Monthly Labor Review • November 2007 

Overview of the Projections

The BLS projections of the U.S. economy to 2016 present an economy with steady but slowing growth. 

Growth in the population, and therefore the 

labor force, is expected to slow. As the baby 

boomers age, so too does the population, but 

also, the boomers begin their transition into 

retirement. Productivity growth is expected 

to maintain a pace slower than the late 1990s 

and early 2000s but one faster than the period 

from the 1970s to the early 1990s. Together, 

these trends combine to produce an expectation of gross domestic product (GDP) growth 

of 2.8 percent per year, slower than the 1996–

2006 annual growth of 3.1 percent.

On a biennial basis, BLS prepares a set of 

10-year projections of industry and occupational employment. The current projections 

to 2016 are the 20th in the series.1 In this issue, four articles examine, in detail, the main 

aspects of these projections: the aggregate 

economy; the labor force; industry output and 

employment; and occupational employment 

and job openings.2 The U.S. economic trends 

projected over the 2006–16 decade arise from 

methods that include both analytical judgment and econometric models, and rest on 

assumptions that are explicit and implicit to 

the projections methods. 

These projections provide information for 

individuals seeking career guidance and for 

organizations and individuals that offer career 

guidance resources. In addition, policymakers, community planners, and educational authorities who need information for long-term 

policy planning purposes make use of the BLS

employment projections. BLS projections also 

are used by States in preparing State and local area projections.

These new projections supersede the 

2004–14 projections published in November 

2005, and they form the basis of updated Internet and print editions of the Occupational 

Outlook Handbook, Career Guide to Industries, 

and Occupational Projections and Training 

Data. The remainder of this article presents 

a summary of the results of each projections 

component, a brief methods statement, and 

some discussion of risks and issues related to 

the projections.

Summary of articles

Aggregate economy. In the first article, 

Betty Su focuses on the aggregate economic 

outlook for the coming decade (pages 13–

32). Gross domestic product (GDP), which 

measures the sales of domestically produced 

goods and services to final users, is projected 

to grow at an annual average rate of 2.8 percent over the 2006–16 period. (See table 1.) 

This is slower than either of the preceding 

two decades. Historically, in nominal terms, 

consumer spending accounts for about twothirds of GDP. Over the projections period, 

consumer spending is expected to maintain 

James C. Franklin 

manages the

Division of Industry 

Employment 

Projections in the

Office of Occupational 

Statistics 

and Employment 

Projections, 

Bureau of Labor 

Statistics. 

E-mail: franklin.james@

bls.gov

James C. Franklin 

The U.S. economy is projected to grow at a moderate pace 

over the next 10 years; productivity growth is expected to slow, 

but still grow at a rate faster than the 1970s and 1980s; 

and the labor force will grow older as baby boomers 

move into the 55-and-older age group

An overview of BLS 

projections to 2016

Employment outlook: 2006–16
U.S. Economy to 2016

 Monthly Labor Review • November 2007

its 2006 share of about 70 percent. In real terms, consumer spending has a projected growth rate of 2.9 percent 

per year from 2006 through 2016. For private investment, the projected real annual growth rate is 3.1 percent. Over the projections period, a deficit foreign trade 

position will persist. Growth of exports in real terms is 

expected to average 5.5 percent on an annual basis, while 

real imports are expected to grow at a 4.2-percent annual rate. This reflects an increase in the growth rate of 

exports and a decrease in the growth rate of imports over 

the previous decade. Real federal spending on defense is 

projected to grow at a rate of 1.0 percent through the decade, while nondefense spending is expected to remain 

nearly flat. State and local government expenditures are 

projected to grow in real terms at an annual average rate 

of 1.9 percent.

The macroeconomic projections are developed under 

certain assumptions and expectations. The unemployment rate is assumed to be 5.0 percent in 2016. Nonfarm 

business labor productivity is assumed to grow at an annual rate of 2.2 percent. This is slower than the 2.6-percent rate for 1996–2006, but faster than the 1.5-percent 

annual growth rate for 1986–96. The world economy is 

expected to be moderately strong along with a continuing and steady depreciation of the dollar against our major trading partners. Inflation, as measured by the GDP

Summary of results of BLS aggregate economic projections, 1986, 1996, 2006, and projected 2016 Table 1.

1986 1996 2016 1996–2006 2006 2006–16

Average annual rate of change

	Gross domestic product .......................................... 	 $6,263.6 $8,328.9 $11,319.4 $14,875.2 	 2.9	 3.1	 2.8

			 Personal consumption expenditures.................... 4,228.9 5,619.4 8,044.1 10,718.3 	 2.9	 3.7	 2.9

			 Gross private domestic investment...................... 843.9 1,234.3 1,919.5 2,609.5 	 3.9	 4.5	 3.1

			 Exports................................................................. 353.7 843.4 1,304.1 2,229.7 	 9.1	 4.5	 5.5

			 Imports ................................................................. 510.0 923.0 1,928.6 2,912.0 	 6.1	 7.6	 4.2

			 Federal defense consumption expenditures

		 and gross investment......................................... 	 462.4 383.8 491.5 542.3 	 –1.8	 2.5	

			 Federal nondefense consumption expenditures

			 	 and gross investment......................................... 	 160.1 189.6 250.7 253.1 	 1.7	 2.8	 .1

			 State and local consumption expenditures

			 	 and gross investment......................................... 	 766.4 990.5 1,239.0 1,489.0 	 2.6	 2.3	 1.9

Nominal GDP and percent distr

			 	 	 (billions

	Gross domestic product .......................................... $4,462.8 7,816.9 13,194.7 22,642.3 	 100.0	 100.0	 100.0	 100.0

			 Personal consumption expenditures.................... 2,899.8 5,256.8 9,224.5 15,881.1 	 65.0	 67.2	 69.9	 70.1

			 Gross private domestic investment...................... 746.5 1,240.3 2,209.1 3,769.1 	 16.7	 15.9	 16.7	 16.6

			 Exports................................................................. 320.5 868.5 1,467.6 3,162.4 	 7.2	 11.1	 11.1	 14.0

			 Imports ................................................................. 453.3 964.8 2,229.6 4,194.3 	 10.2	 12.3	 16.9	 18.5

			 Federal defense consumption expenditures

			 	 and gross investment......................................... 	 330.9 354.6 624.3 913.0 	 7.4	 4.5	 4.7	 4.0

			 Federal nondefense consumption expenditures

			 	 and gross investment......................................... 	 107.8 172.8 308.2 437.2 	 2.4	 2.2	 2.3	 1.9

			 State and local consumption expenditures

			 	 and gross investment......................................... 510.7 888.6 1,590.5 2,673.9 	 11.4	 11.4	 12.1	 11.8

			 Total population (millions) .................................... 	 240.4 269.8 300.5 327.0 	 1.2	 1.1	 0.9

			 	 	 Civilian population aged 16 and older ............. 	 180.6 200.6 228.8 250.6 	 1.1	 1.3	 .9

			 	 	 Civilian labor force .......................................... 	 117.8 133.9 151.4 164.2 	 1.3	 1.2	 .8

			 	 	 Civilian household employment....................... 109.6 126.7 144.4 155.9 	 1.5	 1.3	 .8

			 	 	 Nonfarm payroll employment........................... 	 99.5 119.7 136.2 151.1 	 1.9	 1.3	 1.0

			 Unemployment rate (percent) .............................. 7.0 5.4 4.6 5.0 	 –2.6	 –1.5	 .8

			 Private nonfarm business output per hour

			 	 (chained 2000 dollars) .......................................	 30.4	 35.3	 45.6	 56.9	 1.5	 2.6	 2.2

1986–96

Real gross domestic product 

(GDP) and components 

(Billions of chained 2000 dollars)

Percent distribution

Average annual rate of change

1986

1996–2006

1996 2006 2016

1986–96 2006–16

1986

1986 1996

1996

2006

2006 2016

2016

Labor supply and productivity

1 Imports are subtracted from GDP compnents because they are

produced outside of the United States.

SOURCE: Historical data, Bureau of Economic Analysis; project

data, Bureau of Labor Statistics.
Monthly Labor Review • November 2007 

price index, is assumed to be 2.7 percent per year over 

the projection period.3

In summary, moderately strong economic growth is 

expected, with productivity growth slightly faster than the 

long run trend.

Labor force. Mitra Toossi, the author of the second article in the series, presents the projected growth of the 

labor force by age, sex, race, and ethnicity (pages 33–52). 

The essential story of the labor force has three aspects. 

First, population growth is expected to slow over the 

coming decade, and consequently, labor force growth will 

also slow. Second, over the next 10 years, the labor force 

component of older individuals is expected to grow at a 

rate more than 5 times faster than the growth of the labor 

force overall. This reflects the movement of baby boomers 

into this older cohort and expected increases in labor force 

participation among older workers. Finally, the historical 

trend of increasing racial and ethnic diversity of the labor 

force is expected to continue.

The civilian labor force is projected to grow at an annual 

rate of 0.8 percent (See table 2.), slightly slower than the 

population growth rate of 0.9 percent annually.4 Growth 

in the labor force is a consequence of changes in both the 

population and labor force participation rates. The overall 

participation rate is projected to decline slightly from 66.2 

percent in 2006 to 65.5 percent in 2016. (See table 3.) The 

slower growth in the labor force relative to the population 

growth is a reflection of the declining overall participation 

rate. This, in turn, is being driven by the aging baby-boom 

cohort as they enter the 55-and-older age group with a 

significantly lower participation rate than the 25- to 54-

year-old age group.

The progression of the baby boomers through their 

career paths over the last 40 years has had a significant 

impact on the growth characteristics of the labor force. 

Over the next 10 years, the “boomers’ ” decisions about 

work and retirement also will have significant impacts on 

the character of the labor force. An examination of the 

projected labor force participation rates by age shows a 

significant variation across the three main age groups. The 

16- to 24-year-olds have a decreasing participation rate 

from 60.6 percent in 2006 to 57.1 percent in 2016; individuals in their prime work years of ages 24 to 54 have 

a slightly increasing participation rate of 82.9 percent to 

83.6 percent; and the 55-and-older age group have the 

greatest increase in their participation rate, from 38.0 percent to 42.8 percent. For the 55-and-older age group, the 

participation rate change, along with increased numbers 

of individuals in their group, translates into an annual 

projected growth rate of 3.9 percent for the number of 

those 55 and older in the labor force, as shown in table 2. 

This growth rate is nearly 5 times the overall labor force 

annual growth rate of 0.8 percent. 

The increase in the participation of those 55 and older is 

a continuation of the increase over the 1996–2006 decade 

from 30.3 percent to 38.0 percent. During this decade, 

the oldest of the baby boomers joined the 55-and-older 

component of the population. By contrast, the participation rate of the 55 and older group remained relatively flat 

between 1986 and 1996 at 30.1 percent and 30.3 percent 

respectively. The baby boomers in 1996 were aged 32 to 

50, but by 2006 were aged 42 to 60. The first of the baby 

boomers entered into the 55-and-older age group in 2001. 

Many factors influence an individual’s decision to remain 

in the work force or to retire. Health and the ability to 

work are very important. In general, people are living longer and healthier, allowing them to extend their working 

years. Government policies and legislation, and private 

sector business policies that affect retirement benefits also 

influence retirement decisions. The general trend towards 

defined contribution retirement plans rather than defined 

benefit plans encourages individuals to work longer. So 

too, the gradual increases in the age of eligibility for full 

Social Security payments that began in 2000 encourage 

individuals to work longer. These factors together underlie 

the trend towards increased participation of the 55-andolder age group.

Immigration plays a significant role in the dynamics 

of population and labor force growth. The Census Bureau 

estimate of population change between April 2000 and 

July 2006 is about 18 million.5 Of that, about 7.6 million, 

or 43 percent was supplied by net international migration. 

Asian immigrants accounted for about 23 percent of the 

net migration and immigrants of Hispanic origin, about 

52 percent. Similarly, Asians and Hispanics have been the 

fastest growing components of the labor force since 1986, 

and this is expected to continue into the future. Their respective labor forces have projected growth rates of 2.7 

per year during the 2006–16 period.

In summary, the labor force is projected to grow at a 

pace slightly less than that of the overall population. This 

reflects an aging workforce as the baby boomers move well 

into the ages considered traditional for retirement.

Industry employment. The third article (pages 53–85), by 

Eric Figueroa and Rose Woods, examines the growth of 

industry output and employment. Projections of employment and output at the aggregate level show the combined macro effects of slower growth in both productivity 
U.S. Economy to 2016

  Monthly Labor Review • November 20

Table 2. Civilian labor force by age, sex, race, and Hispanic origin, 1986, 1996, 2006, and projected 2016

Age, sex, race,

and ethnicity

1986

Level

1996 2006 2016 1986 1996 2006

Change

 

Total,16years

		and older................ 	117,834	133,943	 151,428	164,232	 16,109	 17,485	 12,804	 100.0	 100.0	 100.0	 100.0	 1.3	 1.2	 0.8

	Age, years: 	 	 	 	 	 	 	 	 	 	 	

			 16 to 24................ 	 23,367	 21,183	 22,394	 20,852	 –2,184	 1,211	 –1,542	 19.8	 15.8	 14.8	 12.7	 –1.0	 .6	 –.7

			 25 to 54................ 	 79,563	 96,786	 103,566	106,026	 17,223	 6,780	 2,460	 67.5	 72.3	 68.4	 64.6	 2.0	 .7	 .2

			 55 and older......... 	 14,904	 15,974	 25,468	 37,354	 1,070	 9,494	 11,886	 12.6	 11.9	 16.8	 22.7	 .7	 4.8	 3.9

	Sex:

Men	....................... 	 65,422	 72,087	 81,255	 87,781	 6,665	 9,168	 6,526	 55.5	 53.8	 53.7	 53.4	 1.0	 1.2	

Women .................. 	 52,413	 61,857	 70,173	 76,450	 9,444	 8,316	 6,277	 44.5	 46.2	 46.3	 46.6	 1.7	 1.3	

	Race: 	 	 	 	 	 	 	 	 	 	 	 	

			 White.................... 	101,801	113,108	 123,834	130,665	 11,307	 10,726	 6,831	 86.4	 84.4	 81.8	 79.6	 1.1	 .9	 .5

			 Black .................... 	 12,654	 15,134	 17,314	 20,121	 2,480	 2,180	 2,807	 10.7	 11.3	 11.4	 12.3	 1.8	 1.4	 1.5

			 Asian.................... 	 3,379	 5,701	 6,727	 8,741	 2,322	 1,026	 2,014	 2.9	 4.3	 4.4	 5.3	 5.4	 1.7	 2.7

			 All other groups1... 	 –	 –	 3,553	 4,705	 –	 –	 1,152	 –	 –	 2.3	 2.9	 –	 –	 2.8

	Ethnicity:

			 Hispanic origin ..... 	 8,076	 12,774	 20,694	 26,889	 4,698	 7,920	 6,195	 6.9	 9.5	 13.7	 16.4	 4.7	 4.9	 2.7

			 Other than

			 	 Hispanic origin... 	109,758	121,169	 130,734	137,343	 11,411	 9,565	 6,609	 93.1	 90.5	 86.3	 83.6	 1.0	 .8	 .5

	White

			 non-Hispanic ........ 	 94,027	100,915	 104,629	106,133	 6,888	 3,714	 1,504	 79.8	 75.3	 69.1	 64.6	 .7	 .4	 .1

Age of baby

		boomers................. 	22 to 40	32 to 50	 42 to 60	52 to 70

1986–

96

Average annual rate

of change

1996–

2006

2006–

16 2016

Percent distribution

1986–

96

1996–

2006

2006–

16

1

 The “all other groups” category includes (1) those classified 

as being of multiple racial origin and (2) the race categories of (2a)

American Indian and Alaska Native or (2b) Native Hawaiian and Other

Pacific Islanders. Dash indicates no data collected for category.

(Numbers in thousands)

Civilian labor force participation rates by age, 1986, 1996, 2006, and projected 2016 Table 3.

Group

1986

Participation rate

1996 1986–

96 2006 2016 2006–

16

1996–

2006

Percentage point

change

 

	Total, 16 years and older................... 	 65.3 	 66.8 	 66.2 	 65.5 	 1.5 	 –0.6 	 –0.7 	 0.2 	 –0.1 	 –0.1

	16 to 24 ............................................. 	 68.6 	 65.5 	 60.6 	 57.1 	 –3.1 	 –4.9 	 –3.5 	 –.5 	 –.8 	 –.6

			 16 to 19.......................................... 	 54.7 	 52.3 	 43.7 	 37.5 	 –2.4 	 –8.6 	 –6.2 	 –.4 	 –1.8 	 –1.5

			 20 to 24.......................................... 	 78.9 	 76.8 	 74.6 	 71.8 	 –2.1 	 –2.2 	 –2.8 	 –.3 	 –.3 	 –.4

	25 to 54 ............................................. 	 82.0 	 83.8 	 82.9 	 83.6 	 1.8 	 –.9 	 .7 	 .2 	 –.1 	 .1

			 25 to 34.......................................... 	 82.9 	 84.1 	 83.0 	 85.4 	 1.2 	 –1.1 	 2.4 	 .1 	 –.1 	 .3

			 35 to 44.......................................... 	 83.7 	 84.6 	 83.8 	 83.3 	 .9 	 –.8 	 –.5 	 .1 	 –.1 	 –.1

			 45 to 54.......................................... 	 78.0 	 82.1 	 81.9 	 82.1 	 4.1 	 –.2 	 .2 	 .5 	 .0 	 .0

	55 and older ...................................... 	 30.1 	 30.3 	 38.0 	 42.8 	 .2 	 7.7 	 4.8 	 .1 	 2.3 	 1.2

			 55 to 64.......................................... 	 54.0 	 57.9 	 63.7 	 66.7 	 3.9 	 5.8 	 3.0 	 .7 	 1.0 	 .5

			 65 to 74.......................................... 	 15.2 	 17.5 	 23.6 	 29.5 	 2.3 	 6.1 	 5.9 	 1.4 	 3.0 	 2.3

			 75 and older................................... 	 4.0 	 4.7 	 6.4 	 10.5 	 .7 	 1.7 	 4.1 	 1.6 	 3.1 	 5.1

1986–

96

Average annual

rate of change

1996–

2006

2006–

16

(In percent)
Monthly Labor Review • November 2007

and the labor force. Nonagricultural wage and salary employment6

 is projected to grow by 15 million, an annual 

growth rate of 1.0 percent, during the projections decade. 

Projected total industry output is expected to increase7 on 

a real basis at an annual rate of 2.9 percent. (See table 

4.) This growth in both employment and output is slower 

than the respective annual growth rates of 1.3 percent and 

3.0 percent in the historical 1996–2006 period.

Nearly all the growth in nonagricultural wage and salary 

employment is projected to occur in the service-providing 

sectors of the economy. Employment in services is expected to account for 86 percent of all jobs. The projected 2016 

level of employment in services is 130.2 million which 

is attained with an expected 1.3-percent annual growth 

rate. The two fastest growing service-providing sectors 

are health care and social assistance, and professional and 

business services, with growth rates of 2.4 and 2.1 percent 

respectively. The combined employment growth for these 

two sectors, 8.1 million, account for more than half the 

total projected employment increase. 

Construction, projected to add about 780,000 jobs, is 

the only component of the goods-producing sector expected to have a positive employment growth. Manufacturing declined by 3.0 million jobs during 1996–2006 at 

an annual rate of –1.9 percent. The decline is expected to 

continue at a slower pace over 2006–16 of –1.1 percent 

annually, resulting in a 1.5-million job loss. The projected 

decline in manufacturing employment, and the goodsproducing sector overall, is not accompanied by expected 

real output declines, however. Expected productivity increases during 2006–16 offset the employment declines, 

resulting in a projected annual growth rate for the output 

from the goods-producing sector of 2.1 percent, and for 

manufacturing output of 2.4 percent. Real output for the 

service-producing sector has a projected annual growth 

rate of 3.3 percent. With the associated employment 

growth, productivity gains clearly contribute less to service output growth than goods output growth. 

The two sectors within the service-producing sector 

with the fastest projected employment growth also are 

expected to have strong real output growth. Health care 

and social assistance real output growth is projected at 3.6 

Real output and nonfarm wage and salary employment, by major industry, 2006 and 2016 Table 4.

Industry sector

2006

Output1 

Average

annual rate

of change

2016 2006 2016

Average

annual rate

of change

Total .......................................................................	 $20,265.3 	 $27,093.7 	 2.9	 136,912.2 	 151,962.3 1.0

	Goods-producing, excluding agriculture..................	 5,297.3 	 6,535.0 	 2.1	 22,504.9	 21,772.6 	 –.3

			 Mining ..................................................................	 242.2 	 268.6 	 1.0	 618.7 	 608.5 	 –.2

			 Construction.........................................................	 899.1 	 1,031.1 	 1.4	 7,688.9 	 8,469.6 1.0

			 Manufacturing ......................................................	 4,145.8 	 5,263.6 	 2.4	 14,197.3	 12,694.5 	 –1.1

		Service-producing..................................................	 13,778.0 	 18,992.2 	 3.3	 114,407.3 	 130,189.7 1.3

			 Utilities .................................................................	 323.4 	 353.5 	 .9	 548.5	 517.6 	 –.6

			 Wholesale trade...................................................	 1,041.9 	 1,702.7 	 5.0	 5,897.7	 6,326.2 .7

			 Retail trade...........................................................	 1,305.3 	 1,892.1 	 3.8	 15,319.4 	 16,006.4 .4

			 Transportation and warehousing..........................	 669.9 	 889.9 	 2.9	 4,465.8 	 4,962.0 1.1

			 Information...........................................................	 1,006.2 	 1,682.8 	 5.3	 3,054.9 	 3,266.7 .7

			 Financial activities................................................	 2,621.1 	 3,761.6 	 3.7	 8,363.2	 9,570.1 1.4

			 Professional and business services.....................	 2,130.7 	 2,990.7 	 3.4	 17,551.6 	 21,643.7 2.1

			 Educational services ............................................	 157.1 	 190.9 	 2.0	 2,918.4 	 3,527.4 1.9

			 Health care and social assistance .......................	 1,210.9 	 1,720.2 	 3.6	 14,919.8 	 18,954.1 2.4

			 Leisure and hospitality .........................................	 739.3 	 909.4 	 2.1	 13,143.4 	 15,016.7 	 1.3

			 Other services......................................................	 439.1 	 550.5 	 2.3	 6,234.6 	 7,077.2 	 1.3

			 Federal Government............................................	 715.1 	 760.7 	 .6	 2,728.3 	 2,625.7 	 –.4

			 State and local government .................................	 1,435.9 	 1,748.7 	 2.0	 19,261.7	 20,696.1	 .7

Employment2

1

Output is on a gross duplicated basis in billions of chained 2000

dollars. Total includes agriculture which is excluded from detail. 2

Employment is in thousands. Includes wage and salary data

from the Current Employment Statistics survey, except private

households, which is from the Current Populations Survey. Loggi

workers are excluded.
U.S. Economy to 2016

 Monthly Labor Review • November 2007

percent annually, while professional and business services 

real output is expected to grow at an annual rate of 3.4 

percent. The information sector is the fastest growing service-producing sector, with projected real output growth 

of 5.3 percent annually. The growth for the information 

sector is driven by expectations of growth for telecommunications, software publishing, and Internet and other 

related services. 

In summary, the long-term historical shift of employment from the goods-producing to the service-producing 

sector is expected to continue. In part, this is predicated 

on differences in productivity growth at the sector level, 

but also, in part, demographics and technological change 

are driving the shift.

Occupational employment. The final article, by Lynn 

Shniper and Arlene Dohm, discusses the results of the occupational component of the projections (pages 86–125). 

The two largest of the major occupational groups8 in 2006, 

professional and related occupations, and service occupations, are expected to remain the two largest in 2016. (See 

table 5.) These two occupational groups are projected as 

the fastest growing, accounting for about 63 percent of 

the total projected growth. With the addition of the management, business, and financial occupational group—the 

only other group expected to exceed the projected average 

occupational growth—these three occupational groups 

account for 73 percent of total growth. On the opposite 

end of the growth spectrum resides the fishing, forestry, 

and farming occupations and the production occupations. 

These two occupational groups have projected declines in 

the number of jobs over the 10-year span 2006–16. The 

remaining occupational groups are expected to grow, but 

at a rate less than the average for all occupations. 

Within the professional and related occupational group, 

three major occupational groups account for 3.5 million of 

the projected jobs growth. Health care practitioners and 

technical occupations contribute 1.4 million; education, 

training, and library contribute 1.3 million; and computer 

and mathematical science contribute 822,000. Within the 

service occupational group, the major group, healthcare 

support occupations, is expected to be the fastest growing 

at nearly 27 percent over the 2006–16 period.

New job growth is not the only source of employment 

opportunities. People retire, or leave the workforce for 

several reasons; people also leave their jobs and take work 

in different occupations. The job opportunities that arise 

from the need to replace workers are significant: at 35.1 

million it is more than double the 15.6 million of new 

jobs attributed to growth. As the baby boomers age, an 

increasing share of replacement needs will arise from their 

retirements.

The occupational article also examines the most significant source of training by occupation. The analysis of 

the most significant source of training reveals that the 

occupations historically requiring short-term on-the-job 

training are expected to be about 30 percent of all new 

jobs. Jobs that historically require a bachelor’s degree as 

the most significant source of training are expected to account for about 20 percent of all new jobs. 

In summary, the occupational projections are similarly 

impacted by the factors that drive the industry employment projections. The combined influence of the productivity outlook, the aging demographic, and the technolog-

 

Table 5. Employment by major occupational group, 2006 and projected 2016

Occupation

2006

Level

Change

2016 2006 2016

Percent

change

Total, all occupations...............................................	 150,620 	 166,220 	 15,600 	 100.0 	 100.0 	 10.4

Management, business, and financial..................	 15,397 	 16,993 	 1,596 	 10.2 	 10.2 	 10.4

			 Professional and related ......................................	 29,819 	 34,790 	 4,970 	 19.8 	 20.9 	 16.7

			 Service .................................................................	 28,950 	 33,780 	 4,830 	 19.2 	 20.3 	 16.7

			 Sales and related.................................................	 15,985 	 17,203 	 1,218 	 10.6 	 10.3 	 7.6

Office and administrative support ........................	 24,344 	 26,089 	 1,745 	 16.2 	 15.7 	 7.2

Farming, fishing, and forestry ..............................	 1,039 	 1,010 	 –29 	 .7 .6 	 –2.8

			 Construction and extraction .................................	 8,295 	 9,079 	 785 	 5.5 	 5.5 	 9.5

			 Installation, maintenance, and repair ................... 5,883 6,433 550 3.9 

 Production............................................................	 10,675 	 10,147 	 –528 	 7.1 	 6.1 	 –4.9

			 Transportation and material moving.....................	 10,233 	 10,695 	 462 	 6.8 	 6.4 	 4.5

Percent

distribution

(Numbers in thousands)
Monthly Labor Review • November 2007 

ical changes that confront both consumers and businesses 

are expected to motivate a continued shift towards service-producing activities.

Risks to the projections

Every forecast has associated risks; the BLS projections are 

no different. At the first level, the underlying assumptions 

of the projections, whether explicit or implicit within the 

analytic methods, are a point of risk. At the second level, 

the analytic results have risk owing to the uncertain nature 

of the issues addressed. These projections are an attempt 

to identify the most likely path for employment within 

the U.S. economy over the coming decade. That attempt 

requires giving qualitative and quantitative boundaries to 

several issues facing the economy. These issues include the 

aging population, globalization and immigration, and other 

considerations such as the current wars and the reality of 

terrorism. The section that follows briefly discusses these 

issues.

General risks. Statistical and econometric models formally project historical relationships. Subjective analysis, 

as well, relies on understanding history and extrapolating that understanding to conceive the future. Exercises 

such as the BLS projections typically stipulate a disclaimer 

for unanticipated events: no new wars, no forthcoming 

natural disasters or other significant unanticipated events. 

Such a disclaimer reinforces the point that the methods 

rely on an extrapolation of history, and that the occurrence of such events could upset the behavior of the various models or upend the basis of analysis. This disclaimer 

applies to the BLS projections. 

Aging population. The aging of the U.S. population and 

the implications for Social Security and healthcare present 

challenges for domestic policymakers. Future policy decisions present an associated risk to these projections. BLS 

assumes that the laws and policies in effect, or legislated 

to be effective, during the development of the projections 

are not changed. Therefore, the current laws regarding Social Security and Medicare are assumed throughout the 

projections. However, it is clear there are long-term fiscal 

issues regarding both that require political solutions. BLS

makes no presumptions about the nature of any future political solutions, nor what the impacts might be upon the 

projections.

Globalization and immigration. Political and economic 

concerns revolve around the reality of globalization and 

immigration. Persistent foreign trade deficits in goods and 

services, along with increased flows of capital and strong 

immigration growth have prompted both political and 

economic debate about appropriate U.S. policy. Again, 

BLS makes no presumptions during the development of 

these projections about future laws or policies regarding 

these issues. The projections do recognize the reality of 

historical trends, and generally expect the persistence of 

these trends.

Economic growth requires energy, and crude oil is a 

fundamental source of energy on a global basis. These 

projections use the annual energy forecast provided by 

the Department of Energy to develop the underlying 

energy assumptions.9 The cost of imported oil to refiners averaged just shy of $21 a barrel in real terms. When 

deflated by the GDP price deflator (2000 chain-weighted 

basis), the cost to refiners ranged from about $13 to $28 

a barrel from 1986 through 2002.10 In 1980, imported oil 

peaked at a real price of almost $63 a barrel. With the 

beginning of the Iraq war in 2003, the real cost of imported oil began to climb, but at of the end of 2006, it 

had not reached the 1980 peak. The real cost of oil can 

be volatile, and is subject to political as well as market 

forces. These projections mirror the reference case of the 

Department of Energy’s projections in assuming a fairly 

optimistic outlook, where the price of oil is expected to 

retreat somewhat from the high real levels in 2006 and 

not return to the relatively lower prices of the late 1980s 

and 1990s. 

With regard to offshoring of jobs, BLS has attempted 

to address the possible impacts on occupational demand 

in a qualitative sense.11 These efforts involve a process of 

“scoring” individual occupations according to susceptibility of being offshored. The scores are derived from the 

answers regarding specific characteristics of work as they 

pertain to each occupation. Based on these scores, certain occupations are identified as most susceptible—but 

not necessarily certain—to be offshored. This analysis 

lends a structured qualitative understanding to one factor among many that affect occupational demand for a 

given industry.

The immigration assumptions are embedded in the 

Census Bureau’s population projections. In developing 

the labor force projections, BLS adjusts the population 

projections so that they correspond with the most recent 

historical population data. No other adjustment is made 

to the population projections. As Mitra Toossi discusses 

in her article, there is a difference of about 400,000 immigrants per year between the Census Bureau’s estimates of 

the immigrant population and the Census Bureau’s pro-
U.S. Economy to 2016

10 Monthly Labor Review • November 2007

jection of the immigrant population, over the 2000–06 

period. This difference, extrapolated through the 2006–

16 decade, would add 4 million persons to the projected 

resident population to yield 329 million instead of 325 

million in 2016. The projected labor force, given the projected participation rates, would be nearly 167 million in 

2016 as opposed to 164.2 million.

There is much current political debate about immigration. The context of that debate is twofold: economic and 

defensive security. The economic context ranges from 

the advantages of immigration for the overall economy, 

to the risk of job opportunities for U.S. citizens. The security context focuses on the issue of potential terrorist 

activity within U.S. borders. The political outcomes can 

have varying impacts upon the projections. Generally, 

however, immigrants are motivated by economic opportunity and therefore are expected to have higher labor 

force participation rates than the resident population, on 

average.

Projections methods

The projections are developed by BLS as a series of analytical processes that incorporate a variety of methods, ranging from econometric and time-series models to explicitly 

subjective analyses. The process begins with the projection 

of the labor force, followed by the projection of aggregate 

economic activity, then industrial production and employment, and finally the translation of industry employment 

into occupational employment. The methods used are discussed in general terms in the following section. A more 

detailed discussion is available in the BLS Handbook of 

Methods.

12

The labor force projections are developed by first extrapolating detailed labor force participation rates and 

then applying those rates to a set of population projections. The U.S. Census Bureau provides population projections by detailed age, sex, race, and ethnicity groupings.13

The historical labor participation rates are projected using 

time-series smoothing and extrapolation techniques.14

These extrapolated labor force participation rates are then 

multiplied by the projected population to arrive at the initial estimates of the labor force groupings. The projected 

participation rates and labor force levels are reviewed for 

anomalous behavior, such as unexplained changes in the 

relationships between the various groupings of the labor 

force. When completed, the total of the projected labor 

force is supplied, as an exogenous variable, to the next 

stage of the projections.

The aggregate economic projections are developed using the Macroeconomic Advisers, LLC (MA) quarterly 

macroeconomic model. MA is a St. Louis, MO, based 

forecasting group that provides both monthly short-term 

and quarterly long-term projections of the U.S economy.15 

The MA macroeconomic model (WUMMSIM 2005 version 2.0) comprises 744 variables descriptive of the U.S. 

economy. Of these, 134 are behavioral equations, 409 are 

identities. The remaining 201 variables are exogenous and 

must be supplied to the model in order to calculate a solution for the projections horizon. Among the exogenous 

variables, only a relatively small number significantly affect the long-term projections of the value of GDP and its 

demand makeup, as well as the level of employment necessary to produce that GDP. Included in the list of critical assumptions are monetary and fiscal policies, energy, 

outlook, population growth, and demographic changes. 

These are supplied to the model which is then solved for 

the behavioral and identity equations. Further discussion 

and presentation of the exogenous macro assumptions is 

found in the article by Betty Su.

The projections are generally prepared with a prior notion of target values for selected variables in the macroeconomic model. These include the inflation rate, the level 

of the unemployment rate, the labor productivity growth 

rate, and variables related to international trade. Setting 

preliminary target values for those key variables defines 

a context in which the model results are evaluated. The 

final results for these variables are determined through 

several iterations of model solution and review. When the 

aggregate economic projection is final, the components of 

GDP are then supplied to the industry component of the 

projections process.

The translation of GDP into detailed industrial production is the next stage in the process of developing the 

BLS employment projections. This involves two tasks. The 

first is to allocate the GDP components, supplied by the 

macroeconomic model, to a detailed list of commodities 

purchased. The individual GDP components are allocated 

to a detailed commodity-by-category matrix. This matrix 

comprises 201 commodity sectors and 194 categories. The 

methods vary by GDP component and include econometric and statistical techniques, as well as analytic judgment. 

This redistribution of GDP provides the demand component of an inter-industry model of the U.S. economy.

The second task is to derive industry output, using the 

final demand allocated to commodity and an inter-industry model of the U.S. economy. This involves projecting 

an input-output system for the target year that allows the 

calculation of the industry and commodity output necessary to produce the projected level of GDP.

16 This task 
Monthly Labor Review • November 2007 11

also is accomplished by using a combination of statistical methods and analytic judgments. The industry total 

output includes both industry sales to final users and to 

other industries as intermediate inputs. This measure of 

industry output is also referred to as gross duplicated 

output, and, at a detailed industry level, is the determinant for the primary factors of production (labor and 

capital) necessary to produce that given level of output.

Wage and salary employment is solved independently 

for each industry through a system of equations. The 

individual industry estimates of employment are controlled back to a total employment level derived from 

the macroeconomic solution. Total hours are first estimated through an estimated production function for 

each of the detailed industries. These equations solve 

for total hours as a function of industry output, sector 

wage rates, the unemployment rate, and a trend variable 

standing as a proxy for technological change. A separate 

set of trend equations estimates average weekly hours for 

each industry. An identity relating average weekly hours, 

total hours, and employment yields a count of jobs by 

industry.17 Self-employment is estimated as a trend of 

the historical relationship with wage and salary employment. In the final stage, the industry employment for 

the 201 industries is extrapolated to more than 300 industries of the North American Industry Classification 

System (NAICS), for input to the occupational demand 

component.

The occupational projections also involve two basic 

tasks. In the first task, the latest historical industry-byoccupation staffing pattern matrix is extrapolated to the 

projections year. The second task applies the projected industry employment from the labor model to a projected 

staffing pattern matrix to derive occupational employment. A staffing pattern matrix presents the proportional distribution of detailed occupations within each 

of the 311 detailed NAICS industries. Analysts make 

specific judgments as to whether an occupational ratio 

should remain unchanged, increase, or decrease over 

the projections horizon. These ratio analyses are conducted relative to all the other ratios within a given 

industry. Analysts’ judgments are based on reviews of 

available historical data, studies of specific industries 

and occupations, and ongoing consultations with industry, trade and professional associations. Balancing 

procedures ensure that the changed ratios sum to unity 

for each industry. The final step, applying the previously 

projected industry employment levels, result in estimates 

of new job growth for more than 700 detailed occupations. Estimates of job growth for the self-employed are 

carried out in a similar, but separate step.

The projections analysts also form estimates of replacement demand for individuals who temporarily leave 

the labor force, retire, or move on to other occupations 

during the projections decade. These estimates are based 

on data from the Current Population Survey. Replacement demand is expected to be more than double new 

occupational job growth. By considering replacement 

demand in conjunction with new job growth, a better 

understanding is gained for potential job opportunities 

in many occupations.

The results of each stage of the projections are reviewed both as an independent step, and in the context 

of cumulative results. The results are examined for consistency and meaningfulness in the context of the modeling 

framework, research and analysis, and understanding of 

market dynamics. The review process can have feedback 

effects on prior steps so that, for example, a result in occupational levels may influence rethinking the determinants of industry outputs and/or employment, or even 

precipitate revisiting the results at the aggregate level of 

detail. BLS conducts this detailed review process to provide estimates that are consistent from the aggregate to 

the most detailed occupations.

As a final review, BLS evaluates previous projections 

when historical data overtakes the projected years. The 

Bureau has carried out and published projections evaluations since the 1970 projections.18 These evaluations 

are conducted to provide insight on the efficacy of BLS 

methods, to give BLS guidance on potential improvements of methods, and to provide users with a basis to 

determine for themselves both weaknesses and strengths 

in the projections. 

THE BLS PROJECTIONS are undertaken to provide guidance primarily to those seeking labor market and career 

information. These projections present a reasonable and 

attainable view of the likely path of the U.S. economy, given the caveats associated with the projections methods. 

The U.S. economy has been resilient over these last 10 

years, and the 2006–16 projections indicate that this is 

expected to continue, with an expected GDP growth rate 

of 2.8 percent through 2016. The population is aging and 

becoming more diverse, as is the labor force, and those 

trends are expected to continue. The moderate growth of 

the U.S. economy and the aging of both the workforce 

and the population combine to present a unique set of 

opportunities for those seeking employment and unique 

challenges for policymakers and educators. 
U.S. Economy to 2016

12 Monthly Labor Review • November 2007

Notes

1

 The 20 projection groups span projections to 1970, published in 

1966, to the current projections to 2016. They represent a unified set 

of aggregate economic, labor force, industry, and occupational demand 

projections presented as a series of linked outlook estimates. The occupational demand projections predate these unified sets of projections 

by 17 years with the first publication of the Occupational Outlook Handbook in 1949. A series of articles published in the May 1999 issue of the 

Monthly Labor Review takes a comprehensive look at the history of the 

occupational projections program in BLS. These are available at www.

bls.gov/opub/mlr/1999/05/contents.htm (visited Nov. 19, 2007).

2

 See in this issue, Betty Su, “The U.S. economy to 2016: slower 

growth as boomers begin to retire,” pp. 13–32; Mitra Toossi, “Labor 

force projections to 2016: more workers in their golden years,” pp. 33–

52; Eric Figueroa and Rose Woods, “Industry output and employment 

projections to 2016,” pp. 53–85; and Arlene Dohm and Lynn Shniper, 

“Occupational employment projections to 2016: less production, more 

health care jobs,” pp. 86–125.

3 See Su, “The U.S. economy,” for additional disscussion of macroeconomic assumptions.

4

 The labor force is defined as the population that is 16 and older 

at work or actively seeking work. The labor force participation rate is 

the ratio of the labor force to the population aged 16 and older. The 

bottom panel of table 1 shows the 0.9-percent increase in the total 

population.

5

 See Table 5: Cumulative Estimates of the Components of Population Change by Race and Hispanic or Latino Origin for the United 

States: April 1, 2000 to July 1, 2006 (NC–EST2006–05), Population 

Division, U.S. Census Bureau, online at http://www.census.gov/

popest/national/asrh/NC-EST2006/NC-EST2006-05.xls (visited Nov. 

19, 2007). 

6

 Nonagricultural wage and salary employment includes data from 

the Current Employment Statistics survey, except private households, 

which is from the Current Population Survey.

7

 When referencing industry and total industry output, this article 

uses the gross duplicated output concept. Gross duplicated output includes intermediate as well as final purchases of goods and services. 

Real output is measured as a 2000 based chain-weighted Fisher index 

and is used for historical rate of growth comparisons. Real output on 

an industry basis does not add to their higher level aggregates because 

of chain weighting. See Charles Steindel, “Chain-weighting: The New 

Approach to Measuring GDP,” Current Issues in Economics and Finance (New York, Federal Reserve Board of New York, December 

1995).

8

 The Standard Occupational Classification (SOC) system broadly 

classifies occupations in one of 23 major groups. This article uses an 

aggregation of the 23 major groups referred to as the SOC Intermediate 

Aggregation which is comprised of 11 groups. The groupings, management, business, and financial occupations; professional and related 

occupations; and service occupations are comprised of selections of the 

23 major group levels. Military specific occupations are excluded, and 

represent a specific grouping under the 23 major groups as well as the 

intermediate aggregation.

9

 See Annual Energy Outlook 2007 (U.S. Department of Energy, 

Energy Information Agency, February 2007), pp 34–35.

10 See Annual Energy Review (U.S. Department of Energy, Energy 

Information Agency, June 2007), table 5.21, p 171.

11 For more information about BLS methods of evaluating offshoring risk, see “Accounting for Offshoring in Occupational Projections,” 

Occupational Projections and Training Data, 2006–2007 Edition, Bulletin 2602 (U.S. Department of Labor, February 2006), pp.12–15.

12 The BLS Handbook of Methods is available online as a series of 

chapters in pdf format. The projections program is described in chapter 

13 of the Handbook at http://www.bls.gov/opub/hom/pdf/homch13.

pdf (visited Nov. 19, 2007).

13 BLS labor force projections are classified by 136 different groups 

including gender, 17 age groups, and 4 race and ethnic categories. The 

race categories include white-only, black-only, Asian-only and “all 

other.” The “all other” group includes all those who claim multiracial 

backgrounds in addition to the race categories of American Indian, 

Alaska Natives, and Native Hawaiian and other Pacific Islanders. In 

addition, projections are made of the Hispanic ethnic category and 

white non-Hispanics.

14 For detail on the extrapolation techniques applied to the labor 

force participation rates, see Mitra Toossi, “Labor force projection 

methodology” (unpublished documentation memorandum, Bureau of 

Labor Statistics). For updates contact Toossi.Mitra@bls.gov.

15 Information about Macroeconomic Advisors, LLC, and the 

products and services they offer, are available online at http://www.

macroadvisers.com (visited Nov. 19, 2007).

16 The source data for the input-output model is published by the 

Bureau of Economic Analysis. More information about the data and 

methods is available online at http://www.bea.gov/industry/ (visited 

Nov. 19, 2007).

17 For details about the industry employment model, see “A model 

of detailed industry labor demand” (unpublished documentation memorandum, Bureau of Labor Statistics). For updates contact Woods.Rose.

A @bls.gov or Figueroa.Eric@bls.gov.

18 For the most recent BLS evaluations, see Howard N Fullerton Jr., 

“Evaluating the BLS labor force projections to 2000,” Monthly Labor 

Review, October 2003, pp. 3–12 and Jill Auyer, and Andrew Alpert 

“Evaluating the BLS 1988–2000 employment projections,” Monthly 

Labor Review, October 2003, pp. 13–37.