FOR DELIVERY: 9:30 A.M., E.D.T. THURSDAY, JULY 2, 1998 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 Thursday, July 2, 1998 Good morning. I am pleased to have this opportunity to comment on the employment and unemployment data that were released this morning. Nonfarm payroll employment grew moderately in June, and the unemployment rate edged up. At 4.5 percent, the unemployment rate was slightly higher than in the prior two months, but it was still quite low by recent historical standards. The nonfarm job count rose by 205,000 over the month. Private-sector employment grew by 238,000, about in line with the average monthly increase of 242,000 over the prior year. As in most recent months, job growth in June was driven by gains in the service-producing sector of the economy. Employment in the services industry expanded by 136,000. Help supply services, which had been weak for several months, rebounded in June with a gain of 32,000 jobs. Engineering and management services added 25,000 jobs. The long-term growth trend in computer services continued, and health services posted its largest employment gain so far this year. Employment in finance, insurance, and real estate grew by 30,000 over the month, continuing its long-term upward trend. Over the past year, employment in this industry group has grown at a pace about 50 percent faster than the rest of the economy, adding more than a quarter of a million jobs. The June employment gains were widespread. A strong increase in finance was led by job gains in mortgage lending institutions and security brokerages. Insurance continued to grow rapidly, while real estate resumed its job growth after having been flat in May. Retail trade posted its third consecutive large employment increase in June. Eating and drinking places, with 21,000 net new jobs, accounted for a large share of the 53,000-job gain in retail. Furniture stores and auto dealers also added workers. Steady long-term growth in wholesale trade continued. A decline of 33,000 jobs in government resulted from losses at the federal, State, and local levels. In the goods-producing sector, the construction industry posted an increase of 20,000 jobs, after having lost jobs in May. Although month-to-month employment change in the construction industry often is uneven and has been so this winter and spring, the industry has added 269,000 jobs over the past 12 months. Manufacturing employment fell by 29,000 in June, continuing the weakness that has characterized this industry for most of 1998. Over-the-month job losses were widespread. A strike in fabricated metals curtailed the availability of needed components and contributed to an employment decline of 6,000 in the auto industry. Most of the announced plant shutdowns in the auto industry occurred during or after the survey reference week, and thus did not affect the employment estimate. Employment in apparel continued to fall. Textiles, paper products, and electronic components also had significant job losses over the month. Printing and publishing, which showed strength in June, had been flat for most of 1998. At 41.8 hours, the factory workweek was unchanged over the month. Average hourly earnings of production and nonsupervisory workers rose by only one cent in June, following increases totaling 10 cents over the prior 2 months. Since June of 1997, hourly earnings have grown by 4.1 percent. Turning to data from the household survey, the unemployment rate was 4.5 percent in June, compared with 4.3 percent in April and May. In June 1997, the unemployment rate had stood at 5.0 percent. All of the major demographic groups have shared in the general improvement over the past year. In summary, private-sector employment continued to grow in June, with the largest gains coming in the service- producing industries. The unemployment rate edged up by two-tenths of a percentage point to 4.5 percent. My colleagues and I would be glad to answer your questions. 2 4