TEXT FOR DELIVERY: 9:30 A.M., E.D.T. FRIDAY, SEPTEMBER 2, 1994 ___________________________________________________________ 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 time. ____________________________________________ Statement of Katharine G. Abraham Commissioner Bureau of Labor Statistics before the JOINT ECONOMIC COMMITTEE UNITED STATES CONGRESS September 2, 1994 Mr. Chairman and Members of the Committee: My colleagues and I are pleased to have the opportunity to comment on current labor market conditions. Nonfarm payroll employment rose by 179,000 in August, somewhat below the average for the year to date. The unemployment rate held steady at 6.1 percent, as both employment and the labor force increased. Much of the August increase in the number of payroll jobs occurred in the services industry, which added 123,000 jobs over the month. Strong employment growth continued in business services -- though the gain in its personnel services component was notably smaller than in recent months -- and in health and social services. The wholesale trade industry also expanded over the month, adding 18,000 jobs. -2- Job growth throughout the remainder of the service- producing sector of the economy was quite limited. In particular, retail trade employment overall was flat in August, after particularly large gains through much of the spring and summer. Within retail trade, increases in automotive dealers, food stores, and furniture stores were offset by a decline in eating and drinking places. Eating and drinking places had accounted for over half of the job growth in retail trade during the prior 2 months. Manufacturing employment expanded in August with a gain of 32,000. Since last September, manufacturing has added 143,000 jobs. Notable over-the-month increases occurred in motor vehicles and related industries, such as fabricated metals. There were also increases in industrial machinery and electronic equipment. The manufacturing workweek and overtime hours, already at very high levels, edged up in August, after slipping slightly in recent months. Construction employment, which has been trending upward unevenly for 2 years now, held about steady over the month. Turning to the data from our survey of households, the unemployment picture has changed very little in recent months. The unemployment rate has held at or near its present level of 6.1 percent since May, and the number of unemployed persons has remained at around 8 million. There also has been little definitive movement in the unemployment rates for the major demographic groups. The jobless rates for adult men and adult women were both 5.4 percent in -3- August, and the figure for teenagers was 17.5 percent. The incidence of joblessness among minority workers remains much higher than among whites. The unemployment rate among black workers in August, at 11.5 percent, was more than twice as high as the rate for whites, at 5.3 percent. The rate for Hispanics, at 10.2 percent, was almost as high as that for blacks. With respect to our other principal measures of labor market difficulty, the number of persons working part time even though they would have preferred full-time employment totaled 4.3 million in August. There were also 1.7 million former jobseekers who reported that they would have liked, and were available to take, jobs in August, but were not counted as unemployed because they had not actively sought work within the last 4 weeks. Of these, just under half a million said that they had not sought work for job-market related reasons, and hence were categorized as discouraged. I would note that employment in the household survey showed an increase of more than 700,000 in August, the first significant advance since May. As I have commented before, the household survey's estimate of employment not only has fluctuated widely this year, but its cumulative growth has lagged well behind the estimates of job growth from our establishment survey. We have seen similar patterns in the past, but the behavior of this year's data may reflect, at least in part, the introduction of the redesigned survey questionnaire. If the current seasonal adjustment factors, -4- which necessarily are based on our experience with the old survey, are not consistent with the true seasonal pattern of employment in the redesigned survey, this could have produced anomalous movements in the household employment figures. Thus, we continue to rely on our payroll survey as the more accurate gauge of monthly employment change. Accompanying the large employment increase in August was an equal gain in the labor force (the labor force is the sum of the employed and unemployed). The August labor force increase brings the net change since January to about half a million. This change is fairly small, but, as with the employment data, the estimated labor force growth could have been affected by the survey redesign. In summary, the nation's job market continued to improve in August. Payroll employment increased moderately compared with the average monthly growth for the year to date, and unemployment has been about the same for 4 consecutive months, after improving earlier in the year. My colleagues and I now will be happy to answer any questions you may have.