FOR DELIVERY: 9:30 A.M., E.S.T. FRIDAY, JANUARY 10, 1997 Advance copies of this statement are made available to the press under lock-up conditions with the explicit understanding that the data are embargoed until 8:30 a.m. Eastern Standard Time. Statement of Katharine G. Abraham Commissioner Bureau of Labor Statistics before the Joint Economic Committee UNITED STATES CONGRESS Friday, January 10, 1997 Mr. Chairman and Members of the Committee: I would like to thank you for this opportunity to comment on the labor market data released this morning. Nonfarm payroll employment increased by 262,000 in December, with the gains widespread across the major industries. Average hourly earnings rose 6 cents over the month, following a 9-cent gain in November. The unemployment rate was unchanged in December at 5.3 percent (following routine end-of-year revisions to our seasonal adjustment factors). The services industry added 112,000 jobs in December; between May and November, monthly job growth in services averaged 81,000. Health services added 16,000 jobs, and computer and data processing services, which grew by a robust 11 percent over the year, added 15,000 jobs. In amusement and recreation services, employment was up by 12,000 in December and by 87,000 for the year as a whole. Employment in help supply services increased by 12,000 in December, following a decline of 30,000 in November and little change in September and October. Even with the recent weakness, this industry was one of the largest job gainers over the year. Retail trade employment increased by 48,000 in December. This increase was about the same as the average monthly gain in 1996, although month-to-month changes in the industry’s employment levels were erratic during the year. This volatility was, to a large degree, tied to swings in employment in eating and drinking places. Employment in miscellaneous retail establishments, such as drug stores, gift shops, and catalog retailers, rose by 15,000 in December; job gains in this diverse industry have totaled 77,000 since May. Jobs were added over the month both in furniture and home furnishings stores and in building and garden supply stores; these industries were among the fastest growing in 1996. Turning to the goods-producing sector, the construction industry added 23,000 jobs for the second straight month in December, boosted in part by milder-than- usual weather across most of the country. Employment in the industry was strong in 1996, rising by 287,000, more than two-and-a-half times the 1995 increase. Manufacturing added 19,000 jobs in December, following no change in November and a gain of 13,000 in October. Despite this modest resurgence, the industry ended 1996 with 94,000 fewer jobs than at yearend 1995. The over-the- year declines were concentrated in three nondurable goods manufacturing industries: apparel, which lost 61,000 jobs; food products, which lost 22,000; and textiles, which lost 20,000. In durable goods manufacturing, employment in aircraft and parts increased by 5,000 in December and has risen by 28,000 since June. Instruments and related products also experienced job gains over the month. Employment in electronic equipment declined by 4,000 in December. This industry has lost 14,000 jobs since its most recent peak in July, after having been one of the few manufacturing industries to experience steady job growth during 1995 and early 1996. Government employment increased by 31,000 in December, even as declines continued at the Federal level. Most of the seasonally adjusted increase in government employment in December resulted from a change in the employment pattern for election workers this year; fewer than normal were reported on payrolls in November, so fewer were subsequently let go. Average hourly earnings of production or nonsupervisory workers in the private sector rose 6 cents in December, reaching $12.05 per hour. This follows an even larger gain of 9 cents per hour in November. Over the year, average hourly earnings rose by 44 cents, or 3.8 percent. This compares with increases of 3.2 percent in 1995 and 2.7 percent in 1994. Average weekly hours of production or nonsupervisory workers rose 0.3 hour in December to 34.8 hours. Month-to- month changes in weekly hours have varied widely throughout 1996. Average hours in manufacturing also rose 0.3 hour in December, reaching 42.0 hours. Factory overtime rose 0.2 hour to 4.7 hours. In 1996, these factory workweek measures recouped most of the losses they had sustained in 1995 and have returned to near-record levels. Turning now to our survey of households, the unemployment rate was unchanged in December at 5.3 percent. Unemployment rates for the major demographic groups showed little or no change. The total civilian employment level also was little changed over the month, although it increased by 2.8 million over the year. The number of persons at work part time for economic reasons increased by 355,000 in December, reversing a similar decline in November. Before concluding, I would like to note that this is the month in which we update our seasonal adjustment factors and make annual revisions to previously published seasonally adjusted household survey estimates to reflect an additional year’s worth of information on seasonal variations in labor market activity. All the seasonally adjusted household data in today’s news release reflect these revisions. In summary, nonfarm payroll employment continued to expand in December, and unemployment was unchanged. Average hourly earnings showed a sizable increase for the second straight month. For all of 1996, payroll employment rose by 2.6 million, compared with an increase of 2.2 million in 1995. The unemployment rate edged down somewhat in the second half of 1996 and, at 5.3 percent, was three- tenths of a percentage point lower in December than it was a year earlier. My colleagues and I now would be glad to answer your questions. 6 5