TEXT FOR DELIVERY: 9:30 A.M., E.S.T. FRIDAY, DECEMBER 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 December 2, 1994 Mr. Chairman and Members of the Committee: It is again a pleasure to be here to offer a few comments on the Nation's employment situation. The labor market improved further in November. Unemployment declined over the month, and employment as measured by both our employer and household surveys continued to grow. The jobless rate fell two-tenths of a percentage point to 5.6 percent and has dropped by 1.1 points since the beginning of the year. Nonfarm payroll jobs rose by 350,000 in November, with the largest gains in services, construction, and manufacturing. Employment in services rose by 147,000, for -2- its largest increase since July. Nearly two-thirds of this growth occurred in business services, with a relatively large gain in the personnel supply component. The construction industry added 71,000 jobs in November (after seasonal adjustment), following little change in October. The return of some construction workers in the Southeast who were unable to work during the heavy and prolonged October rains added to the November total. It is also likely that, because of the early reference week (November 6-12), fewer seasonal construction layoffs than normal were recorded. The industry has shown very strong underlying job growth this year, although the month-to-month movements in employment have been somewhat erratic. Since reaching a low point in July 1992, the number of construction jobs has risen by about 575,000, for an average gain of 20,000 jobs per month. Manufacturing employment continued to expand with an increase of 51,000 in November. Since its September 1993 low, more than a quarter of a million factory jobs have been added. Widespread over-the-month gains occurred in durable goods industries, including lumber, fabricated metals, industrial machinery, and electronic equipment. Each of these industries has added a large number of jobs over the 14-month period. Both the average workweek in manufacturing and factory overtime held steady in November at their very high levels. -3- Elsewhere, smaller job gains were spread among several industries. Local government employment rose by 18,000, reflecting the hiring of temporary workers to handle the November elections. There was only a small increase in the number of retail trade jobs, although the early survey week may have preceded some of the normal November holiday hiring. Average hourly earnings for private production or nonsupervisory workers declined by 2 cents over the month, after rising by an unusually large 7 cents (as revised) in the prior month. The 2-month change is in line with longer- term trends. Data from the household survey indicate that total employment rose by 372,000 in November, the fourth straight month of marked gains. Since January, total employment has increased by 2.6 million. The employer survey has registered an increase of 3.0 million jobs over the same period. The number of unemployed persons has declined by 1.4 million since January to 7.3 million, and, as I mentioned at the outset of my remarks, the unemployment rate has declined by 1.1 percentage points. Jobless rates for adult men, women, and teenagers all have shown marked improvement since January, as have the rates for whites, blacks, and persons of Hispanic origin. -4- As unemployment has declined over the course of the year to date, there has been heightened interest in how current rates compare to those reported for earlier points in time. On several occasions, I have counseled members of this Committee and others against directly comparing figures from the "new" household survey introduced this past January with pre-1994 data from the former survey. The information available as of the start of the year led us to believe that the introduction of the redesigned survey would raise the measured unemployment rate by about 0.6 percentage point. Research currently under way at the Bureau, however, suggests that the probable effect of the survey redesign on the overall unemployment rate was smaller, raising the unemployment rate by perhaps 0.2 percentage point. In summary, the labor market continued to improve in November. Both of our surveys showed substantial employment growth, and the unemployment rate, at 5.6 percent, has continued to trend downward. My colleagues and I now would be glad to answer any questions you might have.