TEXT FOR DELIVERY: 9:30 A.M., E.D.T. FRIDAY, OCTOBER 6, 1995 ___________________________________________________________ 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 October 6, 1995 Mr. Chairman and Members of the Committee: I would like to thank you for this opportunity to comment on the employment and unemployment data released this morning. Nonfarm payroll employment grew by 121,000 in September, with gains in services and retail trade partially offset by a loss in manufacturing. The unemployment rate was unchanged at 5.6 percent. Services had the largest employment increase, adding 106,000 jobs. More than half that gain was in business services, led by growth in its help supply component. This industry rebounded in August and September following -2- 5 months of weakness. Health services continued its long- term growth trend. The number of jobs in social services rose in September following very little growth during the summer. Retail trade employment expanded by 48,000 in September, after seasonal adjustment. Gains were widespread, with eating and drinking places and automotive dealers and service stations showing the biggest increases. Department stores also added jobs, but employment losses in apparel stores accelerated in September. Wholesale trade employment was little changed for the second straight month, following 2 years of strong growth. Manufacturing employment fell by 32,000 in September. Factory job losses since March now total 200,000; over that period, only industrial machinery and electronic components have shown steady increases. Employment was down over the month in automobile manufacturing, apparel, textiles, paper, and printing and publishing; there was a modest rebound in food processing. The number of jobs in apparel factories has been declining since late 1991, but losses have accelerated recently, totaling 45,000 since April. Losses in the related textiles industry, though less than in apparel, also have accelerated and have totaled 25,000 over the same five months. In contrast to factory employment, which fell over the month, the factory workweek edged up by a tenth of an hour -3- following a rise of two-tenths of an hour in the previous month. Factory overtime also was up in September. Construction employment rose by 16,000 on a seasonally adjusted basis in September, following 2 months of little movement. Employment in the industry likely is weaker than the September figure suggests. Because of sluggish hiring this spring and summer, there were fewer workers to lay off than our seasonal factors expected. Average hourly earnings of private production or nonsupervisory workers rose by 4 cents in September after a decline of 2 cents in the preceding month. While there have been strong gains in hourly earnings in three of the last four months, the quarter-by-quarter changes have been quite steady for more than a year. In the household survey, the unemployment rate was unchanged at 5.6 percent, about the level that has prevailed for some months. Except for declines in the rates for black teens and Hispanics, there was little over-the-month movement in the unemployment rates for the various demographic groups. Total employment increased by 361,000 in September, and the civilian labor force grew by 380,000. Neither of these series has shown a consistent pattern of growth in 1995. The number of workers with a marginal attachment to the labor force--that is, those who want and are available for work but stopped looking some time in the past year-- -4- continued to be below its year-earlier level. The number of discouraged workers--persons who have stopped looking for work specifically because they do not believe there are jobs available for them--also was down from a year earlier. To summarize, the overall employment and unemployment picture changed very little in September. Payroll employment continued to grow slowly, and the number of factory jobs declined further. The unemployment rate remained at 5.6 percent, essentially where it has been for the past several months. Before responding to any questions you might have about this month's report, I would like to spend a few minutes discussing how reduced funding for the Bureau will affect the labor force data we report in the Employment Situation release. At the lower funding levels that have been proposed, we would plan to reduce the number of households in the Current Population Survey from 56,000 to 50,000. One result would be that, with the release of the January 1996 figures, monthly labor force and unemployment data for the 11 large states (as well as New York City and the Los Angeles-Long Beach Metropolitan Area) would no longer be estimated directly from the survey. While we would continue to publish monthly estimates for these areas in the State and Metropolitan Area Employment and Unemployment news release, they would be developed using the modeling approach that has been used in the other 39 states and the District -5- of Columbia since 1989. Their release by BLS would be delayed by about 4 weeks each month, although some states might be able to report their estimates concurrently with the release of the national data. The impact of the sample cut on the national statistics would be to increase the variability of most national estimates by about 5 percent. For example, under the reduced sample, a month-to-month change of 0.19 percentage points in the national unemployment rate would represent a statistically significant change at the 90-percent confidence level; the corresponding change under the current design is 0.18 points. With this sample reduction, the Bureau expects to achieve annual cost savings of about 2 1/2 million dollars. My colleagues and I now would be glad to answer your questions.