TEXT FOR DELIVERY: 9:30 A.M., E.D.T. FRIDAY, MAY 3, 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 time. Statement of Katharine G. Abraham Commissioner Bureau of Labor Statistics before the Joint Economic Committee UNITED STATES CONGRESS May 3, 1996 Mr. Chairman and Members of the Committee: I appreciate the opportunity to comment on the labor market data released this morning. Nonfarm payroll employment was virtually unchanged (up 2,000) in April, after increasing by an average of 221,000 per month over the first three months of the year. The unemployment rate edged down to 5.4 percent, but was still in the narrow range (5.4 to 5.8) where it has held since October 1994. In April, small job gains in the service-producing sector were accompanied by losses in goods-producing industries. Employment in the services industry itself rose by only 20,000 over the month; during the prior 3 months, it had increased an average of 125,000 per month. Computer and data processing services maintained its recent pace of job growth. Several service industries that normally add jobs in the spring, however, failed to match their usual March- April increases, and, thus, showed employment declines on a seasonally adjusted basis. These included amusements and recreation, help supply services, and agricultural services. Retail trade also added 20,000 jobs in April. Employment rose in eating and drinking places, furniture stores, and car dealerships; these gains were partly offset by declines in department, apparel, and food stores. In finance, employment increased by 12,000, with gains in mortgage banks, personal credit institutions, and security brokerages. Brokerages have added 9,000 jobs so far this year. Transportation employment was up by 13,000 in April. The trucking industry has added 21,000 jobs in the past 3 months, following nine months with little net growth, and air transportation has continued the pattern of growth begun last summer. In contrast, job losses continued in public utilities, where employment has been trending downward in telephone communications and in electric companies. In the goods-producing sector, construction employment declined by 53,000 in April. The unusual weather conditions during the winter and early spring have distorted the normal seasonal employment patterns in this industry and complicated the interpretation of the industrys employment trend. Taking a somewhat longer view, construction employment has risen by 91,000 since October. In manufacturing, employment was down by 17,000 in April, but the drop would have been nearly three times as large had it not been for the return of workers in motor vehicles and equipment who had been off payrolls in March due to a strike and related shutdowns. The strikes end also was largely responsible for the increase of both factory hours and overtime by 0.1 hour. Factory job losses were widespread in April. Declines in some industries, such as furniture and fixtures, have been fairly continuous for about a year now. Other industries, including textiles and apparel, have experienced longer-term declines. Even employment in the electronic components industry, which had been growing steadily for several years, has been flat the last 2 months. Average hourly earnings rose by 7 cents in April. As I have mentioned on other occasions, changes in hourly earnings can vary greatly from month to month. In that regard, I would note that the increase in hourly earnings over the 12 months ending in April was 3.1 percent. This figure is comparable to the over-the-year changes for most months since April 1995, but somewhat higher than those that prevailed from 1992 through early 1995. Turning to the data from our household survey, the nations unemployment rate was 5.4 percent in April. Jobless rates for all the major worker groups showed little change over the month, and, in most cases, have been relatively flat for a year or more. The number of newly unemployed--those who have been jobless for less than 5 weeks--was down for the second month in a row. In summary, unemployment edged down and employment was unchanged in April. Services and retail trade had relatively small job gains, and the number of construction jobs dropped over the month. Manufacturing employment continued to decline despite the return of workers from strike-related shutdowns in the auto industry. My colleagues and I now would be glad to answer your questions.