FOR DELIVERY: 9:30 A.M., E.S.T. FRIDAY, DECEMBER 6, 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 Standard Time. Statement of Katharine G. Abraham Commissioner Bureau of Labor Statistics Friday, December 6, 1996 Good morning. I am pleased to have this opportunity to comment on the employment and unemployment data released this morning. Nonfarm payroll employment increased modestly in November, and the unemployment rate edged up to 5.4 percent; it had been 5.2 percent in September and October. Total nonfarm employment rose by 118,000 in November; this increase is about equal to the average for September and October, but less than half of the average for the first 8 months of the year. The declines in government employment that we have reported in recent months have contributed to slower overall employment growth. As I will discuss later, however, these declines are mostly an artifact of changing seasonal patterns in local education. Still, employment gains in the private sector (140,000 in November) also have been more modest recently than they had been earlier in the year. The rate of private-sector job growth over the last 3 months has been about three-fourths as large, on average, as that during the prior 8 months (152,000 vs. 207,000). Within the private sector, employment in the services industry increased by 70,000, continuing a pattern of slower growth evident since the summer. In the business services component, an employment gain of 14,000 in computer and data processing services partially offset a drop of 32,000 in help supply services. Help supply employment had surged from 1992 to 1994, slowed considerably last year, and picked up again this spring and early summer. Since August, however, employment in the industry appears to have fallen somewhat. Health services added 32,000 jobs in November; hospitals have led a recent resurgence of employment in that industry. Private education added 14,000 workers. Employment growth continued in finance, insurance, and real estate, which added 16,000 jobs for the second month in a row. This industry group has rebounded from a slump in 1994 and early 1995, adding 235,000 workers since May 1995. Retail trade employment rose modestly in November, as greater-than-usual holiday-related hiring appears to have occurred in October. Job gains for October and November combined were 110,000, after seasonal adjustment. The November increase occurred in eating and drinking places, auto dealers and service stations, furniture stores, and miscellaneous retail shops. Department and apparel stores lost jobs (after seasonal adjustment); hiring in those industries had been robust in October. Employment in wholesale trade was essentially flat in November, but has had very steady gains since late 1993. Construction added 14,000 jobs in November, after seasonal adjustment, despite unseasonably cold weather throughout the East and Midwest. As is typically the case, nearly all of the gains were in special trade contractors, including electrical, carpentry, and concrete work. Manufacturing employment rose by 9,000 in November, following a gain of the same amount in October. The number of factory jobs had declined by more than 300,000 jobs over the prior year and a half. A November increase in the job count in food and kindred products reflected light summer hiring that resulted in fewer-than-usual fall layoffs. Employment in aircraft and parts rose by 6,000 in November and has increased by 23,000 since July. In contrast, long- term declines continued in apparel and textile plants. Plant shutdowns due to retooling and parts shortages have contributed to an employment loss of 22,000 in motor vehicle manufacturing over the last 3 months. Government employment fell for the third consecutive month. Much of this apparent weakness has reflected changes in the seasonal pattern of school hiring, which caused the survey to record more growth in the summer than it normally does, and, consequently, to record less growth in the fall. Federal employment continued its long-term decline, dropping by 8,000 jobs in November. Average weekly hours of production and nonsupervisory workers rose by 0.2 hour to 34.5 hours, partly offsetting a decline in the previous month. The factory workweek was unchanged at 41.7 hours. That measure has been quite stable since May. Average hourly earnings of workers on private nonfarm payrolls increased by 9 cents to $11.99, following gains totaling 9 cents over the prior 3 months. As I mentioned in June, when we had a similarly large jump, the monthly movements in earnings can be quite erratic. Over the year, hourly earnings were up a total of 40 cents, or 3.5 percent. Turning to data from the household survey, the unemployment rate returned to 5.4 percent, following three months of slightly lower rates. The number of unemployed persons rose to 7.2 million in November. Much of the gain in unemployment occurred in a narrow age group--18- and 19- year olds--though I would hesitate to attach any analytical significance to this single month’s movement. Most other groups also had small increases in joblessness, but these generally were not statistically significant. Total employment was essentially flat over the month. The number of workers who were part time for economic reasons, sometimes called involuntary part-time workers, fell by 361,000 to 3.9 million in November. While this series is relatively volatile on a month-to-month basis, the November decline was unusually large. In addition, the incidence of multiple jobholding in November stood at 6.6 percent of all employed persons, about the same level as in October. This monthly series had held at around 6.0 percent from its inception in January 1994 through September of this year. In summary, labor market indicators were mixed in November. Payroll employment continued to grow, although the pace appears to have slowed from earlier this year. Employment in virtually all of the major private industry groups increased modestly over the month, the workweek recouped half of its October decline, and hourly earnings rose 9 cents. At the same time, unemployment rose slightly, with the rate edging up to 5.4 percent. My colleagues and I now would be glad to respond to your questions. 5 5