FOR DELIVERY: 9:30 A.M., E.D.T. FRIDAY, MAY 2, 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 Daylight Time. Statement of Katharine G. Abraham Commissioner Bureau of Labor Statistics before the Joint Economic Committee UNITED STATES CONGRESS Friday, May 2, 1997 Mr. Chairman and Members of the Committee: I appreciate this opportunity to comment on the labor market data released this morning. Unemployment declined in April, and nonfarm payroll employment rose. The unemployment rate dropped by three- tenths of a percentage point to 4.9 percent; over the prior 10 months, the rate had remained in a narrow range from 5.2 to 5.4 percent. Payroll employment increased by 142,000 in April, about the same as in March (as revised), but well below the growth realized in January and February. Unfavorable weather during the survey reference periods dampened construction hiring in both March and April. In April, employment in the services industry increased by 93,000. There were relatively large over-the- month gains in health services, social services, and engineering and management services. Job growth in computer and data processing services continued at its steady pace. In all these industries, employment has been on an upward trend for many years. Partly offsetting these increases in April was a decline in amusement and recreation services. Help supply services showed virtually no change in employment in April. Although this industry has been a major contributor to job growth during the 6 years of the current economic expansion, gains since last August have been both more modest and more sporadic. In April, each of the major components of finance, insurance, and real estate added jobs, and employment also continued to rise in transportation and communications. In retail trade, a gain in eating and drinking places was partly offset by a decline in general merchandise stores. In manufacturing, employment declined by 14,000 over the month, reflecting, in part, a strike in auto manufacturing and some temporary shutdowns for inventory control in that industry. From September to March, factories had added 75,000 jobs. In April, growth continued in industrial machinery, fabricated metals, and aircraft. Also, overall manufacturing hours rose to match its post-World-War-II high level, at 42.2 hours, and overtime edged up to 5.0 hours, its highest level since the series began in 1956. In April, construction employment declined for the second month in a row. Following a large gain in February, employment in the industry has decreased by 69,000 over the past two months, on a seasonally adjusted basis. Bad weather across much of the country during the March and April survey reference periods probably delayed some of the normal hiring that we otherwise would have expected to see during those months. Average hourly earnings edged down by a penny in April. This followed increases totaling 11 cents over the first quarter of the year. Although the month-to-month movements in this data series remain quite volatile, the over-the-year gains for recent months clearly have been running higher than during the early part of 1996. The 4.9 percent unemployment rate in April was the lowest since 1973. The number of unemployed persons declined to 6.7 million. All the major demographic groups contributed to the decline in the overall jobless rate, and the unemployment rates for both whites and blacks and for adult women were down significantly. Unemployment decreased among those who had been looking for work for less than 14 weeks and among those who had lost jobs to which they did not expect to be recalled. Although a great deal of attention undoubtedly will be paid to the drop in the jobless rate, I would caution, as always, against reading too much into any one month’s data. Total employment, as measured by our household survey, was essentially unchanged in April. The proportion of the population with jobs (the employment-population ratio), however, remained at a record level of 63.8 percent. In summary, unemployment fell in April, and payroll employment rose modestly. The employment-to-population ratio, manufacturing hours and manufacturing overtime all remained at historically high levels. My colleagues and I now would be glad to respond to your questions. 4 4