FOR DELIVERY: 9:30 A.M., E.S.T. FRIDAY, NOVEMBER 3, 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 Standard Time. Statement of Katharine G. Abraham Commissioner Bureau of Labor Statistics Friday, November 3, 2000 Good morning. I am pleased to have this opportunity to comment on the October labor market data that we released this morning. The unemployment rate held steady at 3.9 percent in October, remaining in the narrow 3.9- to 4.1-percent range that has prevailed for the past year. Payroll employment rose by 137,000 over the month, roughly in line with the September gain but below the pace for the first 8 months of the year. (These comparisons are based on data that have been adjusted for hires and layoffs associated with Census 2000 and the effects of strike activity.) In the goods-producing sector of the economy, employment in construction rose by 34,000 over the month, after seasonal adjustment, the second sizable increase in a row for the industry following a relatively weak summer. Home mortgage rates have been declining for several months, which likely has bolstered building activity. Over the past year, construction employment has risen by 272,000, accounting for more than 1 in every 10 payroll jobs added over the period. Manufacturing employment overall was unchanged in October, following large declines in the prior 2 months. The number of factory jobs generally had trended down from its last peak in the spring of 1998 through the end of last year, when the pattern of decline abated. The net employment decline over the past 3 months, however, combined with the net declines in manufacturing hours over the same period, suggest renewed weakening in the demand for factory labor. In October, there were job losses in the lumber and furniture industries, and employment in apparel and textiles continued to decline. Motor vehicle employment also edged down over the month, and is down 46,000 since July, partly due to cutbacks in heavy truck manufacturing. In contrast, electronic components continued on its growth trend, and food products recouped some of its recent losses. In the service-producing sector, several industries continued to add jobs. Real estate employment, for example, rose by 12,000 in October after seasonal adjustment, expanding for the third consecutive month. As with construction, it seems likely that declines in mortgage rates have contributed to the recent employment growth. Job growth also continued in security brokerages, transportation, and wholesale trade. The services industry eked out an over-the-month gain of 17,000 jobs in October, following exceptionally large increases in August and September. In October, job growth continued in social services, health services, and engineering and management services, but employment in business services fell sharply, as 82,000 jobs were shed from its help supply component. This loss more than offset the large gain in help supply in September. Indeed, this industry has had virtually no net employment growth since March. Employment in retail trade has changed little since July. There were October job gains in auto dealers and service stations and in furniture stores within the retail sector, but employment in general merchandise stores fell over the month. Average hourly earnings of private production or nonsupervisory workers rose 6 cents in October to $13.89. Over the past year, hourly earnings were up 3.8 percent. The over-the-year increase has been between 3.5 and 3.8 percent since February 1999. Turning to the data from our survey of households, the unemployment rate was unchanged in October at 3.9 percent. Similarly, the jobless rates for major worker groups generally changed little over the month, though I would note that the unemployment rate for Hispanic workers slipped to 5.0 percent, the lowest level on record. The employment- population ratio (64.4 percent in October) also was little changed over the month and remains a bit below the record- high levels set early this year. Before concluding, I would like to provide you with a preliminary estimate of the effect on our payroll employment figures of the benchmark revision scheduled for release next June. Once a year, the Bureau adjusts the payroll survey's sample-based employment estimates to incorporate the previous year's March universe employment counts in a process known as benchmarking. These universe employment counts are derived principally from state unemployment insurance tax reports that nearly all employers are required to file. By early November of each year, we typically have completed preliminary tabulations of these universe counts for the first quarter of the year. We routinely share our estimate of the anticipated size of the benchmark revision for the prior March at the time we release our October Employment Situation report. Preliminary tabulations for the first quarter of 2000 indicate that the estimate of overall payroll employment will require an upward revision of approximately 392,000, or three- tenths of one percent, for the March 2000 reference month. The historical average for benchmark revisions over the past decade has been plus or minus 0.3 percent. In summary, payroll employment rose moderately in October, and the unemployment rate held steady at 3.9 percent. My colleagues and I now would be glad to answer your questions.