FOR DELIVERY: 9:30 A.M., E.D.T. FRIDAY, SEPTEMBER 5, 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, September 5, 1997 Mr. Chairman and Members of the Committee: Good morning. I would like to thank you for this opportunity to comment on the employment and unemployment data that were released this morning. Nonfarm payroll employment edged up in August; the over-the-month gain would have been larger but for the effect of the strike in the transportation industry. The unemployment rate was essentially unchanged at 4.9 percent. The transportation strike directly involved 185,000 workers. The net impact of the strike on employment, however, was smaller, perhaps about 155,000, after accounting for hiring elsewhere in the transportation industry and at the U.S. Postal Service to help meet the demand for parcel delivery. (In the payroll survey, workers on strike for the entire reference period are not counted as employed because they are not being paid by their employers.) Offsetting the transportation industry decline were employment increases in a number of industries. Government employment rose for the third month in a row, with the gains again concentrated in local education. As I have said before, changes in school schedules make precise seasonal adjustment for local education problematic. In 1996, most of the year’s seasonally adjusted employment gains for local education were recorded in the June-August period; the same pattern appears to be emerging this year. An increase in Federal employment reflected postal workers hired on a temporary basis during the transportation strike. Excluding the postal service, Federal employment continued to decline. The finance industry continued to add workers. Indeed, uninterrupted growth in that industry over the last 26 months has netted nearly 200,000 new jobs, with the largest gains among mortgage bankers and brokers and security and commodity brokers. Services added only 32,000 jobs following a much larger gain in July. The average for the two months was 94,000, about in line with the monthly average over the first half of the year. A job loss of 16,000 in help supply services was the fourth decline in the past five months. Employment in both amusements and recreation and private education declined following substantial employment increases in recent months. More than offsetting these losses were continued job gains in health services, computer services, social services, and engineering and management services. In addition, motion pictures recorded an unusually large gain. Job growth in retail trade (31,000) slowed following two stronger months. General merchandise stores and miscellaneous retail stores continued to add jobs, but employment in eating and drinking places edged down following strong hiring from April to July. Employment in wholesale trade rose moderately following a unusually large gain in July. In the goods-producing sector, manufacturing employment advanced by 47,000, following a decline in July. The August gain reflected the return of 10,000 strikers in the auto and steel industries. In several industries (fabricated metals, autos, and rubber and miscellaneous plastics), August gains reversed July declines. Three other industries continued a strong growth pattern: industrial machinery (including computers), electronic components, and aircraft. On the other hand, there was an unusually large decline in furniture and fixtures, and losses continued in food products, apparel, and textiles. Construction employment increased for the first time since May, as heavy construction and special trade contractors added jobs. Average hourly earnings of production or nonsupervisory workers rose by 5 cents in August after increasing just one cent in July. Over the year, hourly earnings rose by 3.6 percent. The average workweek was up by 0.2 hour in August after declining by 0.1 hour in July. Both the factory workweek and factory overtime rose by 0.1 hour. Turning to data from the household survey, the unemployment rate was about unchanged at 4.9 percent. It has remained between 4.8 and 5.0 percent since April. Civilian employment also was little changed at 129.8 million; since the end of 1996, it has risen by about 1.7 million, after adjusting for new estimates of the size of the working-age population introduced in January. (Unlike the payroll survey, the household survey counts strikers as temporarily absent from a job, and, thus, employed.) In summary, the large transportation strike held the over-the-month payroll employment gain to just 49,000. The unemployment rate was little changed in August at 4.9 percent. My colleagues and I now would be glad to respond to your questions.