FOR DELIVERY: 9:30 A.M., E.D.T.
                            FRIDAY, JUNE 6, 1997


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

before the

Joint Economic Committee

UNITED STATES CONGRESS

Friday, June 6, 1997




Mr. Chairman and Members of the Committee:

I appreciate this opportunity to comment on the labor 
market data released this morning.  
Nonfarm payroll employment rose in May, and the 
unemployment rate was about unchanged following a drop in 
April.  At 4.8 percent, the jobless rate is half a 
percentage point lower than at the end of 1996.  Payroll 
employment increased by 138,000 in May and has averaged 
229,000 per month thus far this year. 
Employment in the services industry rose by 125,000.  
Amusement and recreation services added 32,000 jobs, after 
showing little change in the prior 2 months.  Hotel 
employment increased by 13,000 following a gain of similar 
magnitude in April.  Job growth also continued in health 
services, computer and data processing services, and 
engineering and management services.  Help supply services 
lost jobs for the second straight month, with a combined 
loss of over the two months of 55,000. 
In construction, employment rose by 23,000 in May, 
following a decline in April.  The uneven month-to-month 
movements in construction employment this winter and spring 
have reflected the unusual weather conditions over the 
period.  Taking a slightly longer-term perspective, the 
number of construction jobs increased by 101,000 during the 
first five months of 1997, somewhat less than the gain for 
the same period in 1996.
In May, employment growth continued in trucking, air 
transportation, finance, real estate, and the durable goods 
component of wholesale trade.  In retail trade, employment 
held steady following a substantial increase in April.
The number of factory jobs was about unchanged for the 
second month in a row.  Employment continued to increase in 
electronic components, industrial machinery, and aircraft 
manufacturing; these gains, however, were offset by 
continued declines in apparel and an over-the-month drop in 
food products manufacturing.  Auto manufacturing employment 
was down in May due to a strike.  Manufacturing hours and 
overtime edged down in May, but at 42.0 and 4.8 hours, 
respectively, both measures remain near historically high 
levels.
Average hourly earnings increased 4 cents in May 
following a gain of 1 cent in April.  Over the year, hourly 
earnings rose 3.8 percent.  The over-the-year gains during 
the first five months of this year have been running higher 
than during the same period in 1996.
In accordance with standard practice, these payroll 
survey figures reflect the incorporation of our regularly 
scheduled annual benchmark adjustments.  Each year, we 
adjust our sample-based survey estimates to full universe 
counts of employment, derived principally from the 
administrative records of the state unemployment insurance 
tax system.  There is no benchmark source for the hours and 
earnings data, but these series 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 
1996 reference month is a very small upward adjustment of 
57,000, or less than one-tenth of one percent of the total 
nonfarm employment level.  Estimates of payroll employment 
for the post-benchmark period, April 1996 forward, also 
have been revised to incorporate the new benchmark levels 
as well as revised seasonal adjustment and bias factors; 
the net effects of these post-benchmark revisions also were 
small.  
Turning to the data from our survey of households, the 
unemployment rate was 4.8 percent in May, a level last 
reached in 1973.  Over the month, the jobless rate 
decreased for adult men; the rates for adults of both sexes 
have edged down in recent months.  The number of long-term 
unemployed--those unemployed for 27 weeks or more--also has 
trended downward since the beginning of the year.  
Since the end of 1995, employment as measured by our 
household survey has increased by 4.3 million (after 
adjusting for the change in population controls made in 
January of this year).  Some analysts have wondered how 
such a substantial increase in employment could have 
occurred during a period when unemployment already was low.  
Even with the current high level of labor force 
participation, however, there are more than 66 million 
people aged 16 or older who are not working or actively 
seeking work.  Although our household survey tries to 
measure whether these persons not in the labor force want a 
job, changes in labor market conditions may cause people 
who previously had expressed no desire to work to seek 
employment or to take a job.  For example, a retired person 
may have no interest in finding a job until he or she sees 
a help wanted sign in a local store and realizes that 
conveniently located employment can be readily obtained.  
In other words, the size of the available labor force is 
not fixed, but rather depends upon individual decisions 
based on personal and economic conditions that are 
constantly changing.
To summarize, unemployment remained below 5 percent in 
May, and payroll employment growth continued, although the 
increase for the month was smaller than the average thus 
far in 1997. 
My colleagues and I now would be glad to respond to 
your questions.

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