TEXT

 
 FOR DELIVERY: 9:30 A.M., E.D.T.
                              FRIDAY, JUNE 7, 1996
 
 
 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, June 7, 1996
 
 
 
 
 Mr. Chairman and Members of the Committee:
 I appreciate the opportunity to comment on the labor
 market data released this morning.
 Employment rose in May and the unemployment rate, at
 5.6 percent, remained in the narrow range (5.4 to 5.8
 percent) where it has held since October 1994.  Nonfarm
 payroll employment increased by 348,000 over the month.  By
 contrast, between December and April, payroll job growth
 averaged 191,000 per month.
 In May, the services industry showed widespread
 strength.  Help supply services added 48,000 jobs; over the
 prior 14 months, the industry had added an average of only
 about 7,000 jobs a month.  Over the month, large employment
 increases also occurred in computer and data processing,
 health services, engineering and management services, and
 private education.
 Several other industries in the service-producing
 sector also contributed to Mays job growth.  Employment in
 retail trade rose by 46,000, reflecting brisk hiring in
 department stores.  Thus far this year, the number of retail
 jobs has increased by 130,000.  In finance, insurance, and
 real estate, employment rose by 20,000, with gains in all of
 the component industries.  Transportation and public
 utilities added 17,000 jobs, largely due to growth in local
 transit and in trucking.  Government employment was up
 43,000, in part because of the hiring of temporary workers
 by local governments for primary elections.
 In the goods-producing sector, the construction
 industry added 28,000 jobs in May, about equal to the
 average monthly gain for that industry since October of last
 year.  Manufacturing employment was little changed in May.
 Between March 1995 and April of this year, the industry had
 lost 282,000 jobs.  Over the month, employment in motor
 vehicles and equipment increased by 10,000, and there were
 small gains in a number of other industries.  Job losses
 continued, however, in apparel, food, and printing and
 publishing.
 Average hourly earnings rose 3 cents over the month,
 about in line with the average monthly increase over the
 past year.
 These payroll survey figures reflect the incorporation
 of our regularly scheduled annual benchmark adjustments.
 Each year, we adjust our sample-based survey estimates to
 full universe counts, derived principally from the
 administrative records of the individual state unemployment
 insurance tax systems.  The impact of the revisions on
 employment in the March 1995 benchmark reference month is an
 upward adjustment of 542,000 (not seasonally adjusted), or
 five-tenths of one percent of total nonfarm employment.
 In accordance with standard practice, estimates of
 payroll employment for the post-benchmark period, April 1995
 forward, also have been revised to incorporate the new
 benchmark levels as well as revised seasonal adjustment and
 bias factors.  The net impact of the post-benchmark
 revisions was to increase employment levels further.
 In addition to incorporating the annual benchmark
 revisions, this release introduces an improved seasonal
 adjustment method for the payroll survey estimates.  The new
 procedure allows us to control for the effects of varying
 time intervals between survey reference periods, sometimes
 known as the 4- vs. 5-week effect.  In highly seasonal
 months, the number of weeks between surveys has proven to be
 a significant factor in the number of seasonal hires or
 layoffs that have occurred by the time of the survey
 reference period, thereby complicating the interpretation of
 over-the-month changes when the standard seasonal adjustment
 procedure is used.  The new seasonal adjustment procedure,
 made possible by the availability of enhanced seasonal
 adjustment software developed by the Census Bureau,
 identifies and removes the varying-interval effect.  This
 yields improved measures of over-the-month change and
 underlying economic trends in the employment, hours, and
 earnings series from the payroll survey.
 Turning to the data from our household survey, the
 unemployment rate was 5.6 percent in May.  The rate has been
 between 5.4 and 5.8 percent for the last 20 months.  In May,
 the jobless rate rose for adult women, but rates for other
 major worker groups showed little or no change.  The number
 of persons working part time even though they would have
 preferred full-time work declined in May.
 Total employment (which includes the self-employed and
 agricultural workers as well as nonfarm wage and salary
 workers) was up in May, bringing the gain thus far this year
 to about 1.5 million.  In contrast, this measure of
 employment had shown very little net change during the last
 three quarters of 1995.
 In summary, employment rose in May and the unemployment
 rate was little changed.  Job gains were concentrated in the
 service-producing sector, but construction employment also
 rose.
 
 My colleagues and I now would be glad to answer your
 questions.