2006 OASDI Trustees Report 

V. ASSUMPTIONS AND METHODS UNDERLYING ACTUARIAL ESTIMATES
The basic economic assumptions are embodied in three alternatives that are designed to provide a reasonable range of effects on Social Security's financial status. The intermediate assumptions reflect the Trustees' consensus expectation of moderate economic growth throughout the projection period. The low cost assumptions represent a more optimistic outlook, with relatively strong economic growth. The high cost assumptions represent a relatively pessimistic scenario, with weak economic growth and two recessions in the shortrange period.
Based on the latest data and estimates, the economy is assumed to have been above its sustainable potential level of output and employment during the latter half of 2005. Under all three sets of assumptions the economy is assumed to reach the sustainable, potential level of output by the end of the shortrange period. Economic cycles are not included in the assumptions beyond the first 5 to 10 years of the projection period because they have little effect on the longrange estimates of financial status.
This report also includes a stochastic projection that provides a probability distribution of possible future outcomes that is centered around the Trustees' intermediate assumptions. Additional economic assumptions and modeling are required for these projections. These are discussed in appendix E.
The following sections 1 through 4 present the principal economic assumptions for the three alternatives that are summarized in table V.B1. The subsequent sections 5 through 7 present additional economic factors, summarized in table V.B2, that are critical to the projections of the future financial status of the combined OASI and DI Trust Funds.
Total U.S. economy productivity is defined as the ratio of real gross domestic product (GDP) to hours worked by all workers.^{1} The rate of change in total economy productivity is a major determinant in the growth of average earnings. For the 40 years from 1964 to 2004, annual increases in total productivity averaged 1.8 percent, the result of average annual increases of 2.1, 1.4, 1.4, and 2.2 percent for the 10year periods 196474, 197484, 198494, and 19942004, respectively. However, it should be noted that this growth rate of 1.8 percent reflects a shift of employment from low (farm) to high (nonfarm) productivity sectors that is not expected to continue in the future.
Because productivity growth can vary substantially within economic cycles, it is more useful to consider historical average growth rates for complete economic cycles. The annual increase in total productivity averaged 1.6 percent over the last four complete economic cycles (measured from peak to peak), covering the 34year period from 1966 to 2000. The annual increase in total productivity averaged 2.2, 1.2, 1.3, and 1.6 percent over the economic cycles 196673, 197378, 197889, 19892000, respectively.
The ultimate annual increases in productivity are assumed to be 2.0, 1.7, and 1.4 percent for the low cost, intermediate, and high cost assumptions, respectively. These rates of increase are each 0.1 percentage point higher than those used in the 2005 report. The change reflects the belief that recent strong growth in productivity, after the relatively poor performance from 1973 to 1989, is consistent with future longterm growth that mirrors the longterm trends of the past.
For the intermediate assumptions, the annual change in productivity is assumed to average about 2.1 percent over the 2005 to 2007 period, then gradually decline to the ultimate assumed level of 1.7 percent by 2013. For the low cost assumptions, the annual change in productivity decreases gradually from about 2.2 percent over the 2005 to 2011 period to the ultimate assumed level of 2.0 percent by 2013. For the high cost assumptions, the annual change in productivity decreases from 2.0 percent for 2005 to a cyclic low of 0.4 percent for 2006. Thereafter, the annual change in productivity varies with economic cycles until reaching its ultimate growth rate of 1.4 percent for 2015.
Future changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (hereafter denoted as CPI) will directly affect the OASDI program through the automatic costofliving benefit increases. Future changes in the GDP chaintype price index (hereafter, the GDP deflator) affect the nominal levels of GDP, wages, selfemployment income, average earnings, and taxable payroll.
Historically, the CPI increased by an average of 4.5 percent for the 40 years from 1964 to 2004, the result of average annual increases of 4.7, 7.6, 3.5, and 2.4 percent for the 10year periods 196474, 197484, 198494, and 19942004, respectively. The GDP deflator increased by 4.1 percent for 1964 to 2004, and by 4.6, 6.9, 2.9, and 1.9 percent annually for the same respective 10year periods.
The ultimate annual increases in the CPI are assumed to be 1.8, 2.8, and 3.8 percent for the low cost, intermediate, and high cost assumptions, respectively. These rates of increase are the same as those used in the 2005 report, and reflect a belief that future inflationary shocks will likely be offset by succeeding periods of relatively slow inflation due to persistent international competition, and that future monetary policy will be similar to the recent past, with its strong emphasis on holding the growth rate in prices to relatively low levels.
For each alternative, the ultimate annual increase in the GDP deflator is assumed to be equal to the annual increases in the CPI minus a 0.4 percentage point price differential. This differential is based primarily on methodological differences in the construction of the two indices, and is 0.1 percentage point larger than the one used in the 2005 report. The larger differential reflects additional data indicating that the effects of the methodological differences are greater than previously estimated. Hence, for the intermediate assumptions, the ultimate annual increase in the GDP deflator is 2.4 percent, equal to the 2.8 percent assumed ultimate annual increase in the CPI less the 0.4 percentage point price differential. Similarly, the ultimate annual increases in the GDP deflator are 1.4 and 3.4 percent for the low cost and high cost assumptions, respectively.
For the intermediate assumptions, the annual change in the CPI is assumed to decrease from 3.5 percent for 2005 to 2.9 percent for 2006 and 2.3 percent for 2007. The annual change in the CPI increases over the next 2 years to the assumed ultimate rate of 2.8 percent as of 2009. For the low cost assumptions, the annual change in the CPI decreases from 2.7 percent for 2006 to 1.9 percent for 2007, then to the assumed ultimate rate of 1.8 percent for 2008. For the high cost assumptions, the annual change in the CPI mostly increases from 3.4 percent for 2006 to 5.7 percent by 2010, then decreases to its assumed ultimate rate of 3.8 percent as of 2014. The price differential, defined as the percent change in the CPI less the GDP deflator percent change, is estimated to be 0.8 percentage point for 2005. For all three alternatives, the price differential is projected to be approximately 0.7 percentage point for 2006, and 0.4 percentage point for 2007 and later.
The level of average (nominal) earnings in OASDI covered employment for each year has a direct effect on the size of the taxable payroll and on the future level of average benefits. In addition, increases in the level of average wages in the U.S. economy directly affect the indexation, under the automaticadjustment provisions in the law, of the OASDI benefit formulas, the contribution and benefit base, the exempt amounts under the retirement earnings test, the amount of earnings required for a quarter of coverage, and under certain circumstances, the automatic costofliving benefit increases.
Average U.S. earnings is defined as the ratio of the sum of total U.S. wage and salary disbursements and proprietor income to the sum of total U.S. military and total civilian (household) employment. The growth rate in average U.S. earnings for any period is equal to the combined growth rates for total U.S. economy productivity, average hours worked, the ratio of earnings to compensation (which includes fringe benefits), the ratio of compensation to GDP, and the GDP deflator. Assumed future growth rates in productivity and the GDP deflator are discussed in the previous two sections.
The average annual change in average hours worked was 0.2 percent over the last 40 years, and 0.5, 0.3, 0.1, and 0.2 percent for the 10year periods 196474, 197484, 198494 and 19942004, respectively. Though the historical data by 10year periods suggest that the future trend growth rate in average hours worked may be negative, other evidence indicates differently. Analysis of recent employment and Census data implies that the decline for the most recent 10year period is overstated.
For the 2006 report, the ultimate annual rates of change for average hours worked are assumed to be 0.1, 0.0, and 0.1 percent for the low cost, intermediate, and high cost assumptions, respectively. These ultimate annual rates of change for average hours worked are the same as those assumed for the 2005 report.
The average annual change in the ratio of earnings to compensation was 0.3 percent from 1964 to 2004. For wage workers, the assumed ultimate annual rates of change are 0.1, 0.2, and 0.3 percent for the ratio of earnings to compensation, for the low cost, intermediate, and high cost assumptions, respectively. Under the intermediate assumptions, the ratio of wages to employee compensation is projected to decline from 0.803 for 2005 to 0.697 for 2080. The ratio of compensation to GDP is assumed to be stable.
Thus, the ultimate projected annual growth rate in average U.S. earnings is about 3.9 percent for the intermediate assumptions. This reflects assumed ultimate annual growth rates of about 1.7, 0.2, 0.0, and 2.4 percent for productivity, the ratio of earnings to compensation, average hours worked, and the GDP deflator, respectively. Similarly, the ultimate projected annual growth rate in average nominal U.S. earnings is 3.4 percent for the low cost assumptions and 4.4 percent for the high cost assumptions.
Over long periods of time the average annual growth rates in average U.S. earnings and average earnings in OASDI covered employment are expected to be very close to the average annual growth rates in the average wage in OASDI covered employment (henceforth the average covered wage). Thus, the assumed ultimate annual growth rates in the average covered wage are 3.4, 3.9, and 4.4 percent for the low cost, intermediate, and high cost assumptions, respectively. For the intermediate assumptions, the annual rate of change in the average covered wage is estimated to be 4.4 percent for 2005, and assumed to fall to 4.1 percent for 2006 then rise to average about 4.4 percent from 2007 to 2009. Thereafter, the annual rate of change in the average covered wage declines generally until reaching its assumed ultimate annual growth rate of 3.9 percent for 2015 and later.
For simplicity, real increases in the average OASDI covered wage have traditionally been expressed in the form of realwage differentialsi.e., the percentage change in the average covered wage minus the percentage change in the CPI. This differential is closely related to assumed growth rates in average earnings and productivity, which are discussed in the previous sections. Over the 40year period, 19652004, the realwage differential averaged 0.9 percentage point, the result of averages of 1.1, 0.1, 0.8, and 1.7 percentage points for the 10year periods 196574, 197584, 198594, and 19952004, respectively. The assumed ultimate annual average covered realwage differentials are 1.6, 1.1, and 0.6 percentage point(s) for the low cost, intermediate, and high cost assumptions, respectively.
Based on preliminary data, the realwage differential is estimated to be 1.0 percentage point for 2005. For the intermediate assumptions, the realwage differential is projected to rise to about 1.2 and 2.2 percentage points in 2006 and 2007, respectively. The realwage differential is then projected to fall to 1.8 percentage points for 2008, 1.6 percentage points for 2009, and to the ultimate assumed differential of 1.1 percentage points (3.9 percent nominal wage growth less 2.8 percent CPI inflation) by 2015.
For the low cost assumptions, the realwage differential is assumed to be in the range of 1.0 percentage point to 2.3 percentage points between 2005 and 2014, moving to the ultimate assumed realwage differential of 1.6 percentage points thereafter. For the high cost assumptions, the realwage differential for the shortrange period is projected to fluctuate between 1.2 and 2.2 percentage points, eventually stabilizing at about 0.6 percentage point after 2015.
Calendar year

Annual percentage change^{1} in



Productivity
(Total U.S. economy) 
Earnings as
a percent of compensation 
Average
hours worked 
GDP
price index 
Average
annual wage in covered employment 
Consumer
Price Index 

Historical data:


1960 to 1965

3.2

0.2

0.2

1.4

3.2

1.2

2.0


1965 to 1970

2.0

.4

.7

4.1

5.8

4.2

1.6


1970 to 1975

2.1

.7

.9

6.7

6.6

6.8

.2


1975 to 1980

1.0

.6

.2

7.3

8.7

8.9

.3


1980 to 1985

1.7

.2

.0

5.2

6.7

5.2

1.4


1985 to 1990

1.3

.1

.1

3.2

4.7

3.8

.9


1990 to 1995

1.1

.2

.4

2.5

3.6

3.0

.6


1995 to 2000

2.1

.4

.1

1.7

5.3

2.4

2.9


2000 to 2005

2.6

.6

.7

2.3

2.8

2.5

.4


1995

.1

.7

1.0

2.0

4.7

2.9

1.8


1996

2.4

1.1

.2

1.9

4.0

2.9

1.1


1997

1.6

.8

.7

1.7

5.6

2.3

3.3


1998

2.0

.2

.7

1.1

6.1

1.3

4.7


1999

2.4

.1

.4

1.4

4.9

2.2

2.7


2000

2.3

.1

1.1

2.2

6.1

3.5

2.6


2001

2.0

.3

1.3

2.4

2.0

2.7

.8


2002

3.0

1.5

1.0

1.7

.7

1.4

.7


2003

3.1

.9

1.3

2.0

2.7

2.2

.5


2004

3.0

.2

.1

2.6

4.4

2.6

1.8


2005^{3}

2.0

.3

.2

2.7

4.4

3.5

1.0


Intermediate:


2006

2.1

.0

.4

2.2

4.1

2.9

1.2


2007

2.1

.0

.0

1.9

4.4

2.3

2.2


2008

2.0

.0

.0

2.2

4.4

2.6

1.8


2009

1.9

.1

.0

2.4

4.4

2.8

1.6


2010

1.9

.1

.0

2.4

4.3

2.8

1.5


2011

1.8

.1

.0

2.4

4.2

2.8

1.4


2012

1.8

.2

.0

2.4

4.2

2.8

1.4


2013

1.7

.2

.0

2.4

3.9

2.8

1.1


2014

1.7

.2

.0

2.4

3.8

2.8

1.0


2015

1.7

.2

.0

2.4

3.9

2.8

1.1


2015 to 2020

1.7

.2

.0

2.4

3.8

2.8

1.0


2020 to 2080

1.7

.2

.0

2.4

3.9

2.8

1.1


Low Cost:


2006

2.2

0.0

0.3

2.0

4.1

2.7

1.4


2007

2.2

.0

.1

1.5

4.2

1.9

2.3


2008

2.2

.0

.1

1.4

3.9

1.8

2.1


2009

2.2

.0

.1

1.4

3.9

1.8

2.1


2010

2.1

.1

.1

1.4

3.8

1.8

2.0


2011

2.2

.1

.1

1.4

3.8

1.8

2.0


2012

2.1

.1

.1

1.4

3.8

1.8

2.0


2013

2.0

.1

.1

1.4

3.5

1.8

1.7


2014

2.0

.1

.1

1.4

3.5

1.8

1.7


2015

2.0

.1

.1

1.4

3.4

1.8

1.6


2015 to 2020

2.0

.1

.1

1.4

3.4

1.8

1.6


2020 to 2080

2.0

.1

.1

1.4

3.4

1.8

1.6


High Cost:


2006

0.4

0.1

0.5

2.7

2.2

3.4

1.2


2007

2.6

.0

.1

2.3

5.0

2.7

2.2


2008

1.9

.1

.1

2.4

4.6

2.8

1.8


2009

.2

.2

.1

4.0

3.8

4.4

.6


2010

2.1

.2

.1

5.3

6.9

5.7

1.1


2011

2.1

.3

.1

5.2

7.4

5.6

1.9


2012

1.3

.3

.1

4.3

5.6

4.7

.9


2013

1.3

.3

.1

3.5

4.5

3.9

.5


2014

1.3

.3

.1

3.4

4.3

3.8

.5


2015

1.4

.3

.1

3.4

4.3

3.8

.5


2015 to 2020

1.4

.3

.1

3.4

4.3

3.8

.5


2020 to 2080

1.4

.3

.1

3.4

4.4

3.8

.6

^{1}For rows with a single year listed, the value is the annual percentage change from the prior year. For rows with a range of years listed, the value is the compound average annual percentage change. ^{2}For rows with a single year listed, the value is the unrounded annual percentage change in the average annual wage in covered employment less the unrounded annual percentage change in the Consumer Price Index. For rows with a range of years listed, the value is the average of unrounded annual values of the differential. ^{3}Historical data are not available for the full year. Estimated values vary slightly by alternative and are shown for the intermediate alternative. 
The civilian labor force is projected by age, sex, marital status, and presence of children. Projections of the labor force participation rates for each subgroup take into account the percentages of the population that are disabled or in the military, the levels of Social Security retirement benefits, the state of the economy, and changes in life expectancy. The projections also include a "laggedcohort effect" that applies changes in participation rates for a cohort at a specific age (relative to earlier cohorts at the same age) to participation rates for that cohort at older ages.
The annual rate of growth in the size of the labor force decreased from an average of about 2.1 percent during the 1970s and 1980s to about 1.1 percent from 1990 to 2004. Further slowing of labor force growth is projected due to a substantial slowing of growth in the working age population in the futurea natural consequence of the babyboom generation approaching retirement and the succeeding lowerbirthrate cohorts reaching working age. Under the intermediate assumptions, the labor force is projected to increase by about 0.9 percent per year, on average, through 2015. Thereafter, the labor force is projected to increase much more slowly, averaging 0.5 percent over the 2015 to 2020 period, and 0.3 percent over the remainder of the 75year projection period.
The ultimate projected labor force participation rates are not basic assumptions. They are derived from a historicallybased structural relationship using demographic and economic assumptions specific to each alternative. Little variation in the structural relationship is assumed, and participation rates are not highly sensitive to most of the demographic and economic assumptions. Thus, the ultimate projected labor force participation rates vary modestly into the future, and across alternatives.
Historically, labor force participation rates have been influenced substantially by trends in demographics and pensions. Between the mid1960s and the mid1980s, labor force participation rates at ages 50 and over declined for males and were fairly stable for females. These overall declines were facilitated by the large numbers of workers entering the labor force from the babyboom generation, and from the female population in general, during this period. This increasing supply of labor allowed employers to offer earlyretirement options that were attractive. Between the mid1980s and about 1995, these rates roughly stabilized for males and increased for females. Since 1995, however, participation rates at ages 50 and over have generally risen significantly, reflecting a decrease in earlyout options and relatively strong economic growth.
For the future, changes in available benefit levels from Social Security and increases in the normal retirement age, and the effects of modifying the earnings test are expected to encourage work at higher ages. Some of these factors are modeled directly. However, other factors, like the trend away from private definedbenefit pension plans that often provided incentives to retire and toward definedcontribution plans, are expected to provide additional upward pressure on labor force participation rates. In addition to this shift in private pensions, the aging of the population is expected to both increase the demand for workers and, through improved health associated with greater life expectancy, improve the ability of the older population to work. Longer life expectancy will also increase the amount of assets that will be needed to live comfortably through retirement years, also influencing workers to stay employed longer. In order to account for these effects, which are directly or indirectly related to increases in life expectancy, projected participation rates for prime age and older males and females are adjusted upward in relation to assumed increases in life expectancy. For the intermediate projections, this adjustment for changes related to life expectancy adds about 1.5 percent to the total labor force by 2080.
For men age 16 and over, the projected ageadjusted labor force participation rates for 2080 are 72.7, 73.3, and 74.0 percent for the low cost, intermediate, and high cost assumptions, respectively, compared to the 2004 level of 73.4 percent. (Ageadjusted labor force participation rates are adjusted to the 2004 age distribution of the civilian noninstitutional U.S. population.) These reflect the net effect of increases due to assumed improvements in life expectancy, and decreases due to higher assumed disability prevalence rates and an increasing proportion of males who are never married. For women age 16 and over, the projected ageadjusted labor force participation rates for 2080 are 61.1, 61.3, and 61.3 percent, for the low cost, intermediate, and high cost assumptions, respectively, compared to the 2004 level of 59.5 percent. These projections are the net effect of decreases due to higher assumed disability prevalence rates, increases due to assumed improvements in life expectancy, and increases due to assumed changes in the proportion of females who are never married, separated, widowed, or divorced.
The unemployment rate presented in table V.B2 is in the most commonly cited form, the civilian rate. For years through 2015, total rates are presented without adjustment for the changing agesex distribution of the population. For years after 2015, unemployment rates are presented as total agesex adjusted rates (using the agesex distribution of the 2004 civilian labor force). Agesex adjusted rates allow for more meaningful comparisons across longer time periods.
The total unemployment rate reflects the projected levels of unemployment for various agesex subgroups of the population. The unemployment rate for each subgroup is projected based on a specification (consistent with Okun's Law) relating changes in the unemployment rate to the changes in the economic cycle, as measured by the ratio of the actual to potential GDP. For each alternative, the total unemployment rate is projected to move toward the ultimate assumed rate as the economy moves toward the longrange sustainable growth path.
The ultimate agesexadjusted unemployment rate for each alternative is assumed to be reached by 2015. After 2015, the agesexadjusted rate is stable because the ratio of actual to potential GDP is assumed to be constant. The ultimate assumed unemployment rates are 4.5, 5.5, and 6.5 percent for the low cost, intermediate, and high cost assumptions, respectively. These are the same values assumed for the 2005 report.
The real growth rate in gross domestic product (GDP) equals the combined growth rates for total employment, productivity, and average hours worked. Total employment is the sum of the U.S. Armed Forces and total civilian employment, which is based on the projected total civilian labor force and unemployment rates. For the 40year period from 1964 to 2004, the average growth rate in real GDP was 3.2 percent, combining the approximate growth rates of 1.7, 1.8, and 0.2 percent for its componentstotal employment, productivity, and average hours worked, respectively.
For the intermediate assumptions, the average annual growth in real GDP is projected to be 2.6 percent from 2005 to 2015, a slower rate than the 3.2 percent average observed over the historical 40year period from 1964 to 2004. This slowdown is primarily due to slower projected growth in total employment. For the low cost assumptions, annual growth in real GDP is projected to average 3.2 percent over the decade ending in 2015. The relatively faster growth is due mostly to a higher assumed rate of growth in worker productivity. For the high cost assumptions, real GDP is assumed to fall in the first three quarters of 2006, resulting in a total decline in real GDP of 1.1 percent. After 10 quarters of recovery, a second recession, with a total decline in real GDP of 1.7 percent, is assumed to begin in the second quarter of 2009 and last 3 quarters. After the second recession, a moderate economic recovery is assumed through 2012, with continued modest economic growth thereafter. For the high cost assumptions, annual growth in real GDP is projected to average 1.9 percent for the decade ending in 2015.
After 2015, no economic cycles are assumed for the three alternatives. Thus, projected rates of growth in real GDP are determined by the projected fullemployment rate of growth for total employment, and the assumed fullemployment rates of growth for total U.S. economy productivity and average hours worked. For the intermediate assumptions, the projected rate of growth for real GDP falls toward the assumed productivity growth rate because of the projected decline in labor force growth over the period. By 2080, the growth in real GDP slows to about 1.9 percent, due to the assumed ultimate percent changes of about 0.3, 1.7, and 0.0 for total employment, productivity, and average hours worked, respectively. These projected growth rates are higher than those assumed for the 2005 report, due to the higher (more optimistic) assumptions for the fertility and total productivity growth rates.
The average annual nominal and real interest rates are presented in table V.B2. The nominal rate is the average of the nominal interest rates for special U.S. Government obligations issuable to the trust funds in each of the 12 months of the year. Interest for these securities is generally compounded semiannually. The real interest rate (ex post) is defined to be the annual compound yield rate for investments in these securities divided by the annual rate of growth in the CPI for the first year after issuance. The real rate shown for each year reflects the actual realized (historical) or expected (future) annual real yield on securities issuable in the prior year.
For 2005, the average annual nominal interest rate for securities newly issuable to the trust funds was 4.3 percent, unchanged from 2004. However, because CPI growth is expected to be lower for 2006 than for 2005, the real interest rate is expected to rise from 0.8 percent for 2005 to 1.4 percent for 2006.
In developing a reasonable range of assumed ultimate future real interest rates for the three alternatives, historical experience was examined for the 40 years, 19652004, and for each of the 10year subperiods, 196574, 197584, 198594, and 19952004. For the 40year period, the real interest rate averaged 2.9 percent per year. For the four 10year subperiods, the real interest rates averaged 0.9, 1.9, 5.2, and 3.5 percent, respectively. The assumed ultimate real interest rates are 3.6 percent, 2.9 percent, and 2.1 percent for the low cost, intermediate, and high cost assumptions, respectively. The ultimate real yields, which are assumed to be reached by the end of the shortrange period, are 0.1 percentage point lower than those assumed in the 2005 report. The lower assumed rates reflect recent low realized rates, particularly on Treasury inflationprotected securities (TIPS), and an expectation that low real interest rates will persist. These ultimate real interest rates, when combined with the ultimate CPI assumptions of 1.8, 2.8, and 3.8 percent, yield ultimate nominal interest rates of about 5.4 percent for the low cost assumptions, about 5.7 percent for the intermediate assumptions, and about 5.9 percent for the high cost assumptions.
For the 10year shortrange projection period, nominal interest rates are projected based on changes in the business cycle and in the CPI. Under the intermediate assumptions, the nominal interest rate is projected to rise from 4.3 percent for 2005 to 5.9 percent for 2009 through 2011, reflecting a recovering economy along with a higher rate of inflation. Thereafter, the nominal interest rate falls to the ultimate assumed level of 5.7 percent for 2014. For the low cost assumptions, the average annual nominal interest rate is assumed to reach an ultimate level of about 5.4 percent for 2013. For the high cost assumptions, it is assumed to peak at 8.9 percent for 2011, and then decline to an ultimate rate of about 5.9 percent for 2014.
Calendar year

Average annual
unemployment rate ^{1} 
Annual percentage change^{2} in

Average annual interest rate



Labor
force ^{3} 
Total
employment ^{4} 
Real
GDP ^{5} 
Nominal ^{6}

Real ^{7}


Historical data:


1960 to 1965

5.5

1.3

1.6

5.0

4.0

2.5


1965 to 1970

3.9

2.2

2.1

3.4

5.9

1.0


1970 to 1975

6.1

2.5

1.5

2.7

6.7

.0


1975 to 1980

6.8

2.7

2.9

3.7

8.5

.9


1980 to 1985

8.3

1.5

1.5

3.2

12.1

6.9


1985 to 1990

5.9

1.7

2.0

3.3

8.5

5.1


1990 to 1995

6.6

1.0

.9

2.5

7.0

4.3


1995 to 2000

4.6

1.5

1.8

4.1

6.2

3.9


2000 to 2005

5.4

.9

.7

2.6

4.6

2.5


1995

5.6

1.0

1.4

2.5

6.9

4.2


1996

5.4

1.2

1.4

3.7

6.6

4.0


1997

4.9

1.8

2.2

4.5

6.6

4.3


1998

4.5

1.0

1.4

4.2

5.6

5.3


1999

4.2

1.2

1.5

4.4

5.9

3.4


2000

4.0

2.3

2.5

3.7

6.2

2.4


2001

4.8

.8

.0

.8

5.2

3.5


2002

5.8

.8

.3

1.6

4.9

3.9


2003

6.0

1.1

.9

2.7

4.1

2.6


2004

5.5

.6

1.1

4.2

4.3

1.5


2005^{8}

5.1

1.3

1.8

3.6

4.3

.8


Intermediate:


2006

4.9

1.5

1.7

3.4

4.9

1.4


2007

4.8

1.1

1.2

3.3

5.2

2.6


2008

4.8

1.1

1.0

3.0

5.7

2.6


2009

4.9

.9

.8

2.6

5.9

2.9


2010

5.1

.8

.7

2.6

5.9

3.1


2011

5.2

.8

.7

2.5

5.9

3.1


2012

5.3

.7

.6

2.3

5.8

3.1


2013

5.4

.5

.3

2.0

5.8

3.0


2014

5.5

.5

.4

2.0

5.7

2.9


2015

5.5

.5

.5

2.2

5.7

2.9


2020

5.5

.4

.4

2.1

5.7

2.9


2025

5.5

.3

.3

1.9

5.7

2.9


2030

5.5

.3

.3

1.9

5.7

2.9


2035

5.5

.3

.3

2.0

5.7

2.9


2040

5.5

.3

.3

2.0

5.7

2.9


2045

5.5

.3

.3

2.0

5.7

2.9


2050

5.5

.3

.3

2.0

5.7

2.9


2055

5.5

.3

.3

2.0

5.7

2.9


2060

5.5

.3

.3

1.9

5.7

2.9


2065

5.5

.3

.3

2.0

5.7

2.9


2070

5.5

.3

.3

2.0

5.7

2.9


2075

5.5

.3

.3

2.0

5.7

2.9


2080

5.5

.3

.3

1.9

5.7

2.9


Low Cost:


2006

4.7

1.5

1.8

3.8

4.8

1.6


2007

4.8

1.2

1.2

3.5

4.8

2.8


2008

4.8

1.2

1.1

3.5

5.2

3.0


2009

4.8

1.0

1.0

3.3

5.5

3.4


2010

4.8

1.0

1.0

3.2

5.5

3.7


2011

4.8

.9

1.0

3.3

5.6

3.7


2012

4.7

.9

.9

3.2

5.6

3.8


2013

4.6

.7

.8

2.9

5.4

3.8


2014

4.5

.6

.7

2.9

5.4

3.7


2015

4.5

.6

.6

2.8

5.4

3.6


Low Cost: (Cont.)


2020

4.5

0.6

0.5

2.6

5.4

3.6


2025

4.5

.4

.4

2.5

5.4

3.6


2030

4.5

.4

.4

2.5

5.4

3.6


2035

4.5

.6

.6

2.6

5.4

3.6


2040

4.5

.6

.6

2.7

5.4

3.6


2045

4.5

.7

.7

2.8

5.4

3.6


2050

4.5

.7

.7

2.8

5.4

3.6


2055

4.5

.7

.7

2.8

5.4

3.6


2060

4.5

.7

.7

2.8

5.4

3.6


2065

4.5

.7

.7

2.8

5.4

3.6


2070

4.5

.8

.8

2.9

5.4

3.6


2075

4.5

.8

.8

2.9

5.4

3.6


2080

4.5

.7

.7

2.8

5.4

3.6


High Cost:


2006

5.8

1.1

.3

.3

4.2

.9


2007

6.2

.7

.3

2.8

5.4

1.5


2008

5.9

1.0

1.3

3.1

5.9

2.5


2009

6.4

.7

.1

.2

6.3

1.6


2010

7.2

.5

.3

1.6

8.2

.7


2011

6.6

.8

1.5

3.6

8.9

2.7


2012

6.4

.8

.9

2.1

7.3

4.3


2013

6.5

.5

.4

1.6

6.2

3.4


2014

6.5

.5

.5

1.7

5.9

2.4


2015

6.5

.5

.5

1.8

5.9

2.1


2020

6.5

.4

.4

1.7

5.9

2.1


2025

6.5

.2

.2

1.5

5.9

2.1


2030

6.5

.1

.1

1.4

5.9

2.1


2035

6.5

.1

.1

1.4

5.9

2.1


2040

6.5

.1

.1

1.4

5.9

2.1


2045

6.5

.0

.0

1.3

5.9

2.1


2050

6.5

.1

.1

1.2

5.9

2.1


2055

6.5

.1

.1

1.2

5.9

2.1


2060

6.5

.2

.2

1.1

5.9

2.1


2065

6.5

.2

.2

1.0

5.9

2.1


2070

6.5

.2

.2

1.1

5.9

2.1


2075

6.5

.3

.3

1.0

5.9

2.1


2080

6.5

.2

.2

1.0

5.9

2.1

^{1}The unemployment rates for 2016 and later are adjusted to the agesex distribution of the civilian labor force in 2004. All other rates are unadjusted. ^{2}For rows with a single year listed, the value is the annual percentage change from the prior year. For rows with a range of years listed, the value is the compounded average annual percentage change. ^{3}The U.S. civilian labor force concept is used here. ^{4}Total of civilian and military employment in the U.S. economy. ^{5}The real GDP (gross domestic product) is the value of total output of goods and services in 2000 dollars. ^{6}The average annual nominal interest rate is the average of the nominal interest rates, which, in practice, are compounded semiannually, for special publicdebt obligations issuable to the trust funds in each of the 12 months of the year. ^{7}The average annual real interest rate reflects the realized or expected annual real yield for each year on securities issuable in the prior year. ^{8}Historical data are not available for the full year. Estimated values vary slightly by alternative and are shown for the intermediate assumptions. 
^{1} Historical levels of real GDP are from the Bureau of Economic Analysis' (BEA) National Income and Product Accounts (NIPA). Historical total hours worked is an unpublished series provided by the Bureau of Labor Statistics (BLS), and is for all civilian and military wage and salary workers and the selfemployed.
Privacy Policy  Website Policies & Other Important Information  Site Map 