FOR DELIVERY: 9:30 A.M., E.D.T. FRIDAY, JUNE 2, 2000 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 Daylight Time. Statement of Katharine G. Abraham Commissioner Bureau of Labor Statistics Friday, June 2, 2000 Good morning. I appreciate this opportunity to comment on the employment and unemployment estimates that we released this morning. Nonfarm payroll employment rose by 231,000 in May, boosted by the hiring of 357,000 temporary workers for Census 2000. Private-sector employment declined by 116,000 over the month, following strong gains in March and April. The average monthly gain of 182,000 in private-sector employment thus far this year is slightly below the average of 202,000 for all of 1999. The unemployment rate in May returned to its March level of 4.1 percent, after having dipped to 3.9 percent in April. As measured by our establishment survey, job losses occurred throughout much of the private sector in May. Construction employment declined by 29,000 over the month (after seasonal adjustment). The fluctuations in construction employment this year, including unusually large job gains in both January and March and sizable job losses in each of the other months, make it difficult to assess the industry's underlying growth trend. Thus far in 2000, construction employment growth has averaged 22,000 per month, about the same as the average for all of 1999. Mining employment was little changed in May, following 3 consecutive months of job growth. Manufacturing employment declined by 17,000 in May, after slight improvements in each of the prior 2 months. Within durable goods, employment was unchanged over the month. There were small employment declines in several durable goods industries, but employment in electronic components continued its year-long growth trend. Within nondurable goods manufacturing, the long-term employment declines in textiles, apparel, and chemicals continued. Factory overtime declined over the month by 0.4 hour to 4.5 hours, after seasonal adjustment. The factory workweek fell 0.8 hour to 41.4 hours after having risen by 0.5 hour in April. Retail trade employment declined by 67,000 in May, following an unusually large increase of 176,000 in April. Half of May's decline occurred in eating and drinking places, which also had posted a large job gain the prior month. Job growth in the services industry was tepid in May. Thus far this year, employment growth in the industry has averaged 103,000 per month, somewhat below the average monthly gain in 1999. Business services employment declined slightly in May, reflecting a reduction of 36,000 jobs in help supply, after seasonal adjustment. Job losses also occurred in personal services, in hotels (following 2 months of strong growth), and in motion pictures. Amusement and recreation services added 19,000 jobs over the month, twice the monthly increase of the prior 12 months. Job growth resumed in engineering and management services in May, and private education posted a large job gain of 24,000. Employment in finance was about unchanged in May, as security brokerages continued to add jobs, and commercial banks and mortgage brokerages continued to shed workers. Real estate employment has changed little over the past 3 months. Employment in transportation and public utilities edged down over the month, reflecting declines in trucking, air transportation, and communications. In May, employment in wholesale trade changed little, following 2 months of strong gains. The addition of 357,000 temporary workers hired for the decennial census boosted federal government employment in May. In local government, education employment continued to expand; in state government, employment was little changed. Average hourly earnings of private production or nonsupervisory workers edged up 1 cent in May to $13.65, following a rise of 6 cents in April. Over the year, average hourly earnings have risen by 3.5 percent. I would like to note that, in accordance with our standard practice, these payroll survey figures reflect the incorporation of regularly scheduled annual benchmark revisions. Each year, we adjust our sample-based survey estimates to full universe counts of employment, derived principally from the administrative records of the unemployment insurance tax system. There is no benchmark source for the hours and earnings data, but these series also may be affected by the benchmark process because of changes in the industry employment weights and the introduction of new seasonal factors. The impact of the revisions on employment in the March 1999 reference month is an upward adjustment of 258,000, or about two-tenths of one percent of the total nonfarm employment level. This percent adjustment is slightly smaller than the average for the past decade. Estimates for payroll employment for the post-benchmark period, April 1999 forward, also have been revised to incorporate the new benchmark levels as well as revised seasonal adjustment and bias adjustment factors. In addition to the routine benchmark revisions, all estimates for the wholesale trade industry from April 1998 forward have been revised to incorporate a new sample design. Wholesale trade is the first major industry division to be converted to a probability-based sample under a 4-year phase- in plan for the Current Employment Statistics (CES) survey sample-redesign project. Turning now to our survey of households, the jobless rate rose to 4.1 percent in May, the same as in the first quarter of this year. It had edged down to 3.9 percent in April. The unemployment rates for adult women and blacks rose in May, but the rates for the other major demographic groups were either unchanged or little changed from April. Civilian employment fell by 991,000 in May, and the proportion of the population that is employed also declined, to 64.3 percent. Among the employed, 5.7 percent held more than one job in May (not seasonally adjusted), down from 5.9 percent a year earlier. In summary, private-sector payroll employment declined in May, although there was a large over-the-month increase in temporary Census employment, and the jobless rate returned to its March level of 4.1 percent. My colleagues and I now would be glad to answer your questions.