5.1% 1.3% -2.7% -3.2% -3.0% -3.5%

1.0 0.9 0.9 0.9 0.8 0.8 0.8 -2.3% -3.9% -4.1% -1.5% -0.9% -0.9%

0.0% -2.1% 0.0% -1.1% 0.0% 0.0% 0.0%

6.6 6.7 6.8 6.6 6.2 5.9 5.5 -0.4% -0.6% 0.1% -0.5% -1.1% -1.3%

0.0% 1.4% 0.9% -1.1% -1.1% -1.2% -1.4%

0.6 0.7 0.7 0.6 0.6 0.6 0.6 -0.2% -0.5% -0.3% -0.6% -1.0% -0.5%

1.6% 3.2% 0.0% -1.6% -1.6% 0.0% -1.7%

11.7 12.0 12.2 13.1 13.5 13.7 13.8 3.4% 2.4% 2.0% 1.4% 0.5% 0.2%

2.8% 2.4% 2.0% 0.8% 0.4% 0.2% 0.0%

1.5 1.6 1.6 1.7 1.6 1.6 1.6 1.1% -0.1% 1.0% 0.6% -0.6% -0.3%

4.1% 5.3% 2.5% -0.6% -1.2% 0.0% -0.6%

7.3 7.5 7.8 9.0 10.1 11.3 12.3 2.5% 3.3% -0.3% 2.7% 2.3% 2.1%

1.2% 2.7% 4.0% 2.1% 2.5% 2.2% 1.5%

2.2 2.3 2.3 2.4 2.4 2.4 2.4 0.0% -0.1% 0.3% 0.3% 0.0% 0.0%

3.2% 3.1% 0.4% 0.0% 0.0% 0.0% -0.4%

106.5 110.8 115.3 125.5 128.4 132.1 136.7 2.2% 2.3% 1.4% 1.7% 0.5% 0.6%

3.1% 4.0% 4.1% 1.2% 0.4% 0.7% 0.7%

9.9 10.0 10.0 10.2 10.0 9.9 9.9 0.0% 0.0% -2.1% 0.4% -0.5% -0.1%

-0.4% 0.5% 0.6% -0.9% -0.5% 0.2% -0.5%

7.5 7.4 7.4 6.8 5.9 5.0 4.2 -0.7% -2.0% -0.6% -1.6% -2.8% -3.3%

-0.3% -1.9% 0.4% -2.9% -3.1% -3.1% -3.9%

0.8 0.9 0.9 0.9 0.9 0.8 0.8 0.8% 1.2% 1.2% 0.0% -0.5% -1.0%

3.7% 3.6% 2.3% 0.0% -1.1% -1.2% -1.3%

19.1 19.6 20.1 20.3 19.6 19.1 18.8 1.3% 0.9% 0.1% 0.3% -0.7% -0.4%

3.1% 2.8% 2.3% -0.1% -0.6% -0.3% -0.5%

2.1 2.1 2.2 2.1 1.9 1.8 1.6 -0.8% 0.3% -0.6% -0.7% -1.9% -1.5%

3.5% 2.4% 1.4% -1.4% -2.6% -0.6% -1.8%

61.2 64.5 68.0 76.6 80.1 84.1 88.7 3.6% 3.9% 3.0% 2.4% 0.9% 1.0%

3.4% 5.5% 5.4% 1.8% 0.9% 1.1% 1.0%

3.9 3.8 3.8 4.2 4.2 4.4 4.5 0.2% -0.2% -4.0% 2.0% 0.0% 0.7%

-4.4% -2.6% 0.3% -0.7% 0.5% 0.9% 0.4%

16.4 16.9 17.6 20.2 20.8 21.8 22.9 2.6% 1.9% 0.7% 2.7% 0.6% 0.9%

3.2% 3.1% 4.1% 1.8% 0.8% 1.0% 0.9%

1.5 1.5 1.5 1.7 1.7 1.8 1.8 0.2% 0.1% -7.1% 3.1% 0.2% 0.6%

-12.5% -3.9% -0.7% 3.6% 0.6% 0.6% 0.5%

44.8 47.6 50.4 56.4 59.3 62.4 65.8 4.1% 4.9% 3.8% 2.3% 1.0% 1.0%

3.5% 6.3% 5.9% 1.9% 1.0% 1.1% 1.1%

2.4 2.3 2.4 2.5 2.5 2.6 2.7 0.2% -0.4% -1.8% 1.3% -0.2% 0.8%

1.7% -1.7% 0.9% -3.5% 0.4% 1.2% 0.4%

9.9 10.2 10.5 11.5 11.7 12.0 12.4 2.1% 2.2% -3.7% 1.8% 0.4% 0.6%

3.6% 2.9% 3.4% 0.9% -0.1% 0.6% 0.6%

1.7 1.7 1.7 1.6 1.6 1.5 1.5 0.0% -0.7% -2.1% -1.4% 0.0% -0.2%

1.2% 1.2% -0.6% -1.3% -0.6% 0.0% -0.7%

Employment, Portland-Vancouver OR-WA and U.S.

In thousands A-6

Source: Metro DRC

Metro01.xls 12/5/02
Table 5

Industry 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Employment for Portland-Vancouver, OR-WA and U.S.

 Durable Goods, other

Portland-Vancouver 7.5 7.2 7.4 7.9 7.9 8.2 8.1 8.3 8.2 8.3 8.5 8.7 8.6

 %change 1.6% -3.9% 2.1% 7.8% 0.1% 2.8% -1.1% 3.2% -1.6% 1.9% 1.5% 3.2% -1.7%

U.S. (millions) 1.4 1.4 1.4 1.4 1.4 1.4 1.4 1.5 1.5 1.5 1.5 1.5 1.4

 %change -2.5% -5.3% -0.2% 1.8% 3.1% 1.0% -0.3% 1.5% 2.2% 1.1% 1.7% -2.6% -4.7%

Nonmanufact. (exc. military)

Portland-Vancouver 593.5 597.7 612.6 635.9 665.6 695.6 730.1 761.9 776.0 792.8 812.5 812.5 810.9

 %change 3.9% 0.7% 2.5% 3.8% 4.7% 4.5% 5.0% 4.4% 1.9% 2.2% 2.5% 0.0% -0.2%

U.S. (millions) 90.3 89.8 90.5 92.6 95.8 98.7 101.1 104.0 107.0 110.3 113.3 114.5 114.8

 %change 2.1% -0.5% 0.7% 2.4% 3.5% 3.0% 2.5% 2.9% 2.9% 3.1% 2.7% 1.1% 0.3%

 Constr. & Mining

 Portland-Vancouver 36.3 35.3 33.7 35.2 40.1 45.0 51.5 54.5 53.8 52.8 53.9 53.1 53.3

 %change 14.1% -2.6% -4.5% 4.4% 13.8% 12.2% 14.6% 5.8% -1.3% -1.9% 2.0% -1.4% 0.4%

 U.S. (millions) 5.8 5.3 5.1 5.3 5.6 5.7 6.0 6.3 6.6 7.0 7.2 7.4 7.3

 %change -0.5% -8.4% -4.1% 2.9% 5.8% 3.0% 4.3% 4.8% 5.1% 5.2% 4.1% 2.6% -2.0%

Private Service Producers 4

 Portland-Vancouver 459.2 461.9 474.7 495.6 519.4 542.5 567.2 594.5 606.4 619.3 631.6 631.9 630.5

 %change 3.2% 0.6% 2.8% 4.4% 4.8% 4.4% 4.6% 4.8% 2.0% 2.1% 2.0% 0.0% -0.2%

 U.S. (millions) 66.2 66.1 66.7 68.5 71.1 73.6 75.7 78.2 80.6 83.2 85.4 86.2 86.4

 %change 2.1% -0.1% 0.9% 2.7% 3.8% 3.5% 2.8% 3.3% 3.1% 3.2% 2.6% 1.0% 0.2%

 Transport., Comm., & Util.

 Portland-Vancouver 41.6 42.0 42.5 43.3 44.9 47.8 49.4 51.7 53.1 54.2 55.4 54.8 54.5

 %change 3.6% 1.0% 1.1% 2.0% 3.7% 6.4% 3.4% 4.8% 2.5% 2.2% 2.2% -1.1% -0.5%

 U.S. (millions) 5.8 5.8 5.7 5.8 6.0 6.1 6.3 6.4 6.6 6.8 7.0 7.1 7.0

 %change 2.9% -0.4% -0.6% 1.6% 3.0% 2.5% 2.0% 2.5% 3.2% 3.4% 2.7% 0.7% -0.4%

 Trade, total

 Portland-Vancouver 183.4 183.9 186.3 191.4 201.6 208.8 216.7 225.5 229.0 232.3 235.4 233.7 232.4

 %change 2.7% 0.3% 1.3% 2.7% 5.3% 3.6% 3.8% 4.0% 1.5% 1.5% 1.3% -0.7% -0.5%

 U.S. (millions) 25.8 25.4 25.4 25.8 26.7 27.6 28.1 28.6 29.1 29.8 30.3 30.5 30.2

 %change 0.4% -1.6% 0.0% 1.6% 3.5% 3.4% 1.9% 1.9% 1.7% 2.3% 1.9% 0.6% -0.9%

 Retail Trade

 Portland-Vancouver 128.2 128.6 130.9 134.8 142.1 147.0 153.1 157.6 160.1 164.9 168.1 168.1 167.4

 %change 3.1% 0.3% 1.8% 3.0% 5.4% 3.5% 4.1% 2.9% 1.6% 3.0% 2.0% 0.0% -0.4%

 U.S. (millions) 19.6 19.3 19.4 19.8 20.5 21.2 21.6 22.0 22.3 22.9 23.3 23.5 23.3

 %change 0.6% -1.6% 0.4% 2.2% 3.7% 3.3% 1.9% 1.7% 1.5% 2.5% 2.0% 0.8% -0.9%

 Wholesale Trade

 Portland-Vancouver 55.2 55.4 55.5 56.6 59.6 61.8 63.6 67.9 68.9 67.5 67.2 65.6 65.0

 %change 1.7% 0.4% 0.1% 2.1% 5.2% 3.8% 3.0% 6.8% 1.4% -2.1% -0.3% -2.5% -0.9%

 U.S. (millions) 6.2 6.1 6.0 6.0 6.2 6.4 6.5 6.6 6.8 6.9 7.0 7.0 7.0

 %change -0.2% -1.5% -1.4% -0.3% 3.0% 3.5% 1.7% 2.6% 2.3% 1.6% 1.6% -0.1% -0.9%

 Fin., Ins., & Real Est.

 Portland-Vancouver 52.1 53.8 55.6 59.0 61.1 59.8 63.0 66.3 66.7 66.2 64.5 64.6 64.5

 %change -3.0% 3.3% 3.3% 6.1% 3.7% -2.2% 5.4% 5.2% 0.5% -0.7% -2.6% 0.1% -0.1%

 U.S. (millions) 6.7 6.6 6.6 6.8 6.9 6.8 6.9 7.1 7.4 7.6 7.6 7.6 7.7

 %change 0.6% -0.9% -0.7% 2.3% 2.0% -1.3% 1.5% 2.8% 3.9% 2.3% 0.1% 0.8% 0.7%

 Services, total

 Portland-Vancouver 182.2 182.1 190.3 201.9 211.7 226.1 238.0 250.9 257.7 266.5 276.3 278.9 279.1

 %change 5.5% -0.1% 4.5% 6.1% 4.8% 6.8% 5.3% 5.4% 2.7% 3.4% 3.7% 0.9% 0.1%

 U.S. (millions) 27.9 28.3 29.0 30.2 31.6 33.1 34.5 36.0 37.5 39.0 40.5 41.0 41.5

 %change 3.8% 1.5% 2.5% 3.9% 4.6% 4.9% 4.0% 4.6% 4.1% 4.1% 3.6% 1.4% 1.1%

 Health

 Portland-Vancouver 49.0 49.7 50.6 52.6 54.3 56.1 57.7 60.2 61.3 62.9 62.2 63.3 64.6

 %change 4.3% 1.6% 1.8% 4.0% 3.2% 3.4% 2.8% 4.4% 1.7% 2.6% -1.2% 1.8% 2.0%

 U.S. (millions) 7.8 8.2 8.5 8.8 9.0 9.2 9.5 9.7 9.9 10.0 10.1 10.3 10.7

 %change 4.7% 4.7% 3.7% 3.1% 2.7% 2.6% 2.7% 2.4% 1.5% 1.3% 1.2% 2.4% 3.3%

 Nonhealth

 Portland-Vancouver 133.2 132.4 139.7 149.3 157.4 169.9 180.3 190.7 196.5 203.7 214.2 215.6 214.5

 %change 6.0% -0.6% 5.6% 6.8% 5.4% 8.0% 6.1% 5.7% 3.0% 3.7% 5.1% 0.7% -0.5%

 U.S. (millions) 20.1 20.2 20.6 21.4 22.6 23.9 25.0 26.3 27.7 29.1 30.4 30.7 30.8

 %change 3.5% 0.2% 2.0% 4.3% 5.3% 5.8% 4.6% 5.4% 5.1% 5.0% 4.4% 1.1% 0.4%

 Govt., Fed. Civilian

 Portland-Vancouver 18.1 17.7 18.3 18.1 17.6 17.6 17.5 17.8 17.9 17.6 18.5 17.9 18.1

 %change 2.5% -2.0% 3.5% -1.3% -3.0% 0.2% -0.7% 1.7% 0.6% -1.7% 5.5% -3.6% 1.5%

 U.S. (millions) 2.1 2.0 2.1 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.2 2.0 2.0

 %change 6.0% -4.2% 0.2% -0.4% 0.1% -0.2% -1.3% -0.7% 1.0% 0.4% 6.0% -7.0% 1.0%

 Govt., Fed. Military

 Portland-Vancouver 8.3 8.4 8.0 7.7 7.3 7.1 7.1 7.1 6.8 6.6 6.8 6.7 6.6

 %change 1.8% 1.2% -4.5% -3.0% -5.1% -2.7% -0.8% 0.2% -4.3% -3.4% 3.5% -1.3% -1.3%

 U.S. (millions) 1.0 0.9 0.9 0.9 0.8 0.8 0.7 0.7 0.7 0.6 0.6 0.6 0.6

 %change -2.3% -3.2% -0.4% -5.1% -5.2% -5.6% -5.0% -5.7% -4.7% -3.8% -1.6% -1.6% 0.0%

 Govt., State & Local

 Portland-Vancouver 79.9 82.8 85.8 86.9 88.6 90.6 93.9 95.1 97.9 103.1 108.5 109.7 109.0

 %change 3.9% 3.6% 3.6% 1.3% 1.9% 2.2% 3.7% 1.3% 2.9% 5.4% 5.2% 1.1% -0.6%

 U.S. (millions) 15.2 15.4 15.7 15.9 16.2 16.5 16.6 16.9 17.1 17.5 17.9 18.3 18.5

 %change 2.9% 1.4% 1.5% 1.5% 2.1% 1.4% 1.1% 1.2% 1.6% 2.3% 2.1% 2.0% 1.3%

In thousands A-7

Source: Metro DRC

Metro01.xls 12/5/02
Industry

 Durable Goods, other

Portland-Vancouver

 %change

U.S. (millions)

 %change

Nonmanufact. (exc. military)

Portland-Vancouver

 %change

U.S. (millions)

 %change

 Constr. & Mining

 Portland-Vancouver

 %change

 U.S. (millions)

 %change

Private Service Producers 4

 Portland-Vancouver

 %change

 U.S. (millions)

 %change

 Transport., Comm., & Util.

 Portland-Vancouver

 %change

 U.S. (millions)

 %change

 Trade, total

 Portland-Vancouver

 %change

 U.S. (millions)

 %change

 Retail Trade

 Portland-Vancouver

 %change

 U.S. (millions)

 %change

 Wholesale Trade

 Portland-Vancouver

 %change

 U.S. (millions)

 %change

 Fin., Ins., & Real Est.

 Portland-Vancouver

 %change

 U.S. (millions)

 %change

 Services, total

 Portland-Vancouver

 %change

 U.S. (millions)

 %change

 Health

 Portland-Vancouver

 %change

 U.S. (millions)

 %change

 Nonhealth

 Portland-Vancouver

 %change

 U.S. (millions)

 %change

 Govt., Fed. Civilian

 Portland-Vancouver

 %change

 U.S. (millions)

 %change

 Govt., Fed. Military

 Portland-Vancouver

 %change

 U.S. (millions)

 %change

 Govt., State & Local

 Portland-Vancouver

 %change

 U.S. (millions)

 %change

Table 5

2003 2004 2005 2010 2015 2020 2025 70-00 90-00 00-05 05-10 10-15 15-25

Employment, Portland-Vancouver OR-WA and U.S.

8.9 9.1 9.4 10.3 11.1 11.9 12.8 0.8% 1.2% 2.0% 1.9% 1.5% 1.4%

3.4% 2.7% 2.7% 1.7% 1.2% 1.5% 1.4%

1.4 1.5 1.5 1.5 1.5 1.4 1.4 0.1% 2.2% -0.4% 0.0% -0.4% -0.5%

1.4% 3.5% 0.7% -0.7% 0.0% 0.0% -1.4%

832.2 859.9 888.9 1002.8 1104.3 1214.9 1338.3 3.4% 3.2% 1.8% 2.4% 1.9% 1.9%

2.6% 3.3% 3.4% 2.3% 1.8% 1.9% 1.9%

116.7 119.3 121.3 129.9 137.9 146.0 153.3 2.7% 2.6% 1.4% 1.4% 1.2% 1.1%

1.6% 2.2% 1.7% 1.7% 1.2% 1.2% 1.0%

55.5 57.2 59.3 67.7 71.8 76.3 81.0 3.8% 4.0% 1.9% 2.7% 1.2% 1.2%

4.0% 3.2% 3.6% 2.2% 0.4% 1.6% 0.8%

7.3 7.5 7.7 8.3 9.0 9.4 9.6 1.8% 2.2% 1.2% 1.6% 1.5% 0.7%

0.8% 2.7% 1.7% 2.5% 1.2% 0.9% 0.0%

649.6 675.6 700.5 794.8 883.3 978.8 1,085.3 3.6% 3.2% 2.1% 2.6% 2.1% 2.1%

3.0% 4.0% 3.7% 2.4% 2.0% 2.0% 2.0%

88.1 90.5 92.2 99.8 107.4 114.4 121.2 3.0% 2.6% 1.6% 1.6% 1.5% 1.2%

2.0% 2.7% 2.0% 1.9% 1.4% 1.2% 1.2%

55.2 56.7 58.4 64.9 69.9 75.2 80.9 2.0% 2.9% 1.0% 2.1% 1.5% 1.5%

1.2% 2.7% 2.9% 1.7% 1.6% 1.4% 1.5%

7.2 7.5 7.7 8.2 8.6 8.8 8.8 1.5% 2.0% 1.9% 1.3% 0.8% 0.3%

2.8% 3.9% 2.7% 1.5% 0.6% 0.5% 0.1%

238.5 248.3 258.1 288.6 313.5 339.7 367.9 3.1% 2.5% 1.9% 2.3% 1.7% 1.6%

2.6% 4.1% 4.0% 2.0% 1.5% 1.6% 1.5%

30.3 30.9 31.3 32.1 33.7 34.9 35.6 2.4% 1.6% 0.6% 0.5% 0.9% 0.6%

0.4% 1.9% 1.1% 0.8% 1.1% 0.5% 0.5%

170.8 177.7 184.8 207.0 225.6 245.3 266.3 3.4% 2.7% 1.9% 2.3% 1.7% 1.7%

2.0% 4.0% 4.0% 2.0% 1.6% 1.7% 1.6%

23.3 23.7 24.0 24.5 25.7 26.6 27.3 2.5% 1.7% 0.6% 0.4% 0.9% 0.6%

0.1% 1.8% 1.1% 0.8% 1.1% 0.5% 0.6%

67.7 70.6 73.3 81.6 87.9 94.4 101.6 2.5% 2.0% 1.7% 2.2% 1.5% 1.5%

4.1% 4.3% 3.9% 1.9% 1.3% 1.4% 1.4%

7.0 7.2 7.3 7.6 8.0 8.3 8.4 1.9% 1.3% 0.8% 0.9% 1.0% 0.4%

1.3% 2.3% 1.3% 1.1% 1.1% 0.4% 0.4%

64.7 66.2 68.4 74.2 80.1 85.3 90.2 3.2% 2.2% 1.2% 1.6% 1.5% 1.2%

0.3% 2.3% 3.4% 1.5% 1.4% 1.2% 1.1%

7.8 8.0 8.1 8.7 9.1 9.5 9.9 2.5% 1.2% 1.5% 1.2% 1.0% 0.8%

1.3% 2.3% 2.4% 0.9% 0.9% 0.9% 0.8%

291.2 304.5 315.6 367.1 419.8 478.7 546.3 4.7% 4.3% 2.7% 3.1% 2.7% 2.7%

4.4% 4.6% 3.7% 3.0% 2.5% 2.6% 2.6%

42.8 44.1 45.1 50.8 56.1 61.4 67.0 4.3% 3.8% 2.2% 2.4% 2.0% 1.8%

3.1% 3.1% 2.4% 2.8% 1.7% 1.8% 1.7%

66.8 69.1 71.2 82.3 93.5 105.2 118.9 3.5% 2.4% 2.7% 3.0% 2.6% 2.4%

3.5% 3.4% 3.0% 2.8% 2.4% 2.3% 2.5%

11.0 11.2 11.4 12.6 14.5 16.6 19.2 4.1% 2.6% 2.5% 2.0% 2.8% 2.8%

2.6% 2.3% 2.1% 2.1% 3.3% 2.5% 2.6%

224.4 235.4 244.5 284.8 326.3 373.5 427.4 5.2% 4.9% 2.7% 3.1% 2.8% 2.7%

4.6% 4.9% 3.9% 3.0% 2.5% 2.7% 2.7%

31.8 32.9 33.7 38.2 41.6 44.8 47.8 4.3% 4.2% 2.1% 2.5% 1.7% 1.4%

3.2% 3.3% 2.5% 3.0% 1.1% 1.5% 1.3%

18.0 17.9 17.9 19.3 19.4 20.4 21.2 0.9% 0.3% -0.7% 1.5% 0.2% 0.9%

-0.6% -0.7% -0.2% 5.1% 1.0% 0.9% 0.7%

2.0 2.0 2.0 2.0 2.1 2.1 2.2 0.8% 0.1% -1.0% -0.4% 0.5% 0.8%

1.0% 0.0% 0.0% -0.5% 1.0% 0.9% 0.5%

6.6 6.6 6.6 6.8 6.7 6.7 6.7 0.0% -1.9% -0.5% 0.4% -0.3% 0.1%

-0.2% -0.3% 0.5% -0.7% 0.0% 0.0% 0.0%

0.6 0.6 0.6 0.6 0.6 0.6 0.6 -1.7% -4.0% -0.3% -1.3% 0.3% 0.3%

0.0% 0.0% 0.0% -1.7% 0.0% 0.0% 0.0%

109.2 109.1 111.2 121.0 129.7 139.5 150.8 2.6% 3.1% 0.5% 1.7% 1.4% 1.5%

0.2% -0.1% 1.9% 1.3% 1.3% 1.4% 1.6%

18.6 18.6 18.7 19.0 19.2 19.7 20.2 1.8% 1.6% 0.9% 0.4% 0.2% 0.5%

0.6% 0.2% 0.4% 0.3% 0.2% 0.5% 0.5%

1/ Total Employment includes nonfarm wage and salary jobs, military, & self employed (BEA)

2/ Portland-Vancouver (in thousands): Multnomah, Clackamas, Washington, Yamhill in OR

 and Clark, WA; U.S. (in millions)

3/ Wage and salary employment by place of work - Current Employment Survey (CES).

4/ PSP includes: TCU, Trade, FIRE and all Services

 TCU: Transportation, Communications & Utilities

 FIRE: Finance, Insurance & Real Estate

In thousands A-8

Source: Metro DRC

Metro01.xls 12/5/02
Table 6

Total

(w/Defense)

Proprietors 

Plus * Dur. Mfg.

Non-dur. 

Mfg. Non-Mfg. Military

1970 475.6 78.7 56.5 32.1 301.5 6.8

1971 484.9 82.5 55.6 31.2 308.8 6.8

1972 513.3 85.9 59.5 31.9 329.2 6.7

1973 540.5 90.7 66.6 32.6 343.6 7.1

1974 558.9 93.0 69.7 32.3 355.6 8.3

1975 561.1 99.7 63.0 30.8 359.6 8.0

1976 584.6 103.5 66.3 31.8 375.9 7.2

1977 613.3 104.3 71.1 32.4 398.7 6.8

1978 654.9 105.7 81.4 31.5 429.0 7.3

1979 690.3 112.8 87.7 33.1 449.9 6.8

1980 699.3 120.1 86.1 32.7 453.8 6.6

1981 689.4 120.4 80.4 32.1 450.0 6.4

1982 668.3 122.9 72.9 31.0 434.6 6.9

1983 675.1 131.7 68.3 31.4 436.7 7.0

1984 707.4 135.8 74.4 32.3 457.8 7.2

1985 728.5 142.5 75.2 32.2 470.9 7.8

1986 749.5 143.9 74.1 32.3 491.1 8.1

1987 777.9 149.0 75.9 33.8 511.3 8.0

1988 819.3 156.4 80.6 34.0 540.1 8.1

1989 857.6 159.2 83.6 35.3 571.3 8.1

1990 891.5 168.0 85.3 36.4 593.5 8.3

1991 902.2 176.3 83.0 36.8 597.7 8.4

1992 916.1 176.6 81.7 37.2 612.6 8.0

1993 944.5 178.9 83.8 38.2 635.9 7.7

1994 996.2 196.5 87.3 39.4 665.6 7.3

1995 1,038.8 201.1 94.6 40.3 695.6 7.2

1996 1,084.5 208.1 99.4 39.8 730.1 7.1

1997 1,124.8 210.8 105.4 39.6 761.9 7.1

1998 1,150.1 220.4 107.8 39.2 776.0 6.8

1999 1,175.1 232.9 105.1 37.7 792.8 6.6

2000 1,217.0 252.2 107.4 38.1 812.5 6.8

2001 1,215.8 254.3 105.0 37.2 812.5 6.7

2002 1,211.2 253.3 103.3 37.1 810.9 6.6

2003 1,240.7 257.7 106.5 37.8 832.2 6.6

2004 1,280.0 264.2 110.8 38.6 859.8 6.6

2005 1,320.7 270.7 115.3 39.3 888.8 6.6

2006 1,352.0 277.3 118.1 39.7 910.2 6.8

2007 1,382.1 284.9 119.8 39.8 930.7 6.9

2008 1,420.6 293.6 121.8 40.1 958.3 6.9

2009 1,452.7 301.0 124.0 40.5 980.3 6.8

2010 1,483.9 308.5 125.5 40.5 1,002.7 6.8

2011 1,514.2 317.3 125.6 40.4 1,024.1 6.7

2012 1,544.9 326.3 126.2 40.3 1,045.4 6.7

2013 1,575.0 334.7 127.1 40.4 1,066.1 6.7

2014 1,603.2 343.1 127.8 40.5 1,085.1 6.7

2015 1,631.8 352.0 128.4 40.5 1,104.2 6.7

2016 1,662.9 361.6 129.0 40.6 1,125.1 6.7

2017 1,694.2 371.0 129.7 40.6 1,146.2 6.7

2018 1,728.3 381.2 130.4 40.6 1,169.4 6.7

2019 1,761.6 391.2 131.2 40.7 1,191.9 6.7

2020 1,795.5 401.2 132.1 40.7 1,214.9 6.7

2021 1,832.5 412.0 133.1 41 1,240.0 6.7

2022 1,868.2 422.9 134.0 40.7 1,263.9 6.7

2023 1,904.5 434.1 134.9 40.6 1,288.2 6.7

2024 1,942.2 445.6 135.9 40.6 1,313.4 6.7

2025 1,979.3 457.2 136.7 40.5 1,338.2 6.7

Wage and Salary

Total Employment for Portland-Vancouver, OR-WA

In Thousands, Details may not add due to rounding

*Includes partnerships, self-employed, and wage salary workers A-9

Source: Metro DRC

Metro01.xls 10/8/02
Table 7

Total W & S 

(exc. defense)

Constr. 

and 

Mining Manuf.

Transp. 

Com. & 

Utilities Whsle. Retail

Finance, 

Insur., & 

Real E. Service

State & 

Local Fed. Civ.

1970 390.1 17.6 88.6 30.5 32.4 62.1 25.3 69.6 49.9 14.1

1971 395.7 18.2 86.8 30.2 32.7 63.5 25.6 72.5 51.7 14.4

1972 420.7 21.4 91.4 31.0 34.5 67.2 29.6 77.6 53.3 14.6

1973 442.8 21.8 99.2 32.1 36.0 71.6 31.6 81.6 54.5 14.5

1974 457.6 21.7 102.0 32.2 37.0 74.3 32.3 85.5 57.8 14.8

1975 453.4 18.7 93.8 30.9 36.4 77.5 32.7 88.5 60.0 15.0

1976 474.0 20.6 98.0 31.1 37.7 81.9 34.2 93.1 62.4 15.0

1977 502.2 23.4 103.5 32.5 39.5 87.6 37.9 98.8 64.1 15.0

1978 541.9 26.9 112.8 34.3 43.2 95.0 41.7 105.2 67.2 15.7

1979 570.7 28.8 120.8 36.3 45.8 99.4 45.4 110.5 67.8 15.9

1980 572.6 26.0 118.8 37.1 46.0 99.5 46.6 114.2 68.1 16.4

1981 562.5 21.9 112.5 37.0 46.1 99.5 46.5 114.8 68.2 16.1

1982 538.5 18.4 103.9 35.9 43.7 95.6 44.7 112.6 67.6 16.1

1983 536.4 17.4 99.7 35.5 45.7 95.1 43.7 116.2 67.2 16.0

1984 564.5 20.7 106.7 36.5 47.7 100.3 44.0 124.1 68.5 16.0

1985 578.3 21.4 107.4 36.8 48.5 102.2 45.0 131.4 69.2 16.6

1986 597.5 22.7 106.4 36.8 49.2 105.8 47.6 141.3 71.1 16.7

1987 620.9 23.4 109.6 37.8 50.0 110.1 50.7 149.0 73.4 16.9

1988 654.7 26.9 114.7 38.4 51.8 119.2 51.9 159.4 75.0 17.4

1989 690.2 31.8 118.9 40.2 54.2 124.3 53.7 172.7 76.9 17.6

1990 715.2 36.3 121.7 41.6 55.2 128.2 52.1 182.2 79.9 18.1

1991 717.5 35.3 119.8 42.1 55.4 128.6 53.8 182.1 82.8 17.7

1992 731.5 33.7 118.9 42.5 55.5 130.9 55.6 190.3 85.8 18.3

1993 757.8 35.2 121.9 43.3 56.6 134.8 59.0 201.9 86.9 18.1

1994 792.4 40.1 126.8 44.9 59.6 142.1 61.2 211.7 88.6 17.6

1995 830.5 45.0 134.9 47.8 61.8 147.1 59.8 226.1 90.6 17.6

1996 869.3 51.5 139.2 49.4 63.6 153.1 63.0 238.1 93.9 17.5

1997 906.9 54.5 145.0 51.7 67.9 157.6 66.3 250.9 95.1 17.8

1998 923.0 53.9 147.0 53.1 68.9 160.1 66.7 257.7 97.9 17.9

1999 935.7 52.8 142.9 54.2 67.5 164.9 66.2 266.6 103.1 17.6

2000 958.0 53.9 145.5 55.4 67.2 168.1 64.5 276.3 108.5 18.5

2001 954.8 53.1 142.2 54.8 65.6 168.1 64.6 278.9 109.7 17.9

2002 951.3 53.3 140.4 54.5 65.0 167.4 64.5 279.1 109.0 18.1

2003 976.5 55.5 144.3 55.2 67.7 170.8 64.7 291.2 109.2 18.0

2004 1,009.3 57.2 149.4 56.7 70.6 177.7 66.2 304.5 109.1 17.9

2005 1,043.5 59.3 154.7 58.4 73.3 184.8 68.4 315.6 111.2 17.9

2006 1,068.0 60.6 157.7 59.8 75.1 189.5 69.9 323.9 113.5 17.9

2007 1,090.4 62.4 159.6 61.2 76.6 193.9 71.3 331.9 115.6 17.8

2008 1,120.2 64.7 161.9 62.5 78.4 198.6 72.3 346.0 117.7 18.0

2009 1,144.9 66.3 164.5 63.8 80.0 202.9 73.1 356.6 119.4 18.3

2010 1,168.7 67.7 165.9 64.9 81.6 207.0 74.2 367.1 121.0 19.3

2011 1,190.2 68.6 166.0 65.9 82.9 210.7 75.4 378.7 122.9 19.2

2012 1,212.0 70.4 166.5 66.8 84.3 214.9 76.8 388.4 124.7 19.1

2013 1,233.7 71.1 167.5 67.8 85.6 218.6 78.0 399.4 126.5 19.1

2014 1,253.4 71.5 168.3 68.9 86.8 222.1 79.1 409.6 128.1 19.2

2015 1,273.1 71.8 168.9 69.9 87.9 225.6 80.1 419.7 129.7 19.4

2016 1,294.8 72.3 169.6 71.0 89.1 229.4 81.2 430.9 131.7 19.6

2017 1,316.5 73.1 170.2 72.0 90.4 233.2 82.3 442.1 133.5 19.8

2018 1,340.5 74.0 171.0 73.1 91.7 237.2 83.3 454.5 135.6 20.0

2019 1,363.8 75.0 171.9 74.1 93.1 241.2 84.3 466.5 137.6 20.2

2020 1,387.7 76.3 172.8 75.2 94.4 245.3 85.3 478.6 139.5 20.4

2021 1,413.9 77.5 173.8 76.3 95.9 249.6 86.3 492.1 141.8 20.5

2022 1,438.6 78.3 174.7 77.4 97.3 253.7 87.3 505.2 144.0 20.7

2023 1,463.7 79.3 175.5 78.6 98.7 257.9 88.2 518.5 146.2 20.9

2024 1,489.9 80.4 176.4 79.8 100.2 262.1 89.2 532.3 148.4 21.1

2025 1,515.5 81.0 177.2 80.9 101.6 266.3 90.2 546.2 150.8 21.2

Trade Government

Wage and Salary Employment for Portland-Vancouver, OR-WA

In thousands

Details may not add due to rounding A-10

Source: Metro DRC

Metro01.xls 10/8/02
Table 8

Total

(w/Defense)

Proprietors 

Plus * Dur. Mfg.

Non-dur. 

Mfg. Non-Mfg. Military

1970 12.4 2.5 1.8 1.1 6.7 0.3

1971 13.1 2.7 2.0 1.0 7.1 0.3

1972 14.0 3.0 2.2 1.1 7.4 0.3

1973 14.9 3.2 2.6 1.1 7.7 0.3

1974 15.8 3.9 2.7 1.0 7.9 0.3

1975 16.9 4.8 2.6 1.0 8.3 0.3

1976 18.1 4.9 3.0 1.1 8.8 0.3

1977 19.5 5.2 3.4 1.2 9.5 0.3

1978 20.9 5.4 3.8 1.2 10.2 0.3

1979 22.4 5.5 4.1 1.3 11.2 0.3

1980 22.9 6.3 3.6 1.3 11.5 0.2

1981 22.3 5.9 3.4 1.4 11.3 0.2

1982 21.6 5.9 3.1 1.4 10.9 0.3

1983 21.7 6.0 3.0 1.4 11.0 0.3

1984 22.3 6.3 3.3 1.5 11.0 0.3

1985 22.6 5.9 3.3 1.4 11.6 0.3

1986 23.3 5.9 3.4 1.5 12.3 0.3

1987 24.1 6.0 3.6 1.6 12.7 0.3

1988 25.1 5.9 3.7 1.5 13.7 0.3

1989 26.1 5.8 3.8 1.8 14.4 0.3

1990 27.1 6.4 3.6 1.8 14.9 0.3

1991 26.9 6.3 3.5 1.9 14.8 0.3

1992 28.4 7.0 3.5 2.0 15.6 0.3

1993 29.3 6.4 3.6 2.0 17.0 0.3

1994 31.0 6.9 3.9 2.0 17.9 0.3

1995 32.4 7.4 4.0 1.9 18.8 0.3

1996 34.5 8.1 4.1 2.1 19.8 0.3

1997 35.1 8.3 4.1 2.2 20.3 0.3

1998 35.7 8.1 4.1 2.3 20.9 0.3

1999 36.8 9.2 4.0 2.3 21.0 0.3

2000 37.5 9.8 4.0 2.2 21.3 0.2

2001 37.0 9.8 3.8 2.1 21.1 0.2

2002 37.1 9.6 3.7 2.0 21.5 0.2

2003 37.9 9.5 3.8 2.1 22.3 0.2

2004 39.5 9.4 4.0 2.4 23.5 0.2

2005 40.9 9.3 4.3 2.5 24.6 0.2

2006 42.0 9.2 4.5 2.7 25.4 0.2

2007 42.6 9.2 4.5 2.8 25.9 0.2

2008 43.1 9.2 4.5 2.8 26.4 0.2

2009 43.7 9.1 4.6 2.8 26.9 0.3

2010 44.3 9.1 4.6 2.9 27.5 0.3

2011 45.0 9.2 4.6 2.9 28.1 0.3

2012 45.8 9.2 4.7 2.9 28.7 0.3

2013 46.5 9.3 4.7 2.9 29.4 0.3

2014 47.3 9.3 4.7 3.0 30.0 0.3

2015 48.0 9.3 4.8 3.0 30.7 0.3

2016 48.8 9.4 4.8 3.0 31.4 0.3

2017 49.7 9.4 4.8 3.0 32.1 0.3

2018 50.5 9.5 4.9 3.0 32.8 0.3

2019 51.3 9.5 4.9 3.0 33.6 0.3

2020 52.2 9.6 5.0 3.0 34.4 0.3

2021 53.1 9.6 5.0 3.1 35.1 0.3

2022 54.0 9.7 5.0 3.1 35.9 0.3

2023 54.9 9.7 5.1 3.1 36.8 0.3

2024 55.9 9.8 5.1 3.1 37.6 0.3

2025 56.8 9.9 5.2 3.1 38.5 0.3

Total Employment for Yamhill County, OR

Wage and Salary

In Thousands, Details may not add due to rounding

*Includes partnerships, self-employed, and wage salary workers A-11

Source: Metro DRC

Metro01.xls 10/8/02
Table 9

Government

Total 

Wage & 

Salary

Constr. 

and 

Mining Manuf.

Transp. 

Com. & 

Utilities

Whsle. & 

Retail 

Trade

Finance, 

Insur., & 

Real Est. Service

Fed. Civ., 

State & Local

1970 9.6 0.2 2.9 0.4 2.0 0.5 2.0 1.7

1971 10.1 0.3 3.0 0.4 2.1 0.5 2.0 1.8

1972 10.7 0.4 3.3 0.3 2.1 0.5 2.1 2.0

1973 11.4 0.4 3.8 0.4 2.2 0.6 2.2 2.0

1974 11.6 0.4 3.7 0.4 2.2 0.6 2.2 2.1

1975 11.8 0.4 3.5 0.3 2.4 0.6 2.4 2.2

1976 12.9 0.6 4.1 0.3 2.5 0.7 2.5 2.3

1977 14.1 0.7 4.6 0.4 2.8 0.7 2.7 2.3

1978 15.2 0.8 5.1 0.4 3.1 0.8 2.8 2.5

1979 16.6 0.9 5.4 0.4 3.3 0.9 3.3 2.5

1980 16.4 1.1 4.9 0.5 3.2 0.9 3.1 2.6

1981 16.1 0.6 4.9 0.5 3.4 1.0 3.2 2.7

1982 15.4 0.3 4.5 0.5 3.2 1.0 3.3 2.6

1983 15.4 0.4 4.4 0.4 3.2 0.9 3.5 2.6

1984 15.7 0.6 4.7 0.4 3.1 0.9 3.4 2.5

1985 16.3 0.6 4.7 0.5 3.5 1.0 3.5 2.6

1986 17.1 0.6 4.9 0.5 3.8 1.0 3.8 2.6

1987 17.8 0.7 5.2 0.6 3.9 0.9 3.9 2.8

1988 18.9 0.8 5.2 0.7 4.1 0.9 4.3 2.9

1989 19.9 0.9 5.6 0.6 4.4 0.9 4.5 3.1

1990 20.3 0.9 5.4 0.7 4.4 0.8 4.7 3.4

1991 20.2 1.0 5.4 0.8 4.0 0.9 4.7 3.5

1992 21.1 1.0 5.5 0.8 4.2 0.9 5.0 3.8

1993 22.6 1.1 5.6 0.8 4.9 1.0 5.4 3.8

1994 23.8 1.2 5.9 0.7 5.3 1.0 5.8 3.9

1995 24.7 1.3 6.0 0.8 5.5 1.1 6.3 3.8

1996 26.1 1.6 6.2 0.8 6.0 1.0 6.5 3.9

1997 26.5 1.6 6.3 0.9 5.9 1.1 6.8 4.1

1998 27.3 1.6 6.4 0.9 6.0 1.1 7.1 4.2

1999 27.3 1.5 6.3 0.9 6.1 1.1 7.2 4.2

2000 27.5 1.5 6.2 0.9 6.0 1.1 7.3 4.3

2001 27.1 1.6 6.0 0.9 6.0 1.1 7.3 4.3

2002 27.2 1.6 5.7 1.0 6.2 1.0 7.4 4.3

2003 28.2 1.7 5.9 1.1 6.5 1.0 7.6 4.4

2004 29.9 1.7 6.4 1.2 7.0 1.0 8.0 4.6

2005 31.4 1.7 6.8 1.3 7.2 1.0 8.7 4.8

2006 32.5 1.7 7.2 1.3 7.3 1.0 9.2 4.9

2007 33.1 1.7 7.3 1.3 7.4 1.0 9.5 5.0

2008 33.7 1.7 7.3 1.3 7.5 1.1 9.8 5.0

2009 34.3 1.7 7.4 1.3 7.6 1.1 10.1 5.1

2010 34.9 1.7 7.5 1.4 7.8 1.1 10.4 5.2

2011 35.6 1.7 7.5 1.4 7.9 1.1 10.7 5.3

2012 36.3 1.8 7.6 1.4 8.0 1.1 11.0 5.4

2013 37.0 1.8 7.6 1.4 8.2 1.2 11.3 5.5

2014 37.7 1.8 7.7 1.5 8.3 1.2 11.7 5.6

2015 38.4 1.8 7.7 1.5 8.5 1.2 12.0 5.7

2016 39.2 1.9 7.8 1.5 8.6 1.2 12.4 5.8

2017 40.0 1.9 7.9 1.6 8.8 1.2 12.8 5.9

2018 40.7 1.9 7.9 1.6 8.9 1.3 13.2 6.0

2019 41.5 2.0 7.9 1.6 9.1 1.3 13.6 6.1

2020 42.3 2.0 8.0 1.6 9.2 1.3 14.0 6.2

2021 43.2 2.0 8.0 1.7 9.4 1.3 14.4 6.3

2022 44.0 2.1 8.1 1.7 9.5 1.3 14.9 6.4

2023 44.9 2.1 8.1 1.7 9.7 1.4 15.4 6.6

2024 45.8 2.1 8.2 1.8 9.9 1.4 15.8 6.7

2025 46.7 2.2 8.3 1.8 10.0 1.4 16.3 6.8

Wage and Salary Employment for Yamhill County, OR

In thousands

Details may not add due to rounding A-12

Source: Metro DRC

Metro01.xls 10/8/02
Table 10

Total Personal 

Income

Wages & 

Salaries

Other Labor 

Income

Transfer 

Payments

Dividends 

Interest & 

Rents

Proprietors’ 

Income

Social Ins. 

Contribution

Resident 

Adjust.

1970 $4,583,778 $3,007,793 $198,709 $412,942 $692,965 $428,469 $132,699 -$24,401

1971 4,989,157 3,221,885 226,813 483,247 750,322 464,809 146,766 -11,153

1972 5,557,442 3,606,551 266,059 523,817 809,930 519,746 171,361 2,700

1973 6,258,168 4,050,079 306,828 610,602 915,961 585,458 221,960 11,200

1974 7,092,332 4,529,620 375,583 738,819 1,056,436 628,091 257,619 21,402

1975 7,806,160 4,817,701 446,745 933,504 1,139,852 667,346 272,919 73,931

1976 8,845,638 5,426,508 551,653 1,022,064 1,274,184 798,513 304,392 77,108

1977 9,897,231 6,110,939 670,178 1,098,368 1,457,081 882,529 344,780 22,916

1978 11,452,259 7,131,016 805,845 1,190,498 1,741,584 1,008,637 407,548 -17,773

1979 13,110,100 8,178,315 926,762 1,320,604 2,134,387 1,081,605 484,973 -46,600

1980 14,697,285 8,981,025 1,064,603 1,551,864 2,585,966 1,109,729 539,065 -56,837

1981 16,091,647 9,547,238 1,136,175 1,792,460 3,173,490 1,124,688 623,603 -58,801

1982 16,636,752 9,613,964 1,208,400 2,042,448 3,407,599 1,055,718 649,368 -42,009

1983 17,474,173 9,917,636 1,267,138 2,216,439 3,626,196 1,147,434 673,899 -26,771

1984 19,213,950 10,839,648 1,356,592 2,250,517 4,110,824 1,441,795 744,053 -41,373

1985 20,376,011 11,456,435 1,557,811 2,355,180 4,315,639 1,570,349 828,689 -50,714

1986 21,487,037 12,191,225 1,559,433 2,427,298 4,572,894 1,703,840 903,945 -63,708

1987 22,859,879 13,023,012 1,690,540 2,539,734 4,830,343 1,819,559 967,696 -75,613

1988 25,143,546 14,420,807 1,865,703 2,751,218 5,210,286 2,116,318 1,126,024 -94,762

1989 27,696,108 15,821,423 2,087,312 2,970,906 6,003,996 2,176,977 1,257,941 -106,565

1990 30,517,226 17,359,781 2,347,638 3,240,651 6,485,510 2,590,914 1,382,937 -124,331

1991 32,174,558 18,272,383 2,549,204 3,597,119 6,676,208 2,694,622 1,501,665 -113,313

1992 34,270,886 19,604,662 2,779,411 3,994,778 6,709,608 2,933,704 1,600,197 -151,080

1993 36,735,666 20,855,908 3,003,008 4,283,095 7,224,649 3,259,725 1,710,170 -180,549

1994 39,370,499 22,530,618 3,232,621 4,425,478 8,035,830 3,230,984 1,855,967 -229,065

1995 42,661,456 24,786,516 3,261,021 4,739,211 9,018,831 3,183,367 2,028,071 -299,419

1996 45,872,189 27,300,282 3,335,219 4,911,304 9,453,829 3,454,693 2,205,273 -377,865

1997 49,743,957 30,003,725 3,531,843 5,068,853 10,252,203 3,744,645 2,397,724 -459,588

1998 52,539,011 31,853,197 3,627,459 5,204,265 10,887,713 3,952,727 2,509,026 -477,324

1999 54,874,825 33,361,176 3,716,622 5,422,305 11,256,262 4,245,566 2,633,711 -493,395

2000 59,689,525 36,581,871 3,664,492 5,915,498 12,448,842 4,401,230 2,802,567 -519,840

2001 61,745,373 37,574,109 3,754,668 6,423,055 12,890,789 4,489,748 2,853,232 -533,764

2002 62,987,798 38,112,379 3,795,750 7,226,837 12,682,797 4,589,316 2,877,493 -541,788

2003 66,918,346 40,105,109 4,000,732 8,066,776 13,375,022 4,958,654 3,016,200 -571,748

2004 71,089,969 42,798,284 4,234,611 8,236,851 14,458,692 5,175,429 3,205,704 -608,193

2005 75,024,509 45,721,337 4,511,644 8,234,122 15,187,558 5,423,779 3,405,674 -648,257

2006 78,671,039 48,166,127 4,776,595 8,341,487 15,904,576 5,743,162 3,577,469 -683,439

2007 82,477,778 50,624,365 5,061,721 8,541,691 16,629,023 6,093,994 3,753,660 -719,355

2008 88,509,462 53,640,190 5,598,337 9,029,181 18,278,631 6,705,896 3,974,806 -767,967

2009 93,499,037 56,401,533 5,975,321 9,454,045 19,581,983 7,076,018 4,181,294 -808,568

2010 98,999,632 59,432,456 6,362,448 9,937,627 21,010,511 7,518,578 4,408,734 -853,253

2011 104,062,674 62,724,410 6,577,925 10,517,299 22,317,719 7,492,402 4,674,327 -892,754

2012 109,695,481 66,229,447 6,935,385 11,153,747 23,757,991 7,499,034 4,943,144 -936,978

2013 115,900,868 69,946,070 7,347,287 11,879,447 25,413,108 7,524,095 5,224,624 -984,515

2014 121,521,793 72,974,837 7,767,741 12,674,353 26,197,347 8,401,882 5,459,661 -1,034,707

2015 127,656,746 76,301,544 8,209,052 13,562,728 27,112,316 9,277,134 5,717,521 -1,088,506

2016 135,332,036 80,896,980 8,685,705 14,505,306 29,121,178 9,338,422 6,068,359 -1,147,197

2017 142,527,754 84,989,646 9,185,452 15,512,260 30,196,729 10,240,244 6,385,908 -1,210,669

2018 151,333,496 90,302,422 9,734,608 16,621,350 32,392,066 10,355,660 6,793,639 -1,278,971

2019 159,508,678 94,931,432 10,314,124 17,813,765 33,542,363 11,416,126 7,157,799 -1,351,333

2020 168,188,025 99,866,020 10,931,129 19,108,819 34,722,956 12,535,714 7,548,304 -1,428,309

2021 178,661,799 106,106,217 11,599,455 20,543,721 37,180,694 12,784,847 8,043,175 -1,509,959

2022 188,506,544 111,597,494 12,283,754 22,090,295 38,627,914 14,002,475 8,500,496 -1,594,892

2023 198,842,614 117,317,718 13,006,317 23,748,218 40,172,524 15,267,390 8,986,309 -1,683,245

2024 209,725,681 123,311,858 13,782,631 25,539,422 41,581,796 16,792,542 9,504,187 -1,778,382

2025 221,160,595 129,559,584 14,600,013 27,434,053 43,117,605 18,384,088 10,057,271 -1,877,478

Personal Income by Major Source, Portland-Vancouver OR-WA

In Thousands

Detail may not add due to rounding A-13

Source: Metro DRC

Metro01.xls 10/8/02
Table 11

Amount

(in thous.)

Percent 

Change

Infl. Adj. (1996 

$)

Percent 

Change Nominal

Infl. Adj. 

(1996 $) U.S.

Percent 

Change

Port.-Vanc.

OR-WA

Percent 

Change

1970 $4,583,778 $19,791,972 $4,368 $18,861 1970 38.8 38.7

1971 4,989,157 8.8% 20,999,701 6.1% 4,638 19,520 1971 40.5 4.2% 39.7 2.6%

1972 5,557,442 11.4% 22,760,994 8.4% 5,182 21,223 1972 41.8 3.3% 40.8 2.8%

1973 6,258,168 12.6% 24,039,997 5.6% 5,728 22,003 1973 44.4 6.3% 43.5 6.6%

1974 7,092,332 13.3% 24,285,424 1.0% 6,347 21,732 1974 49.3 11.0% 48.8 12.2%

1975 7,806,160 10.1% 24,381,483 0.4% 6,813 21,279 1975 53.8 9.1% 53.5 9.6%

1976 8,845,638 13.3% 25,931,686 6.4% 7,549 22,132 1976 56.9 5.8% 57.0 6.5%

1977 9,897,231 11.9% 26,847,846 3.5% 8,223 22,306 1977 60.6 6.5% 61.6 8.1%

1978 11,452,259 15.7% 28,225,258 5.1% 9,275 22,859 1978 65.2 7.6% 67.8 10.1%

1979 13,110,100 14.5% 28,450,620 0.8% 10,356 22,474 1979 72.6 11.3% 77.0 13.6%

1980 14,697,285 12.1% 28,164,178 -1.0% 11,324 21,699 1980 82.4 13.5% 87.2 13.2%

1981 16,091,647 9.5% 28,304,360 0.5% 12,239 21,528 1981 90.9 10.4% 95.0 8.9%

1982 16,636,752 3.4% 28,367,360 0.2% 12,551 21,400 1982 96.5 6.2% 98.0 3.2%

1983 17,474,173 5.0% 29,464,524 3.9% 13,269 22,375 1983 99.6 3.2% 99.1 1.1%

1984 19,213,950 10.0% 31,232,014 6.0% 14,451 23,490 1984 103.9 4.4% 102.8 3.7%

1985 20,376,011 6.0% 31,910,323 2.2% 15,179 23,772 1985 107.6 3.5% 106.7 3.8%

1986 21,487,037 5.5% 33,183,770 4.0% 15,855 24,486 1986 109.7 1.9% 108.2 1.4%

1987 22,859,879 6.4% 34,444,416 3.8% 16,693 25,152 1987 113.7 3.7% 110.9 2.5%

1988 25,143,546 10.0% 36,630,223 6.3% 17,978 26,192 1988 118.4 4.1% 114.7 3.4%

1989 27,696,108 10.2% 38,438,701 4.9% 19,390 26,911 1989 124.0 4.8% 120.4 5.0%

1990 30,517,226 10.2% 40,026,911 4.1% 20,649 27,084 1990 130.8 5.4% 127.4 5.8%

1991 32,174,558 5.4% 40,152,118 0.3% 21,421 26,732 1991 136.3 4.2% 133.9 5.1%

1992 34,270,886 6.5% 40,963,269 2.0% 22,082 26,395 1992 140.4 3.0% 139.8 4.4%

1993 36,735,666 7.2% 42,422,459 3.6% 22,997 26,558 1993 144.6 3.0% 144.7 3.5%

1994 39,370,499 7.2% 44,182,743 4.1% 23,957 26,886 1994 148.3 2.6% 148.9 2.9%

1995 42,661,456 8.4% 46,532,176 5.3% 25,377 27,679 1995 152.5 2.8% 153.2 2.9%

1996 45,872,189 7.5% 48,330,661 3.9% 26,610 28,036 1996 157.0 2.9% 158.6 3.5%

1997 49,743,957 8.4% 50,668,791 4.8% 28,062 28,584 1997 160.6 2.3% 164.1 3.4%

1998 52,539,011 5.6% 52,539,011 3.7% 28,995 28,995 1998 163.1 1.6% 167.1 1.9%

1999 54,874,825 4.4% 53,126,207 1.1% 29,749 28,801 1999 166.7 2.2% 172.6 3.3%

2000 59,689,525 8.8% 56,034,380 5.5% 31,844 29,894 2000 172.3 3.3% 178.0 3.1%

2001 61,745,373 3.4% 56,442,297 0.7% 32,455 29,667 2001 177.2 2.8% 182.8 2.7%

2002 62,987,798 2.0% 55,795,489 -1.1% 32,563 28,845 2002 179.7 1.5% 188.6 3.2%

2003 66,918,346 6.2% 57,211,847 2.5% 34,078 29,135 2003 184.1 2.4% 195.5 3.6%

2004 71,089,969 6.2% 58,845,464 2.9% 35,408 29,310 2004 188.7 2.5% 201.9 3.3%

2005 75,024,509 5.5% 60,208,412 2.3% 36,612 29,382 2005 193.3 2.5% 208.2 3.1%

2006 78,671,039 4.9% 61,372,225 1.9% 37,624 29,351 2006 198.0 2.4% 214.2 2.9%

2007 82,477,778 4.8% 62,614,314 2.0% 38,672 29,358 2007 202.7 2.4% 220.1 2.8%

2008 88,509,462 7.3% 64,393,640 2.8% 40,786 29,673 2008 207.5 2.4% 229.7 4.3%

2009 93,499,037 5.6% 66,028,607 2.5% 42,442 29,972 2009 212.3 2.3% 236.6 3.0%

2010 98,999,632 5.9% 67,901,484 2.8% 44,317 30,396 2010 217.3 2.4% 243.6 3.0%

2011 104,062,674 5.1% 69,311,515 2.1% 45,954 30,608 2011 222.8 2.5% 250.9 3.0%

2012 109,695,481 5.4% 71,140,708 2.6% 47,805 31,003 2012 228.7 2.7% 257.7 2.7%

2013 115,900,868 5.7% 73,260,081 3.0% 49,856 31,514 2013 235.1 2.8% 264.4 2.6%

2014 121,521,793 4.8% 74,928,200 2.3% 51,539 31,778 2014 242.0 3.0% 271.0 2.5%

2015 127,656,746 5.0% 76,800,872 2.5% 53,321 32,079 2015 249.5 3.1% 277.8 2.5%

2016 135,332,036 6.0% 79,447,664 3.4% 55,703 32,701 2016 257.7 3.3% 284.6 2.5%

2017 142,527,754 5.3% 81,638,459 2.8% 57,838 33,129 2017 266.4 3.4% 291.7 2.5%

2018 151,333,496 6.2% 84,560,532 3.6% 60,546 33,831 2018 275.6 3.5% 299.1 2.5%

2019 159,508,678 5.4% 86,933,790 2.8% 62,926 34,295 2019 285.1 3.5% 306.6 2.5%

2020 168,188,025 5.4% 89,390,010 2.8% 65,414 34,767 2020 295.2 3.5% 314.4 2.5%

2021 178,661,799 6.2% 92,600,455 3.6% 68,495 35,501 2021 305.6 3.5% 322.4 2.5%

2022 188,506,544 5.5% 95,262,335 2.9% 71,214 35,988 2022 316.5 3.6% 330.7 2.6%

2023 198,842,614 5.5% 97,976,000 2.8% 74,003 36,463 2023 327.8 3.6% 339.1 2.6%

2024 209,725,681 5.5% 100,747,912 2.8% 76,891 36,937 2024 339.8 3.6% 347.9 2.6%

2025 221,160,595 5.5% 103,567,344 2.8% 79,894 37,413 2025 352.2 3.7% 356.8 2.6%

Personal Income, Total and Per Capita Consumer Price Index, All Earners

Per Capita

Portland-Vancouver OR-WA (1982-84 = 100)

A-14

Source: Metro DRC

Metro01.xls 10/8/02
Table 12

United States Portland-Vancouver OR-WA

Avg. Weekly 

Earnings

Avg. Hourly 

Earnings

Avg. Hours 

Per Week

Avg. Weekly 

Earnings

Avg. Hourly 

Earnings

Avg. Hours 

Per Week

1970 $133.83 $3.36 39.8 $145.84 $3.80 38.4

1971 141.87 3.56 39.85 155.90 4.04 38.59

1972 154.86 3.82 40.54 166.44 4.26 39.07

1973 166.38 4.09 40.68 175.96 4.52 38.93

1974 177.33 4.43 40.03 191.82 4.94 38.83

1975 190.45 4.83 39.43 210.92 5.51 38.28

1976 209.43 5.22 40.12 231.49 5.98 38.71

1977 228.67 5.67 40.33 247.23 6.45 38.33

1978 249.45 6.17 40.43 266.39 6.95 38.33

1979 268.80 6.69 40.18 291.90 7.71 37.86

1980 288.87 7.28 39.68 325.66 8.57 38.00

1981 318.48 7.99 39.86 361.28 9.53 37.91

1982 331.50 8.50 39.00 386.77 10.17 38.03

1983 354.26 8.83 40.12 406.26 10.34 39.29

1984 373.76 9.19 40.67 412.42 10.42 39.58

1985 386.56 9.54 40.52 403.68 10.45 38.63

1986 396.11 9.73 40.71 425.86 10.85 39.25

1987 406.51 9.91 41.02 425.30 10.80 39.38

1988 417.18 10.18 40.98 425.20 10.74 39.59

1989 428.95 10.48 40.93 431.79 10.89 39.65

1990 441.65 10.83 40.78 451.56 11.38 39.68

1991 454.69 11.18 40.67 471.74 11.77 40.08

1992 470.48 11.45 41.09 496.05 12.42 39.94

1993 486.86 11.74 41.47 499.84 12.44 40.18

1994 505.68 12.06 41.93 514.88 12.66 40.67

1995 514.47 12.37 41.59 521.95 12.84 40.65

1996 530.72 12.77 41.56 533.12 13.17 40.48

1997 552.46 13.16 41.98 559.76 13.43 41.68

1998 564.03 13.50 41.78 588.72 14.44 40.77

1999 580.33 13.91 41.72 609.59 15.10 40.37

2000 597.07 14.37 41.55 627.17 15.44 40.62

2001 604.17 14.83 40.74 608.06 15.70 38.73

2002 615.37 15.09 40.78 595.84 15.68 38.00

2003 637.31 15.32 41.60 619.77 15.99 38.76

2004 661.30 15.87 41.67 643.12 16.52 38.93

2005 678.26 16.32 41.56 665.98 17.16 38.81

2006 699.92 16.89 41.44 690.05 17.84 38.68

2007 725.28 17.54 41.35 715.89 18.58 38.53

2008 750.88 18.19 41.28 734.77 19.09 38.49

2009 775.23 18.83 41.17 749.01 19.48 38.45

2010 800.65 19.49 41.08 779.32 20.30 38.39

2011 826.37 20.18 40.95 813.10 21.18 38.39

2012 851.13 20.81 40.90 841.29 21.88 38.45

2013 880.17 21.52 40.90 864.49 22.46 38.49

2014 912.70 22.31 40.91 889.66 23.09 38.53

2015 945.96 23.14 40.88 917.73 23.80 38.56

2016 981.22 24.02 40.85 946.61 24.53 38.59

2017 1,015.51 24.89 40.80 977.34 25.30 38.63

2018 1,048.50 25.73 40.75 1,008.13 26.07 38.67

2019 1,082.89 26.60 40.71 1,037.82 26.81 38.71

2020 1,120.05 27.54 40.67 1,069.00 27.58 38.76

2021 1,159.22 28.51 40.66 1,101.92 28.40 38.80

2022 1,204.61 29.59 40.71 1,135.78 29.25 38.83

2023 1,248.68 30.62 40.78 1,172.88 30.19 38.85

2024 1,301.26 31.80 40.92 1,208.62 31.07 38.90

2025 1,350.13 32.89 41.05 1,248.23 32.08 38.91

Average Weekly and Hourly Earnings, Average Work Hours Per Week, 

Manufacturing Industries Only

A-15

Source: Metro DRC

Metro01.xls 10/8/02
Table 13

Single 

Family Change Multi-Family Change U.S.

Portland-Vanc.

OR-WA

Relative Price 

Index * 

(1996=100)

1970 5,500 5,130 $17,243 $18,300 69.4

1971 7,740 2,240 9,270 4,140 18,588 20,000 69.4

1972 9,000 1,260 9,950 680 20,008 21,400 66.5

1973 7,490 -1,510 6,010 -3,940 21,716 23,400 65.9

1974 6,120 -1,370 3,160 -2,850 24,032 26,000 65.9

1975 7,200 1,080 2,720 -440 26,453 30,500 70.9

1976 10,190 2,990 5,320 2,600 28,573 33,300 70.6

1977 12,350 2,160 7,590 2,270 32,080 40,400 78.4

1978 11,750 -600 7,510 -80 36,536 50,910 87.9

1979 7,530 -4,220 6,190 -1,320 41,679 59,900 92.8

1980 5,750 -1,780 2,960 -3,230 46,562 62,900 89.9

1981 3,680 -2,070 2,020 -940 49,612 66,500 90.2

1982 2,300 -1,380 1,260 -760 50,784 65,000 86.5

1983 3,850 1,550 790 -470 52,373 63,000 78.4

1984 3,820 -30 1,410 620 54,227 62,500 75.0

1985 4,180 360 4,640 3,230 56,522 61,500 71.7

1986 4,790 610 3,230 -1,410 60,205 62,900 68.1

1987 5,240 450 4,450 1,220 64,206 63,000 62.4

1988 5,980 740 5,080 630 66,941 64,000 59.3

1989 7,090 1,110 9,140 4,060 67,106 70,000 63.0

1990 8,320 1,230 2,960 -6,180 68,937 79,700 69.7

1991 7,060 -1,260 2,020 -940 72,632 91,750 79.2

1992 8,740 1,680 1,260 -760 74,778 97,000 83.2

1993 9,940 1,200 790 -470 77,056 107,000 88.1

1994 10,400 460 1,410 620 80,268 117,000 91.8

1995 9,800 -600 4,640 3,230 82,435 128,000 96.2

1996 10,720 920 3,230 -1,410 86,702 139,900 100.0

1997 10,660 -60 4,450 1,220 91,085 150,000 102.4

1998 10,620 -40 5,080 630 133,958 155,100 102.3

1999 9,900 -720 9,140 4,060 139,592 161,000 105.0

2000 9,300 -600 3,260 -5,880 145,455 166,000 104.8

2001 10,170 870 2,590 -670 151,404 169,730 104.8

2002 10,600 430 2,010 -580 151,235 170,740 107.3

2003 10,160 -440 1,670 -340 156,281 176,280 107.4

2004 10,010 -150 1,590 -80 161,319 184,580 110.0

2005 10,540 530 1,690 100 166,022 195,210 113.9

2006 10,570 30 1,810 120 171,127 206,680 118.2

2007 10,570 0 2,020 210 175,706 218,190 122.9

2008 10,050 -520 2,330 310 183,084 230,890 126.9

2009 9,680 -370 2,690 360 187,752 244,590 132.2

2010 9,750 70 3,150 460 192,212 256,060 136.3

2011 9,800 50 3,650 500 195,797 265,980 140.4

2012 9,900 100 4,210 560 200,378 275,450 143.1

2013 10,010 110 4,620 410 205,593 287,350 146.1

2014 10,190 180 5,070 450 211,185 297,350 149.2

2015 10,330 140 5,440 370 216,967 307,290 152.1

2016 10,360 30 5,760 320 222,912 318,150 154.1

2017 10,500 140 6,060 300 229,025 329,410 157.1

2018 10,600 100 6,360 300 235,330 340,730 158.7

2019 10,700 100 6,620 260 241,841 352,610 161.5

2020 10,780 80 6,960 340 248,558 364,950 164.2

2021 10,910 130 7,250 290 255,468 377,850 166.1

2022 11,000 90 7,450 200 262,559 391,400 169.5

2023 11,120 120 7,630 180 269,801 405,120 172.8

2024 11,260 140 7,810 180 277,254 419,440 176.4

2025 11,340 80 7,940 130 284,953 434,830 180.4

Residential Authorized Permits Housing Price Statistics

Median Home Price

A-16

Source: Metro DRC

Metro01.xls 10/8/02
Table 14

AARG

2000 2005 2010 2015 2020 2025 2030 2000-30

(in thousands)

Population, total 1,874.6 2,049.2 2,233.9 2,394.1 2,571.1 2,768.2 2,955.3

Base 1,874.5 2,049.2 2,233.9 2,394.1 2,571.1 2,768.2 2,955.3 1.5%

High 1,874.5 2,087.8 2,299.6 2,453.6 2,701.4 3,026.2 3,391.5 2.0%

Low 1,874.5 1,991.4 2,079.6 2,120.3 2,177.2 2,275.2 2,385.8 0.8%

Age, 0 to 4 years

Base 133.1 147.0 159.3 168.4 179.3 191.9 204.1 1.4%

High 133.1 158.8 180.9 191.9 210.7 239.0 271.9 2.4%

Low 133.1 133.6 130.0 125.1 124.6 129.1 134.4 0.0%

Age, 5 to 9 years

Base 132.3 142.6 154.8 164.8 175.7 187.8 199.7 1.4%

High 132.3 147.6 167.4 182.1 200.8 225.5 254.8 2.2%

Low 132.3 135.8 134.6 129.5 127.4 130.0 134.1 0.0%

Age, 10 to 14 years

Base 127.5 137.9 149.2 159.4 170.4 182.3 193.9 1.4%

High 127.5 139.9 155.4 169.9 189.1 211.8 237.9 2.1%

Low 127.5 134.2 136.1 133.0 130.6 131.6 133.9 0.2%

Age, 15 to 19 years

Base 124.5 135.3 145.8 155.5 166.7 178.7 190.0 1.4%

High 124.5 136.9 148.5 160.0 179.4 202.3 226.8 2.0%

Low 124.5 131.8 135.4 134.5 133.6 134.8 136.5 0.3%

Age, 20 to 24 years

Base 133.1 143.5 153.5 161.6 173.2 186.4 197.2 1.3%

High 133.1 146.6 154.5 159.5 181.9 209.4 235.6 1.9%

Low 133.1 136.1 137.7 135.2 137.1 142.3 146.4 0.3%

Age, 25 to 29 years

Base 142.2 150.2 160.5 167.3 178.3 191.7 203.0 1.2%

High 142.2 153.4 161.8 162.4 182.1 210.9 239.6 1.8%

Low 142.2 142.5 142.0 137.6 139.0 146.1 153.0 0.2%

Age, 30 to 34 years

Base 146.7 152.8 162.3 168.9 178.6 191.0 202.6 1.1%

High 146.7 155.2 164.1 164.7 178.9 203.9 232.3 1.5%

Low 146.7 147.1 145.9 141.1 140.4 146.2 153.3 0.1%

Age, 35 to 39 years

Base 149.4 153.6 161.1 167.6 176.2 187.0 198.2 0.9%

High 149.4 155.3 163.0 165.2 175.4 194.6 219.6 1.3%

Low 149.4 149.8 148.9 144.7 142.7 145.8 151.0 0.0%

Alternate Forecasts for the Portland-Vancouver, OR-WA

A-17
Table 14

AARG

2000 2005 2010 2015 2020 2025 2030 2000-30

Alternate Forecasts for the Portland-Vancouver, OR-WA

Age, 40 to 44 years

Base 147.7 152.4 158.5 164.4 171.9 181.3 191.5 0.9%

High 147.7 153.6 160.2 163.5 171.5 185.8 205.8 1.1%

Low 147.7 150.0 150.1 147.3 145.0 146.0 148.8 0.0%

Age, 45 to 49 years

Base 137.0 146.6 153.8 159.7 166.5 174.7 183.8 1.0%

High 137.0 147.5 155.2 159.8 167.0 178.0 193.5 1.2%

Low 137.0 145.1 148.4 147.9 146.5 146.6 147.8 0.3%

Age, 50 to 54 years

Base 117.1 133.6 144.7 152.2 159.3 166.8 174.8 1.3%

High 117.1 134.4 146.0 153.0 160.7 170.5 183.0 1.5%

Low 117.1 132.5 141.3 144.5 145.4 146.2 147.3 0.8%

Age, 55 to 59 years

Base 94.1 114.3 130.0 140.7 149.3 157.0 164.6 1.9%

High 94.1 115.1 131.4 142.0 151.7 161.9 173.2 2.1%

Low 94.1 113.6 127.8 135.9 140.2 143.3 145.9 1.5%

Age, 60 to 64 years

Base 74.7 92.9 110.4 124.1 134.9 143.9 151.6 2.4%

High 74.7 93.7 112.1 126.0 138.3 150.3 162.0 2.6%

Low 74.7 92.4 109.1 121.3 129.6 135.9 141.4 2.2%

Age, 65 to 69 years

Base 61.8 74.4 90.2 105.0 117.6 128.1 136.7 2.7%

High 61.8 75.1 91.8 107.1 121.3 135.1 148.2 3.0%

Low 61.8 74.0 89.4 103.4 114.7 124.3 133.2 2.6%

Age, 70 to 74 years

Base 52.1 59.4 71.1 84.3 97.1 108.5 118.0 2.8%

High 52.1 60.0 72.6 86.5 101.0 115.9 130.3 3.1%

Low 52.1 59.3 70.8 83.8 96.2 108.0 119.9 2.8%

Age, 75 to 79 years

Base 42.0 46.2 53.5 63.4 74.4 85.1 94.6 2.7%

High 42.0 46.7 55.1 65.8 78.4 93.0 107.7 3.2%

Low 42.0 46.2 53.9 63.9 75.1 87.5 101.2 3.0%

Age, 80 to 84 years

Base 30.9 33.9 38.3 44.7 52.7 61.4 69.8 2.8%

High 30.9 34.4 39.7 47.0 56.5 69.2 83.2 3.4%

Low 30.9 34.0 38.9 45.7 54.3 65.5 79.2 3.2%

A-18
Table 14

AARG

2000 2005 2010 2015 2020 2025 2030 2000-30

Alternate Forecasts for the Portland-Vancouver, OR-WA

Age, 85 and over years

Base 28.7 32.7 36.9 42.1 49.1 64.9 81.2 3.5%

High 28.7 33.6 39.9 47.3 56.8 69.3 86.0 3.7%

Low 28.7 33.5 39.3 46.3 55.0 66.2 80.9 3.5%

Births, total

Base 27.5 30.2 32.6 34.3 36.6 39.2 41.7 1.4%

High 27.5 34.7 38.8 39.7 44.3 50.9 58.0 2.5%

Low 27.5 25.7 24.9 24.5 24.7 25.8 27.0 -0.1%

Deaths, total

Base 13.8 15.3 17.1 19.4 21.5 22.7 26.1 2.2%

High 13.8 13.5 15.1 17.2 19.7 18.9 22.3 1.6%

Low 13.8 13.4 14.7 16.6 18.7 17.6 20.4 1.3%

Migration, total

Base 16.4 25.4 15.3 21.7 21.6 24.0 20.4 n.m.

High 16.4 29.3 4.0 20.1 32.0 39.2 39.5 n.m.

Low 16.4 11.2 0.8 -0.5 9.1 13.9 11.9 n.m.

Household, total

Base 725.4 799.6 876.7 946.9 1,021.6 1,104.2 1,177.8 1.6%

High 725.4 811.1 894.1 956.3 1,049.8 1,171.6 1,308.7 2.0%

Low 725.4 785.9 840.1 876.7 915.1 966.4 1,022.6 1.2%

INCOME

Per Capita Income, 1996 $

Base $ 27,875.3 28,836.2 30,432.9 32,982.5 35,493.6 37,532.0 0.9% 28,320.3

High 28,320.3 28,328.1 28,687.1 31,200.8 33,346.7 34,788.1 36,442.2 0.8%

Low 28,319.9 28,317.9 31,563.7 34,070.2 35,229.8 35,438.4 34,479.8 0.7%

Per Capita Income

Base $ 36,602.5 44,305.5 53,306.7 65,396.6 79,872.3 96,087.5 3.8% 31,787.2

High 31,787.2 37,699.3 44,650.1 56,054.2 70,639.3 87,777.8 110,631.9 4.2%

Low 31,786.9 36,770.8 44,517.4 54,545.5 66,281.8 79,367.2 92,498.8 3.6%

Personal Income, 1996 $ millions

Base $ 57,130.8 64,428.6 72,874.1 84,818.6 98,271.6 110,938.8 2.5% 53,088.4

High 53,088.4 59,154.3 65,981.7 76,568.4 90,101.1 105,294.4 123,614.7 2.9%

Low 53,088.4 56,400.2 65,650.3 72,250.3 76,714.3 80,641.3 82,263.9 1.5%

Personal Income

Base $ 75,017.6 98,990.6 127,646.0 168,173.3 221,140.7 284,015.0 5.3% 59,689.5

High 59,689.5 78,724.4 102,695.6 137,559.6 190,865.5 265,686.4 375,279.3 6.3%

Low 59,689.5 73,234.7 92,589.8 115,667.7 144,329.8 180,602.8 220,691.5 4.5%

A-19
Table 14

AARG

2000 2005 2010 2015 2020 2025 2030 2000-30

Alternate Forecasts for the Portland-Vancouver, OR-WA

Wage Disbursements

Base $ 45,721.3 59,432.5 76,301.5 99,866.0 129,559.6 167,863.3 5.2% 36,581.9

High 36,581.9 47,196.0 61,803.9 81,078.0 109,364.3 147,711.8 197,360.2 5.8%

Low 36,581.9 44,660.7 57,279.2 69,862.4 84,178.5 101,627.0 121,649.0 4.1%

Social Security

Base $ 3,405.7 4,408.7 5,717.5 7,548.3 10,057.3 13,420.1 5.4% 2,802.6

High 2,802.6 3,510.9 4,565.9 6,234.6 8,379.9 11,342.9 15,310.7 5.8%

Low 2,802.6 3,323.5 4,225.2 5,758.4 7,775.6 10,569.8 14,562.2 5.6%

Other Labor Income

Base $ 4,511.6 6,362.4 8,209.1 10,931.1 14,600.0 19,385.6 5.7% 3,664.5

High 3,664.5 4,696.6 6,463.9 9,494.8 13,831.5 19,238.3 25,695.9 6.7%

Low 3,664.5 4,495.8 6,146.5 8,231.6 10,833.7 14,332.7 18,932.7 5.6%

Dividends, Interest, & Rent

Base $ 15,187.6 21,010.5 27,112.3 34,723.0 43,117.6 49,724.0 4.7% 12,448.8

High 12,448.8 16,862.7 22,274.2 30,760.9 45,278.4 68,521.3 104,081.6 7.3%

Low 12,448.8 13,993.9 17,330.4 22,978.0 30,894.6 42,335.3 58,264.9 5.3%

Transfer Payments

Base $ 8,234.1 9,937.6 13,562.7 19,108.8 27,434.1 40,326.6 6.6% 5,915.5

High 5,915.5 8,642.9 10,264.5 13,599.4 18,744.7 25,232.8 40,032.7 6.6%

Low 5,915.5 8,520.5 9,548.7 11,912.7 15,117.1 17,992.3 19,935.4 4.1%

Farm Proprietors’ Income

Base $ 75.0 72.5 72.4 82.0 93.1 104.3 1.0% 76.7

High 76.7 77.6 80.9 105.6 120.1 120.2 121.6 1.5%

Low 76.7 70.5 74.9 99.1 112.7 112.8 112.4 1.3%

Business Proprietors’ Income

Base $ 5,348.7 7,446.1 9,204.7 12,453.7 18,291.0 22,469.6 5.6% 4,324.5

High 4,324.5 5,435.0 7,263.6 9,934.2 13,507.5 18,372.1 19,637.0 5.2%

Low 4,324.5 5,460.2 7,267.4 9,363.5 12,209.4 16,287.2 17,318.6 4.7%

A-20
Table 14

AARG

2000 2005 2010 2015 2020 2025 2030 2000-30

(in thousands)

Employment, total (includes self employed)

Base 1,210.2 1,314.2 1,477.2 1,625.2 1,788.9 1,972.7 2,151.6 1.9%

High 1,210.2 1,344.3 1,518.3 1,677.3 1,873.4 2,115.9 2,399.9 2.3%

Low 1,210.2 1,290.0 1,431.0 1,525.7 1,609.1 1,709.4 1,814.2 1.4%

Self Employment

Base 252.2 270.7 308.5 352.0 401.2 457.2 510.1 2.4%

High 252.2 275.9 315.9 355.7 413.6 488.2 576.1 2.8%

Low 252.2 266.1 293.0 316.5 341.3 373.6 408.2 1.6%

Wage & Salary 

Base 958.0 1,043.5 1,168.7 1,273.1 1,387.7 1,515.5 1,641.5 1.8%

High 958.0 1,068.5 1,202.4 1,321.6 1,459.8 1,627.7 1,823.8 2.2%

Low 958.0 1,023.9 1,138.0 1,209.3 1,267.8 1,335.8 1,406.0 1.3%

Manufacturing

Base 145.5 154.7 165.9 168.9 172.8 177.2 182.9 0.8%

High 145.5 159.1 172.7 181.1 190.0 201.1 214.0 1.3%

Low 145.5 148.9 157.5 158.4 157.8 157.6 157.6 0.3%

Durable Mfg.

Base 107.4 115.3 125.5 128.4 132.1 136.7 142.3 0.9%

High 107.4 119.3 131.7 139.6 147.9 158.6 170.7 1.6%

Low 107.4 110.4 118.7 120.0 120.3 121.2 122.3 0.4%

Lumber & Wood

Base 7.6 7.4 6.8 5.9 5.0 4.2 3.6 -2.5%

High 7.6 7.2 6.5 5.7 5.0 4.5 4.0 -2.2%

Low 7.6 7.3 6.3 5.3 4.5 3.8 3.2 -2.8%

Metals: Primary & Fabricated

Base 19.9 20.1 20.3 19.6 19.1 18.8 18.6 -0.2%

High 19.9 20.5 20.8 20.7 20.6 20.8 21.1 0.2%

Low 19.9 19.7 20.2 19.5 18.6 17.9 17.3 -0.5%

Nonelectrical Machinery

Base 17.0 17.6 20.2 20.8 21.8 22.9 24.1 1.2%

High 17.0 18.3 20.4 20.9 21.8 23.1 24.6 1.2%

Low 17.0 17.4 19.9 20.0 20.2 20.7 21.3 0.8%

Electrical Machinery & Instruments

Base 41.7 50.4 56.4 59.3 62.4 65.8 69.9 1.7%

High 41.7 50.7 56.7 61.5 66.0 70.9 75.9 2.0%

Low 41.7 46.3 50.6 53.4 55.2 56.7 58.1 1.1%

Alternate Forecasts for the Portland-Vancouver, OR-WA

A-21
Table 14

AARG

2000 2005 2010 2015 2020 2025 2030 2000-30

Alternate Forecasts for the Portland-Vancouver, OR-WA

Transportation Equipment

Base 12.7 10.5 11.5 11.7 12.0 12.4 12.6 0.0%

High 12.7 11.5 12.7 12.8 13.0 13.5 13.8 0.3%

Low 12.7 10.6 11.6 11.2 10.9 10.7 10.5 -0.6%

Other Durable Mfg.

Base 8.5 9.4 10.3 11.1 11.9 12.8 13.5 1.6%

High 8.5 11.1 14.5 17.9 21.4 25.8 31.3 4.5%

Low 8.5 9.1 10.1 10.6 11.0 11.5 11.9 1.1%

Nondurable Mfg.

Base 38.1 39.3 40.5 40.5 40.7 40.5 40.7 0.2%

High 38.1 39.8 41.0 41.6 42.1 42.5 43.3 0.4%

Low 38.1 38.6 38.8 38.4 37.5 36.4 35.2 -0.3%

Food Processing

Base 8.9 8.5 8.2 7.7 7.2 6.7 6.3 -1.2%

High 8.9 8.8 8.4 7.9 7.4 6.9 6.3 -1.1%

Low 8.9 8.5 8.0 7.3 6.7 6.2 5.6 -1.5%

Textile & Apparels

Base 3.4 4.0 3.6 3.1 2.6 2.2 2.0 -1.7%

High 3.4 3.9 3.9 3.8 3.8 3.8 3.8 0.4%

Low 3.4 3.5 2.9 2.5 2.3 2.1 1.9 -2.0%

Paper & Pulp

Base 6.7 6.8 6.6 6.2 5.9 5.5 5.2 -0.9%

High 6.7 6.8 6.7 6.5 6.3 6.1 5.9 -0.4%

Low 6.7 6.9 6.6 6.2 5.7 5.3 4.9 -1.1%

Printing & Publishing

Base 11.1 12.2 13.1 13.5 13.7 13.8 13.8 0.7%

High 11.1 12.4 13.3 13.6 13.9 14.2 14.5 0.9%

Low 11.1 12.2 12.9 13.0 13.0 12.9 12.8 0.5%

Other Nondurable Mfg.

Base 8.0 7.8 9.0 10.1 11.3 12.3 13.4 1.7%

High 8.0 8.0 8.8 9.8 10.8 11.6 12.7 1.6%

Low 8.0 7.5 8.5 9.4 9.8 10.0 10.1 0.8%

Nonmanufacturing (except military)

Base 812.5 888.9 1,002.8 1,104.3 1,214.9 1,338.3 1,458.6 2.0%

High 812.5 909.4 1,029.7 1,140.5 1,269.8 1,426.6 1,609.9 2.3%

Low 812.5 875.0 980.5 1,050.9 1,109.9 1,178.2 1,248.4 1.4%

A-22
Table 14

AARG

2000 2005 2010 2015 2020 2025 2030 2000-30

Alternate Forecasts for the Portland-Vancouver, OR-WA

Private Services, total

Base 685.5 759.8 862.5 955.1 1,055.1 1,166.3 1,275.7 2.1%

High 685.5 778.5 888.3 989.4 1,104.1 1,241.6 1,401.8 2.4%

Low 685.5 752.5 856.7 924.3 979.8 1,042.9 1,108.2 1.6%

Construction & Mining

Base 53.9 59.3 67.7 71.8 76.3 81.0 85.4 1.5%

High 53.9 60.0 71.2 76.6 79.5 84.9 91.3 1.8%

Low 53.9 58.5 69.5 72.8 71.5 70.5 69.4 0.8%

Transp., Comm., Utilities

Base 55.4 58.4 64.9 69.9 75.2 80.9 86.5 1.5%

High 55.4 59.4 66.6 71.8 79.0 88.0 98.1 1.9%

Low 55.4 56.5 60.5 62.7 64.7 67.6 70.8 0.8%

Trade, total

Base 235.4 258.1 288.6 313.5 339.7 367.9 395.6 1.7%

High 235.4 261.4 294.4 322.1 353.2 389.8 430.9 2.0%

Low 235.4 255.3 282.9 301.7 317.4 335.3 353.5 1.4%

Wholesale Trade

Base 67.2 73.3 81.6 87.9 94.4 101.6 108.6 1.6%

High 67.2 74.5 83.2 90.5 98.7 108.2 119.1 1.9%

Low 67.2 72.6 79.9 84.7 88.7 93.0 97.2 1.2%

Retail Trade

Base 168.1 184.8 207.0 225.6 245.3 266.3 287.0 1.8%

High 168.1 186.9 211.2 231.6 254.5 281.7 311.8 2.1%

Low 168.1 182.7 203.0 217.0 228.7 242.3 256.3 1.4%

Finance, Ins., & Real Est.

Base 64.5 68.4 74.2 80.1 85.3 90.2 94.7 1.3%

High 64.5 68.8 75.3 80.7 85.7 90.8 96.1 1.3%

Low 64.5 67.8 73.9 76.8 78.4 79.9 81.6 0.8%

Service, total

Base 276.3 315.6 367.1 419.8 478.7 546.3 613.4 2.7%

High 276.3 328.9 380.9 438.2 506.7 588.1 685.4 3.1%

Low 276.3 314.4 370.0 410.4 447.8 489.6 532.9 2.2%

Health Services

Base 62.2 71.2 82.3 93.5 105.2 118.9 133.6 2.6%

High 62.2 74.5 85.5 97.2 113.6 135.2 162.8 3.3%

Low 62.2 71.3 77.7 83.6 90.4 99.0 108.3 1.9%

A-23
Table 14

AARG

2000 2005 2010 2015 2020 2025 2030 2000-30

Alternate Forecasts for the Portland-Vancouver, OR-WA

Other Services

Base 214.2 244.5 284.8 326.3 373.5 427.4 479.8 2.7%

High 214.2 254.4 295.3 340.9 393.1 452.9 522.6 3.0%

Low 214.2 243.1 292.3 326.8 357.5 390.6 424.5 2.3%

Government, total

Base 133.9 135.7 147.0 155.8 166.6 178.8 189.6 1.2%

High 133.9 137.7 148.1 157.8 172.4 191.7 214.9 1.6%

Low 133.9 129.3 130.5 133.3 136.9 142.0 146.9 0.3%

Federal Civilian, Govt.

Base 18.5 17.9 19.3 19.4 20.4 21.2 21.8 0.5%

High 18.5 17.5 17.2 17.8 18.8 19.8 20.8 0.4%

Low 18.5 17.5 17.2 17.1 17.1 17.0 17.0 -0.3%

Federal Military, Govt.

Base 6.8 6.6 6.8 6.7 6.7 6.7 6.7 0.0%

High 6.8 6.8 6.8 6.7 6.7 6.8 6.8 0.0%

Low 6.8 6.8 6.8 6.7 6.7 6.7 6.7 0.0%

State & Local Govt.

Base 108.5 111.2 121.0 129.7 139.5 150.8 161.1 1.3%

High 108.5 113.4 124.2 133.2 147.0 165.2 187.3 1.8%

Low 108.5 105.0 106.6 109.5 113.1 118.2 123.2 0.4%

A-24
Table 15

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

AFF Services & Mining 16.6 16.2 15.6 15.7 15.8 15.7 15.5 15.3 15.2 15.0 14.7

Construction 71.7 70.9 71.1 73.8 75.9 78.4 80.2 82.7 85.7 87.9 89.8

Nondur. Mfg. less Paper 31.9 31.1 31.0 31.6 32.3 32.9 33.2 33.5 33.8 34.2 34.2

Durable Mfg. plus Paper 59.2 55.6 54.3 55.4 56.3 57.4 58.0 58.3 58.6 59.0 59.0

Hi-tech Mfg. 58.1 59.2 58.6 60.4 63.5 66.8 68.9 70.4 72.0 74.0 75.4

Transport & Warehouse 41.3 40.9 40.6 41.0 42.0 43.1 44.2 45.2 46.2 47.1 47.9

Comm. & Utilities 21.8 21.6 21.5 21.7 22.2 22.9 23.4 24.0 24.6 25.1 25.5

Wholesale Trade 74.6 72.9 72.2 74.9 77.9 80.8 82.7 84.5 86.4 88.3 90.0

Retail Trade 201.8 202.2 201.3 204.7 212.3 220.2 225.8 231.4 237.0 242.2 247.2

FIRE 93.5 93.8 93.6 93.6 95.5 98.4 100.6 102.7 104.2 105.4 107.0

Consumer Services 177.5 179.4 178.6 186.5 195.4 202.7 208.4 214.1 223.8 231.0 238.4

Health Services (80+83) 119.2 121.3 123.0 127.2 131.6 135.6 139.1 142.8 148.5 153.2 157.7

Bus. & Prof. Services 83.3 84.2 83.8 87.5 91.7 95.1 97.8 100.5 105.0 108.4 111.9

Government (civilian) 122.3 123.0 122.5 122.3 121.7 123.4 125.6 127.6 129.9 131.9 134.3

 TOTAL - excl. military 1172.9 1172.2 1167.7 1196.4 1234.2 1273.4 1303.5 1332.9 1370.9 1402.4 1433.1

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

AFF Services & Mining 14.4 14.0 13.6 13.2 12.6 12.1 11.5 10.9 10.3 9.6 8.9

Construction 91.1 93.7 94.7 95.4 96.0 96.8 98.0 99.3 100.9 102.7 104.5

Nondur. Mfg. less Paper 34.3 34.4 34.6 34.7 34.9 35.1 35.2 35.4 35.5 35.7 35.8

Durable Mfg. plus Paper 58.8 58.8 58.7 58.4 58.3 58.2 58.1 58.0 58.0 58.1 58.1

Hi-tech Mfg. 75.8 76.4 77.5 78.5 79.3 80.2 81.1 81.9 82.9 83.8 84.9

Transport & Warehouse 48.7 49.5 50.2 51.1 51.9 52.8 53.6 54.4 55.3 56.1 57.0

Comm. & Utilities 26.0 26.4 26.8 27.3 27.8 28.2 28.7 29.2 29.7 30.1 30.6

Wholesale Trade 91.6 93.3 94.8 96.2 97.6 99.2 100.6 102.3 104.0 105.6 107.4

Retail Trade 251.9 257.3 262.0 266.5 271.2 276.2 281.1 286.4 291.6 296.8 302.5

FIRE 108.9 111.0 112.8 114.5 116.3 118.0 119.7 121.5 123.0 124.6 126.3

Consumer Services 246.8 253.7 261.7 269.3 276.9 285.1 293.7 303.0 312.1 321.5 331.6

Health Services (80+83) 162.4 167.2 171.9 176.3 180.9 186.0 190.8 196.1 201.2 206.3 212.1

Bus. & Prof. Services 115.9 119.1 122.8 126.4 129.9 133.8 137.8 142.2 146.5 150.9 155.6

Government (civilian) 136.2 138.1 139.9 141.8 143.7 146.1 148.2 150.6 153.0 155.2 157.8

 TOTAL - excl. military 1462.7 1492.7 1522.0 1549.5 1577.3 1607.7 1638.1 1671.4 1703.9 1736.9 1773.0

Annual Avg. Growth Rates for Selected Periods 

2022 2023 2024 2025 2000-05 2005-10 2010-15 2015-20 2020-25 2000-25

AFF Services & Mining 8.1 7.2 6.3 5.3 -1.1% -1.3% -3.0% -5.4% -11.1% -4.5%

Construction 105.8 107.2 108.9 110.0 1.8% 2.7% 1.3% 1.4% 1.4% 1.7%

Nondur. Mfg. less Paper 35.9 36.0 36.1 36.1 0.6% 0.8% 0.4% 0.4% 0.2% 0.5%

Durable Mfg. plus Paper 58.1 58.1 58.1 58.1 -0.6% 0.5% -0.2% -0.1% 0.0% -0.1%

Hi-tech Mfg. 85.9 86.9 88.0 89.0 2.8% 2.4% 1.0% 1.1% 1.2% 1.7%

Transport & Warehouse 57.9 58.8 59.8 60.7 0.9% 2.2% 1.6% 1.6% 1.6% 1.6%

Comm. & Utilities 31.2 31.7 32.2 32.8 1.0% 2.2% 1.7% 1.7% 1.7% 1.6%

Wholesale Trade 109.1 110.9 112.6 114.4 1.6% 2.2% 1.6% 1.6% 1.6% 1.7%

Retail Trade 307.9 313.4 319.0 324.6 1.8% 2.3% 1.9% 1.8% 1.8% 1.9%

FIRE 127.8 129.4 131.1 132.7 1.0% 1.7% 1.7% 1.4% 1.3% 1.4%

Consumer Services 341.6 351.9 362.5 373.2 2.7% 3.3% 3.0% 3.0% 3.0% 3.0%

Health Services (80+83) 217.8 223.7 229.7 235.9 2.6% 3.1% 2.8% 2.7% 2.7% 2.8%

Bus. & Prof. Services 160.3 165.1 170.1 175.2 2.7% 3.3% 3.0% 3.0% 3.0% 3.0%

Government (civilian) 160.3 162.8 165.4 168.1 0.2% 1.7% 1.4% 1.5% 1.6% 1.3%

 TOTAL - excl. military 1807.8 1843.1 1879.8 1916.0 1.7% 2.4% 1.9% 1.9% 2.0% 2.0%

Adjusted to BEA employment levels which includes proprietors.

Geographic Extent: Multnomah, Clackamas, Washington and Clark

Employment Forecast for Standardized MetroScope Industry Classification

A-25

Source: Metro DRC

Metro01.xls 10/8/02
 1 

Appendix B: 

U.S. Economic Forecast Details 

DRI-WEFA, The U.S. Economy, The 25-Year Focus, 

Winter Issue 2002 
DRI-WEFA prepares 4 U.S. macroeconomic scenarios:

 Trend Projection (a baseline scenario)

 Cyclical Projection (a scenario that incorporates business cycles)

 Optimistic Projection (a high growth scenario)

 Pessimistic Projection (a low growth scenario)

The Metro Regional Forecast assumes the national growth projections

from DRI-WEFA’s Trend Projection scenario for the baseline regional

forecast. Metro’s optimistic and pessimistic alternative growth

forecasts are produced using DRI-WEFA’s corresponding projection

alternatives. The DRI-WEFA cyclical projection is not used in any

Metro Regional Forecast.
25-Year Focus, Winter 2002 1

FORECAST OVERVIEW

This issue of The U.S. Economy, 25-Year Focus presents 

DRI•WEFA’s most recent set of long-range projections. 

Given the detail available in the current DRI•WEFA 

model, the projections for the next quarter-century 

cover not just the macro concepts such as output, inflation, and unemployment, but also the more disaggregated variables such as production and employment by 

industry. This disaggregation provides a variety of concepts for analysts to use in their planning models. Many 

of these variables serve as inputs to DRI•WEFA’s 

Regional and Energy models.

While the long-range outlooks have been of particular 

interest to utilities and state and local governments, 

which have relatively long planning horizons, they can 

be equally relevant to analysts dealing with shorter 

intervals. This is especially true of the trend scenario, 

the principal long-range projection. The trend is completely consistent with DRI•WEFA’s February shortterm baseline (Control) solution (detailed in the February 2002 issue of The U.S. Economic Outlook), which 

represents our forecast through 2011. Thereafter, the 

economy is expected to make a transition to “full 

employment” (4.0-5.0% unemployment), and then 

evolve gradually along this full-employment growth 

path. Hence, the transition between the short and longterm forecasts is smooth, making the trend projection an 

excellent base for ten-year planning purposes and policy 

simulations.

The Four Long-Term Projections

This 25-Year Focus presents four projections: baseline, 

cyclical, optimistic, and pessimistic.

The trend projection is the baseline scenario. It 

assumes that the economy suffers no major mishaps 

between now and 2027. It grows smoothly, in the sense 

that actual output follows potential output relatively 

closely. This projection is best described as depicting 

the mean of all possible paths that the economy could 

EXHIBIT 1

A Comparison of the Past and Future

(Percent)

History Trend Cycle Optim Pesim

1976-2001 2002-2027 2002-2027 2002-2027 2001-2027

–––––––– –––––––– –––––––– –––––––– ––––––––

Average Annual Real Growth

Average Annual Real Growth

 Potential Output 3.1 2.8 2.5 3.4 2.3

 GDP 3.3 3.1 3.1 3.7 2.7

 Consumption 3.4 3.0 3.2 3.6 2.6

 Business Fixed Investment 5.9 5.2 5.2 5.7 4.6

 Government 2.1 1.6 1.6 1.8 1.4

 Exports 6.6 6.9 6.7 7.0 6.6

 Imports 7.7 5.8 6.3 6.1 5.7

Average Annual Growth

 Labor Force 1.6 0.7 0.7 1.0 0.5

 Productivity 1.7 2.5 2.2 2.7 2.1

 Industrial Production 3.4 3.7 4.9 4.3 2.4

Average Level 

 Inflation (Chain-wt. Impicit GDP deflator) 4.0 2.6 3.9 2.1 3.3

 Unemployment 6.5 4.9 4.9 4.8 5.1

Average Percent of GDP

 Fuel Import Bill 1.3 1.0 0.9 1.0 1.1

 Trade Balance -1.4 -2.5 -2.9 -3.2 -2.4

 Federal Deficit -2.5 0.0 -1.1 0.5 -2.5

 Fixed Investment 11.7 12.9 12.4 13.3 12.5

Note: Growth rates for the projecion period are compound annual growth rates calculated between the years 2001 and 2027. 

Level Variables are averages for the years 2001 to 2027. Interpretation of the historical figures is similar. Unless otherwise

stated, all real data are in chained 1996 dollars.
FORECAST OVERVIEW

2 DRI•WEFA The U.S. Economy

follow in the absence of major disruptions. Such disruptions include large oil price shocks, untoward swings in 

macroeconomic policy, or excessively rapid increases in 

demand. In all three situations, demographic forces 

slow the pace of real economic growth after 2010. 

The cyclical projection is the primary alternative scenario. It superimposes business-cycle behavior on the 

trend scenario. Economic growth proceeds in a series of 

starts and stops, with periods of rapid expansion, followed by externally- or policy-induced recessions. The 

timing of the recessions is merely suggestive. Because it 

is impossible to predict the exact timing of business 

cycles much in advance, it is unwise to focus on specific 

years. It is also inappropriate to calculate average 

growth rates between different points in the business 

cycle.

The optimistic projection is the “upside” scenario, in 

which economic growth proceeds smoothly but more 

rapidly than in the baseline, while prices rise more 

slowly. In this projection, population, labor force, and 

capital stock growth, as well as exogenous technological changes, occur more quickly than in the trend. 

Potential output thus climbs more rapidly, and because 

EXHIBIT 4

Contributions to Real Potential GDP Growth

(Average annual percent change)

History Trend Cycle Optim Pessim

–––––––––––––––– –––––––––––––––– –––––––––––––––– –––––––––––––––– ––––––––––––––––

1979-1989 1989-1999 2001-06 2007-27 2001-06 2007-27 2001-06 2007-27 2001-06 2007-27

––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– –––––––

Factors of Production: Private Nonresidential

 Labor Force (0.643) 1.1 1.0 0.8 0.5 0.8 0.5 0.9 0.7 0.7 0.3

 Capital Stock (0.272) 0.9 1.4 1.1 1.3 0.9 1.3 1.2 1.4 1.0 1.2

 Energy (0.084) 0.0 0.1 0.1 0.2 0.1 0.2 0.1 0.2 0.1 0.1

 Govt. Infrastructure (0.022) 0.0 0.0 0.0 0.1 0.0 0.1 0.1 0.1 0.0 0.1

 Total 2.1 2.5 2.0 2.0 1.9 2.0 2.3 2.4 1.8 1.7

Contributions to Factor Productivity

 Research and Development 0.3 0.2 0.3 0.3 0.3 0.2 0.3 0.3 0.3 0.2

 Other 0.8 1.0 1.0 0.9 1.0 0.7 1.2 1.2 0.8 0.7

 Total 1.1 1.2 1.3 1.2 1.3 0.9 1.5 1.4 1.1 0.9

Output Coverage -0.2 -0.5 -0.3 -0.4 -0.3 -0.4 -0.4 -0.4 -0.3 -0.4

Real Potential Growth 2.9 3.2 3.0 2.7 2.8 2.5 3.4 3.4 2.6 2.1

Note: Figures in parentheses are production function weights. All real data are in chained 1996 dollars. Labor and capital exclude labor and capital used to produce 

energy.

0

2

4

6

8

10

1962 1972 1982 1992 2002 2012 2022

Trend Cycle

Optimistic Pessimistic 

EXHIBIT 3

GDP Price Inflation

(Percent)

0

5

10

15

20

25

1962 1972 1982 1992 2002 2012 2022

Trend Cycle

Optimistic Pessimistic 

EXHIBIT 2

Real GDP

(Trillions of chained 1992 dollars)
FORECAST OVERVIEW

25-Year Focus, Winter 2002 3

output is primarily supply-determined in the long run, 

real GDP grows 0.5 percentage point quicker per year. 

The pessimistic projection is the “downside” scenario. 

Here, growth proceeds smoothly, but more slowly than 

in the baseline, and productivity growth is weaker. In 

this projection, population, labor force, and capital stock 

growth, together with exogenous technological changes, 

occur less rapidly than in the trend. Output thus climbs 

0.5 percentage point more slowly per year. 

Probabilities

The underlying rate of growth in TREND25YR0202 is 

consistent with history, as well as with conjecture about 

the economy’s unfolding structure. It can be regarded as 

the best unbiased projection of the economy. Although 

any probabilities attached to long-run projections must 

be highly subjective, DRI•WEFA believes there is only 

a 10% chance that the economy’s underlying path will 

be outside the “bandwidth” encompassed by the optimistic and pessimistic projections. 

Key Assumptions

Demographics. Demographic factors are a primary 

driving force in any long-term economic projection. The 

population’s growth rate and changes in its composition 

have considerable impacts on the labor force, the fullemployment unemployment rate, housing demand, and 

other spending categories—most notably, consumption 

of health services and purchases by state and local governments.

The population projections in DRI•WEFA’s trend and 

cyclical scenarios are consistent with the Census 

Bureau’s “middle” projection for the U.S. population. 

This projection is based on specific assumptions about 

immigration, fertility, and mortality rates. The fertility 

rate (the average number of births per woman upon 

completion of childbearing) will rise from its current 

level of 2.0 to about 2.2 in 2027, while the mortality rate 

should continue to improve—with life expectancy for 

men and women rising steadily from 74.1 and 79.8 

years, respectively, in 1999 to 77.6 and 83.6 years, 

respectively, in 2027. Meanwhile, net immigration 

(including undocumented immigration) is estimated to 

rise from only 960,000 persons in 1999 to 979,000 in 

2027. Based on these assumptions, the U.S. population 

will average 0.8% growth per year through 2027, down 

from the 1.0% pace during the last 25 years. Thus total 

population will rise from 273.1 million in 1999 to 343.0 

million in 2027. 

The age distribution of the population is also an important factor in the long-term outlook. As baby boomers 

begin to retire, the share of the U.S. population aged 65 

years and over will jump from 13% in 2010 to 19% by 

2027, pushing up outlays for Social Security, Medicare, 

and Medicaid. In addition, the growth rate of the working-age population will slow more than that of the overall population. After increasing 1.1% annually over the 

past 25 years, the population aged 16 to 64 years will 

grow 0.8% annually during 1999-2014 and just 0.2% 

per year thereafter.

The optimistic and pessimistic alternatives embody 

population projections different from those in the trend. 

The optimistic outlook assumes the U.S. population will 

increase more quickly because of higher net immigration. Conversely, the pessimistic alternative constricts 

growth in the labor force because of lower assumed net 

immigration from the start of the forecast period. As a 

result, annual population growth averages 1.3% in the 

optimistic scenario and just 0.5% in the pessimistic scenario. By the end of the forecast interval, the current 

population increases to 390 million in the optimistic 

EXHIBIT 5

Mortality Assumptions

(Ultimate levels by 2050)

Trend/Cycle Optim Pessim

–––––––– ––––– –––––

Life Expectancy at Birth (Years)

 Male 81.2 83.8 79.5

 Female 86.7 88.4 84.9

8

10

12

14

16

18

20

1962 1972 1982 1992 2002 2012 2022

EXHIBIT 6

The Percentage of the Population Aged 65 and 

Older Rises
FORECAST OVERVIEW

4 DRI•WEFA The U.S. Economy

projection, but to only 310 million in the pessimistic 

scenario compared with 343 million in the baseline.

The Census Bureau has yet to revise its projections to 

make them consistent with the 2000 census. The revised 

projections, which will be released in late 2002, will 

show a larger population; the revised 2000 estimates 

were raised to 281.4 million, up from 275.3 million.

Fiscal Policy. We expect federal spending on defense, 

transfer payments, and federal aid to state and local governments to consume a larger share of GDP than previously thought. As a result, the federal government 

should post surpluses in the unified budget, averaging 

0.02% of GDP from 2001 through 2027.

In the longer run, the baby boomers’ retirement will 

cause a gradual disappearance of the surplus, despite 

some increases in the Social Security tax rate. In the 

trend scenario, the (unified) surplus falls, but does not 

return to a deficit until fiscal 2018.

Monetary Policy and Inflation. Monetary policy 

remains important in the long-term projections, not so 

much in determining the level of output, but rather in 

determining the rate of inflation. Ultimately, the Federal 

Reserve decides on the “steady-state” rate of inflation. 

Monetary policy can cause inflation to accelerate by 

being overly accommodative and pushing the unemployment rate temporarily below the rate at which inflation is stable. Alternatively, it can cause inflation to 

decelerate by being restrictive and pushing the unemployment rate temporarily above the rate at which inflation is stable.

The monetary authorities choose to keep short-term 

interest rates slightly below their equilibrium levels 

throughout the forecast period in the trend projection, 

causing a slow but steady increase in inflation. Consequently, the rate of inflation—as measured by the chainweighted GDP price index—rises from 1.4% in 1999 to 

2.2% by 2010 and 3.2% in 2027.

Bond yields will generally move parallel to the funds 

rate over the forecast interval, but run somewhat higher. 

The yield on ten-year treasuries stays below 6.0% 

through 2007. Thereafter, the combination of higher 

short-term rates and increased government borrowing 

pushes up the ten-year bond rate to 9.6% by 2027. The 

forecast implies a real federal funds rate of about 2.0% 

and a real long-term bond rate between 2.5% and 

3.0%—in line with historical averages. 

In the cyclical scenario, periods of overly expansive 

monetary policy are followed by intervals of overly 

restrictive policy, which translates into the periodic 

acceleration and deceleration of inflation. In the optimistic scenario, the Fed is assumed to keep a tight rein 

on the money supply, permitting little acceleration of 

inflation. Conversely, in the pessimistic scenario, the 

central bank is assumed to be reluctant to put the economy through the pain necessary to bring inflation back 

to baseline levels, choosing instead to tolerate an inflation rate that eventually exceeds 6%.

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1963 1973 1983 1993 2003 2013 2023

Trend/Cycle Optimistic Pessimistic

EXHIBIT 7

Population Growth

(Percent)

-6

-5

-4

-3

-2

-1

0

1

2

3

1962 1972 1982 1992 2002 2012 2022

February 2002 Forecast August 2001 Forecast

EXHIBIT 8

The Federal Surplus Shrinks as the Population 

Ages

(Percent of GNP, NIPA basis)
FORECAST OVERVIEW

25-Year Focus, Winter 2002 5

Energy. Except for temporary spikes (such as this 

year’s), DRI•WEFA’s Energy Service expects the average acquisition price of foreign oil to remain below $30 

per barrel until 2015. With worldwide demand steadily 

increasing, however, the OPEC cartel will maintain 

some pricing power. Energy price inflation should thus 

heat up early in the next decade. Although it is impossible to predict the precise timing of price changes, the 

trend projection assumes that oil prices hover around 

$25 per barrel through the end of 2012. Thereafter, the 

forecast shows oil prices climbing steadily to $59 per 

barrel by 2027. The West Texas Intermediate price for 

oil is projected to reach $63.1 per barrel by 2027, compared with the average price of $26.4 in 2000. 

In the long run, scarcity tends to bid energy prices up, 

while new technologies tend to hold them down. In the 

end, we project that scarcity will win out, with the real 

price of imported oil rising from about $20.0 a barrel in 

2001 to $27.0 a barrel in 2027.

The oil price path in the cyclical scenario has a major 

spike in 2020, where oil producers are assumed to 

mimic their behavior of the 1970s, raising oil prices 

substantially when the world economy is close to a 

cyclical peak. In the pessimistic scenario, nominal oil 

prices are higher than in the trend. In the optimistic scenario, both nominal and real oil prices are below what 

they are in the trend.

International. In all three projections, the major U.S. 

trading partners are assumed to follow a growth pattern 

similar to that in the United States, with the pace of 

growth (in real consumption) averaging 2.45% over the 

forecast period, down from an average 2.8% over the 

past 25 years. This slowdown reflects demographic 

forces similar to those operating in the United States, as 

well as the maturation of many developing economies. 

The dollar’s exchange rate will depreciate steadily 

through 2027, in order to keep the country’s current 

account deficit from growing too fast.

Variations in the international environment help explain 

some of the differences among the alternative scenarios. 

A faster (slower) rate of growth abroad partially 

explains the higher (lower) level of exports in the optimistic (pessimistic) scenario. Meanwhile, a cycle in the 

real exchange rate due to swings in domestic interest 

-8

-6

-4

-2

0

2

4

6

8

1962 1972 1982 1992 2002 2012 2022

EXHIBIT 9

Short-Term Interest Rates Will Settle at Their 

Equilibrium

(Federal funds rate less nominal GDP growth, percentage points)

10

15

20

25

30

1989 1999 2009 2019

February 2002 Forecast August 2001 Forecast

EXHIBIT 10

Real Oil Prices Are Higher in the Long Term

(Refiners’ acquisition cost of imported crude, 1996 dollars/barrel)

10

20

30

40

50

60

1976 1986 1996 2006 2016 2026

Trend Cycle

Optimistic Pessimistic 

EXHIBIT 11

Oil Price Paths Across the Four Scenarios

(Refiners’ acquisition cost of imported crude, 1996 dollars/barrel)
FORECAST OVERVIEW

6 DRI•WEFA The U.S. Economy

rates helps explain the trade pattern in the cyclical scenario.

Demand Mix. Although the overall level of output is 

determined by supply conditions, many mixes of aggregate demand are consistent with that level of output. 

Over the forecast period, the demand mix will be dominated by the retirement of baby boomers. The consumption share of GDP rises because senior citizens continue 

to spend, even though they are no longer directly producing GDP. In addition, federal government outlays for 

Social Security and Medicare explode, further boosting 

consumption relative to GDP. Between 2011 and 2027, 

consumption’s share of GDP jumps from 69% to more 

than 72%. 

The sum of the remaining shares of GDP must decline 

to make room for the rising share devoted to consumption. Government spending will bear some of the burden––between 2011 and 2026, government’s share of 

GDP will decline by more than three percentage points. 

Methodology over the Short-Term Forecasting 

Horizon 

The trend remains consistent with the February Control 

forecast through 2011. The two bandwidth scenarios, 

optimistic and pessimistic, take the trend solution as 

their starting point and immediately diverge from it—

according to their own underlying assumptions—at the 

beginning of the solution interval. This ensures that 

growth is always higher in the optimistic alternative, 

and lower in the pessimistic alternative. However, while 

average GDP growth, inflation, unemployment, and 

interest rates may be higher or lower than in the trend, 

depending on which is appropriate, these relationships 

will not necessarily hold for every individual quarter of 

the forecast period. 

by Patrick J. Newport, Mike Montgomery

 and Michael Donnelly

60

62

64

66

68

70

72

74

1962 1972 1982 1992 2002 2012 2022

EXHIBIT 12

The Consumption Share Will Keep Rising

(Percent of GDP)
FORECAST OVERVIEW

25-Year Focus, Winter 2002 7

TABLE 1

Capsule Summary of the Long-Term Projections

 Trend Cyclical 

General Outlook The economy exhibits mild variations in growth 

and approaches its balanced-growth path. 

Inflation rises slowly, averaging 3.0%. 

Typical business-cycle fluctuations. 

I. Principal Exogenous Assumptions

 Demographic Projections consistent with the Census Bureau’s latest middle-growth forecast, which assumes a 

leveling off of the fertility rate at 2.2 births, an ultimate mortality rate of 77.6 years for men and 

83.6 years for women, and net immigration of 912,000–954,000 per year. 

 Energy imports Real oil prices remain stable. No embargoes are 

assumed. 

Sharp price hikes occur in periods of peak 

demand. 

 Food prices Wholesale farm prices average 1.5% annual 

increases. 

Wholesale farm prices average 2.9% annual 

increases. Inflation spikes in 2020. 

II. Principal Policy Dimensions

 Tax changes Lower personal income tax rates. Corporate tax 

falls to 33.0% as the national debt shrinks. 

Fluctuates with the business cycle. 

 Growth of federal government 

purchases Real, +1.2% per year. Real, +12% per year. Growth pattern 

resembles the trend’s. 

 Transfers Real growth of 4.0% per year. Real growth of 4.0% per year. 

 Budget deficit Surplus averages 0.02% of GDP. Deficit averages 0.3% of GDP. 

 Average federal government 

share of GDP 

18.5% 19.2% 

 Monetary policy Sufficient funds made available to promote 

stable credit growth. Money (M2) growth 

averages 5.3%. 

Fluctuations in monetary policy contribute to 

severity of cycles. M2 averages 5.6% annual 

growth. 

 Federal funds rate Rises gradually over forecast period. Ranges between 1.75% and 9.50%. 

 Nonborrowed reserves Steadily rises over forecast period. Steadily rises over forecast period. 
FORECAST OVERVIEW

8 DRI•WEFA The U.S. Economy

 Trend Cyclical 

III. Behavior of Economic Agents

 Consumers Consumer confidence weakens as inflation picks 

up. 

Cyclical swings in confidence, income, and 

wealth cause large fluctuations in 

expenditures, particularly on durable goods. 

 Average annual real 

consumption growth 

3.0% 3.2% 

 Business Decisions made in relatively stable environment. Fluctuations in output, interest rates, and 

inflation lead to fluctuations in investment. 

 Average fixed investment 

share in GDP 

13.0% 12.4% 

 Average share of corporate 

cash flow in GNP 

10.9% 10.2% 

 State and local government Real expenditures dictated by demographics and 

ability to raise taxes. Average real growth in 

purchases of 1.7% per year. 

Average real growth in purchases of 1.7% per 

year. 

 Federal budget position 

(Fiscal years) Surpluses through 2017. Deficits starting in 2013. 

 International 

Average annual wholesale 

price inflation for major 

trading partners 

1.8% (OECD countries) 

3.7% (Developing countries) 

1.9% (OECD countries) 

3.8% (Developing countries) 

 U.S. exchange rate Declines over forecast period. Declines over forecast period. 

IV. Other Parameters 

 Average annual productivity 

growth 

2.5% 2.2% 

Average annual potential output 

growth 

2.8% 2.5% 

 Consumer price inflation Demand pressures and a return of moderate oil 

and food price inflation gradually push consumer 

price inflation from 2.5% in 1999 to 3.7% in 

2027. 

Periodic demand surges, oil price shocks, and 

more aggressive wage responses boost the 

average inflation rate. 

 Consumer price index 

 Average annual increase 

 Peak annual 

3.0% 

3.75% (2027) 

4.3% 

6.7% (2027) 

 Hourly earnings 

 Average annual rise 

 Peak annual 

4.4% 

5.0% (2026) 

5.6% 

7.8% (2027) 

 Housing market Demographics dictate slower growth of the 

housing stock after 1998. 

Cycles in incomes and monetary policy affect 

the housing sector more severely. 

 Median new home price in 

 2027 

 Average annual rise 

$393,300 

3.1% 

$512,700 

4.1% 

 Unemployment Hovers about 5.0%. Annual rates vary between 3.0% and 7.0%. 

 Average rate 4.9% 4.9% 

TABLE 1 (Continued)

Capsule Summary of the Long-Term Projections
FORECAST OVERVIEW

25-Year Focus, Winter 2002 9

 Optimistic Pessimistic 

General Outlook High growth. Low growth. 

 Deviations from trend due to differences in demographic assumptions, productivity growth, and 

investment. 

I. Principal Exogenous Assumptions

 Demographic Projections above the trend are a result of higher 

net immigration. 

Projections below the trend due to lower net 

immigration. 

 Energy imports By 2027, oil import bill reaches $528 billion. Oil prices rise steadily, reaching $97 per 

barrel by 2027. Oil import bill reaches $553 

billion by 2027. 

 Food prices Wholesale farm prices rise 1.5% annually. Wholesale farm prices average 2.6% annual 

increases. 

II. Principal Policy Dimensions

 Tax changes Similar to trend. Similar to trend. 

Growth of federal government 

purchases 

Real, +1.2% per year. Real, +1.3% per year. 

 Transfers Real growth of 4.3% per year. Real growth of 3.8% per year. 

 Budget deficit The government runs a surplus through forecast 

period. 

Deficits in most years. 

 Average federal government 

share of GDP 

17.5% 20.6% 

 Monetary policy Stable and predictable. Tight policies required to contain rising 

inflationary pressures. 

 Federal funds rate Settles at 5.0%. Rises continually over forecast period. 

 Nonborrowed reserves 2.4% average growth. 2.0% average growth. 

TABLE 1 (Continued)

Capsule Summary of the Long-Term Projections
FORECAST OVERVIEW

10 DRI•WEFA The U.S. Economy

 Optimistic Pessimistic 

III. Behavior of Economic Agents

 Consumers Consumer confidence weakens as inflation rises. Lower real incomes depress consumer 

expenditures, especially on durable goods. 

 Average annual real 

consumption growth 

3.6% 2.6% 

 Business High demand expectations plus low inflation and 

interest rates enhance the business 

environment. 

Higher inflation, higher interest rates, and 

weaker demand make investors more 

cautious. 

 Average fixed investment 

 share in GDP 

 Average share of corporate 

 cash flow in GNP 

13.3% 

11.1% 

12.5% 

10.4% 

 State and local government Average real growth in purchases of 2.1% per 

year. 

Average real growth in purchases of 1.5% per 

year. 

 Federal budget position 

(Fiscal years) Government runs surplus through forecast 

period. 

Deficits after 2001. 

 International 

Average annual wholesale 

price inflation for major 

trading partners 

1.6% (OECD countries) 

3.4% (Developing countries) 

2.5% (OECD countries) 

4.4% (Developing countries) 

 U.S. exchange rate Declines over forecast period. Declines over forecast period. 

IV. Other Parameters

 Average annual productivity 

growth 

2.7% 2.1% 

 Average annual potential output 

growth 

3.4% 2.3% 

 Consumer price inflation Hovers below 3.0%. Inflation accelerates, approaching 6.0% in 

2027. 

 Consumer price index 

 Average annual increase 

 Peak annual 

2.5% 

2.9% (2017) 

3.7% 

5.7% (2027) 

 Hourly earnings 

 Average annual rise 

 Peak annual 

4.2% 

4.7% (2017) 

4.7% 

6.2% (2027) 

 Housing market The higher population projections push the 

housing stock above the trend. 

Lower real incomes and high cost of funds 

depress housing starts. 

 Median new home price in 

 2027 

 Average annual rise 

$336,600 

2.6% 

$498,700 

4.2% 

 Unemployment Remains near trend throughout forecast period. Remains near trend throughout forecast 

period. 

TABLE 1 (Continued)

Capsule Summary of the Long-Term Projections
THE FOUR SCENARIOS: THE TREND PROJECTION

25-Year Focus, Winter 2002 11

SLOW GROWTH AND RISING INFLATION: 

THE TREND PROJECTION

Highlights

• Real GDP growth will average 3.1% per year during 2001-27. Growth slows after 2012 as baby 

boomers retire.

• The outlook for inflation remains moderate. CPI 

inflation will average 3.0% per year over the forecast period. Core inflation will average 3.0%. 

• High investment and a more slowly growing labor 

force should result in higher productivity growth. 

Nonfarm business productivity growth averages 

2.5% over the forecast period, compared with the 

1.7% average experienced since 1975.

• After worsening through 2002, the current account 

deficit will narrow, but remain negative. The deficit 

will hover between 3% and 4% of GDP during most 

of the projection period.

• Real oil prices will creep up over the forecast 

period. The real price of imported oil rises from 

about $20.0 a barrel in 2001 to $27.0 a barrel in 

2027.

• The labor market will stay tight, with the unemployment rate remaining below 5.0% through most of 

the forecast period. 

• Solid economic growth, combined with only moderate increases in federal spending, will result in

surpluses throughout most of the forecast period.

Introduction

Economists focus on the short run. Will the Federal

Reserve raise interest rates? Is the stock market overvalued? Will we have a recession next year? This focus is

understandable. We care more about what will happen

tomorrow than what will happen three years from today.

The focus, though, is misplaced. When historians look

back on the 20th century, the most striking economic

fact that will distinguish it from previous centuries will

not be the 21 recessions, but rather the steady, inexorable rise in per capita income.

The driving force behind rising per capita income is one

that economists still do not quite understand: productivity growth. They agree that new technologies eventually

make workers more productive, but many questions

remain under debate. What determines the pace of technological progress? How long does it take for new technologies to catch on? How does an innovation such as

the Internet compare with the invention of the transistor,

the airplane, or the electric bulb? Not knowing these

answers makes productivity— and the course of the

economy— extremely tricky to forecast.

A further complication made this forecast even trickier.

Productivity, before the current slowdown, was surging,

possibly because of what Alan Greenspan called “ a revolution in information technologies.” Although productivity growth eased as the economy slowed in 2001,

recent data indicate that it is surging again. Will the productivity boom continue much longer? While there are

several promising new technologies in the pipeline, we

think things will settle, with productivity growth rising

faster than it did in during the 1970s and 1980s, but

slower than in the second half of the 1990s.

Long-Term Forecast Assumptions

In the trend scenario, we assume an environment free of

exogenous shocks. Economic output will converge

towards its potential level, with all resources fully utilized. As a result, the growth rates of output, real

incomes, real expenditures, and the general standard of

living of the population are determined by the growth

rate of potential GDP. The long-range outlook is dominated by supply factors, such as population growth and

demographics, labor force participation rates, average

weekly hours worked, national saving and capital stock

accumulation, productivity growth, fiscal and monetary

policies, foreign developments, and internationally

determined prices. 

Population and Demographics 

DRI•WEFA's population projections are based on the

Census Bureau’s middle series assumptions for fertility,

life expectancy, and net immigration. These projections

have the U.S. population expanding at an annual rate of

0.8% between 2000 and 2027, when the population

reaches 344 million. Growth in the older age cohorts

will be stronger as the baby boomers age. The 65 years

and over population share rises from 12.5% in 2001 to

19.5% in 2027. 
THE FOUR SCENARIOS: THE TREND PROJECTION

12 DRI•WEFA The U.S. Economy

The population projections do not incorporate the 2000

Census estimates. When the Census updates its population projections later this year, the population numbers

should be 2-3% higher than currently projected.

Productivity and Aggregate Supply 

It is the economy’s ability to increase supply in the long

run that determines its potential growth path. Growth in

aggregate supply depends on the increase in the labor

force, the growth of the capital stock, and improvements

in productivity.

DRI•WEFA believes productivity growth will exceed

its recent historical average and average 2.5% per year

during 2001– 27. This is lower than the stellar 2.9%

average annual growth achieved during the 1960s,

although higher than the 1.7% annual growth rate for

1975-2000. The pickup in productivity growth, particularly over the next decade, is largely due to robust

growth in equipment spending and new technologies.

The real capital stock will grow 4.5% annually, compared with 4.2% in 1976-2001. The declining price of

capital goods relative to other inputs accounts for the

robust capital stock growth rates.

Government Policy

The government sector's share of GDP will decline over

the forecast period. Public purchases (both state and

local) as a share of GDP will decrease from 18.0% in

2001 to 14.3% in 2027. This reduction in the government’s share of the economy is concentrated in the federal sector. The reduction in federal spending as a

percentage of GDP will largely be the result of a declining defense share. State and local spending as a share of

GDP will shrink from 12.0% in 2001 to 10.0% in 2027. 

DRI•WEFA expects the federal government to record a

surplus through 2017. The federal surplus will average

0.2% of GDP over the entire forecast period. Our projections are based upon the assumption that Congress

and the executive will find it politically difficult to

spend or tax away the Social Security surplus, and consequently, the publicly held debt will decline over time.

We also expect state and local governments will run surpluses throughout the forecast period, since, statutorily,

most states are required to do so.

Monetary Policy and Financial Markets

The Federal Reserve decides on the “steady-state” rate

of inflation. Monetary policy can cause inflation to

accelerate by being overly accommodative. Alternatively, it can cause inflation to decelerate by being

restrictive. The monetary authorities choose to keep

short-term interest rates slightly below their equilibrium

levels throughout the forecast period in the trend projection, causing a slow but steady increase in inflation.

Consequently, the rate of inflation— as measured by the

chain-weighted GDP price index— rises from 1.3% in

2002 to 2.2% by 2010 and 3.2% in 2027.

Bond yields will generally move parallel to the funds

rate over the forecast interval, but run somewhat higher.

The yield on ten-year treasuries stays below 6.0%

through 2007. Thereafter, the combination of higher

short-term rates and increased government borrowing

55

57

59

61

63

65

67

69

1962 1972 1982 1992 2002 2012 2022

EXHIBIT 1

The Labor-Force Participation Rate Will Drop

(Percent)

75

77

79

81

83

85

87

1962 1972 1982 1992 2002 2012 2022

EXHIBIT 2

Population Aged 16-65 as a Percent of the Total 

Adult Population
THE FOUR SCENARIOS: THE TREND PROJECTION

25-Year Focus, Winter 2002 13

pushes up the ten-year bond rate to 9.6% by 2027. The

forecast implies a real fed funds rate of about 2.0% and

a real long-term bond rate close between 2.5% and

3.0%— in line with historical averages. 

Oil Prices 

Except for temporary spikes (such as this year’s),

DRI•WEFA’s Energy Service expects the average acquisition price of foreign oil to remain below $30 per barrel

until 2015. With worldwide demand steadily increasing,

however, the OPEC cartel will maintain some pricing

power. Energy price inflation should, therefore, heat up

early in the next decade. Although it is impossible to

predict the precise timing of price changes, the trend

projection assumes that oil prices hover around $25 per

barrel through the end of 2012. Thereafter, the forecast

shows oil prices climbing steadily to $59 per barrel by

2027. The West Texas Intermediate price for oil is projected to reach $63.1 per barrel by 2027, compared with

the average price of $26.4 in 2000. 

In the long run, scarcity tends to bid energy prices up,

while new technologies tend to hold them down. In the

end, we project that scarcity will win out, with the real

price of imported oil rising from about $20.00 per barrel

in 2001 to $27.00./barrel in 2027.

Foreign Assumptions 

The major U.S. industrialized trading partners are

assumed to follow a growth pattern similar to that in the

United States, with the pace of growth averaging 2.5%

over the forecast period, down from an average 2.8%

over the past 25 years. This slowdown reflects demographic forces similar to those operating in the United

States. The developing countries that trade with the

United States will grow 4.6%, about the same as during

the past 25 years. 

The dollar will have to depreciate steadily against foreign currencies throughout the forecast period in order

to keep the U.S. current account deficit from growing

too fast. Over the forecast period, the real U.S. tradeweighted dollar with industrialized countries depreciates 0.5% annually. 

Long-Term Forecast Highlights

Real GDP. The trend projection assumes that the U.S.

economy experiences no major mishaps between now

and 2027. The projection is identical with our February

short-term forecast through 2011, and represents

EXHIBIT 3

Contribution to New Jobs

(Payroll employment, cumulative percent change)

History Trend

–––––––––––––– –––––––––––––––––––

 1976 1986 2002 2008 2018

-1986 -2001 -2007 -2017 -2027

–––– –––– –––– –––– ––––

Manufacturing 4.5 -2.3 -4.7 -8.2 -7.6

Mining and Construction 6.4 4.8 2.3 6.6 -5.5

Government 8.4 12.4 9.2 8.5 15.8

Private Services 80.6 85.0 93.2 93.1 97.3

Total New Jobs (Millions) 20.4 34.4 8.5 12.2 6.2

2.0

2.5

3.0

3.5

4.0

4.5

5.0

1965 1975 1985 1995 2005 2015 2025

EXHIBIT 5

Potential Output Growth Will Slow

(Percent)

5

10

15

20

25

30

35

1962 1972 1982 1992 2002 2012 2022

EXHIBIT 4

Manufacturing’s Share of Total Employment 

Continues to Slide

(Percent)
THE FOUR SCENARIOS: THE TREND PROJECTION

14 DRI•WEFA The U.S. Economy

DRI•WEFA’s best estimate of the economy’s path over

that period. Beyond 2011, the projection should be

interpreted as the mean of all possible “ near-fullemployment” paths the economy could follow. The

smooth-growth characteristics of the trend projection

make it most useful for tasks largely impervious to

short-term cyclical fluctuations, such as planning capacity additions and evaluating new markets. This projection is also the best base from which to evaluate the

effects of various assumptions about key exogenous elements, such as fiscal policy or energy prices, on the

overall economic outlook. 

Annual real GDP growth averages 3.1% during 2001-

27, compared with 3.0% during 1976-2001. The economy’s underlying growth rate will slow after 2011 as

baby boomers begin to retire, slowing labor force

growth. Potential output growth should hold up fairly

well in the future, with greater business fixed investment and R&D spending offsetting the slowdown in

labor force growth. Eventually, though, the effects of

weaker labor force growth become dominant and, in a

sense, self-perpetuating. As output growth drops off,

business fixed investment rises more slowly, limiting

capital stock growth and thus future output gains.

Employment. Slower long-run increases in the labor

force indicate more moderate long-run employment

growth in the future. Total civilian employment will rise

at an average annual rate of 1.0% from 2000 to 2005

and will moderate to an average growth rate of 1.1% for

the rest of the forecast period. Total establishment

employment will rise from 131.4 million in 2000 to

173.5 million in 2027, an increase of 32%. This growth

is significantly slower than the astonishing gain of 49.7

million (63%) recorded in the previous 25 years. Manufacturing’s share of total employment will continue to

decline over the forecast period, falling to 10.1% in

2027 from 14.1% in 2000. The broad service sector will

generate an increasing share of employment growth in

the forecast period, although the share of employment

accounted for by the federal government will decline

during the forecast period.

0

2

4

6

8

10

12

14

1962 1972 1982 1992 2002 2012 2022

EXHIBIT 6

Consumer Price Inflation

(Percent)

60

62

64

66

68

70

72

74

1962 1972 1982 1992 2002 2012 2022

EXHIBIT 8

The Consumption Share Rises Steadily

(Percent of GDP)

0

2

4

6

8

10

12

14

16

18

1962 1972 1982 1992 2002 2012 2022

EXHIBIT 7

The Federal Funds Rate

(Percent)
THE FOUR SCENARIOS: THE TREND PROJECTION

25-Year Focus, Winter 2002 15

Inflation. Over the long run, inflation is a monetary

phenomenon. Its future course will be determined by

policies implemented by Alan Greenspan and his successors. Since we do not know who his successors will

be, we assumed the following in the 25-year forecast:

• The Fed will attempt to keep inflation contained 

over the first ten years of the forecast period.

• In the second half of the forecast period, as baby 

boomers start retiring, labor markets will tighten, 

putting pressure on wages. We assume that the Fed 

will allow inflation to creep up rather than slow the 

economy— possibly inducing a recession— to keep 

inflation checked.

The CPI is expected to average 3.0% annual increases

between 2000 and 2027, somewhat less than the 4.0%

average from 1947 to 2000. The broader-based GDP

deflator will rise 2.6% per year. The acceleration of

inflation over the projection period reflects a more

accommodative Federal Reserve attitude in response to

pressures created by the aging population

Consumption. Expenditures, in the long term, are primarily determined by the growth of real permanent

income, demographic influences, and changes in relative prices. The share of personal consumption expenditures in GDP will rise slightly over the forecast interval,

and should account for 72% of the overall economy by

the end of the forecast horizon. Real consumption

expenditure growth will average 3.0% per year over the

forecast period.

With total output growth easing, real consumer spending gains will slow from 3.2% annually between 1973

and 2000 to 2.9% during 2001– 26. In per capita terms,

growth will advance about 2.0% per year, 0.4% below

the 1975-2000 rate. Most consumption categories are

expected to slow, except for health-care spending,

which will pick up again after 2012.

The share of consumption devoted to services will rise,

mainly because of rising health expenditures, while that

for goods will fall over the forecast period. 

The long-term outlook for auto and light truck sales 

calls for a slowdown in the rate of increase relative to 

past performance. Vehicle sales growth will average 

close to 0.8% over the next 25 years. Light-vehicle sales 

are forecasted to reach 21.3 million units by 2027. 

Although the number of vehicles per person has 

increased significantly in the past 20 years, the United 

States is approaching a saturation point in the rate of 

vehicle ownership. Future growth in vehicle sales will 

EXHIBIT 9

Personal Consumption Slows in Trend Scenario

(Average annual percent change)

History Trend

–––––––––––– ––––––––––––––––––––

 1976 1986 2002 2008 2018

-1986 -2001 -2007 -2017 -2027

–––– –––– –––– –––– ––––

Total Personal Consumption 3.3 3.3 3.0 3.2 3.0

 Durable Goods 5.4 5.4 4.0 4.2 4.8

 Autos & Parts 5.1 3.2 2.7 2.0 3.2

 Furniture & Appliances 6.2 8.2 5.4 5.9 6.0

 Software N/A 38.3 9.2 6.2 6.7

 Ophthalmic Goods 5.8 3.6 3.3 5.7 7.1

 Other Durable Goods 4.2 5.4 4.2 5.4 5.5

 Nondurable Goods 2.4 2.8 2.8 3.2 3.4

 Food & Beverages 1.7 2.1 1.9 2.2 2.2

 Prescription & 

 Over-the-Counter Drugs 4.4 5.4 4.4 6.1 6.4

 Clothing & Shoes 5.9 4.7 4.4 4.4 4.2

 Gasoline & Oil 1.3 1.5 2.3 2.2 1.4

 Fuel Oil & Coal -5.6 -0.8 1.0 -0.6 -0.8

 Tobacco Products -1.2 -2.2 -1.2 -1.3 -4.8

 Othe Nondurable Goods 3.8 4.3 4.4 4.3 4.3

 Services 3.5 3.1 2.8 3.1 2.7

 Housing 2.9 2.1 1.8 1.4 1.0

 Household Operation 2.7 3.5 3.7 4.5 4.7

 Electricity 3.1 2.0 3.1 2.4 2.3

 Natural Gas -1.1 0.9 1.5 1.2 1.3

 Telephony 5.1 7.8 7.0 7.9 7.7

 Other 2.4 1.9 1.4 2.8 2.6

 Transportation 3.2 3.1 2.2 1.8 1.2

 Motor Vehicle Leases N/A N/A 6.9 6.3 1.9

 Other Transportation N/A N/A 1.6 1.1 1.1

 Personal Business Services 4.7 4.0 3.1 2.8 1.9

 "Free" Financial Services 5.5 3.6 3.6 2.2 1.1

 Medical 3.8 2.9 3.0 3.9 3.4

 Recreational 5.7 4.8 6.1 5.1 3.6

 Other Services 3.4 3.2 1.6 2.6 2.8

Note: All real data are in chained 1996 dollars.

10

12

14

16

18

20

22

1978 1988 1998 2008 2018

EXHIBIT 10

Light-Vehicle Sales

(Millions of units)
THE FOUR SCENARIOS: THE TREND PROJECTION

16 DRI•WEFA The U.S. Economy

be primarily driven by growth in population and 

demand for replacement vehicles. Automobile sales 

should be relatively strong throughout the projection 

period, averaging 9.2 million units per year. Total lightvehicle sales (cars plus light trucks) reached 145 million 

units in the 1990s and will reach 171 million in the subsequent decade, compared with 135 million during the 

1980s. 

According to DRI•WEFA’s Energy Service, real

energy-intensive consumption (gasoline, fuel oil, coal,

electricity, and natural gas) should increase 1.7% per

year through 2027, compared with 1.5% annual gains

since 1970. Energy conservation efforts will continue.

This stems partly from a stock/flow phenomenon:

despite the trend toward minivans and sport/utility vehicles, for example, the average new vehicle is still more

fuel-efficient than the existing stock. Gasoline usage per

vehicle should fall for several more years, even if relative energy prices remain flat. Similar considerations

apply to business capital and housing stocks. The ongoing employment shift from manufacturing to services

also implies lower energy usage per unit of output.

Real personal disposable income, which climbed 3.1%

between 1970 and 2000, will rise 2.9% annually over

the next 25 years— in line with the slowdown in total

output growth. This does not take into account the rising

volume of withdrawals from existing retirement plans.

Housing. Household growth clearly depends on population growth, but real incomes, employment, the age distribution of the population, and societal values also

influence it. Net additions to the housing stock are

closely linked to household growth, which is the primary driver of housing starts. Many analysts tend to

overlook another key factor for housing starts: the geographic location of the demand for net additions.

The 25– 34 age cohort is key for the demand for new

housing. This is the age group where individuals typically purchase their first home. The demand for new

housing was boosted by the large gains in this age group

in the late 1960s and 1970s, as the baby-boom generation entered the housing market. Unfortunately for the

housing sector, the baby-boom generation began to pass

through this age bracket in the mid-1980s, limiting the

demand for additions to the housing stock. The number

of households in this cohort will begin a modest

9

10

11

12

13

14

15

1962 1972 1982 1992 2002 2012 2022

EXHIBIT 12

Investment’s Share of GDP Will Turn Down After 

2015

(Percent of GDP)

1.0

1.2

1.4

1.6

1.8

2.0

2.2

2.4

2.6

1962 1972 1982 1992 2002 2012 2022

EXHIBIT 11

Housing Starts

(Millions of units)

EXHIBIT 13

Saving and Investment Shares of GNP

(Percent)

History Trend

–––––––––––– ––––––––––––––––––––

 1976 1986 2002 2008 2018

-1986 -2001 -2007 -2017 -2027

–––– –––– –––– –––– ––––

Household 10.3 7.4 4.4 4.0 3.4

Business 9.1 9.2 9.6 10.8 11.8

Government -3.4 -2.5 -0.8 -0.3 -1.4

Total Saving 15.9 14.0 13.2 14.5 13.8

Total Investment 16.5 13.9 11.8 13.6 13.1

Gross Private Investment 17.3 15.8 16.3 17.2 16.4

 Nonresidential Fixed 

 Investment 12.1 11.3 11.8 13.4 13.5

 Residential 4.5 4.1 4.1 3.5 2.6

 Change in Inventories 0.6 0.4 0.3 0.3 0.2

Net Foreign Investment -0.8 -1.9 -4.5 -3.6 -3.2

Statistical Discrepancy 0.9 0.0 -1.3 -0.9 -0.7
THE FOUR SCENARIOS: THE TREND PROJECTION

25-Year Focus, Winter 2002 17

increase after 2005. The overall headship rate will gradually increase toward older segments due to the shift in

the age composition.

The demographic demand for housing will be higher

over the next 25 years than over the past 25 years. Thus,

housing starts are projected to average 1.7 million units

annually from 2001 to 2027, above the 1.5 million average for 1971-2000. Meanwhile, the housing stock will

climb from 109.3 million units to 142.0 million units. 

Business Fixed Investment. Good profitability and

solid demand growth should keep investment healthy

over the next 25 years. The share of GDP devoted to

business fixed investment will hover about 12-13% of

GDP through most of the forecast period. The effective

capital stock (in 1996-dollar terms) is projected to

increase 4.5% annually, just above the average growth

rate recorded for 1971– 2001. Inventory investment will

remain a small percentage of GDP. Although inventories have played significant roles during past business

cycles, inventory investment represents an average in

the stable growth scenario and is thus artificially

smooth. Capital inflow will contribute to net domestic

investment throughout the forecast period, although federal deficits clearly hurt it in the later years of the forecast. The government saving projection assumes that

state and local governments continue to run modest

operating surpluses.

The composition of investment will continue to change

in the forecast period; structures’ share of investment

will decline modestly, while equipment’s share rises.

This is a continuation of a long-standing trend, and is a

direct result of declining relative prices for equipment

and software. 

International Trade. A decline in the exchange rate,

combined with modest unit labor cost growth, will stimulate U.S. exports abroad and result in an eventual

0

2

4

6

8

10

12

14

16

18

1962 1972 1982 1992 2002 2012 2022

EXHIBIT 14

Net Interest Paid by the Federal Government

(Percent of federal government expenditures, excluding 

investment)

-5

-4

-3

-2

-1

0

1

2

1962 1972 1982 1992 2002 2012 2022

The Goods and Service Trade Balance

-60

-50

-40

-30

-20

-10

0

10

20

1978 1988 1998 2008 2018

Net U.S. Investment Position

EXHIBIT 15

The Trade Outlook

(Percent of GDP)
THE FOUR SCENARIOS: THE TREND PROJECTION

18 DRI•WEFA The U.S. Economy

improvement in the U.S. current account balance.

DRI•WEFA projects that real exports will expand at an

average annual rate of 6.9% over the entire forecast

period. Real imports, meanwhile, will grow at an average annual rate of 5.8%.

10

20

30

40

50

60

70

1976 1986 1996 2006 2016 2026

EXHIBIT 17

Foreign Oil Prices

(Dollars per barrel)

90

95

100

105

110

115

120

125

130

1974 1984 1994 2004 2014 2024

EXHIBIT 16

Ratio of Manufacturing Output to Real GDP

(1996=100)
THE FOUR SCENARIOS: THE TREND PROJECTION

25-Year Focus, Winter 2002 19

TABLE 1 

Summary for the U.S. Economy--TREND25YR0202 

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 

–––– –––– –––– –––– –––– –––– –––– –––– –––– –––– –––– –––– ––––

Composition of Real GDP (Annual percent change) 

Gross Domestic Product 1.0 4.0 3.9 3.0 2.9 2.9 3.3 3.4 3.6 3.4 3.4 3.3 3.3 

Final Sales 0.3 3.7 3.8 3.2 2.9 2.9 3.3 3.4 3.6 3.4 3.4 3.3 3.3 

Gross National Product 1.1 3.7 3.7 3.0 2.8 2.9 3.3 3.4 3.6 3.4 3.3 3.3 3.3 

Total Consumption 1.9 3.6 3.3 2.8 2.6 2.6 2.9 3.1 3.3 3.2 3.3 3.3 3.2 

Durable Goods -0.6 6.7 4.4 2.5 3.2 3.2 2.9 3.6 4.5 4.4 2.6 4.1 4.8 

Nondurable Goods 2.0 3.2 3.2 2.8 2.5 2.4 2.7 2.8 3.0 3.0 3.3 3.3 3.3 

Services 2.4 3.1 3.1 2.9 2.6 2.5 3.0 3.1 3.2 3.1 3.4 3.2 3.0 

Nonres. Fixed Investment -4.6 6.7 8.5 6.1 5.0 5.5 6.4 6.6 6.7 6.7 7.2 6.3 6.3 

Equipment and Software -2.3 8.3 10.4 7.4 6.1 6.3 7.5 7.8 7.8 7.7 7.8 7.5 7.4 

Computers 10.8 14.9 18.2 19.9 20.1 19.8 19.1 18.4 17.9 17.2 17.5 17.7 17.2 

Software 6.0 8.6 9.0 10.4 10.6 10.6 10.8 10.9 11.0 11.1 11.5 11.2 10.4 

Communications Equipment -9.1 8.7 11.1 8.0 8.1 6.7 7.3 7.7 7.5 7.4 7.1 6.1 6.4 

Light Vehicles -3.4 8.9 6.7 1.9 2.9 3.4 5.1 5.0 4.8 4.6 4.4 4.1 4.5 

Other -6.4 6.7 10.6 5.2 2.0 2.2 4.0 4.4 4.5 4.1 4.0 3.4 3.6 

Private Nonres. Structures -11.0 1.9 3.0 2.0 1.2 3.1 3.1 2.9 3.1 3.8 5.3 2.6 2.6 

Buildings and Other -9.8 3.4 3.0 2.2 1.6 2.7 3.8 4.0 3.9 4.5 6.2 2.9 2.9 

Residential Fixed Investment -0.5 1.3 1.3 1.7 0.5 1.0 2.3 2.0 3.1 3.1 -1.2 -1.9 0.1 

Exports -8.6 7.6 9.3 7.9 8.1 7.8 7.4 7.4 7.1 6.9 7.0 7.6 7.7 

Imports 0.6 6.5 5.2 4.5 4.1 4.0 4.1 4.5 4.8 4.7 5.4 6.0 6.3 

Federal Government 4.5 4.7 2.3 1.0 0.6 0.5 0.7 0.8 1.2 -0.2 0.8 1.0 1.0 

State and Local Governments 1.8 2.1 1.8 2.0 1.8 1.5 1.5 1.4 1.4 1.4 1.5 1.6 1.8 

Billions of Dollars 

Real GDP (Chained 1996 $) 9416.7 9794.5 10172.5 10480.1 10783.7 11100.7 11470.3 11862.4 12287.2 12709.2 13140.7 13575.2 14029.7 

Gross Domestic Product 10431.3 11058.7 11728.4 12339.3 12957.3 13615.6 14360.7 15161.8 16042.4 16979.5 17987.3 19048.4 20212.2 

Prices and Wages (Annual percent change) 

GDP Price Index (Chain-Wt.) 1.2 1.9 2.1 2.1 2.1 2.1 2.1 2.1 2.2 2.3 2.5 2.5 2.7 

CPI - All Urban Consumers 1.4 2.4 2.5 2.5 2.4 2.4 2.4 2.3 2.4 2.5 2.7 2.8 3.0 

Excl. Food & Energy 2.5 2.6 2.6 2.6 2.6 2.5 2.5 2.4 2.5 2.6 2.8 2.9 3.1 

Producer Price Index - Fin. Gds. -1.4 0.8 1.4 1.3 1.1 1.0 1.1 1.1 1.2 1.4 1.5 1.6 1.7 

Emp. Cost Index - Total Comp. 3.3 2.9 3.0 2.9 3.1 3.2 3.3 3.4 3.6 3.8 4.0 4.1 4.4 

Output per Hour 2.8 3.4 2.4 2.3 2.3 2.3 2.4 2.4 2.4 2.3 2.9 2.6 2.4 

Other Key Measures 

Industrial Production (% ch) -1.3 7.5 5.7 4.0 3.6 3.7 4.7 4.8 4.8 4.7 4.5 4.3 4.0 

Nonfarm Inven. Accumulation 

(Billion chained 1996 $) 15.6 53.3 58.9 41.8 39.6 40.4 45.4 47.9 52.1 52.4 53.0 54.0 57.0 

Consumer Confidence Index 93.2 92.2 94.7 93.7 91.8 91.6 92.2 92.8 94.8 94.8 90.9 91.7 91.9 

Housing Starts (Mil. units) 1.6 1.6 1.6 1.6 1.6 1.6 1.6 1.7 1.7 1.7 1.6 1.6 1.6 

Light-Vehicle Sales (Mil. units) 15.4 16.9 17.3 17.0 17.3 17.5 17.5 17.6 17.9 18.3 18.1 18.4 19.0 

Unemployment Rate (%) 6.0 5.8 5.1 5.0 5.1 5.1 5.0 4.8 4.4 4.2 4.5 4.6 4.6 

Payroll Employment (% ch.) -0.4 1.6 2.1 1.6 1.2 1.1 1.2 1.3 1.4 1.2 0.7 0.9 1.1 

Federal Budget Surplus 

(Unified, CY, bil. $) 5.3 -7.4 -20.5 -8.9 32.0 80.4 101.0 130.5 160.8 207.9 128.1 115.3 103.3 

Foreign Trade 

Curr. Account Balance (Bil. $) -459.8 -535.5 -567.2 -579.5 -588.3 -590.5 -599.0 -605.7 -618.5 -627.4 -671.3 -701.3 -733.6 

Foreign Crude Oil ($ per barrel) 19.6 21.0 22.7 23.8 24.8 25.5 26.1 26.9 27.7 28.7 29.8 30.9 32.1 

Financial Markets 

Money Supply (M2, billion $) 5821.9 6136.3 6424.4 6726.3 7043.9 7379.1 7735.7 8115.5 8521.4 8955.3 9396.4 9869.4 10378.0 

Percent Change 7.6 5.4 4.7 4.7 4.7 4.8 4.8 4.9 5.0 5.1 4.9 5.0 5.2 

Thirty-Year Mortgage Rate (%) 7.1 7.4 7.5 7.4 7.4 7.4 7.3 7.3 7.3 7.3 7.7 7.8 7.9 

Ten-Year Treasury Note Yield (%) 5.3 5.8 5.9 5.9 5.9 5.9 6.0 6.0 6.1 6.1 6.5 6.6 6.7 

Treasury Bill Rate (%) 2.0 3.7 4.6 4.6 4.6 4.6 4.6 4.6 4.7 4.7 5.1 5.1 5.1 

Federal Funds Rate (%) 2.2 4.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.5 5.5 5.5 

Prime Rate (%) 5.2 7.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.5 8.5 8.5 

S&P 500 Stock Index 1161.5 1237.8 1324.7 1423.7 1507.5 1599.0 1692.3 1786.0 1876.8 1973.8 2103.1 2235.8 2376.6 

Incomes 

Personal Income (% ch) 2.5 5.3 5.7 4.8 4.7 4.8 5.3 5.4 5.7 5.9 6.0 5.9 6.2 

Real Disposable Income (% ch) 2.2 3.5 3.5 2.7 2.3 2.3 3.0 3.1 3.3 3.3 3.4 3.3 3.3 

Saving Rate (%) 1.9 1.8 2.0 1.8 1.3 1.0 1.0 1.1 1.2 1.3 1.5 1.5 1.6 

Profits After Tax (% chya) 4.8 8.4 1.0 2.2 5.0 5.3 7.4 6.8 7.2 7.1 7.2 7.7 8.7 
THE FOUR SCENARIOS: THE TREND PROJECTION

20 DRI•WEFA The U.S. Economy

TABLE 1 (Continued) 

Summary for the U.S. Economy--TREND25YR0202 

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 

–––– –––– –––– –––– –––– –––– –––– –––– –––– –––– –––– –––– ––––

Composition of Real GDP (Annual percent change) 

Gross Domestic Product 3.3 3.3 3.3 3.1 3.1 3.0 2.7 2.8 2.8 3.0 2.9 3.0 3.1 

Final Sales 3.3 3.3 3.3 3.1 3.1 3.0 2.7 2.7 2.8 3.0 2.9 3.0 3.1 

Gross National Product 3.3 3.2 3.3 3.1 3.2 2.9 2.7 2.8 2.9 2.9 3.0 3.1 3.1 

Total Consumption 3.2 3.2 3.2 3.1 3.2 3.0 2.7 2.8 2.9 3.1 3.0 3.2 3.3 

Durable Goods 4.4 4.6 4.4 4.1 4.8 4.3 3.1 4.6 4.6 5.8 4.7 5.6 5.5 

Nondurable Goods 3.3 3.4 3.4 3.4 3.4 3.3 3.2 3.1 3.3 3.4 3.5 3.6 3.6 

Services 3.0 3.0 3.0 2.9 2.9 2.7 2.5 2.5 2.6 2.7 2.7 2.7 2.8 

Nonres. Fixed Investment 6.2 6.0 5.7 5.1 5.0 4.8 4.1 3.9 4.0 4.4 4.3 4.3 4.4 

Equipment and Software 7.2 7.0 6.5 6.1 5.8 5.4 4.8 4.8 4.9 5.2 4.9 5.0 5.1 

Computers 16.2 15.3 14.8 14.1 13.4 13.3 13.9 14.1 14.2 14.1 14.1 14.2 14.5 

Software 9.6 8.8 8.0 7.2 6.4 5.6 4.8 4.1 4.0 4.0 4.0 4.0 4.0 

Communications Equipment 6.7 6.6 5.6 6.0 6.1 5.8 4.5 4.8 5.3 5.6 4.7 5.0 5.5 

Light Vehicles 4.6 4.6 4.2 4.0 4.3 4.1 2.8 3.9 4.2 4.8 3.8 4.4 4.5 

Other 3.8 4.0 3.8 3.6 3.7 3.7 3.2 3.5 3.9 4.5 4.2 4.3 4.3 

Private Nonres. Structures 2.8 2.8 3.0 2.0 2.3 2.6 2.0 0.8 0.8 1.5 1.9 1.9 1.8 

Buildings and Other 3.2 3.2 3.5 2.2 2.5 2.9 2.3 0.9 0.9 1.6 2.2 2.0 1.9 

Residential Fixed Investment 1.5 1.7 1.4 1.0 1.5 1.4 0.2 1.6 1.1 2.2 1.2 1.9 2.0 

Exports 7.6 7.6 7.6 7.5 7.5 7.6 7.5 7.5 7.5 7.6 7.6 7.6 7.6 

Imports 6.5 6.7 6.8 6.8 7.0 7.1 6.6 6.8 6.9 7.4 7.2 7.4 7.5 

Federal Government 1.0 1.0 1.0 1.0 1.0 1.9 0.2 0.9 1.1 1.1 1.1 1.1 1.2 

State and Local Governments 1.8 1.9 1.9 1.9 1.8 1.9 1.8 1.8 1.8 1.8 1.8 1.9 1.8 

Billions of Dollars 

Real GDP (Chained 1996 $) 14497.0 14982.6 15472.0 15955.3 16457.7 16952.7 17404.5 17884.0 18393.1 18945.6 19497.8 20091.0 20707.6 

Gross Domestic Product 21465.4 22831.1 24290.8 25819.3 27444.1 29145.8 30839.9 32679.3 34638.8 36797.4 39063.7 41540.2 44187.4 

Prices and Wages (Annual percent change) 

GDP Price Index (Chain-Wt.) 2.8 2.9 3.0 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.2 3.2 3.2 

CPI - All Urban Consumers 3.1 3.3 3.4 3.5 3.5 3.5 3.5 3.6 3.6 3.6 3.7 3.7 3.8 

Excl. Food & Energy 3.2 3.4 3.5 3.6 3.6 3.7 3.7 3.7 3.7 3.8 3.8 3.9 3.9 

Producer Price Index - Fin. Gds. 1.8 1.9 2.0 2.0 2.0 2.1 2.0 2.0 2.0 2.1 2.1 2.1 2.2 

Emp. Cost Index - Total Comp. 4.5 4.7 4.7 4.7 4.6 4.7 4.5 4.6 4.4 4.5 4.4 4.5 4.4 

Output per Hour 2.6 2.5 2.7 2.8 2.6 2.4 2.3 2.2 2.4 2.1 2.3 2.3 2.4 

Other Key Measures 

Industrial Production (% ch) 3.5 3.4 3.4 3.5 3.5 3.3 3.1 3.0 3.0 3.1 3.1 3.2 3.2 

Nonfarm Inven. Accumulation 

(Billion chained 1996 $) 58.1 61.5 60.5 60.3 63.2 63.1 58.8 62.1 66.4 72.8 71.7 76.9 79.7 

Consumer Confidence Index 91.2 91.3 90.0 88.4 88.3 87.8 86.7 86.7 86.6 87.7 87.2 87.8 87.4 

Housing Starts (Mil. units) 1.6 1.6 1.6 1.6 1.6 1.6 1.6 1.6 1.6 1.7 1.7 1.7 1.7 

Light-Vehicle Sales (Mil. units) 19.5 19.9 20.1 20.1 20.3 20.4 20.0 20.2 20.3 20.8 20.8 21.1 21.3 

Unemployment Rate (%) 4.6 4.5 4.6 4.8 5.0 5.0 5.1 5.1 5.2 5.1 5.1 5.0 5.1 

Payroll Employment (% ch.) 1.0 1.1 0.9 0.7 0.8 0.9 0.7 0.8 0.7 1.1 0.9 0.9 0.9 

Federal Budget Surplus 

(Unified, CY, bil. $) 90.2 66.8 38.5 -3.5 -48.2 -58.2 -63.6 -66.6 -147.7 -230.1 -336.1 -436.8 -530.9 

Foreign Trade 

Curr. Account Balance (Bil. $) -770.5 -833.3 -873.4 -917.2 -972.6 -1054.9 -1083.0 -1119.2 -1176.8 -1292.1 -1372.0 -1465.0 -1568.2 

Foreign Crude Oil ($ per barrel) 33.3 34.6 35.9 37.5 39.2 41.0 43.1 45.3 47.7 50.2 53.1 56.1 59.3 

Financial Markets 

Money Supply (M2, billion $) 10925.3 11483.7 12087.8 12738.9 13438.5 14158.6 14915.3 15723.3 16586.0 17473.6 18412.9 19423.1 20509.1 

Percent Change 5.3 5.1 5.3 5.4 5.5 5.4 5.3 5.4 5.5 5.4 5.4 5.5 5.6 

Thirty-Year Mortgage Rate (%) 8.0 8.5 8.5 8.6 8.7 9.1 9.2 9.3 9.3 9.7 9.8 9.9 10.0 

Ten-Year Treasury Note Yield (%) 6.9 7.3 7.3 7.4 7.5 7.8 7.9 8.0 8.0 8.4 8.5 8.6 8.6 

Treasury Bill Rate (%) 5.2 5.6 5.6 5.7 5.7 6.0 6.1 6.1 6.1 6.5 6.6 6.6 6.6 

Federal Funds Rate (%) 5.5 6.0 6.0 6.0 6.0 6.4 6.5 6.5 6.5 6.9 7.0 7.0 7.0 

Prime Rate (%) 8.5 9.0 9.0 9.0 9.0 9.4 9.5 9.5 9.5 9.9 10.0 10.0 10.0 

S&P 500 Stock Index 2526.4 2685.6 2854.9 3034.8 3226.1 3429.4 3645.6 3875.3 4119.2 4378.3 4653.7 4946.1 5256.8 

Incomes 

Personal Income (% ch) 6.3 6.6 6.6 6.5 6.5 6.6 6.3 6.4 6.3 6.6 6.5 6.7 6.7 

Real Disposable Income (% ch) 3.3 3.4 3.2 3.1 3.1 2.8 2.4 2.5 2.7 3.0 2.9 2.9 2.9 

Saving Rate (%) 1.8 2.0 2.0 1.9 1.8 1.6 1.4 1.1 0.9 0.8 0.6 0.4 0.1 

Profits After Tax (% chya) 8.3 5.1 8.4 8.2 7.5 2.9 3.6 4.2 5.4 1.8 3.4 4.9 5.7 
THE FOUR SCENARIOS: THE TREND PROJECTION

25-Year Focus, Winter 2002 21

TABLE 2 

Supply Conditions--TREND25YR0202 

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 

–––– –––– –––– –––– –––– –––– –––– –––– –––– –––– –––– –––– ––––

Percent Change 

Unsmoothed Potential Output 3.0 2.9 2.9 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 

Components 

Labor Hours 0.6 0.8 0.9 0.8 0.9 0.8 0.7 0.7 0.6 0.7 0.6 0.6 0.6 

Capital Stock 1.4 0.8 0.9 1.1 1.2 1.3 1.3 1.3 1.4 1.4 1.5 1.5 1.5 

Energy Usage -0.1 0.3 0.2 0.1 0.1 0.1 0.1 0.2 0.2 0.2 0.2 0.1 0.1 

Research and Development Stock 0.3 0.3 0.2 0.2 0.1 0.2 0.2 0.2 0.3 0.3 0.3 0.3 0.3 

Stock of Infrastructure Capital 0.0 0.1 0.1 0.1 0.1 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 

Smoothed Potential Output 3.2 3.0 2.9 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 

Productivity 

Labor Output per Hour 2.8 3.4 2.4 2.3 2.3 2.3 2.4 2.4 2.4 2.3 2.9 2.6 2.4 

Percent 

Industrial Supply Conditions 

Vendor Performance 50.2 52.9 53.6 52.7 52.0 51.8 52.2 52.4 52.9 52.6 52.2 51.9 51.7 

Factory Operating Rate 0.7 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 

Labor Availability 

Civilian Unemployment Rate 6.0 5.8 5.1 5.0 5.1 5.1 5.0 4.8 4.4 4.2 4.5 4.6 4.6 

Full-Employment Unemployment Rate 5.1 5.1 5.0 5.0 4.9 4.8 4.7 4.7 4.6 4.5 4.5 4.5 4.5 

Finance 

Net Mortgage Acquisitions (% change)-28.4 -10.9 -6.9 0.2 2.9 7.3 11.3 10.1 9.0 9.1 1.5 -1.4 1.7 

Nominal Corp. Cost of Financial Capital 4.9 4.9 5.0 5.1 5.1 5.1 5.1 5.1 5.1 5.1 5.3 5.4 5.5 

Real Cost of Financial Capital 3.8 3.8 3.8 3.9 3.9 3.8 3.8 3.8 3.7 3.7 3.9 3.9 4.0 

Personal Saving Rate 1.9 1.8 2.0 1.8 1.3 1.0 1.0 1.1 1.2 1.3 1.5 1.5 1.6 

Money Supply (M2, % change) 7.6 5.4 4.7 4.7 4.7 4.8 4.8 4.9 5.0 5.1 4.9 5.0 5.2 
THE FOUR SCENARIOS: THE TREND PROJECTION

22 DRI•WEFA The U.S. Economy

TABLE 2 (Continued) 

Supply Conditions--TREND25YR0202 

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 

–––– –––– –––– –––– –––– –––– –––– –––– –––– –––– –––– –––– ––––

Percent Change 

Unsmoothed Potential Output 2.9 2.9 2.8 2.7 2.7 2.5 2.5 2.4 2.4 2.4 2.4 2.4 2.3 

Components 

Labor Hours 0.5 0.5 0.4 0.4 0.3 0.2 0.3 0.3 0.3 0.3 0.3 0.3 0.3 

Capital Stock 1.5 1.5 1.5 1.4 1.4 1.3 1.2 1.2 1.1 1.1 1.1 1.1 1.1 

Energy Usage 0.2 0.2 0.2 0.2 0.2 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 

Research and Development Stock 0.3 0.3 0.2 0.2 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 

Stock of Infrastructure Capital 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 

Smoothed Potential Output 3.0 2.9 2.9 2.8 2.7 2.6 2.5 2.4 2.4 2.4 2.4 2.4 2.3 

Productivity 

Labor Output per Hour 2.6 2.5 2.7 2.8 2.6 2.4 2.3 2.2 2.4 2.1 2.3 2.3 2.4 

Percent 

Industrial Supply Conditions 

Vendor Performance 51.6 51.7 51.5 51.3 51.4 51.1 50.5 50.6 50.8 51.1 51.1 51.5 51.7 

Factory Operating Rate 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 

Labor Availability 

Civilian Unemployment Rate 4.6 4.5 4.6 4.8 5.0 5.0 5.1 5.1 5.2 5.1 5.1 5.0 5.1 

Full-Employment Unemployment Rate 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 

Finance 

Net Mortgage Acquisitions (% change) 4.4 3.0 5.2 5.4 5.7 2.8 -0.4 1.3 0.8 1.5 1.7 4.9 5.5 

Nominal Corp. Cost of Financial Capital 5.6 5.8 5.9 6.0 6.0 6.2 6.2 6.2 6.3 6.4 6.4 6.5 6.5 

Real Cost of Financial Capital 4.1 4.2 4.2 4.3 4.3 4.4 4.4 4.3 4.3 4.3 4.3 4.3 4.3 

Personal Saving Rate 1.8 2.0 2.0 1.9 1.8 1.6 1.4 1.1 0.9 0.8 0.6 0.4 0.1 

Money Supply (M2, % change) 5.3 5.1 5.3 5.4 5.5 5.4 5.3 5.4 5.5 5.4 5.4 5.5 5.6 
THE FOUR SCENARIOS: THE OPTIMISTIC AND PESSIMISTIC PROJECTIONS

25-Year Focus, Winter 2002 35

A RANGE OF POSSIBILITIES: THE

OPTIMISTIC AND PESSIMISTIC

PROJECTIONS

Highlights

• Real GDP advances 3.7% per year on average 

over the next 25 years in the optimistic scenario 

(optim). This is above the 3.2% growth rate 

recorded between 1975 and 2001, and higher 

than the projected averages of 3.1% in the baseline (trend) and 2.7% in the pessimistic scenario (pessim).

• Despite optim's strong growth, inflation as 

measured by the GDP deflator averages a moderate 2.2%. This compares with the averages of 

2.6% in the trend and 3.3 % in pessim.

• In optim, the federal budget remains in surplus 

throughout the forecast period; in pessim, deficits start appearing in 2001.

• In optim, capital formation is strong through 

2018, with business fixed investment soaring 

beyond 15.0% of GDP. Investment’s share of 

GDP then declines slowly but steadily, ending 

at 13.5% by 2027. 

• Output per man-hour rises 2.7% in optim, 2.5% 

in trend, and 2.1% in pessim. 

The optimistic scenario is characterized by strong GDP 

growth and moderate inflation, with higher rates of 

growth in capital spending and factor-productivity relative to the trend. The pessimistic alternative (which 

encompasses opposite assumptions on labor force, capital stock, and factor productivity) exhibits higher inflation than optim, partly because of escalating energy 

prices.

In the optimistic case, real GDP growth averages 3.7% 

annually, which is above the 3.2% gains achieved during 1975-2001 (Exhibit 1). Consumer price inflation, on 

the other hand, averages only 2.2%, well below the previous 25-year rate of 4.8%. The high-growth, low-inflation environment depicted here is especially favorable 

to durable-goods spending categories such as business 

fixed investment, housing construction, and motor vehicles. In contrast, the low-growth environment of the 

pessimistic projection debilitates these same sectors. 

For example, in optim, business investment in equipment and software is 11% higher than its trend level by 

2027, while in pessim it is 10% lower.

Projection Detail

Participation Rates and the Labor Force. These two 

scenarios incorporate different demographic assumptions from those in the trend, leading to varying laborforce growth and participation rates. The optimistic outlook assumes that the U.S. population will grow more 

quickly because of higher net immigration. The pessimistic alternative constricts growth in the labor force, 

the result of lower assumed net immigration. As a 

result, the U.S. population increases from 273 million in 

1999 to 392 million by 2027 in the optim, but to just 311 

million in the pessim, compared with the 344 million in 

the trend. Annual population growth averages 1.3% in 

optim, but only 0.5% in pessim.

Thus, by 2027, the adult population (aged 16 and over) 

is roughly 11% higher in optim than in the trend, while 

it is 7% lower in pessim. These results directly affect the 

-2

0

2

4

6

8

1962 1972 1982 1992 2002 2012 2022

Trend Optimistic Pessimistic

EXHIBIT 1

Output Growth Will Weaken

(Real GDP, annual percent change)
THE FOUR SCENARIOS: THE OPTIMISTIC AND PESSIMISTIC PROJECTIONS

36 DRI•WEFA The U.S. Economy

labor force. By 2027, the civilian labor force is 9% 

higher in optim and 4% lower in pessim relative to the 

trend. Labor-force growth averages 1.0% in optim and 

0.5% in pessim over the next 25 years, compared with 

the 0.7% annual gains in the trend.

Potential Output. Over the longer term, the economy’s 

actual growth is constrained by the expansion of potential output. The optimistic scenario, with its above-trend 

supply factors, yields average potential output growth of 

3.7% per year through 2027. In the pessimistic scenario, 

with its slower labor-force and capital-stock growth, 

potential production is limited to 2.3% gains over the 

forecast interval (Exhibit 4).

Inflation. The subdued inflation in the optimistic scenario depends on relatively low energy prices and moderate wage increases. When combined with faster 

productivity growth, consumer price inflation averages 

55

57

59

61

63

65

67

69

1962 1972 1982 1992 2002 2012 2022

Trend Optimistic Pessimistic

EXHIBIT 2

Labor-Force Participation Rates Retreat 

After 2010

(Percent)

EXHIBIT 3

Bandwith Projections at a Glance

(Percent difference from trend in 2027)

2027

––––––––––––––

Optim Pessim Spread

––––– ––––– –––––

Real GDP Growth 4.6 3.7 0.9

CPI Inflation -0.5 2.7 -3.2

Real GDP 3.7 2.7 1.0

 Consumption 3.6 2.6 1.0

 Motor Vehicles 3.4 0.7 2.7

 Nonresidential Fixed Investment 5.7 4.6 1.1

 Residential Fixed Investment 2.9 -0.3 3.2

 Exports 7.0 6.6 0.4

 Imports 6.1 5.7 0.4

 Total Government 1.8 1.4 0.4

Chain-Wt. Implicit GDP Deflator 2.1 3.3 -1.2

Output per Hour 2.7 2.1 0.6

Real Short-Term Interest Rates (Basis pts.) 0.0 0.0 0.0

Federal Funds Rate (Basis pts.) 0.9 3.5 -2.5

Unemployment Rate (% pts.) 0.2 0.4 -0.2

Foreign Cude Oil ($/barrel) 31.2 74.2 -43.1

Real After-Tax Profits 4.5 0.8 3.7

Real Disposable Income 3.5 2.7 0.8

Population 1.3 0.4 0.9

Real Disposable Income Per Capita 2.1 2.3 -0.1

Light Vehicle Sales (Mil. Units) 294.3 35.7 258.6

Housing Starts (Mil. Units) 1.5 -0.7 2.2

Note: All data represent compound annual growth rates calculated over the 

entire foreast period, except where units are given.

Data accompanied by units represents the absolute change over the forecast 

period. All real data are in chained 1996 dollars.

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

1965 1975 1985 1995 2005 2015 2025

Trend Optimistic Pessimistic

EXHIBIT 4

Actual Output Growth Will Be Constrained by 

Slower Potential Output Gains

(Potential output, percent change)

0

2

4

6

8

10

12

14

1962 1972 1982 1992 2002 2012 2022

Trend Optimistic Pessimistic

EXHIBIT 5

Consumer Price Inflation

(Percent)
THE FOUR SCENARIOS: THE OPTIMISTIC AND PESSIMISTIC PROJECTIONS

25-Year Focus, Winter 2002 37

only 2.5% per year through 2027, compared with 3.0% 

in the trend and 4.5% over the past 25 years (Exhibit 5).

In the pessimistic case, inflation is fanned by higher 

crude oil prices. Thus, although the GDP deflator 

recedes to less than 3.0% early in the forecast period, it 

then reaccelerates to over 5.0% in 2027. Rising energy 

prices, wages, and import prices combine to push consumer price inflation up to nearly 6.0% annually in 

2027. Consumer price inflation averages 3.7% per year 

through 2027, compared with 3.0% in the trend.

Financial Conditions. The federal funds rate averages 

6.7% in pessim and 4.9% in optim, just below as in the 

trend (Exhibit 6). The rate would be higher in pessim, 

but the Federal Reserve compromises between fighting 

the inflationary forces of rising oil prices and pushing 

the economy into recession. At the long end of the 

maturity spectrum, the 10-year government bond yield 

rises to 8.6% in optim and 11.8% in pessim. The steeper 

yield curve in pessim reflects mounting concerns about 

the inflationary outlook, given the Fed’s accommodative monetary policy and accelerating inflation.

Consumer Spending and Income. Real consumer 

spending averages 3.6% annual growth in optim, 0.6 

percentage point above the trend rate. Real per capita 

consumption expands an average of 2.3%, compared 

with its 2.4% annual rate since 1970. 

Income-sensitive durable goods are affected the most 

(Exhibit 7). Spending on consumer durables rises an 

average 5.1% per year in optim, 1.0 percentage point 

stronger than the trend growth rate; in pessim, growth in 

the same spending category averages just 3.3%. In the 

optimistic scenario, light-vehicle sales average 21.3 

million units per year, pushing the stock of cars and 

light trucks 15% above its trend level by 2027.

Real personal income averages 3.4% annual gains in 

optim, up from 2.9% in the trend. Income grows only 

2.6% per year in pessim. Interest income in pessim is 

bolstered by higher interest rates and larger federal deficits.

Housing. Since the demographic forces of population 

growth and household formation are the main long-term 

determinants of new residential construction, we would 

expect the housing outlook to be weaker in pessim and 

stronger in optim relative to the trend. In fact, the disparity between interest rates in the two bandwidth alternatives drives their respective housing outlooks even 

further apart. The conventional mortgage rate averages 

7.91% in optim, below its 9.77% average in pessim and 

8.27% average in the trend.

0

2

4

6

8

10

12

14

16

18

1962 1972 1982 1992 2002 2012 2022

Trend Optimistic Pessimistic

EXHIBIT 6

The Federal Funds Rate

(Percent)

EXHIBIT 7 

Personal Consumption 

(Average annual percent change)

History Optim Pessim

–––––––––– –––––––––– –––––––

 1976 1986 2002 2008 2002 2008

-1986 -2001 -2007 -2027 -2007 -2027

–––– –––– –––– –––– –––– ––––

Total Personal Consumption 3.5 3.3 3.4 3.7 2.4 2.7

 Durable Goods 5.7 5.3 4.2 5.4 2.5 3.5

 Autos & Parts 6.5 2.6 1.7 3.9 0.3 0.7

 Furniture & Appliances 5.6 8.5 7.2 6.7 4.6 5.4

 Software N/A 45.7 11.6 6.9 10.1 6.6

 Ophthalmic Goods 4.5 5.6 2.3 5.5 2.0 6.7

 Other Durable Goods 4.1 5.7 4.7 6.1 3.4 4.8

 Nondurable Goods 2.6 2.9 3.2 3.8 2.4 2.9

 Food & Beverages 2.0 2.1 2.1 2.5 1.5 1.9

 Prescription & 

 Over-the-Counter Drugs 4.3 5.4 4.5 6.6 4.0 5.9

 Clothing & Shoes 5.6 4.9 5.3 4.9 3.8 3.7

 Gasoline & Oil 1.2 1.8 2.6 2.4 2.0 1.2

 Fuel Oil & Coal -4.8 0.0 1.6 -0.1 0.9 -1.1

 Tobacco Products -0.3 -2.3 -0.5 -1.4 -0.7 -4.0

 Othe Nondurable Goods 3.8 4.3 4.9 4.8 4.1 4.0

 Services 3.6 3.2 3.3 3.4 2.4 2.5

 Housing 2.9 2.2 2.4 2.0 1.5 0.6

 Household Operation 3.0 3.6 4.0 4.9 2.9 4.3

 Electricity 3.5 2.3 3.3 2.9 2.5 2.0

 Natural Gas -0.4 0.6 1.8 1.7 0.9 0.8

 Telephony 5.5 7.6 7.0 8.3 5.4 7.4

 Other 2.0 2.2 2.1 2.8 1.1 2.9

 Transportation 3.3 3.4 2.9 1.8 2.1 1.6

 Motor Vehicle Leases N/A N/A 3.8 3.1 2.0 6.0

 Other Transportation N/A N/A 2.8 1.6 2.1 0.9

 Personal Business Services 5.3 4.0 3.9 3.1 2.6 2.0

 "Free" Financial Services 6.5 3.8 4.4 2.4 3.4 1.4

 Medical 3.9 3.0 3.4 3.9 2.7 3.4

 Recreational 6.0 4.9 6.3 5.1 5.3 3.8

 Other Services 3.4 3.3 2.4 3.4 0.9 2.2

Note: All real data are in chained 1996 dollars.
THE FOUR SCENARIOS: THE OPTIMISTIC AND PESSIMISTIC PROJECTIONS

38 DRI•WEFA The U.S. Economy

Housing starts average slightly more than 2.42 million 

units per year (or 795,000 units above trend) in optim 

and 1.08 million (or 539,000 below trend) in pessim 

(Exhibit 8). By 2027, the housing stock in optim is 12% 

above the trend level, while in pessim it stands 8% 

below. Because of the gloomier inflation picture in 

pessim, the slower economy pushes the average nominal price of a new home to only $608,600 in 2027, compared with $478,000 in the trend and $410,000 in the 

optimistic alternative.

Business Fixed Investment. The extremely volatile 

investment sector reacts strongly to the differing 

assumptions in the alternatives. Business investment 

suffers long-term damage in pessim, as weak final 

demand and higher interest rates raise the cost of capital, lower the rate of return on investments, and weaken 

investor confidence (Exhibit 9). The economy’s overall 

sluggishness also hurts the profitability of corporations, 

limiting the funds available for investment. Thus, real 

investment in equipment and software grows only 5.8% 

annually in the pessimistic case, compared with 6.2% in 

the trend and 6.7% in the optimistic scenario.

Corporations may choose from several options to 

finance plant and equipment expansion. The type of 

inflationary environment in which they operate is likely 

to influence whether they finance by issuing stocks or 

bonds, selling short-term commercial paper or obtaining 

bank loans, or using internally generated funds. The 

higher inflation in the pessimistic environment encourages firms to rely more heavily on relatively scarce 

internal funds to finance investment— avoiding the payouts associated with stocks, bonds, and bank loans. In 

addition, high inflation depresses the real value of 

depreciation allowances, constraining corporate cash 

flow and, subsequently, business fixed investment.

Government. The taxation policy assumptions in the 

two bandwidth scenarios are similar to those in the 

trend. The government expenditure assumptions are different, however, largely reflecting the different growth 

paths and demographic assumptions of the optim and 

pessim projections. In pessim, a weaker economy leads 

to a higher ratio of federal spending to GDP. Higher 

interest rates on past debt and larger operating deficits 

0.5

1.0

1.5

2.0

2.5

3.0

3.5

1962 1972 1982 1992 2002 2012 2022

Trend Optimistic Pessimistic

EXHIBIT 8

Demographics and Interest Rates Determine the 

Housing Outlook

(Housing starts, millions of units)

9

10

11

12

13

14

15

1962 1972 1982 1992 2002 2012 2022

Trend Optimistic Pessimistic

EXHIBIT 9

Business Fixed Investment

(Percent of GDP)

EXHIBIT 10 

Saving and Investment Shares of GNP

(Percent)

History Optim Pessim

–––––––––– –––––––––– –––––––

 1976 1986 2002 2008 2002 2008

-1986 -2001 -2007 -2027 -2007 -2027

–––– –––– –––– –––– –––– ––––

Household 10.4 7.4 4.4 2.9 4.7 5.5

Business 9.1 9.2 9.8 11.5 9.6 10.7

Government -3.5 -2.5 -0.4 -0.3 -1.6 -4.0

Total Saving 16.0 14.0 13.8 14.0 12.7 12.3

Total Investment 16.7 13.9 12.4 13.3 11.2 11.5

Gross Private Investment 17.0 15.8 17.1 17.8 15.6 15.9

 Nonresidential Fixed Investment12.0 11.3 12.1 13.8 11.6 13.1

 Residential 4.4 4.1 4.6 3.7 3.8 2.6

 Change in Inventories 0.5 0.4 0.4 0.3 0.3 0.3

Net Foreign Investment -0.4 -1.9 -4.8 -4.5 -4.4 -4.4

Statistical Discrepancy 0.9 0.0 -1.3 -0.8 -1.4 -0.8
THE FOUR SCENARIOS: THE OPTIMISTIC AND PESSIMISTIC PROJECTIONS

25-Year Focus, Winter 2002 39

boost federal interest payments, exacerbating the persistent shortfalls.

Federal government outlays as a share of GDP average 

117.5% in optim and 18.5% in the trend. They are 

higher, at 20.6% of GDP, in pessim because of the 

slower economy and the need to make larger transfer 

payments. The federal budget averages an annual deficit 

of $6.2 billion in the trend projection and a surplus of 

$34.6 billion in the optimistic scenario, but averages a 

deficit of $202 billion in pessim.

Unlike the federal government, state and local governments must maintain budgets close to balance. Therefore, their spending is tied closely to available revenue, 

which is created by economic activity within their 

regions. Increases in state and local government purchases average 2.1% in optim, 1.7% in trend, and 1.5% 

in pessim. 

International. The world is assumed to become more 

open to trade in all the scenarios, but it opens up most 

quickly in the optimistic alternative and most slowly in 

the pessimistic projection. In the optimistic outlook, the 

nation’s major trading partners are also assumed to 

experience strong output growth and low inflation, 

although the relative performance of the United States 

improves slightly when compared with the trend. Real 

export growth averages 7.0% per year in optim, versus 

0.75

0.85

0.95

1.05

1.15

1.25

1975 1985 1995 2005 2015 2025

Trend Optimistic Pessimistic

EXHIBIT 13

The Dollar’s Real Trade-Wtd Exchange Rate

(Versus developed-country currencies)

-2500

-2000

-1500

-1000

-500

0

1962 1972 1982 1992 2002 2012 2022

Trend Optimistic Pessimistic

EXHIBIT 11

Federal Budget Paths Diverge in the Bandwidth 

Scenarios

(Billions of dollars)

7

8

9

10

11

12

13

14

1962 1972 1982 1992 2002 2012 2022

Trend Optimistic Pessimistic

EXHIBIT 12

Corporate Cash Flow as a Percent of GNP

3

4

5

6

7

8

9

10

1962 1972 1982 1992 2002 2012 2022

Trend Optimistic Pessimistic

EXHIBIT 14

Unemployment Varies Only Slightly Across the 

Bandwidth Alternatives

(Percent)
THE FOUR SCENARIOS: THE OPTIMISTIC AND PESSIMISTIC PROJECTIONS

40 DRI•WEFA The U.S. Economy

6.9% in the trend; real import growth averages 6.1% 

annually in optim, versus 5.8% in the trend.

Industrial Production and Employment. In the pessimistic scenario, the index of industrial production is 

13% below the pessim level by 2027. Total nonfarm 

employment is 4% lower, consistent with the laborforce participation projections. The pattern of employment losses by industry reflects output differences from 

trend levels, as well as productivity losses in individual 

industries. 

Over the projection period, total payroll employment 

rises by 39.8 million in the trend, 52.8 million in optim, 

and 32.3 million in pessim; the last 25 years saw total 

payrolls increase by about 54 million workers. Total 

employment in the optimistic scenario is 7.6% above its 

trend level by 2027. Manufacturing employment falls 

from 18.5 million in 2000 to 17.8 million in 2027. In 

pessim, manufacturing payrolls decline to 14.7 million.

Energy. The optimistic scenario assumes that energy 

availability is greater than in the trend, facilitating stronger economic growth by the United States and its major 

trading partners. Total U.S. energy usage is boosted to 

167 quadrillion British thermal units (quads) by 2027 in 

this scenario, compared with 143 quads in the trend.

EIn the long run, production costs determine energy 

prices. Technological improvements lower production 

costs, but drilling deeper holes raises them. In all three 

scenarios, higher drilling costs win out: in both optim 

and trend, the real oil price rises to $28 per barrel by the 

end of the projection period (Exhibit 17). Energy-efficiency gains are made in all scenarios, but lower fuel 

prices hinder such developments in optim.

EXHIBIT 15 

Production Growth by Industry

(Average annual percent change)

History Optim Pessim

–––––––––– –––––––––– –––––––

 1976 1986 2002 2008 2002 2008

-1986 -2001 -2007 -2027 -2007 -2027

–––– –––– –––– –––– –––– ––––

High

Electrical Machinery 7.0 14.1 10.7 10.3 10.4 9.5

Non-Electrical Machinery 3.6 7.5 7.4 5.7 6.2 4.3

Rubber and Plastics Products 4.2 4.3 3.1 5.0 1.0 2.3

Utilities 1.3 2.1 2.7 3.2 1.5 2.1

Fabricated Metal Products 0.5 2.2 1.1 2.5 -0.8 1.2

Chemicals and Products 1.8 2.9 3.4 4.9 1.7 1.9

Medium

Transportation Equipment 2.2 3.1 3.8 2.8 2.5 1.3

Instruments 5.3 2.2 3.3 3.3 2.0 2.2

Paper and Products 2.2 2.0 2.4 2.7 1.1 0.8

Textile Mill Products 1.4 0.7 3.0 1.6 0.9 0.1

Miscellaneous Manufactures 0.7 2.5 0.7 2.7 -0.9 1.2

Primary Metals -2.7 1.9 0.5 3.9 -2.0 -0.3

Stone, Clay and Glass 0.7 2.0 2.9 1.4 -0.9 -0.6

Furniture and Fixtures 2.4 3.0 3.2 1.8 0.3 -0.3

Petroleum Products 0.1 1.7 1.8 1.3 0.9 0.3

Low

Food and Products 2.4 1.8 1.1 1.1 0.5 0.7

Mining 1.1 -0.8 0.3 1.0 -0.2 0.5

Lumber and Wood Products 2.0 1.7 2.6 2.1 -2.6 -1.7

Printing and Publishing 3.9 1.5 -0.1 1.2 -1.3 0.2

Tobacco Products 0.2 -0.4 -0.8 -0.5 -0.9 -4.1

Apparel and Products 1.9 -0.7 -2.8 -2.7 -4.2 -2.9

Leather and Products -3.7 -4.3 -8.0 -0.6 -8.0 -1.1

Summary

Total Production 2.2 3.4 2.4 3.2 1.4 2.1

Manufacturing 2.4 3.8 2.5 3.3 1.5 2.1

 Durables Manufacturing 2.6 5.4 3.1 4.0 2.3 3.6

 Nondurables Manufacturing 2.2 1.9 1.7 2.8 0.4 0.6

Final Products 2.7 2.9 3.4 3.5 2.1 2.0

 Consumer Goods 2.1 2.2 2.4 2.9 1.1 1.0

 Business Equipment 2.8 5.8 5.2 5.1 3.9 4.0

 Defense Equipment 5.1 -1.0 3.4 -0.6 3.4 -0.6

Intermediate Products 2.2 2.5 1.6 2.2 -0.5 0.6

Materials 1.7 4.3 8.1 10.2 7.6 9.2

Note: Industries are ranked according to their average annual growth rates in 

the trend scenario for the entire forecast period.

EXHIBIT 16 

Contribution to New Jobs

(Cumulative percent change)

History Optim Pessim

–––––––––– –––––––––– –––––––

 1976 1986 2002 2008 2002 2008

-1986 -2001 -2007 -2027 -2007 -2027

–––– –––– –––– –––– –––– ––––

Manufacturing 4.5 -2.3 -1.8 -4.6 -19.0 -17.4

Mining and Construction 6.4 4.8 9.8 10.8 -10.6 -7.9

Government 8.4 12.4 8.7 15.5 11.5 10.5

Private Services 80.6 85.0 83.2 78.3 118.2 114.8

Total New Jobs (Millions) 20.4 34.4 11.6 25.9 5.8 13.8

0

20

40

60

80

100

1977 1987 1997 2007 2017 2027

Trend Optimistic Pessimistic

EXHIBIT 17

Foreign Oil Prices Rise

(Average refiners’ acquisition price of imported oil, 

dollars/barrel)
THE FOUR SCENARIOS: THE OPTIMISTIC AND PESSIMISTIC PROJECTIONS

25-Year Focus, Winter 2002 41

TABLE 1 

Summary for the U.S. Economy - Optimistic Outlook 

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 

–––– –––– –––– –––– –––– –––– –––– –––– –––– –––– –––– –––– ––––

Composition of Real GDP (Annual percent change) 

Gross Domestic Product 1.5 5.0 4.3 3.7 3.5 3.5 3.9 4.1 4.2 3.8 3.6 3.9 3.9 

Final Sales 0.7 4.7 4.3 3.8 3.5 3.5 3.9 4.0 4.2 3.8 3.6 3.9 3.9 

Gross National Product 1.7 4.6 4.1 3.7 3.4 3.4 3.8 4.0 4.1 3.7 3.7 3.8 3.8 

Total Consumption 2.2 4.1 3.8 3.5 3.4 3.3 3.8 4.0 4.1 3.9 3.9 3.7 3.7 

Durable Goods 0.7 8.0 4.8 3.5 4.2 4.3 4.3 5.5 5.9 5.1 3.9 4.9 5.3 

Nondurable Goods 2.1 3.6 3.7 3.4 3.1 3.0 3.4 3.7 3.8 3.7 3.7 3.7 3.6 

Services 2.5 3.6 3.7 3.6 3.4 3.3 3.8 3.9 3.8 3.8 3.9 3.5 3.4 

Nonres. Fixed Investment -3.9 9.5 9.4 6.8 5.6 6.2 6.9 7.0 7.4 6.5 6.6 7.1 6.6 

Equipment -1.7 10.2 10.8 7.8 6.4 6.7 7.7 8.1 8.2 7.7 7.6 8.1 7.9 

Computers 11.1 15.3 18.8 20.4 20.6 20.2 19.8 19.1 18.7 18.1 18.2 18.0 17.3 

Software 6.0 8.7 9.2 10.6 10.8 10.8 11.1 11.2 11.3 11.5 11.8 11.4 10.5 

Communications -8.5 12.7 14.0 9.3 8.9 7.0 7.0 7.7 7.8 6.5 6.4 7.6 7.0 

Light Vehicles -2.4 11.9 6.4 2.7 3.6 3.8 5.5 5.7 5.6 4.4 4.2 5.6 5.1 

Other -5.7 9.1 10.8 5.4 2.2 2.7 4.2 4.7 4.9 4.1 3.5 4.0 4.5 

Private Nonres. Structures -9.8 7.4 5.6 3.9 3.4 4.8 4.4 4.1 5.1 3.2 3.9 4.6 3.2 

Buildings and Other -8.2 10.7 6.2 4.6 4.2 4.8 5.4 5.4 6.2 3.6 4.3 5.3 3.6 

Residential Fixed Investment 5.0 10.6 0.4 3.3 1.4 2.1 3.3 3.3 4.6 2.6 -2.8 1.9 3.1 

Exports -8.7 7.6 9.7 8.1 8.3 7.9 7.3 7.1 6.7 6.4 6.7 7.5 8.1 

Imports 1.1 7.8 5.5 5.1 4.7 4.7 5.0 5.6 5.8 5.1 5.3 6.1 6.3 

Federal Government 4.5 4.7 2.3 1.0 0.6 0.5 0.7 0.8 1.2 -0.2 0.8 1.0 1.0 

State and Local Governments 2.1 2.3 2.2 2.3 2.0 1.8 1.7 1.8 2.0 1.6 1.7 2.0 2.1 

Billions of Dollars 

Real GDP (Chained 1996 $) 9468.5 9943.7 10368.1 10750.6 11128.8 11521.3 11973.1 12459.1 12978.9 13466.6 13955.6 14500.3 15060.7 

Gross Domestic Product 10496.9 11255.1 11983.9 12679.7 13384.5 14131.2 14969.1 15878.2 16878.9 17880.5 18920.5 20092.5 21359.5 

Prices and Wages (Annual percent change) 

GDP Price Index (Chain-Wt.) 1.3 2.1 2.1 2.0 2.0 2.0 1.9 1.9 2.0 2.1 2.1 2.2 2.4 

CPI - All Urban Consumers 1.5 2.6 2.5 2.4 2.3 2.2 2.1 2.1 2.2 2.2 2.3 2.5 2.6 

Excl. Food & Energy 2.5 2.7 2.6 2.5 2.4 2.4 2.3 2.2 2.3 2.3 2.4 2.6 2.7 

Producer Price Index - Fin. Gds. -1.3 1.1 1.4 1.3 1.0 0.9 0.9 0.9 1.0 1.1 1.1 1.3 1.5 

Emp. Cost Index - Total Comp. 3.3 3.0 3.1 3.1 3.3 3.4 3.5 3.5 3.7 3.9 4.1 4.1 4.3 

Output per Hour 2.9 3.8 2.2 2.6 2.6 2.6 2.8 2.6 2.4 2.6 3.2 3.0 2.7 

Other Key Measures 

Industrial Production (% ch) -0.6 8.8 5.9 4.6 4.3 4.3 5.2 5.5 5.4 4.8 4.6 5.0 4.6 

Nonfarm Inven. Accumulation 

(Billion chained 1996 $) 24.2 64.5 64.5 49.8 47.6 48.6 54.3 58.6 61.7 57.0 56.4 64.4 66.1 

Consumer Confidence Index 95.3 94.3 97.0 95.8 93.6 93.4 93.9 95.6 97.4 95.9 92.5 93.5 93.7 

Housing Starts (Mil. units) 1.831 1.964 2.019 2.085 2.082 2.118 2.164 2.225 2.321 2.309 2.175 2.235 2.297 

Light-Vehicle Sales (Mil. units) 15.7 17.4 17.8 17.7 18.0 18.3 18.5 18.9 19.4 19.7 19.8 20.3 21.1 

Unemployment Rate (%) 5.9 5.7 5.0 4.9 5.0 5.0 4.9 4.7 4.3 4.1 4.4 4.5 4.5 

Payroll Employment (% ch.) 0.0 2.1 2.6 1.9 1.5 1.4 1.5 1.7 1.9 1.3 0.7 1.1 1.3 

Federal Budget Surplus 

(Unified, FY, bil. $) 13.3 30.7 16.2 38.4 86.3 136.1 134.5 151.2 167.4 174.5 104.1 129.0 136.0 

Foreign Trade 

Curr. Account Balance (Bil. $) -468.6 -570.4 -607.6 -632.6 -654.8 -677.2 -710.7 -747.7 -799.6 -840.7 -883.8 -952.9 -1024.3 

Foreign Crude Oil ($ per barrel) 19.6 21.1 22.9 24.1 25.0 25.7 26.4 27.1 27.9 28.9 29.8 30.8 31.9 

Financial Markets 

Money Supply (M2, billion $) 5826.3 6153.9 6457.0 6778.4 7119.1 7481.2 7868.7 8283.5 8728.8 9203.8 9710.9 10251.9 10831.7 

Percent Change 7.7 5.6 4.9 5.0 5.0 5.1 5.2 5.3 5.4 5.4 5.5 5.6 5.7 

Thirty-Year Mortgage Rate (%) 7.0 7.4 7.4 7.3 7.3 7.5 7.5 7.5 7.6 7.7 7.7 7.8 7.9 

Ten-Year Treasury Note Yield (%) 5.3 5.8 5.9 5.9 6.0 6.2 6.4 6.5 6.6 6.6 6.7 6.8 7.0 

Treasury Bill Rate (%) 2.0 3.7 4.6 4.6 4.6 4.6 4.6 4.6 4.6 4.6 4.6 4.6 4.6 

Federal Funds Rate (%) 2.2 4.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 

Prime Rate (%) 5.2 7.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 

S&P 500 Stock Index 1164.6 1339.8 1479.7 1646.3 1789.7 1911.9 2049.9 2206.2 2314.6 2479.9 2803.9 2962.7 3099.2 

Incomes 

Personal Income (% ch) 2.9 6.3 6.3 5.4 5.3 5.3 5.7 5.9 6.2 6.1 5.8 6.0 6.2 

Real Disposable Income (% ch) 2.5 4.1 4.1 3.4 3.0 3.1 3.9 4.1 4.2 4.0 3.5 3.6 3.7 

Saving Rate (%) 2.0 1.9 2.1 1.9 1.4 1.1 1.2 1.3 1.4 1.5 1.2 1.1 1.2 

Profits After Tax (% chya) 10.0 14.0 1.4 3.2 5.5 4.9 8.6 7.0 6.8 7.2 9.8 9.2 8.5 
THE FOUR SCENARIOS: THE OPTIMISTIC AND PESSIMISTIC PROJECTIONS

42 DRI•WEFA The U.S. Economy

TABLE 1 (Continued) 

Summary for the U.S. Economy - Optimistic Outlook 

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 

–––– –––– –––– –––– –––– –––– –––– –––– –––– –––– –––– –––– ––––

Composition of Real GDP (Annual percent change) 

Gross Domestic Product 3.8 3.9 3.7 3.7 3.6 3.5 3.2 3.2 3.4 3.6 3.4 3.6 3.5 

Final Sales 3.8 3.9 3.7 3.7 3.6 3.5 3.2 3.2 3.4 3.6 3.4 3.5 3.5 

Gross National Product 3.8 3.9 3.7 3.6 3.6 3.6 3.3 3.3 3.4 3.6 3.5 3.6 3.6 

Total Consumption 3.7 3.7 3.6 3.7 3.7 3.6 3.3 3.3 3.5 3.8 3.6 3.7 3.8 

Durable Goods 5.3 5.9 4.8 4.8 5.5 5.9 4.3 5.0 5.5 7.3 5.8 6.3 6.3 

Nondurable Goods 3.7 3.8 3.7 3.8 3.8 3.8 3.6 3.6 3.8 3.9 3.9 4.0 4.1 

Services 3.4 3.3 3.4 3.4 3.4 3.2 3.0 2.9 3.1 3.2 3.2 3.2 3.3 

Nonres. Fixed Investment 6.3 6.6 5.7 5.5 5.4 5.0 4.8 4.1 4.5 5.1 4.9 4.9 5.0 

Equipment 7.5 7.3 6.7 6.4 6.1 5.8 5.4 5.2 5.4 5.8 5.6 5.7 5.7 

Computers 16.5 15.8 15.0 14.3 13.8 13.8 14.3 14.5 14.8 14.8 14.7 14.7 15.3 

Software 9.8 9.1 8.3 7.5 6.7 6.1 5.3 4.7 4.6 4.8 4.8 4.8 4.9 

Communications 6.5 6.8 6.2 6.3 6.2 5.9 5.4 4.9 4.9 5.5 5.2 5.2 5.1 

Light Vehicles 4.7 5.3 4.4 4.5 4.7 4.5 3.9 4.1 4.5 5.4 4.5 4.8 4.8 

Other 4.2 4.2 4.1 4.0 4.0 4.0 3.7 3.9 4.3 4.8 4.6 4.8 4.7 

Private Nonres. Structures 3.2 4.7 2.9 2.9 3.6 2.9 3.4 1.2 2.1 3.2 2.8 2.8 2.8 

Buildings and Other 3.6 5.4 3.3 3.2 4.0 3.2 3.8 1.3 2.4 3.6 3.1 3.1 3.1 

Residential Fixed Investment 2.9 3.6 2.2 1.8 2.5 2.9 2.1 2.8 2.5 4.2 2.9 2.9 2.5 

Exports 8.2 8.1 8.1 8.2 8.0 7.7 7.6 7.7 7.7 7.4 7.4 7.6 7.4 

Imports 6.5 6.7 6.4 6.6 7.0 7.2 6.5 6.5 7.0 7.6 7.1 7.1 7.5 

Federal Government 1.0 1.0 1.0 1.0 1.0 1.9 0.2 0.8 1.0 1.1 1.1 1.1 1.1 

State and Local Governments 2.2 2.4 2.2 2.2 2.2 2.2 2.3 2.1 2.2 2.3 2.3 2.3 2.4 

Billions of Dollars 

Real GDP (Chained 1996 $) 15634.2 16240.8 16840.3 17455.9 18091.7 18729.2 19331.6 19955.4 20630.3 21365.6 22098.0 22882.8 23687.1 

Gross Domestic Product 22707.3 24185.2 25703.0 27300.2 28970.2 30700.8 32415.6 34211.2 36118.7 38197.7 40318.7 42610.0 45013.4 

Prices and Wages (Annual percent change) 

GDP Price Index (Chain-Wt.) 2.4 2.5 2.5 2.5 2.4 2.4 2.3 2.2 2.1 2.1 2.1 2.1 2.1 

CPI - All Urban Consumers 2.7 2.8 2.9 2.9 2.8 2.7 2.7 2.7 2.6 2.6 2.5 2.5 2.5 

Excl. Food & Energy 2.8 3.0 3.0 3.0 2.9 2.9 2.8 2.8 2.7 2.7 2.6 2.7 2.6 

Producer Price Index - Fin. Gds. 1.4 1.5 1.5 1.5 1.3 1.3 1.3 1.2 1.0 1.0 1.0 1.0 1.0 

Emp. Cost Index - Total Comp. 4.3 4.4 4.5 4.4 4.2 4.2 4.0 4.0 3.7 3.8 3.7 3.7 3.6 

Output per Hour 2.7 2.6 3.0 3.2 3.0 2.6 2.4 2.4 2.7 2.4 2.5 2.5 2.5 

Other Key Measures 

Industrial Production (% ch) 4.2 4.3 4.0 4.2 4.1 4.0 3.8 3.6 3.6 3.5 3.2 3.2 3.1 

Nonfarm Inven. Accumulation 

(Billion chained 1996 $) 67.2 69.9 67.4 69.1 72.0 71.8 66.3 67.7 73.7 79.2 75.0 79.1 79.7 

Consumer Confidence Index 93.8 94.1 91.6 90.3 90.2 91.0 89.6 89.2 89.3 91.0 90.4 91.0 90.9 

Housing Starts (Mil. units) 2.358 2.433 2.449 2.479 2.536 2.622 2.659 2.734 2.799 2.927 2.986 3.056 3.094 

Light-Vehicle Sales (Mil. units) 21.8 22.5 22.8 22.9 23.3 23.7 23.7 23.9 24.2 25.1 25.5 26.0 26.5 

Unemployment Rate (%) 4.5 4.4 4.5 4.7 4.9 4.9 5.0 5.0 5.1 5.0 5.0 4.9 5.0 

Payroll Employment (% ch.) 1.3 1.5 1.0 0.8 1.0 1.2 1.1 1.0 0.9 1.3 1.1 1.2 1.3 

Federal Budget Surplus 

(Unified, FY, bil. $) 143.1 158.0 149.2 140.4 142.9 187.8 245.0 273.0 229.7 210.3 177.3 133.6 97.1 

Foreign Trade 

Curr. Account Balance (Bil. $) -1085.9 -1153.1 -1213.7 -1279.1 -1357.8 -1440.3 -1499.1 -1567.6 -1654.1 -1777.6 -1887.4 -2013.5 -2139.9 

Foreign Crude Oil ($ per barrel) 33.0 34.1 35.3 36.6 38.0 39.6 41.2 43.0 44.8 46.7 48.8 50.9 53.2 

Financial Markets 

Money Supply (M2, billion $) 11452.4 12119.0 12831.3 13591.3 14399.5 15256.5 16158.2 17106.1 18105.3 19160.3 20271.2 21442.6 22679.0 

Percent Change 5.7 5.8 5.9 5.9 5.9 6.0 5.9 5.9 5.8 5.8 5.8 5.8 5.8 

Thirty-Year Mortgage Rate (%) 8.0 8.1 8.1 8.2 8.2 8.3 8.3 8.4 8.4 8.5 8.5 8.6 8.6 

Ten-Year Treasury Note Yield (%) 7.0 7.1 7.2 7.2 7.3 7.3 7.3 7.3 7.3 7.4 7.4 7.4 7.5 

Treasury Bill Rate (%) 4.7 4.7 4.7 4.7 4.7 4.7 4.7 4.7 4.7 4.7 4.7 4.6 4.6 

Federal Funds Rate (%) 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 

Prime Rate (%) 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 

S&P 500 Stock Index 3284.0 3514.1 3776.2 4046.8 4305.9 4601.4 4873.6 5042.1 5333.2 5636.0 6009.3 6263.5 6507.4 

Incomes 

Personal Income (% ch) 6.3 6.6 6.3 6.2 6.2 6.2 5.9 5.8 5.7 5.9 5.8 5.9 5.9 

Real Disposable Income (% ch) 3.7 3.7 3.5 3.4 3.4 3.2 2.8 2.9 3.2 3.4 3.3 3.4 3.4 

Saving Rate (%) 1.2 1.3 1.2 1.0 0.7 0.3 -0.2 -0.5 -0.8 -1.1 -1.5 -1.8 -2.1 

Profits After Tax (% chya) 7.4 7.6 8.0 8.7 7.4 4.9 4.2 3.3 5.1 3.8 3.6 3.6 3.4 
THE FOUR SCENARIOS: THE OPTIMISTIC AND PESSIMISTIC PROJECTIONS

25-Year Focus, Winter 2002 43

TABLE 2 

U.S. Population - Optimistic Outlook 

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 

–––– –––– –––– –––– –––– –––– –––– –––– –––– –––– –––– –––– ––––

Millions of Persons 

Total Population 281.2 284.4 287.8 291.3 295.0 298.6 302.4 306.2 310.1 314.1 318.2 322.4 326.7 

Under 5 19.2 19.5 19.9 20.2 20.6 21.1 21.5 22.0 22.5 23.0 23.5 23.9 24.4 

5 to 15 43.5 43.4 43.5 43.7 43.9 44.2 44.5 44.3 44.1 45.1 46.3 47.0 47.9 

16 and Over 218.4 221.4 224.4 227.4 230.4 233.4 236.4 239.9 243.5 246.0 248.4 251.5 254.4 

16 to 21 25.0 25.5 25.8 26.2 26.5 26.7 26.9 27.6 28.4 27.8 27.0 26.9 26.8 

21 to 64 158.0 160.1 162.4 164.6 166.7 168.8 170.6 172.6 174.7 176.8 178.2 179.9 181.5 

65 and Over 35.4 35.8 36.2 36.7 37.2 37.9 38.8 39.7 40.5 41.4 43.2 44.6 46.1 

Annual Rate of Change 

Total Population 1.1 1.1 1.2 1.2 1.2 1.2 1.3 1.3 1.3 1.3 1.3 1.3 1.3 

Under 5 1.2 1.6 1.8 1.9 2.0 2.1 2.2 2.2 2.2 2.2 2.1 2.0 1.9 

5 to 15 -0.5 -0.2 0.3 0.4 0.5 0.6 0.8 -0.5 -0.5 2.4 2.6 1.4 1.9 

16 and Over 1.4 1.4 1.4 1.3 1.3 1.3 1.3 1.5 1.5 1.0 1.0 1.2 1.2 

16 to 21 3.1 2.2 1.2 1.3 1.2 0.9 0.6 2.8 2.6 -2.1 -2.6 -0.4 -0.7 

21 to 64 1.2 1.3 1.4 1.4 1.3 1.3 1.1 1.2 1.2 1.2 0.8 1.0 0.9 

65 and Over 0.9 1.1 1.2 1.3 1.4 1.8 2.6 2.2 2.1 2.3 4.2 3.4 3.3 

Population Structure - Percents of Total 

Under 5 6.8 6.9 6.9 6.9 7.0 7.1 7.1 7.2 7.3 7.3 7.4 7.4 7.5 

5 to 15 15.5 15.3 15.1 15.0 14.9 14.8 14.7 14.5 14.2 14.4 14.6 14.6 14.7 

16 and Over 77.7 77.9 78.0 78.1 78.1 78.2 78.2 78.4 78.5 78.3 78.1 78.0 77.9 

16 to 21 8.9 9.0 9.0 9.0 9.0 9.0 8.9 9.0 9.1 8.8 8.5 8.4 8.2 

21 to 64 56.2 56.3 56.4 56.5 56.5 56.5 56.4 56.4 56.3 56.3 56.0 55.8 55.6 

65 and Over 12.6 12.6 12.6 12.6 12.6 12.7 12.8 13.0 13.1 13.2 13.6 13.8 14.1 

Mortality 

--------- 

Percent of Population 65 and Over 12.6 12.6 12.6 12.6 12.6 12.7 12.8 13.0 13.1 13.2 13.6 13.8 14.1 

The Impact of Shifts in Population Age Groups 

Dependency Ratio (a) 0.96 0.95 0.94 0.93 0.93 0.93 0.94 0.93 0.93 0.94 0.96 0.97 0.98 

Ratio of Stock of Cars 

to Driving-Age Population 0.58 0.57 0.56 0.55 0.55 0.54 0.53 0.53 0.52 0.52 0.52 0.51 0.51 

Ratio of New Car Sales 

to Driving-Age Population 0.07 0.08 0.08 0.08 0.08 0.08 0.08 0.08 0.08 0.08 0.08 0.08 0.08 

Ratio of Stock of Houses and Mobile Homes 

to Population 21 and Over 0.62 0.62 0.62 0.63 0.63 0.63 0.63 0.63 0.63 0.63 0.63 0.63 0.63 

Ratio of Stock of Multi-Unit Houses 

to Population 21 and Over 0.17 0.17 0.17 0.17 0.17 0.17 0.16 0.16 0.16 0.16 0.16 0.16 0.16 

a. The dependency ratio here is defined as the ratio of the number of people not in the civilian labor force or 

in the military to the number of people that are. 
THE FOUR SCENARIOS: THE OPTIMISTIC AND PESSIMISTIC PROJECTIONS

44 DRI•WEFA The U.S. Economy

TABLE 2 Continued) 

U.S. Population - Optimistic Outlook 

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 

–––– –––– –––– –––– –––– –––– –––– –––– –––– –––– –––– –––– ––––

Millions of Persons 

Total Population 331.1 335.5 340.1 344.7 349.5 354.3 359.5 364.5 369.7 375.0 380.4 386.0 391.7 

Under 5 24.8 25.3 25.7 26.1 26.5 26.9 27.4 27.8 28.2 28.7 29.1 29.6 30.1 

5 to 15 48.2 48.7 49.9 51.2 52.5 53.4 54.4 55.5 56.6 57.6 58.7 59.7 60.8 

16 and Over 258.0 261.5 264.5 267.5 270.4 274.0 277.7 281.3 284.9 288.7 292.6 296.6 300.8 

16 to 21 27.3 27.8 27.8 27.9 27.9 28.5 28.9 29.4 29.9 30.5 31.1 31.8 32.5 

21 to 64 183.1 184.5 185.8 187.0 188.1 189.1 190.5 191.4 192.5 193.6 194.9 196.2 197.7 

65 and Over 47.6 49.2 50.9 52.6 54.5 56.4 58.3 60.4 62.5 64.5 66.6 68.6 70.6 

Annual Rate of Change 

Total Population 1.3 1.4 1.4 1.4 1.4 1.4 1.5 1.4 1.4 1.4 1.4 1.5 1.5 

Under 5 1.8 1.7 1.7 1.6 1.6 1.6 1.5 1.5 1.6 1.6 1.6 1.7 1.6 

5 to 15 0.8 1.0 2.5 2.5 2.7 1.6 2.0 2.0 1.9 1.9 1.8 1.8 1.7 

16 and Over 1.4 1.4 1.1 1.1 1.1 1.3 1.4 1.3 1.3 1.3 1.4 1.4 1.4 

16 to 21 1.9 2.0 -0.1 0.2 0.0 2.2 1.6 1.7 1.8 1.9 2.1 2.1 2.2 

21 to 64 0.8 0.8 0.7 0.6 0.6 0.6 0.7 0.5 0.5 0.6 0.6 0.7 0.8 

65 and Over 3.3 3.3 3.4 3.4 3.5 3.5 3.5 3.6 3.4 3.2 3.2 3.0 2.9 

Population Structure - Percents of Total 

Under 5 7.5 7.5 7.6 7.6 7.6 7.6 7.6 7.6 7.6 7.6 7.7 7.7 7.7 

5 to 15 14.6 14.5 14.7 14.8 15.0 15.1 15.1 15.2 15.3 15.4 15.4 15.5 15.5 

16 and Over 77.9 77.9 77.8 77.6 77.4 77.3 77.3 77.2 77.1 77.0 76.9 76.9 76.8 

16 to 21 8.2 8.3 8.2 8.1 8.0 8.0 8.0 8.1 8.1 8.1 8.2 8.2 8.3 

21 to 64 55.3 55.0 54.6 54.2 53.8 53.4 53.0 52.5 52.1 51.6 51.2 50.8 50.5 

65 and Over 14.4 14.7 15.0 15.3 15.6 15.9 16.2 16.6 16.9 17.2 17.5 17.8 18.0 

Mortality 

--------- 

Percent of Population 65 and Over 14.4 14.7 15.0 15.3 15.6 15.9 16.2 16.6 16.9 17.2 17.5 17.8 18.0 

The Impact of Shifts in Population Age Groups 

Dependency Ratio (a) 0.98 0.99 1.00 1.01 1.03 1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 

Ratio of Stock of Cars 

to Driving-Age Population 0.51 0.51 0.51 0.51 0.51 0.51 0.51 0.51 0.51 0.51 0.51 0.51 0.51 

Ratio of New Car Sales 

to Driving-Age Population 0.08 0.09 0.09 0.09 0.09 0.09 0.09 0.08 0.09 0.09 0.09 0.09 0.09 

Ratio of Stock of Houses and Mobile Homes 

to Population 21 and Over 0.63 0.64 0.64 0.64 0.64 0.64 0.64 0.64 0.64 0.65 0.65 0.65 0.65 

Ratio of Stock of Multi-Unit Houses 

to Population 21 and Over 0.16 0.16 0.16 0.16 0.16 0.16 0.16 0.16 0.16 0.16 0.16 0.16 0.16 

a. The dependency ratio here is defined as the ratio of the number of people not in the civilian labor force or 

in the military to the number of people that are. 
THE FOUR SCENARIOS: THE OPTIMISTIC AND PESSIMISTIC PROJECTIONS

25-Year Focus, Winter 2002 45

TABLE 3 

Supply Conditions - Optimistic Outlook 

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 

–––– –––– –––– –––– –––– –––– –––– –––– –––– –––– –––– –––– ––––

Percent Change (SAAR) 

Unsmoothed Potential Output 3.1 3.3 3.4 3.5 3.5 3.5 3.4 3.7 3.8 3.5 3.4 3.6 3.6 

Components 

Labor Hours 0.8 1.0 1.0 1.0 1.0 0.9 0.8 1.0 1.0 0.7 0.6 0.8 0.8 

Capital Stock 1.4 0.8 1.0 1.2 1.3 1.4 1.4 1.4 1.5 1.5 1.6 1.6 1.6 

Energy Usage 0.0 0.3 0.2 0.1 0.1 0.1 0.2 0.2 0.2 0.2 0.2 0.1 0.2 

Research and Development Stock 0.3 0.3 0.2 0.2 0.1 0.2 0.2 0.2 0.3 0.3 0.3 0.3 0.3 

Stock of Infrastructure Capital 0.0 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 

Smoothed Potential Output 3.3 3.2 3.4 3.5 3.5 3.5 3.4 3.6 3.8 3.6 3.4 3.6 3.6 

Productivity 

Labor (Output per hour) 2.9 3.8 2.2 2.6 2.6 2.6 2.8 2.6 2.4 2.6 3.2 3.0 2.7 

Percent 

Industrial Supply Conditions 

Vendor Performance 50.9 54.2 54.0 53.3 52.4 52.1 52.7 52.7 52.7 52.3 52.0 52.0 51.6 

Manufacturing Capacity Utilization 0.73 0.77 0.78 0.79 0.79 0.80 0.80 0.81 0.82 0.82 0.82 0.82 0.82 

Labor Availability 

Civilian Unemployment Rate 5.9 5.7 5.0 4.9 5.0 5.0 4.9 4.7 4.3 4.1 4.4 4.5 4.5 

Full-Employment Unemployment Rate 5.1 5.1 5.0 5.0 4.9 4.8 4.7 4.7 4.6 4.5 4.5 4.5 4.5 

Finance 

Net Mortgage Acquisitions (% change)-19.8 6.8 -3.0 5.1 4.7 4.9 5.8 5.5 9.6 3.8 -3.5 4.9 4.7 

Nominal Corp. Cost of Financial Capital (%)5.0 4.9 5.1 5.1 5.1 5.1 5.1 5.1 5.1 5.2 5.2 5.2 5.3 

Real Corp. Cost 3.8 3.8 3.9 3.8 3.8 3.8 3.8 3.8 3.8 3.8 3.8 3.8 3.9 

Personal Saving Rate (%) 2.0 1.9 2.1 1.9 1.4 1.1 1.2 1.3 1.4 1.5 1.2 1.1 1.2 

Money Supply (M2, % change) 7.7 5.6 4.9 5.0 5.0 5.1 5.2 5.3 5.4 5.4 5.5 5.6 5.7 
THE FOUR SCENARIOS: THE OPTIMISTIC AND PESSIMISTIC PROJECTIONS

46 DRI•WEFA The U.S. Economy

TABLE 3 (Continued) 

Supply Conditions - Optimistic Outlook 

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 

–––– –––– –––– –––– –––– –––– –––– –––– –––– –––– –––– –––– ––––

Percent Change (SAAR) 

Unsmoothed Potential Output 3.7 3.7 3.4 3.3 3.2 3.3 3.3 3.1 3.1 3.2 3.2 3.2 3.3 

Components 

Labor Hours 0.9 0.8 0.5 0.5 0.5 0.6 0.7 0.6 0.6 0.6 0.6 0.7 0.7 

Capital Stock 1.6 1.6 1.6 1.5 1.5 1.4 1.4 1.3 1.3 1.2 1.2 1.2 1.2 

Energy Usage 0.2 0.2 0.3 0.2 0.2 0.1 0.2 0.2 0.2 0.2 0.2 0.2 0.1 

Research and Development Stock 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 

Stock of Infrastructure Capital 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 

Smoothed Potential Output 3.6 3.7 3.5 3.3 3.2 3.2 3.3 3.2 3.1 3.2 3.2 3.2 3.2 

Productivity 

Labor (Output per hour) 2.7 2.6 3.0 3.2 3.0 2.6 2.4 2.4 2.7 2.4 2.5 2.5 2.5 

Percent 

Industrial Supply Conditions 

Vendor Performance 51.2 51.0 50.9 51.0 51.1 50.7 49.8 49.9 50.3 50.6 50.4 50.7 50.5 

Manufacturing Capacity Utilization 0.82 0.82 0.82 0.82 0.81 0.81 0.80 0.80 0.79 0.79 0.78 0.78 0.77 

Labor Availability 

Civilian Unemployment Rate 4.5 4.4 4.5 4.7 4.9 4.9 5.0 5.0 5.1 5.0 5.0 4.9 5.0 

Full-Employment Unemployment Rate 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 

Finance 

Net Mortgage Acquisitions (% change) 4.7 7.8 4.4 4.5 3.5 1.9 1.3 -0.5 0.4 3.9 1.5 1.8 1.3 

Nominal Corp. Cost of Financial Capital (%)5.4 5.5 5.6 5.6 5.6 5.6 5.6 5.6 5.5 5.5 5.5 5.5 5.5 

Real Corp. Cost 3.9 4.0 4.0 4.0 3.9 3.9 3.8 3.8 3.7 3.7 3.6 3.6 3.6 

Personal Saving Rate (%) 1.2 1.3 1.2 1.0 0.7 0.3 -0.2 -0.5 -0.8 -1.1 -1.5 -1.8 -2.1 

Money Supply (M2, % change) 5.7 5.8 5.9 5.9 5.9 6.0 5.9 5.9 5.8 5.8 5.8 5.8 5.8 
THE FOUR SCENARIOS: THE OPTIMISTIC AND PESSIMISTIC PROJECTIONS

25-Year Focus, Winter 2002 47

TABLE 4 

Summary for the U.S. Economy - Pessimistic Outlook 

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 

–––– –––– –––– –––– –––– –––– –––– –––– –––– –––– –––– –––– ––––

Composition of Real GDP (Annual percent change) 

Gross Domestic Product 0.6 2.9 3.6 2.6 2.5 2.7 3.0 2.8 3.3 2.8 2.8 2.8 3.0 

Final Sales -0.1 2.6 3.5 2.7 2.5 2.7 3.0 2.8 3.2 2.9 2.8 2.8 3.0 

Gross National Product 0.7 2.6 3.3 2.6 2.4 2.6 2.9 2.7 3.2 2.8 2.8 2.6 2.8 

Total Consumption 1.7 2.8 2.9 2.4 2.2 2.3 2.6 2.5 3.0 2.7 2.8 2.7 2.9 

Durable Goods -1.5 3.9 4.6 2.3 3.0 3.4 2.7 1.8 4.5 3.4 1.9 1.9 4.1 

Nondurable Goods 1.8 2.8 3.0 2.5 2.1 2.1 2.4 2.3 2.7 2.6 3.0 3.0 3.2 

Services 2.3 2.5 2.5 2.3 2.1 2.2 2.7 2.6 2.8 2.7 2.9 2.8 2.7 

Nonres. Fixed Investment -5.2 4.1 7.4 5.4 4.5 5.5 6.5 5.8 6.5 6.2 6.6 5.9 6.4 

Equipment -2.6 6.4 9.6 7.1 6.1 6.4 7.5 7.2 7.5 7.4 7.4 7.2 7.2 

Computers 10.8 14.1 17.5 19.4 19.7 19.3 18.6 17.9 17.3 16.7 17.2 17.4 16.7 

Software 6.0 8.3 8.7 10.2 10.4 10.4 10.6 10.7 10.8 10.9 11.4 11.0 10.2 

Communications -9.5 5.0 6.1 5.3 8.1 8.1 8.1 7.3 7.2 7.3 6.4 5.5 5.2 

Light Vehicles -4.1 5.5 6.7 1.6 2.5 3.6 5.1 3.6 4.8 4.1 3.7 3.5 4.6 

Other -6.9 4.4 10.2 5.2 2.0 2.1 4.0 3.7 4.0 3.7 3.3 3.1 3.5 

Private Nonres. Structures -12.0 -2.4 0.7 0.1 -0.7 2.4 3.2 1.1 3.1 2.4 3.9 1.4 3.5 

Buildings and Other -11.3 -2.4 -0.1 -0.3 -1.0 1.7 3.9 1.6 4.0 2.7 4.6 1.5 4.2 

Residential Fixed Investment -4.4 -7.2 2.2 0.5 -0.4 0.6 1.7 0.0 2.6 0.8 -5.6 -1.8 1.1 

Exports -8.6 7.6 9.1 7.6 7.7 7.3 6.9 6.9 6.6 6.2 6.4 6.8 6.9 

Imports 0.3 5.1 4.9 4.3 4.0 4.1 4.1 4.0 4.8 4.5 5.1 6.0 6.8 

Federal Government 4.5 4.7 2.3 1.0 0.6 0.5 0.7 0.8 1.2 -0.2 0.8 1.0 1.0 

State and Local Governments 1.6 1.9 1.5 1.8 1.6 1.2 1.3 1.0 1.2 1.0 1.2 1.3 1.6 

Billions of Dollars 

Real GDP (Chained 1996 $) 9377.9 9651.4 9996.4 10253.8 10511.4 10791.4 11118.0 11424.5 11796.6 12132.3 12475.9 12823.3 13212.7 

Gross Domestic Product 10384.9 10885.1 11511.0 12068.2 12633.6 13253.9 13968.1 14683.6 15534.7 16407.0 17362.4 18382.3 19566.5 

Prices and Wages (Annual percent change) 

GDP Price Index (Chain-Wt.) 1.2 1.9 2.1 2.2 2.1 2.2 2.3 2.3 2.5 2.7 2.9 3.0 3.3 

CPI - All Urban Consumers 1.4 2.4 2.5 2.6 2.5 2.5 2.6 2.6 2.7 2.9 3.2 3.3 3.6 

Excl. Food & Energy 2.5 2.5 2.6 2.7 2.6 2.7 2.7 2.7 2.8 3.0 3.2 3.4 3.7 

Producer Price Index - Fin. Gds. -1.4 0.8 1.3 1.5 1.2 1.2 1.4 1.3 1.5 1.8 2.0 2.1 2.3 

Emp. Cost Index - Total Comp. 3.3 2.7 2.7 2.7 2.8 2.9 3.2 3.3 3.5 3.9 4.1 4.2 4.6 

Output per Hour 2.6 3.0 2.2 2.0 2.1 2.0 2.1 2.2 2.0 1.9 2.3 2.3 2.0 

Other Key Measures 

Industrial Production (% ch) -0.8 6.1 5.4 3.7 3.3 3.3 3.9 3.7 4.0 3.4 3.1 2.8 2.5 

Nonfarm Inven. Accumulation 

(Billion chained 1996 $) 9.2 40.4 55.2 36.8 35.2 37.2 41.1 38.5 47.2 43.2 43.9 45.5 52.6 

Consumer Confidence Index 91.6 87.3 91.2 90.0 89.5 90.4 91.2 90.5 94.2 93.4 89.9 88.9 90.3 

Housing Starts (Mil. units) 1.391 1.242 1.311 1.306 1.279 1.283 1.284 1.251 1.291 1.238 1.079 1.043 1.046 

Light-Vehicle Sales (Mil. units) 15.2 16.1 16.6 16.4 16.6 17.0 17.0 16.8 17.2 17.3 17.1 16.8 17.2 

Unemployment Rate (%) 6.1 6.1 5.4 5.2 5.3 5.2 5.0 4.9 4.5 4.3 4.6 4.7 4.7 

Payroll Employment (% ch.) -0.7 0.8 1.5 0.9 0.8 1.0 1.2 0.9 1.5 1.2 0.8 0.6 1.1 

Federal Budget Surplus 

(Unified, FY, bil. $) -5.4 -70.8 -118.8 -131.1 -106.6 -74.3 -56.9 -43.2 -36.3 -35.6 -160.9 -242.5 -320.5 

Foreign Trade 

Curr. Account Balance (Bil. $) -454.7 -511.9 -547.2 -557.2 -563.1 -569.2 -582.7 -587.6 -606.0 -621.9 -660.2 -716.9 -796.5 

Foreign Crude Oil ($ per barrel) 19.8 21.6 23.8 25.5 27.0 28.3 29.6 31.0 32.6 34.5 36.4 38.5 40.7 

Financial Markets 

Money Supply (M2, billion $) 5818.7 6119.9 6395.2 6683.3 6984.1 7300.5 7635.2 7981.6 8347.7 8734.7 9129.9 9541.6 9964.2 

Percent Change 7.5 5.2 4.5 4.5 4.5 4.5 4.6 4.5 4.6 4.6 4.5 4.5 4.4 

Thirty-Year Mortgage Rate (%) 7.1 7.5 7.7 7.6 7.7 7.7 7.7 7.8 7.9 8.0 8.4 8.9 9.3 

Ten-Year Treasury Note Yield (%) 5.3 5.8 6.1 6.1 6.2 6.2 6.3 6.5 6.6 6.8 7.2 7.6 8.1 

Treasury Bill Rate (%) 2.0 3.7 4.6 4.6 4.6 4.6 4.7 4.9 5.0 5.1 5.5 5.9 6.3 

Federal Funds Rate (%) 2.2 4.0 5.0 5.0 5.0 5.0 5.1 5.3 5.4 5.5 5.9 6.3 6.8 

Prime Rate (%) 5.2 7.0 8.0 8.0 8.0 8.0 8.1 8.3 8.4 8.5 8.9 9.3 9.8 

S&P 500 Stock Index 1152.8 1017.2 1002.5 1105.4 1226.7 1292.2 1362.9 1434.8 1491.1 1554.9 1622.7 1633.1 1649.9 

Incomes 

Personal Income (% ch) 2.3 4.4 5.3 4.5 4.5 4.7 5.3 5.2 5.7 5.9 6.1 6.1 6.7 

Real Disposable Income (% ch) 1.9 2.9 3.4 2.3 1.8 2.0 2.7 2.5 3.1 3.0 3.1 3.1 3.3 

Saving Rate (%) 1.9 2.0 2.5 2.3 1.8 1.4 1.4 1.5 1.7 2.0 2.3 2.7 3.2 

Profits After Tax (% chya) 1.9 3.4 1.0 1.5 5.6 5.3 7.1 4.1 7.1 3.9 6.0 4.6 5.5 
THE FOUR SCENARIOS: THE OPTIMISTIC AND PESSIMISTIC PROJECTIONS

48 DRI•WEFA The U.S. Economy

TABLE 4 (Continued) 

Summary for the U.S. Economy - Pessimistic Outlook 

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 

–––– –––– –––– –––– –––– –––– –––– –––– –––– –––– –––– –––– ––––

Composition of Real GDP (Annual percent change) 

Gross Domestic Product 2.7 2.8 2.7 2.7 2.5 2.5 2.3 2.4 2.5 2.6 2.6 2.7 2.8 

Final Sales 2.7 2.8 2.7 2.7 2.5 2.5 2.3 2.4 2.4 2.6 2.6 2.7 2.8 

Gross National Product 2.5 2.7 2.6 2.5 2.4 2.4 2.3 2.2 2.3 2.5 2.4 2.5 2.7 

Total Consumption 2.7 2.9 2.8 2.7 2.7 2.6 2.4 2.4 2.5 2.7 2.6 2.8 2.9 

Durable Goods 2.7 4.4 3.1 3.0 3.5 4.4 3.0 3.7 3.7 5.6 4.1 4.9 5.1 

Nondurable Goods 3.1 3.2 3.1 3.2 3.1 3.0 2.8 2.7 2.8 2.9 3.0 3.1 3.1 

Services 2.6 2.6 2.6 2.5 2.5 2.3 2.2 2.1 2.2 2.3 2.3 2.4 2.6 

Nonres. Fixed Investment 5.8 5.3 5.4 5.1 4.2 4.0 4.2 3.5 3.3 3.7 3.7 3.7 3.7 

Equipment 6.7 6.4 6.3 5.9 5.3 4.9 4.6 4.4 4.4 4.6 4.4 4.4 4.5 

Computers 16.2 15.4 14.4 13.6 13.3 13.1 13.4 13.4 13.5 13.5 13.3 13.2 13.6 

Software 9.5 8.7 7.7 6.9 6.1 5.3 4.4 3.5 3.3 3.4 3.2 3.1 3.0 

Communications 4.8 4.6 5.9 5.4 4.4 4.4 5.1 5.4 5.0 5.3 5.4 5.4 5.5 

Light Vehicles 3.3 3.8 4.1 3.9 3.0 3.4 3.2 3.6 3.4 4.1 3.6 3.8 4.0 

Other 3.2 3.0 3.3 3.5 3.2 3.0 3.0 3.5 3.6 3.9 3.8 3.9 4.0 

Private Nonres. Structures 2.4 1.3 2.5 2.4 0.3 0.8 2.6 -0.1 -0.7 0.4 0.9 0.8 0.9 

Buildings and Other 2.7 1.4 3.0 2.7 0.1 0.8 3.1 -0.3 -1.1 0.2 0.9 0.6 0.7 

Residential Fixed Investment 0.1 0.7 0.0 0.1 -0.1 0.3 -0.6 0.0 -0.5 0.8 -0.3 0.2 1.5 

Exports 6.5 6.2 6.4 6.8 6.9 6.9 7.1 7.6 7.9 8.0 8.1 8.3 8.5 

Imports 6.8 6.9 6.6 6.8 6.9 7.1 6.5 6.5 6.7 7.3 7.0 7.2 7.5 

Federal Government 1.0 1.0 1.0 1.0 1.0 1.9 0.3 0.9 1.1 1.1 1.2 1.2 1.2 

State and Local Governments 1.5 1.5 1.6 1.8 1.6 1.5 1.5 1.5 1.5 1.6 1.6 1.6 1.7 

Billions of Dollars 

Real GDP (Chained 1996 $) 13567.8 13943.9 14326.6 14716.4 15089.5 15466.2 15826.2 16201.9 16600.5 17037.9 17478.3 17956.3 18465.3 

Gross Domestic Product 20789.0 22140.5 23612.4 25237.7 26943.6 28777.4 30700.8 32827.1 35149.2 37755.4 40570.7 43717.9 47208.0 

Prices and Wages (Annual percent change) 

GDP Price Index (Chain-Wt.) 3.5 3.6 3.8 4.1 4.1 4.2 4.3 4.5 4.5 4.7 4.8 4.9 5.0 

CPI - All Urban Consumers 3.8 3.9 4.2 4.5 4.6 4.7 4.8 5.0 5.1 5.3 5.4 5.6 5.7 

Excl. Food & Energy 3.9 4.1 4.3 4.6 4.7 4.8 4.9 5.2 5.2 5.4 5.6 5.7 5.9 

Producer Price Index - Fin. Gds. 2.4 2.5 2.7 3.0 3.0 3.1 3.2 3.5 3.5 3.7 3.8 4.0 4.1 

Emp. Cost Index - Total Comp. 4.7 5.0 5.2 5.3 5.2 5.4 5.3 5.5 5.4 5.6 5.6 5.7 5.7 

Output per Hour 2.0 2.1 2.3 2.1 2.0 2.0 2.1 1.8 2.1 1.7 1.9 2.0 2.0 

Other Key Measures 

Industrial Production (% ch) 1.4 1.2 1.2 1.3 0.9 0.8 0.8 0.7 1.1 1.5 1.9 2.5 3.3 

Nonfarm Inven. Accumulation 

(Billion chained 1996 $) 47.6 50.9 51.4 53.7 52.4 54.4 53.5 56.5 61.1 68.0 68.9 75.1 80.8 

Consumer Confidence Index 88.6 89.1 87.2 86.7 85.4 85.1 83.9 83.7 83.6 84.9 84.0 84.6 84.5 

Housing Starts (Mil. units) 1.019 1.019 0.995 0.981 0.961 0.956 0.931 0.920 0.901 0.903 0.873 0.869 0.880 

Light-Vehicle Sales (Mil. units) 17.1 17.3 17.1 16.9 16.7 16.8 16.6 16.6 16.5 16.9 16.8 16.9 17.0 

Unemployment Rate (%) 4.7 4.6 4.7 4.9 5.1 5.1 5.2 5.2 5.3 5.2 5.2 5.1 5.2 

Payroll Employment (% ch.) 0.8 0.8 0.6 0.8 0.7 0.7 0.5 0.7 0.6 1.0 0.8 0.9 1.0 

Federal Budget Surplus 

(Unified, FY, bil. $) -436.0 -543.3 -677.7 -830.3 -1019.2 -1169.0 -1320.0 -1500.4 -1775.3 -2051.7 -2388.6 -2760.1 -3142.5 

Foreign Trade 

Curr. Account Balance (Bil. $) -869.4 -945.6 -1045.9 -1163.7 -1273.4 -1398.9 -1513.8 -1656.8 -1811.0 -1993.8 -2205.8 -2443.4 -2694.8 

Foreign Crude Oil ($ per barrel) 43.1 45.6 48.3 51.3 54.7 58.4 62.4 66.9 71.8 77.1 83.0 89.3 96.2 

Financial Markets 

Money Supply (M2, billion $) 10413.1 10895.1 11405.1 11943.1 12526.9 13154.0 13828.7 14546.4 15318.0 16150.6 17036.7 17997.0 19054.6 

Percent Change 4.5 4.6 4.7 4.7 4.9 5.0 5.1 5.2 5.3 5.4 5.5 5.6 5.9 

Thirty-Year Mortgage Rate (%) 9.7 10.0 10.4 10.8 11.1 11.4 11.6 11.9 12.2 12.5 12.9 13.1 13.3 

Ten-Year Treasury Note Yield (%) 8.4 8.7 9.0 9.4 9.7 9.9 10.1 10.4 10.7 11.0 11.3 11.6 11.8 

Treasury Bill Rate (%) 6.6 6.8 7.1 7.4 7.6 7.8 7.9 8.2 8.4 8.6 8.8 9.0 9.1 

Federal Funds Rate (%) 7.0 7.2 7.5 7.9 8.0 8.2 8.3 8.6 8.8 8.9 9.3 9.4 9.5 

Prime Rate (%) 10.0 10.2 10.5 10.9 11.0 11.2 11.3 11.6 11.8 11.9 12.3 12.4 12.5 

S&P 500 Stock Index 1669.7 1772.4 1833.7 1864.4 1912.8 2031.7 2170.6 2280.0 2400.3 2589.9 2772.4 2968.1 3212.7 

Incomes 

Personal Income (% ch) 6.7 6.9 7.1 7.3 7.3 7.4 7.3 7.5 7.5 7.9 8.0 8.3 8.4 

Real Disposable Income (% ch) 3.2 3.1 3.0 3.0 2.9 2.5 2.2 2.3 2.5 2.7 2.6 2.7 2.7 

Saving Rate (%) 3.7 3.9 4.2 4.4 4.6 4.6 4.5 4.4 4.5 4.5 4.5 4.5 4.4 

Profits After Tax (% chya) 3.5 6.2 5.8 4.8 4.6 3.6 5.1 2.1 4.3 3.7 3.2 5.3 8.3 
THE FOUR SCENARIOS: THE OPTIMISTIC AND PESSIMISTIC PROJECTIONS

25-Year Focus, Winter 2002 49

TABLE 5 

U.S. Population - Pessimistic Outlook 

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 

–––– –––– –––– –––– –––– –––– –––– –––– –––– –––– –––– –––– ––––

Millions of Persons 

Total Population 279.9 281.7 283.5 285.1 286.7 288.2 289.7 291.1 292.5 293.9 295.2 296.5 297.8 

Under 5 18.9 18.8 18.7 18.6 18.6 18.5 18.5 18.5 18.6 18.6 18.6 18.7 18.7 

5 to 15 43.7 43.6 43.4 43.2 42.8 42.4 41.8 42.3 41.6 42.0 41.3 41.5 40.8 

16 and Over 217.3 219.3 221.3 223.3 225.3 227.3 229.3 230.3 232.3 233.3 235.3 236.3 238.3 

16 to 21 24.5 24.8 25.0 25.3 25.8 26.2 26.6 26.1 26.6 26.0 26.3 25.6 25.9 

21 to 64 157.5 159.0 160.4 161.8 163.0 164.1 164.8 165.7 166.6 167.6 167.9 168.4 168.8 

65 and Over 35.3 35.6 35.9 36.2 36.6 37.1 37.9 38.5 39.2 39.7 41.2 42.4 43.6 

Annual Rate of Change 

Total Population 0.6 0.7 0.6 0.6 0.6 0.5 0.5 0.5 0.5 0.5 0.5 0.4 0.4 

Under 5 -0.6 -0.4 -0.5 -0.4 -0.3 -0.2 0.0 0.1 0.1 0.2 0.2 0.2 0.1 

5 to 15 -0.1 -0.2 -0.4 -0.7 -0.8 -1.0 -1.2 1.0 -1.5 0.8 -1.7 0.7 -1.8 

16 and Over 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.4 0.9 0.4 0.9 0.4 0.8 

16 to 21 1.2 1.0 0.9 1.3 1.7 1.5 1.7 -2.0 1.8 -2.2 1.1 -2.7 1.4 

21 to 64 0.9 0.9 0.9 0.8 0.7 0.7 0.5 0.5 0.5 0.6 0.1 0.3 0.3 

65 and Over 0.5 0.8 0.8 0.9 1.0 1.3 2.2 1.7 1.6 1.4 3.7 3.0 2.8 

Population Structure - Percents of Total 

Under 5 6.7 6.7 6.6 6.5 6.5 6.4 6.4 6.4 6.3 6.3 6.3 6.3 6.3 

5 to 15 15.6 15.5 15.3 15.1 14.9 14.7 14.4 14.5 14.2 14.3 14.0 14.0 13.7 

16 and Over 77.6 77.8 78.1 78.3 78.6 78.9 79.2 79.1 79.4 79.4 79.7 79.7 80.0 

16 to 21 8.8 8.8 8.8 8.9 9.0 9.1 9.2 9.0 9.1 8.8 8.9 8.6 8.7 

21 to 64 56.3 56.4 56.6 56.7 56.8 56.9 56.9 56.9 57.0 57.0 56.9 56.8 56.7 

65 and Over 12.6 12.6 12.7 12.7 12.8 12.9 13.1 13.2 13.4 13.5 14.0 14.3 14.6 

Mortality 

--------- 

Percent of Population 65 and Over 12.6 12.6 12.7 12.7 12.8 12.9 13.1 13.2 13.4 13.5 14.0 14.3 14.6 

The Impact of Shifts in Population Age Groups 

Dependency Ratio (a) 0.96 0.95 0.94 0.92 0.91 0.90 0.90 0.90 0.89 0.89 0.89 0.90 0.89 

Ratio of Stock of Cars 

to Driving-Age Population 0.58 0.57 0.56 0.55 0.55 0.54 0.53 0.53 0.52 0.52 0.51 0.51 0.50 

Ratio of New Car Sales 

to Driving-Age Population 0.07 0.07 0.08 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 

Ratio of Stock of Houses and Mobile Homes 

to Population 21 and Over 0.62 0.62 0.62 0.62 0.62 0.63 0.63 0.63 0.63 0.63 0.63 0.63 0.62 

Ratio of Stock of Multi-Unit Houses 

to Population 21 and Over 0.17 0.17 0.17 0.17 0.17 0.16 0.16 0.16 0.16 0.16 0.16 0.16 0.16 

a. The dependency ratio here is defined as the ratio of the number of people not in the civilian labor force or 

in the military to the number of people that are. 
THE FOUR SCENARIOS: THE OPTIMISTIC AND PESSIMISTIC PROJECTIONS

50 DRI•WEFA The U.S. Economy

TABLE 5 (Continued) 

U.S. Population - Pessimistic Outlook 

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 

–––– –––– –––– –––– –––– –––– –––– –––– –––– –––– –––– –––– ––––

Millions of Persons 

Total Population 299.1 300.3 301.5 302.6 303.7 304.8 305.8 306.7 307.7 308.5 309.3 310.1 310.9 

Under 5 18.7 18.7 18.7 18.7 18.6 18.6 18.5 18.4 18.3 18.2 18.1 18.0 17.9 

5 to 15 41.1 41.3 41.5 40.7 40.8 40.9 40.9 41.0 41.0 41.0 40.9 40.9 40.8 

16 and Over 239.3 240.3 241.3 243.3 244.3 245.3 246.3 247.3 248.3 249.3 250.3 251.2 252.1 

16 to 21 25.4 25.0 24.6 25.4 25.1 24.9 24.8 24.7 24.6 24.6 24.6 24.6 24.6 

21 to 64 169.1 169.3 169.2 169.1 168.9 168.5 168.1 167.5 167.0 166.4 165.8 165.2 164.7 

65 and Over 44.8 46.1 47.5 48.9 50.3 51.9 53.5 55.1 56.7 58.3 59.9 61.4 62.8 

Annual Rate of Change 

Total Population 0.4 0.4 0.4 0.4 0.4 0.3 0.3 0.3 0.3 0.3 0.3 0.2 0.2 

Under 5 0.1 0.0 -0.1 -0.2 -0.2 -0.3 -0.4 -0.4 -0.5 -0.5 -0.6 -0.6 -0.6 

5 to 15 0.6 0.5 0.5 -2.0 0.3 0.2 0.1 0.1 0.0 0.0 -0.1 -0.2 -0.1 

16 and Over 0.4 0.4 0.4 0.8 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 

16 to 21 -2.0 -1.7 -1.4 3.0 -1.0 -0.8 -0.6 -0.3 -0.2 -0.1 0.0 0.1 0.1 

21 to 64 0.2 0.1 0.0 -0.1 -0.1 -0.2 -0.3 -0.3 -0.3 -0.3 -0.4 -0.4 -0.3 

65 and Over 2.8 2.8 3.0 3.0 3.0 3.0 3.1 3.1 2.9 2.7 2.7 2.5 2.3 

Population Structure - Percents of Total 

Under 5 6.3 6.2 6.2 6.2 6.1 6.1 6.0 6.0 6.0 5.9 5.9 5.8 5.8 

5 to 15 13.7 13.7 13.8 13.4 13.4 13.4 13.4 13.4 13.3 13.3 13.2 13.2 13.1 

16 and Over 80.0 80.0 80.0 80.4 80.4 80.5 80.6 80.6 80.7 80.8 80.9 81.0 81.1 

16 to 21 8.5 8.3 8.2 8.4 8.3 8.2 8.1 8.0 8.0 8.0 8.0 7.9 7.9 

21 to 64 56.5 56.4 56.1 55.9 55.6 55.3 55.0 54.6 54.3 53.9 53.6 53.3 53.0 

65 and Over 15.0 15.3 15.7 16.1 16.6 17.0 17.5 18.0 18.4 18.9 19.4 19.8 20.2 

Mortality 

--------- 

Percent of Population 65 and Over 15.0 15.3 15.7 16.1 16.6 17.0 17.5 18.0 18.4 18.9 19.4 19.8 20.2 

The Impact of Shifts in Population Age Groups 

Dependency Ratio (a) 0.89 0.90 0.90 0.90 0.90 0.90 0.91 0.91 0.91 0.91 0.91 0.91 0.91 

Ratio of Stock of Cars 

to Driving-Age Population 0.50 0.50 0.49 0.49 0.48 0.48 0.48 0.48 0.47 0.47 0.47 0.47 0.46 

Ratio of New Car Sales 

to Driving-Age Population 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 

Ratio of Stock of Houses and Mobile Homes 

to Population 21 and Over 0.62 0.62 0.62 0.62 0.62 0.62 0.62 0.62 0.62 0.62 0.62 0.62 0.62 

Ratio of Stock of Multi-Unit Houses 

to Population 21 and Over 0.16 0.16 0.16 0.16 0.16 0.15 0.15 0.15 0.15 0.15 0.15 0.15 0.15 

a. The dependency ratio here is defined as the ratio of the number of people not in the civilian labor force or 

in the military to the number of people that are. 
THE FOUR SCENARIOS: THE OPTIMISTIC AND PESSIMISTIC PROJECTIONS

25-Year Focus, Winter 2002 51

TABLE 6 

Supply Conditions - Pessimistic Outlook 

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 

–––– –––– –––– –––– –––– –––– –––– –––– –––– –––– –––– –––– ––––

Percent Change (SAAR) 

Unsmoothed Potential Output 2.8 2.6 2.5 2.5 2.5 2.5 2.5 2.2 2.6 2.4 2.6 2.3 2.7 

Components 

Labor Hours 0.5 0.7 0.8 0.8 0.8 0.7 0.7 0.3 0.7 0.5 0.7 0.4 0.7 

Capital Stock 1.4 0.8 0.8 0.9 1.1 1.1 1.2 1.2 1.3 1.3 1.4 1.4 1.4 

Energy Usage -0.1 0.2 0.2 0.1 0.1 0.1 0.1 0.1 0.1 0.2 0.1 0.1 0.1 

Research and Development Stock 0.3 0.3 0.2 0.2 0.1 0.2 0.2 0.2 0.3 0.3 0.3 0.3 0.3 

Stock of Infrastructure Capital 0.0 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 

Smoothed Potential Output 3.1 2.7 2.5 2.5 2.5 2.5 2.5 2.3 2.5 2.4 2.6 2.4 2.5 

Productivity 

Labor (Output per hour) 2.6 3.0 2.2 2.0 2.1 2.0 2.1 2.2 2.0 1.9 2.3 2.3 2.0 

Percent 

Industrial Supply Conditions 

Vendor Performance 49.7 51.7 53.3 52.5 52.1 52.1 52.5 52.5 53.2 52.6 52.0 52.1 52.0 

Manufacturing Capacity Utilization 0.73 0.74 0.76 0.76 0.77 0.77 0.78 0.78 0.79 0.80 0.80 0.80 0.81 

Labor Availability 

Civilian Unemployment Rate 6.1 6.1 5.4 5.2 5.3 5.2 5.0 4.9 4.5 4.3 4.6 4.7 4.7 

Full-Employment Unemployment Rate 5.1 5.1 5.0 5.0 4.9 4.8 4.7 4.7 4.6 4.5 4.5 4.5 4.5 

Finance 

Net Mortgage Acquisitions (% change)-34.7 -28.6 -12.8 -7.8 -0.8 13.7 22.7 13.6 12.5 5.8 -4.5 -0.2 7.5 

Nominal Corp. Cost of Financial Capital (%)4.9 5.1 5.3 5.3 5.3 5.4 5.4 5.5 5.5 5.6 5.8 6.1 6.4 

Real Corp. Cost 3.8 3.9 4.1 4.1 4.1 4.1 4.1 4.1 4.1 4.2 4.4 4.6 4.9 

Personal Saving Rate (%) 1.9 2.0 2.5 2.3 1.8 1.4 1.4 1.5 1.7 2.0 2.3 2.7 3.2 

Money Supply (M2, % change) 7.5 5.2 4.5 4.5 4.5 4.5 4.6 4.5 4.6 4.6 4.5 4.5 4.4 
THE FOUR SCENARIOS: THE OPTIMISTIC AND PESSIMISTIC PROJECTIONS

52 DRI•WEFA The U.S. Economy

TABLE 6 (Continued) 

Supply Conditions - Pessimistic Outlook 

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 

–––– –––– –––– –––– –––– –––– –––– –––– –––– –––– –––– –––– ––––

Percent Change (SAAR) 

Unsmoothed Potential Output 2.3 2.3 2.2 2.4 2.0 1.9 1.8 1.8 1.7 1.7 1.7 1.7 1.6 

Components 

Labor Hours 0.3 0.3 0.2 0.5 0.2 0.1 0.2 0.1 0.1 0.1 0.1 0.1 0.2 

Capital Stock 1.4 1.4 1.3 1.3 1.2 1.2 1.1 1.1 1.0 0.9 0.9 0.9 0.9 

Energy Usage 0.1 0.2 0.2 0.2 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 

Research and Development Stock 0.3 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 

Stock of Infrastructure Capital 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 

Smoothed Potential Output 2.4 2.3 2.2 2.4 2.1 1.9 1.8 1.8 1.8 1.7 1.7 1.7 1.6 

Productivity 

Labor (Output per hour) 2.0 2.1 2.3 2.1 2.0 2.0 2.1 1.8 2.1 1.7 1.9 2.0 2.0 

Percent 

Industrial Supply Conditions 

Vendor Performance 51.5 51.8 51.8 51.3 51.3 51.5 51.3 51.3 51.7 52.1 52.3 53.0 53.6 

Manufacturing Capacity Utilization 0.80 0.81 0.81 0.81 0.81 0.81 0.81 0.81 0.81 0.81 0.82 0.82 0.83 

Labor Availability 

Civilian Unemployment Rate 4.7 4.6 4.7 4.9 5.1 5.1 5.2 5.2 5.3 5.2 5.2 5.1 5.2 

Full-Employment Unemployment Rate 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 

Finance 

Net Mortgage Acquisitions (% change) 4.2 6.4 6.9 8.4 3.3 2.8 4.2 0.9 0.4 4.5 3.7 6.3 10.1 

Nominal Corp. Cost of Financial Capital (%)6.7 6.9 7.1 7.4 7.7 7.8 8.0 8.1 8.3 8.5 8.7 8.8 9.0 

Real Corp. Cost 5.1 5.2 5.4 5.6 5.8 5.9 5.9 6.0 6.1 6.1 6.2 6.3 6.3 

Personal Saving Rate (%) 3.7 3.9 4.2 4.4 4.6 4.6 4.5 4.4 4.5 4.5 4.5 4.5 4.4 

Money Supply (M2, % change) 4.5 4.6 4.7 4.7 4.9 5.0 5.1 5.2 5.3 5.4 5.5 5.6 5.9 
 

Appendix C: 

Metro Economic Review Panel 

Dennis Yee, chief economist Metro 

Karen Larson, GIS economist Metro 

Richard Bolen, DRC manager Metro 

Robert Anderson, economist Bonneville Power Administration 

Thomas Aston, economist U.S. Department of Housing and Urban 

Development 

Betty Atteberry, director Westside Economic Alliance 

Joe Cortright, consultant Impresa, Inc. 

Eric Hovee, consultant E. D. Hovee & Company 

Steve Kelly, senior planner Washington County 

Gene Leverton, consultant Gene Leverton & Associates 

John McConnaughey, transportation planner WSDOT 

Eric Moore, employment economist Oregon Employment Department 

Amy Vanderbuilt, employment economist Oregon Employment Department 

Hossein Parandvash, chief economist City of Portland Water Bureau 

Ken Pearrow, GIS demographer Clark County 

Tom Potiowsky, state economist Oregon Office of Economic Analysis 

Lynn Peterson, transportation planner Tri-Met 

Tony Rufolo, professor Portland State University 

 

Not in attendance: 

Barry Edmonston, director Portland State University - CPRC 

George Hough Jr., demographer Portland State University - CPRC 

Kanhaiya Vaidya, state demographer Oregon Office of Economic Analysis 

Metro Economic Development Review Panel 

Community & Economic Development officials: 

Doug Rux Tualatin City 

Janet Young Beaverton City 

Larry Pederson Hillsboro City 

Mary Gibson Port of Portland 

Mike Ogan Portland Development Commission 

Pam Neal CREDC 

Renate Mengelberg Clackamas County 

Shelly Parini Gresham City 

The views and economic outlook in this report are the sole responsibility of Metro’s Data Resource Center. 

The review panels were instructed to offer any insights they may have, critique and then evaluate the 

accuracy and reasonableness of the regional forecast. The comments of the review committees were 

considered and incorporated into the regional forecast as interpreted by the Metro chief economist. 
 

Appendix D: 

Model Documentation Summary 

Metro Regional Economic Model 

Presented to the 32nd Annual 

Pacific Northwest Economic Conference 

May 1998 

Dennis Yee 

Senior Economist 

Metro 

Data Resource Center 

600 NE Grand Ave. 

Portland, OR 97232-2736 

Phone: (503) 797-1578 

Fax: (503) 797-1909 

E-Mail: yeed@metro.dst.or.us

Executive Officer 

Mike Burton 

Elaine Wilkerson 

Director 
 1 

Metro Regional Economic Model 

0. Abstract 

Portland Metro presents its version of a regional economic model with embedded input-output coefficients 

as explanatory variables in the model’s employment sector equations. The Metro model implements the 

integration strategy as described by Coomes et al (1991), Stover (1994), and Rey (1997). Coomes et al first 

described the I-SAMIS model technique for linking I-O and econometric models. Stover evaluates the 

efficacy of using Census benchmark I-O tables as technical coefficients for creating the inter-industry 

demand variables (IDV) in each industry employment equation. Rey clarifies the theoretical underpinnings 

of the IDV and the use of a national I-O matrix as a proxy for an unavailable regional matrix. The regional 

model implemented by Metro is based on this integrated approach as described by the literature. This paper 

describes Metro’s regional model and presents the empirical estimates and some results from our study. It 

is shown that the Metro model contains reasonable parameter estimates and produces forecast estimates 

within tolerable limits. 

Key words: integrated regional econometric and input-output model; inter-industry 

demand variable; forecasting 

1. Introduction. 

For metropolitan areas, the federal ISTEA (Intermodal Surface Transportation Efficiency Act) legislation 

has generated a considerable amount of study into the relationship between urban growth and 

transportation. ISTEA requires an understanding of how choices made in transportation and land-use 

simultaneously impact each other. In addition, Metro (the metropolitan planning organization for the 

Portland, OR metropolitan region) initiated its own 50-year regional planning framework to encourage 

more compact urban development. Influence from the Metro Region 2040 Framework plan and ongoing 

interest to link transportation and land use modeling has been the main stimulus behind Portland Metro’s 

regional model development. 

In Portland, Metro has responded to the planning and information demands of ISTEA and Region 2040 

with two operational models: one designed and patterned after so-called integrated regional econometric 

and input-output methodologies and the second a micro-simulation model based on theories between the 

interaction of land-use and transportation. The two models taken together are used by Metro planners to 

forecast regional economic and population growth, future real estate and land prices, and future population 

or household distributions in each forecast analysis zone. 

The focus of this paper is to describe the regional economic and demographic model. The organization of 

this paper begins with an introduction in section 1, followed in section 2 by a description of the integrated 

econometric and I-O modeling approach for the Metro model’s employment equations, and concluding in 

section 3 with empirical results and our conclusions. 

 

The region is defined to be the Portland-Vancouver CMSA14. The regional model includes a fully described 

employment sector with manufacturing industries disaggregated to two-digit SIC and nonmanufacturing in 

one-digit SIC. The model also includes econometrically estimated regional wage rates, components of 

regional personal income, and non-stochastic equations which estimate regional production (indexed). Also 

included in the model is a cohort-component population model linked by a stochastic net migration 

equation to regional economic/employment growth. 

 

14 The CMSA includes the Oregon counties of Multnomah, Clackamas, Washington, Yamhill, and the 

Washington county of Clark. 
 2 

2. Metropolitan Regional Model Described 

Integration strategies for combining econometric and input-output models for regional forecasting and 

policy analysis have been gaining attention in regional economic literature. This attention is based on 

blending the analytical and policy properties found in input-output modeling with the strengths and features 

available from traditional econometric forecasting models. Input-output models generally perform well in 

analyzing inter-industry impacts and policy alternatives, but are not as well suited in forecasting future 

years. Structural econometric models are designed for forecasting and are constructed in a fashion to 

maximize this capability. The integration of a structural econometric model with an input-output matrix for 

regional forecasting and analysis is the marriage of these two approaches in an effort to create a combined 

model that exceeds the capabilities of the traditional models taken individually. However, Metro has so far 

employed the regional model as a device for forecasting population and employment growth in the region. 

The initial theoretical approach of the Metro economic model was fundamentally based on a traditional 

export-based structural econometric model formulation for the Portland-Vancouver MSA. A structural 

econometric model of the Portland region had never before been constructed for long-range planning in the 

history of Metro and its predecessor the Columbia Regional Association of Governments (CRAG). The 

structural model included detailed stochastic estimates of industry manufacturing and nonmanufacturing 

employment, wage rates for aggregations for groupings of manufacturing and nonmanufacturing industries, 

components of regional income, and a net-migration equation linking economic growth with future 

population increases. A five-year age-cohort survival model provided annual estimates of population 

growth along with changes in employment, wages, and income from the econometric half of the model. 

Early testing of the structural model yielded surprisingly effective inter-industry employment impact 

estimates. However, continued concern over the model’s lack of specific input-output features prompted a 

make-over in the theoretical formulation of the model. Research into integrating regional econometric 

models with input-output models revealed three main strategies for combining regional econometric and 

input-output models: linking, coupling, and embedding strategies. 

The Portland Metro economic model adopts an embedding integration strategy similar to the one used by 

the I-SAMIS (integrated-small area modeling of the industrial sector) model from the St. Louis MSA 

(metropolitan statistical area). This paper describes Metro’s results from its attempt at combining a 

traditional export-based regional econometric model and the technical coefficients of a national inputoutput matrix. 

2.1 Data and Methodology 

The input-output table used in the embedding strategy derives from the U.S. Bureau of Economic Analysis 

(BEA) industry-commodity flow table. The table includes considerably wider industry detail than is 

possible in a regional model. The disaggregate industry data is collapsed into broader aggregate estimates 

of industry-commodity flow which match the desired industry employment detail of the Metro economic 

model. This means that the 90 industries/commodities shown in the national input-output matrix collapses 

to 20 industries in the desired Metro model. 

The procedure combines the input-output matrix to the econometric model using an inter-industry demand 

variable (IDV) in equations for industry employment in the model. The parameter of the IDV is determined 

by regression and therefore not pre-determined or fixed as in other embeddding strategies. Generalization 

of the industry employment equations in the Metro economic model are as follows: 

jt

n

b

ajt bj bjt

m

a

Ejt   jIDVjt ajN R  1 1

where,

Ejt = employment in industry j at time t 

IDVjt = inter-industry dependent variable for industry j at time t 

Najt = national variables a1...am for industry j at time t

Rbjt = national variables b1...bn for industry j at time t 

 j = regression parameter for inter-industry variable for industry j at time t 
 3 

 aj = parameter estimate for national variables for industry j 

 aj = parameter estimate for national variables for industry j

jt = stochastic error term for industry j at time t. 

The employment equation represents one of twenty manufacturing or nonmanufacturing industry sector. 

Explanatory variables for employment in any industry j may (or may not) include national drivers and/or 

aggregate regional macroeconomic drivers, such as: population, personal income, sector wage rates, land 

development activity, productivity or output production indexes, etc. 

The inter-industry dependent variable is defined as follows: 

IDVjt = jt

n

j i

i  Cij E 

1

where, 

Cij = commodity by industry direct requirements coefficient 

Eit = employment in industry i at time t

The commodity by industry direct requirements coefficient is taken from the 1987 Use of Commodities by 

Industry Table and groupings of each industry/commodity are collapsed to the desired industry detail. The 

cross product of the direct requirement coefficients matrix and the industry employment matrix results in an 

IDV term for an industry j with an historical time-series equal to the number of time periods for the matrix 

of employment. Thus, the IDV term provides an historical measurement of the inter-industry demand 

linkage between industry j and all the other industries in the region. 

3. Empirical Results 

Table 1, nearby, summarizes the employment demand equations from the Metro economic model. In all but 

one equation, the IDV term is statistically significant at the 1 percent level (except in health services in 

which the term was not positive and significant). Specification of employment equations with the IDV 

variable seems to provide both satisfactory statistical fit and explanatory information. (In the following 

section, we shall compare an ex ante forecast with actual employment data to see how the model equations 

have performed in an out of sample forecast.) 

According to the findings made by Stover, he suggests that “in general, the IDV is a useful explanatory 

variable in those industrial sectors where the output serves as an input for other local industries.” The 

health service industry (SIC 80) is certainly an industry which serves mostly final demand and has little 

interaction with other industries in the region, and therefore the IDV term was found to be insignificant and 

not a useful explanatory variable in the Metro health service employment equation. 

 

Stover goes on to suggest that the estimated coefficient for the IDV term may be an indicator of the degree 

of inter-industry interactions and a measure of the strength of this relationship15. In our log-log formulation 

of each employment equation, the IDV term may be interpreted in terms of an elasticity measurement. The 

empirical results in each equation show the estimated IDV to be relatively inelastic – although some more 

inelastic than others. Our interpretation is that the more inelastic IDV’s indicate a lesser dependence of the 

particular industry with all other industries in the regional economy. Generally, the inelastic nature of the 

IDV term in each of the employment equations suggests to us that the regional industries in the Portland 

MSA are relatively less dependent and have less inter-industry interactions with one another than perhaps 

in other regional economies. This also suggests that the mix of industries in the Portland MSA may have 

stronger commodity flow relationships with industry sectors outside of the region. 

The empirical findings of the model estimations reveal no major surprises with the use of the IDV as an 

explanatory term and seems consistent with the recent literature on the matter. The Metro model in all but 

one equation found satisfactory fits, and in the industry sector that produced unsatisfactory statistics, the 

IDV term was excluded. 

 

15 Rey also agrees so long as the estimation of the employment equations with the IDV term is unrestricted. 
 4 

3.1 Equation Listing 

Table 1. Metro Regional Economic Model – Employment Equations 

Industry Intercept 

InterIndustry 

Demand 

Variable 

Real 

Industry 

Wage 

Rate 

Other 

Regional 

Explanatory 

Variable(s) 

Industry 

Output 

Index 

Industry 

Productivity 

Index 

Other 

National 

Explanatory 

Variable(s) 

DurbinWatson Adj.- 

R2 

Food Processing 0.8951 

(4.33) 

0.4313 

(7.86) 

 1.43 0.90 

Textile & Apparel 1.8235 

(3.51) 

0.5364 

(3.24) 

 0.6339 

(4.10) 

-0.9456 

(4.45) 

 2.06 0.96 

Lumber & Wood 

Products 

3.9579 

(6.33) 

0.1931 

(3.49) 

-0.7740 

(4.45) 

0.0392a 

(2.52) 

0.1665 

(2.17) 

 0.1259b 

(1.82) 

0.1854c

(3.05) 

1.84 0.99 

Paper & Pulp 2.8822 

(5.37) 

0.4538 

(6.68) 

-0.2147 

(2.69) 

Dummyd -0.3167 

(2.37) 

 2.12 0.86 

Printing & 

Publishing 

-0.8372 

(2.36) 

0.7828 

(12.95) 

 Dummyd 0.5009 

(12.95) 

-0.2917 

(1.75) 

 1.98 0.99 

Metals 3.2341 

(5.31) 

0.6420 

(11.08) 

-0.3558 

(2.18) 

Dummyd 0.2324e 

(3.42) 

-0.1267f

(1.84) 

 

Nonelectrical 

Machinery 

0.1343 

(0.52) 

0.6500 

(8.33) 

 0.2472 

(3.98) 

-0.1664 

(2.03) 

0.1307g 

(2.94) 

1.98 0.99 

Electrical Mach. 

& Instruments 

1.6767 

(2.47) 

0.4399 

(6.59) 

0.4657 

(2.88) 

 0.2203 

(2.22) 

 0.2424h 

(2.37) 

1.59 0.99 

Transportation 

Equipment 

1.5380 

(1.63) 

0.7122 

(8.66) 

-0.2629 

(2.27) 

 -0.3074f

(1.85) 

1.94 0.93 

Other Durable 

Goods 

-1.1273 

(2.20) 

0.6684 

(9.32) 

 0.3547 

(3.11) 

 1.95 0.98 

Other Nondurable 

Goods 

-3.6252 

(8.87) 

0.6360 

(7.08) 

 0.6457 

(5.81) 

 1.87 0.99 

Construction & 

Mining 

-0.7889 

(0.65) 

0.4222 

(5.91) 

 0.0490a 

(2.25) 

0.3062 

(4.38) 

 1.81 0.99 

Transp., Comm. & 

Utilities 

1.2896 

(6.09) 

0.6672 

(15.98) 

 -0.0803 

(3.00) 

 1.03 0.99 

Wholesale Trade 1.0729 

(4.14) 

0.5493 

(7.65) 

 0.2121i 

(2.60) 

 -0.0934 

(2.04) 

 2.09 0.99 

Retail Trade -0.4829 

(0.58) 

0.2614 

(7.46) 

 -0.1976 

(4.61) 

 

Finance, Ins. & 

Real Estate 

1.1425 

(2.38) 

0.4526 

(3.18) 

 0.0207a

(2.00) 

 4.4556j 

(1.91) 

2.03 0.99 

Health Services -4.7777 

(7.63) 

 -0.3480 

(2.73) 

0.40540k 

(4.01) 

 0.4933l 

(7.15) 

2.13 0.99 

Nonhealth Other 

Services 

-0.0397 

(0.11) 

0.3706 

(5.76) 

-0.1535 

(1.53) 

 0.1294m 

(4.09) 

0.9847n 

(7.64) 

1.70 0.99 

State & Local 

Government 

0.2365 

(0.26) 

0.2881 

(5.21) 

-0.2537 

(4.95) 

 1.44 0.99 

a. Regional building permits, number of dwelling units 

b. (U.S. fixed investment in nonresidential structures, 1992$)/(Gross Domestic Product, 1992$) 
 5 

c. (U.S. fixed investment in residential structures, 1992$)/(Gross Domestic Product, 1992$) 

d. dummy variable(s) for periods of work stoppages 

e. (U.S. fixed investment in nonresidential producer durable industrial equipment, 1992$)/(Gross 

Domestic Product, 1992$) 

f. 1990$ exchange rate index, weighted average, U.S. dollar vs. 18 countries, Morgan Guaranty. 

A polynomial distributed lags was used in the employment equation for the metals industry (the 

exchange rate statistic reported is a summation of the lags). 

g. Exports of Computer Goods, nominal $ 

h. (U.S. investments in information processing equipment)/(Gross Domestic Product) in nominal $ 

i. Regional retail trade employment 

j. U.S. employment in Finance, Insurance & Real Estate (FIRE) 

k. Regional total personal income, 1992$ 

l. Regional proxy of per capita share of U.S. consumption of medical services, 1992$ 

m. U.S. exports of Services, total, 1992$ 

n. U.S. Service employment, less employment in health services (SIC 80) 

Each employment equation is specified in log-log form and estimated using OLS and corrected for 

autocorrelation. Since the data are quarterly frequency, the Durbin-Watson statistic that we report is 

modified to detect the existence of a fourth-order autocorrelation.16 Durbin Watson statistics to test for firstorder autocorrelation report generally nothing significant. 

3.2 Forecast Results and Conclusions 

Table 2. Employment Forecast 

In total, the mean absolute percent error is under 0.8 of a percent for the forecast years 1995 to 1997 for 

nonfarm wage and salary employment. In particular, the employment equations for nonmanufacturing 

 

16 Wallis test for fourth-order autocorrelation; J. Johnston, Econometric Methods, 3rd Edition, p. 317 

 1995 1996 1997 MAPE* 

Wage & Salary Employment Forecast Actual %diff Forecast Actual %diff Forecast Actual %diff 1995-97 

Nonfarm, Total 813,288 812,800 0.06% 848,981 851,800 -0.33% 878,852 897,400 -2.07% 0.8%

Food Processing 9,875 10,100 -2.23% 9,855 10,000 -1.45% 9,985 9,700 2.94% 2.2%

Textile & Apparel 4,967 4,900 1.37% 4,957 4,600 7.76% 4,942 4,500 9.82% 6.3%

Lumber & Wood 7,666 7,800 -1.72% 7,449 7,700 -3.26% 7,218 7,800 -7.46% 4.1%

Paper & Pulp 6,956 7,100 -2.03% 6,641 6,500 2.17% 6,549 6,300 3.95% 2.7%

Printing 10,304 10,200 1.02% 10,469 9,900 5.75% 10,698 10,300 3.86% 3.5%

Metals 18,159 18,700 -2.89% 18,770 19,000 -1.21% 18,592 19,600 -5.14% 3.1%

Nonelectrical 18,496 18,700 -1.09% 19,032 19,900 -4.36% 19,432 21,300 -8.77% 4.7%

Electrical Mach. & Instruments 29,350 30,600 -4.08% 31,728 34,200 -7.23% 34,562 36,900 -6.34% 5.9%

Transportation 10,210 10,600 -3.68% 9,884 10,400 -4.96% 9,748 10,900 -10.57% 6.4%

Other Durable 10,049 8,200 22.55% 10,192 8,200 24.29% 10,193 8,300 22.81% 23.2%

Other Nondurable 7,957 8,000 -0.54% 8,469 8,800 -3.76% 8,669 9,400 -7.78% 4.0%

Construction & Mining 44,640 44,900 -0.58% 46,578 51,600 -9.73% 48,920 64,500 -24.16% 11.5%

Transp., Comm. & Utilities 46,926 47,800 -1.83% 48,708 49,400 -1.40% 50,461 50,600 -0.27% 1.2%

Wholesale Trade 63,077 61,800 2.07% 65,790 63,600 3.44% 67,959 66,700 1.89% 2.5%

Retail Trade 147,364 147,000 0.25% 155,832 153,100 1.78% 160,366 160,800 -0.27% 0.8%

FIRE 61,392 59,800 2.66% 64,379 63,000 2.19% 67,166 65,900 1.92% 2.3%

Health Services 55,847 56,100 -0.45% 57,167 57,700 -0.92% 58,892 59,100 -0.35% 0.6%

Nonhealth Services 170,243 169,900 0.20% 180,287 180,300 -0.01% 189,612 189,600 0.01% 0.1%

State & Local Government 89,810 90,600 -0.87% 92,794 93,900 -1.18% 94,888 95,200 -0.33% 0.8%

*Mean Absolute Percent Error
 6 

industries exhibit consistently lower MAPE’s than the manufacturing and producer industry equations. The 

two highest being other nondurables (includes SIC 25, 32, and 39) and construction and mining. The high 

MAPE’s do not necessarily point to a misspecification, but could mean that these two particular industries 

are just subject to wider variance. This is probably more likely in the manufacturing sector than in 

nonmanufacturing as the results reveal. 

During this periods, the Portland Metro area has experienced above average employment growth which has 

exceeded the U.S. average. The regional model has apparently captured the current trend and seems to have 

produced reasonably accurate projections for this short term period. Of course as the forecast period 

extends out, we see increasing volatility from the 1994 base year. Nevertheless, we have deemed the 

regional forecast to be sufficient for our planning purposes and are generally pleased with the model’s 

performance and accuracy. 

In this paper, we have described the employment sector of the Portland Metro economic model. We took an 

econometrically estimated structural model and re-estimated each of its employment equations by 

embedding the technical coefficients of a national input-output table using the so-called inter-industry 

demand variable. The IDV is purported to indicate the degree of inter-industry trade between a particular 

industry and all others in the region. 

The Metro formulation with the IDV is in log-log specification which in turn easily shows the degree of 

elasticity of this inter-industry relationship. A higher elasticity in the IDV term suggests greater economic 

relationship between the particular industry and other industries in the region. More inelastic IDV’s suggest 

that the particular industry is more highly linked or dependent to national trends and trade conditions. All 

the regional employment IDV’s indicate inelastic coefficients which suggest the latter regional interindustry conditions may exist. 

In closing, the IDV appears to be a useful explanatory variable. Integration of an input-output table 

produces significant parameter estimates, and also provides reasonable and statistically good fitting model 

equations overall. Sensitivity tests of the multiplier impacts (incomplete and not reported in this paper) also 

reveal reasonable results. 
 

Bibliography 

Bureau of Economic Analysis (1994) Survey of Current Business, U.S. Department of Commerce, Bureau 

of Economic Analysis, U.S. Government Printing Office, Washington D.C. 

Coomes P, Olson D, Glennon D (1991) The interindustry employment demand variable: an extension of the 

I-SAMIS technique for linking input-output and econometric models, Environment & Planning A 23:1063-

1068 

Duobinis, S F (1981) An Econometric Model of the Chicago SMSA, Journal of Regional Science 21:293-

319 

Johnston J (1984) Econometric Methods, McGraw-Hill, New York 

Metro (1994) Metro Regional Quarterly Economic Model: Model Reference Guide, (unpublished staff 

report) 

Rey, S J (1997) Integrating regional econometric and input-output models: an evaluation of embedding 

strategies, Environment & Planning A 29:1057-1072 

Stover, M E (1994) A comparison of annual and benchmark input-output tables in regional economic 

modeling, The Annals of Regional Science 28:223-228