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Labor Markets of the 1920s

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Looking back to the labor markets of the 1920s requires using annual estimates derived much later, which somewhat reduces the accuracy of the data. These estimates show that the labor market was booming in 1923, as the economy recovered from the large employment declines experienced two years earlier (3 million jobs lost). While the net gain for 1923 (214,000 workers per month) is quite similar to recent increases, it was added to a far smaller labor force. At the time, this number of workers expanded the nation’s employment almost 10%; in contrast, adding an average 237,000 workers a month over the year ending August 1998 increased payroll employment only 3%. Note that in the 1920s, the manufacturing sector (36% of nonfarm payroll employment in 1923) accounted for almost half of the employment changes. Manufacturing today plays a small role in total jobs growth.


Suggested citation: “Labor Markets of the 1920s,” Federal Reserve Bank of Cleveland, Economic Trends, no. 98-09, pp. 12, 09.01.1998.

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