FOR DELIVERY: 9:30 A.M., E.D.T. FRIDAY, MAY 4, 2001 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 Friday, May 4, 2001 Good morning. I appreciate this opportunity to comment on the labor market data we released this morning. Labor market conditions weakened considerably in April. Payroll employment fell by 223,000, following the loss of 53,000 jobs (as revised) in March, and the unemployment rate rose to 4.5 percent. April job losses again were concentrated in manufacturing and help supply services, but the declines were even larger than in recent months. Moreover, in April there was very little job growth elsewhere in the economy. Roughly half of the net employment decline in April occurred in manufacturing, as the nation’s factories shed 104,000 jobs. The bulk of the losses occurred in durable goods manufacturing, where there were declines in nearly all of the component industries. The steepest employment reductions took place in electrical equipment (-31,000), industrial machinery (-16,000), and fabricated metals (-13,000). Employment also fell in nondurable goods manufacturing industries, notably textiles, apparel, printing and publishing, and rubber products. Manufacturing employment overall has been trending downward since April 1998, but factory job losses have accelerated dramatically this year. In the past 4 months, manufacturing has lost an average of 93,000 jobs per month. The average monthly loss for all of 2000 was just 14,000. In April, the factory workweek and factory overtime held steady at 40.7 and 3.8 hours, respectively, but both measures are down substantially over the past year. Employment in help supply services fell markedly for the second month in a row, with a decline of 108,000 in April. This industry supplies temporary or continuing help on a contract basis, in part to help other businesses fine-tune their ability to meet demand fluctuations. Employment in help supply had trended upward for most of the 1990s, but since September 2000 the job total in the industry has fallen by 370,000, a drop of 11 percent. Some of the recent declines undoubtedly are related to the ongoing retrenchment in manufacturing employment, but it seems likely that other industries also are experiencing a reduced need for temporary workers. Elsewhere in services, job growth was for the most part sluggish in April. Hiring in hotels and in amusement and recreation services fell short of seasonal expectations for the month, resulting in employment declines after seasonal adjustment. Employment in engineering and management services continued to edge up, but the pace of job growth this year has slowed sharply compared with last year. Health services added 14,000 jobs in April, half the monthly average for the first quarter of this year. One exception to the general pattern of weakness in services was social services, where a job gain of 14,000 was in line with its recent trend growth. In April, hiring in construction fell short of seasonal expectations. As a result, employment declined by 64,000 on a seasonally adjusted basis. This decline follows very strong growth in the first quarter of the year. Thus, some of the hiring that typically occurs in April may already have taken place. Moreover, heavy rains in the Midwest may have adversely affected April's employment level. We will need to see additional months' data to determine whether and to what extent the underlying trend in construction employment truly has slowed. In contrast, the employment trend in mining has been quite easy to discern in recent months. Employment rose by 4,000 in April and has grown by 17,000 thus far in 2001. All of the net growth has been in oil and gas extraction. Quickly looking at April employment developments elsewhere in the economy, wholesale trade employment slipped for the fifth month in a row, likely reflecting the weakness in manufacturing. Employment in transportation also declined a bit. Retail employment was up 22,000 over the month, but would have declined without the large rebound of 41,000 jobs in eating and drinking places. Within finance, the number of jobs in mortgage banks was little changed, and employment in security brokerages declined. The insurance industry gained 8,000 jobs in April, and has added 33,000 jobs since September. Government employment rose by 38,000 in April, mostly in local government. Finally from the payroll data, I should note that average hourly earnings were up 5 cents over the month and 4.3 percent over the year. As I mentioned at the outset, the jobless rate was 4.5 percent in April, up two-tenths of a percentage point over the month. The unemployment rate is now six-tenths of a percentage point above its recent low in October of last year. All of the major worker groups--adult men, adult women, teenagers, whites, blacks, and Hispanics--have experienced an increase in joblessness since October. Other cyclical indicators from our survey of households also point to a softening job market. The increase in the number of unemployed persons since October (about 870,000) has been concentrated among persons who have lost their jobs and do not expect to be recalled, although there has been an increase among those on temporary layoff as well. We also have observed in recent months an increase in the number of newly unemployed persons, our best measure of the flow of workers into unemployment. Finally, I would note that civilian employment fell by 426,000 in April, and the employment-population ratio fell to 64.0 percent, down eight- tenths of a percentage point from its all-time record high set in April of last year. In summary, payroll employment fell by 223,000 in April and the unemployment rate rose to 4.5 percent. Employment losses were concentrated in manufacturing and help supply services, but the employment situation for most major industries appears to have weakened in April. My colleagues and I now would be glad to answer your questions.