TEXT FOR DELIVERY: 9:30 A.M., E.S.T. FRIDAY, JANUARY 19, 1996 ___________________________________________________________ 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 January 19, 1996 Good morning. I am very pleased to be here to comment on the December 1995 employment and unemployment data that were released this morning. The release of these data comes two weeks later than originally scheduled because the recent Federal government shutdown affected both the Bureau of Labor Statistics (BLS) and the Bureau of the Census, which conducts our household survey. This is the first time since 1961, when BLS began announcing its scheduled release dates in advance, that the report on employment and unemployment has been delayed. It is only thanks to the hard work of many BLS and Census Bureau staff members that we are able to release these data so soon after the reopening of the government. Payroll employment rose by 151,000 in December, boosted by the return of some aircraft workers who had been on -2- strike. The overall increase, however, should be interpreted with some caution. In addition to the effects of changing economic conditions, the payroll data may have been affected by the vagaries of the calendar combined with the strong seasonal swings in employment in certain industries. On balance, these special effects probably led to the reported month-to-month change between November and December being somewhat understated. The largest employment increase occurred in the services industry, with a gain of 69,000 jobs. This increase was below the 1995 monthly average, but may have been underestimated due to quirks in seasonal adjustment affecting some components of the industry. Business services gained 30,000 jobs in December; employment in its personnel supply services component was flat for the third straight month. Amusement and recreation services usually gain jobs between November and December as ski resorts and other winter sports facilities hire for the season; the reported figures for this industry show an employment decline. The computer and data processing portion of business services continued its strong growth trend. Health, engineering and management, and private education services all gained jobs in December. Manufacturing employment rose by 52,000 in December; returning strikers accounted for 30,000 of this total. The automobile manufacturing industry gained 10,000 jobs in -3- December, nearly offsetting the declines that had occurred in the previous month. The industrial machinery and electronic equipment industries continued their growth trends of the last several years. Both the manufacturing workweek and factory overtime edged down by a tenth of an hour in December, to 41.4 hours and 4.3 hours, respectively. Retail trade lost 48,000 jobs on a seasonally adjusted basis in December, following a rather large gain in November. The timing of the survey periods in these two months probably contributed to these offsetting movements. Taking the September-to-December period as a whole--a period in which substantial seasonal hiring normally occurs-- monthly job gains averaged 11,000 on a seasonally adjusted basis, considerably less than in the prior 2 years. This weak job growth is consistent with recent news reports that many retailers experienced disappointing sales during the holiday shopping season. Within retail trade, there were job declines in department stores and apparel and accessory stores over the September-to-December period. In transportation and public utilities, trucking and air transportation experienced greater-than-normal seasonal hiring in December. These gains more than offset job losses in the communications industry. Wholesale trade continued its moderate growth trend, and finance, insurance, and real estate showed a small employment increase over the month. -4- Average hourly earnings for private-industry workers rose 5 cents in December. Over the past year, hourly earnings rose by 3.2 percent and weekly earnings by 2.3 percent. Turning now to the household survey, the unemployment rate was unchanged at 5.6 percent in December and has shown no clear trend for more than a year. There was little or no over-the-month movement in the other major labor market indicators from the household survey, including unemployment rates for the major demographic groups and total employment and labor force levels. Before my colleagues and I take your questions, I would like to provide some information about the impact of the recent Federal government shutdown on the December estimates. In the household survey, Census Bureau collection activities ended sooner than they normally would have, resulting in a somewhat lower than usual interview rate. In contrast, the establishment survey had a higher than usual response rate for December because the delay in the release of the data provided additional time for the state employment security agencies that collect this information to receive payroll reports. The shutdown also interfered with some of the processing work that ordinarily would have been done prior to the release of December's data. In the household survey, it has been the custom, coincident with the release of -5- December data, to revise previously released seasonally adjusted estimates of employment, unemployment, and other labor force series. BLS staff were unable to calculate the revised historical estimates without further delaying the release of the December figures. Absent further disruptions, the revised seasonally adjusted estimates will be released together with the labor force data for February 1996, scheduled for publication on March 8. In the establishment survey, preliminary estimates of employment, hours, and earnings for November have not been revised, as they normally would have been, again due to time constraints. The November estimates presented in today's release are the same as those originally published in the December 8 Employment Situation report. The October data were revised in the usual way. Final data for November will be released with the preliminary January data, as would normally occur. In summary, payroll employment continued to grow in December and unemployment was unchanged. Although the recent Federal government shutdown caused some disruption to our data collection and processing schedule, we do not believe that it appreciably affected our estimates. My colleagues and I now would be glad to answer your questions.