FOR DELIVERY: 9:30 A.M., E.S.T. FRIDAY, JANUARY 9, 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 Standard Time. Statement of Katharine G. Abraham Commissioner Bureau of Labor Statistics Friday, January 9, 1998 Good morning. I am pleased to have this opportunity to comment on the employment and unemployment data that we released this morning. The unemployment rate, at 4.7 percent, was about unchanged from November, and the number of nonfarm payroll jobs increased by 370,000. Employment gains were spread across most major industries. Average hourly earnings were about unchanged following four consecutive monthly increases totalling 23 cents. For all of 1997, payroll employment expanded by 3.2 million, compared with 2.5 million in 1996, and average hourly earnings grew by 3.7 percent. The unemployment rate declined by 0.6 percentage point over the year to 4.7 percent. Looking at December data from our nonfarm payroll survey, the construction industry showed strength for the second month in a row, adding 50,000 jobs. Job growth was widespread across the industry; heavy construction had its first increase since August. Employment in construction rose by 209,000 over the year, compared with 289,000 in 1996. A strong gain of 39,000 factory jobs followed gains of similar magnitude in both October and November. The total fourth-quarter increase was 125,000. Over the year, manufacturing employment grew by 230,000, after having declined by 55,000 in 1996. Within manufacturing, lumber and wood products added the most jobs (7,000) over the month. December gains also occurred in several industries that had grown throughout 1997--fabricated metals, industrial machinery and equipment, electronic components, and aircraft and parts. Employment in auto manufacturing declined by 9,000 over the month, partially offsetting a gain of 18,000 in November. In the service-producing sector, the services industry added 181,000 jobs, the largest monthly increase of the year. Services employment grew by a total of 1.4 million during 1997, compared with 1.2 million in 1996. Help supply services and employment agencies each contributed to the large gain in personnel supply (45,000) over the month. Computer services added 17,000 jobs in December. This industry, which comprises only about 1 percent of nonfarm payroll employment, added 162,000 jobs during 1997, about 5 percent of the increase in total payroll employment. Employment in the engineering and management services industry also continued to expand rapidly, with payrolls increasing by 26,000 in December. Health services showed a notable increase as well, with about half of the 26,000 job gain occurring in hospitals. December gains also were above average in legal services (5,000), social services (15,000), motion pictures (12,000), and membership organizations (10,000). While most services industries had sizable employment gains over the year, a few did not; growth was sluggish in 1997 in hotels and other lodging places, services to buildings, nursing and personal care facilities, home health care, and membership organizations, and employment was about unchanged in personal services. Retail trade added 52,000 jobs in December, following an unusually large increase in November (115,000). Eating and drinking places and miscellaneous retail establishments (which include drug stores, book stores, florists, and catalog retailers, among others) contributed most of the December increase. Employment in department stores declined by 11,000 after seasonal adjustment, as more holiday- related hiring than is typical already had occurred in November. The over-the-year gain in retail trade employment totaled 513,000, compared with 572,000 in 1996. Wholesale trade employment grew by 13,000 in December, about equal to the average monthly gain in 1997. The finance industry continued to expand, as payrolls grew by 13,000 in December. Commercial banks and security brokerages both added workers, while the job count in mortgage banking was unchanged for the second month in a row. The insurance industry showed an unusually large gain of 12,000 jobs in December. Air transportation employment declined by 21,000 in December, after seasonal adjustment; over-the-year employment gains in the industry totalled 67,000. Job growth continued to be strong in the communications industry. Government employment edged up by 22,000 in December, due mostly to a gain in the non-education component of local government. Over the year, federal government employment declined by 39,000, while state and local governments added 57,000 and 252,000 jobs, respectively. Average weekly hours of production or nonsupervisory workers declined by 0.2 hour to 34.6 hours in December, offsetting most of the 0.3 hour gain in November. Average hours in manufacturing, however, increased by 0.2 hour to 42.3 hours, a post-World War II high. Manufacturing overtime was unchanged at 4.9 hours per week. Average hourly earnings of production or nonsupervisory workers in the private sector grew by 1 cent, to $12.48, following 4 months of relatively large increases. Over the year, average hourly earnings rose by 3.7 percent. Turning now to our survey of households, the unemployment rate was about unchanged at 4.7 percent in December. The unemployment rate for adult men edged up two-tenths of a percentage point to 4.1 percent after declining by the same amount in November. Rates for the other worker groups showed no significant change. Civilian employment was also about unchanged over the month, but was up by 2.6 million over the year. The employment-to- population ratio, 64.1 percent at year's end, was at an all-time high. Before concluding, I would like to note that this is the month in which we update our seasonal adjustment factors and make revisions to previously published seasonally adjusted household survey estimates going back to January 1994. All of the seasonally adjusted household data in today's news release reflect these revisions. In summary, nonfarm payroll employment continued to expand in December, and unemployment was about unchanged. Average hourly earnings of production or nonsupervisory workers increased only slightly. My colleagues and I now would be glad to respond to your questions. 5