TEXT FOR DELIVERY: 9:30 A.M., E.S.T. FRIDAY, MARCH 8, 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 before the Joint Economic Committee UNITED STATES CONGRESS March 8, 1996 Mr. Chairman and Members of the Committee: I appreciate the opportunity to comment on the labor market data released this morning. Nonfarm payroll employment jumped by 705,000 in February, and the unemployment rate fell to 5.5 percent, down from 5.8 percent in January. The jobless rate has fluctuated between 5.4 percent and 5.8 percent since the last quarter of 1994. The 705,000 rise in payroll employment followed a decline of 188,000 in January. The January decline reflected the severe weather in that month. Viewing Februarys large increase together with Januarys decline yields an average monthly gain of 259,000. The largest increase in employment over the month was in the services industry (287,000). January's weather- related declines in private education and amusement and recreation services were reversed. Health services added 46,000 jobs in February following almost no increase in January; over the two months combined, the pace of growth in the industry was in line with its long-term trend. Business services rebounded from January's job decline (31,000) with a gain of 126,000 in February. Much of this rise was due to the addition of 79,000 jobs in help supply services, which more than offset the January decline in that industry. Help supply services added an average of 27,000 workers per month between December and February, considerably more than the monthly average for all of 1995. Elsewhere in business services, computing and data processing services continued to show strength; employment also rose in services to buildings, boosted in part by the return to work of about 13,000 strikers. Construction added 121,000 jobs in February. This increase reflects some real strength in the industry, but also the impact of severe weather on the recent pattern of layoffs and hires. Retail trade gained 166,000 jobs in February, following a decline of 60,000 jobs in the prior month. Much of the gain was in eating and drinking establishments, which had been particularly hard-hit by Januarys storms. The growth in employment in department stores, on a seasonally adjusted basis, reflected the fact that there were fewer-than- expected layoffs in January and February, following weak holiday hiring. Total government employment rose by 42,000 in February, more than offsetting the January losses. Employment in State education, local education, and other local government agencies increased. Partly offsetting these gains was the continued decline in Federal government employment. Manufacturing added 26,000 jobs in February, but this represents only a partial return to work of employees who had been off payrolls in January. Electronic components continued to be the only industry with a steady growth trend, while most of the other manufacturing industries recovered only part of their January job losses. The factory workweek and factory overtime also recovered from their January declines, reaching 41.6 and 4.5 hours, respectively. Turning to data from the household survey, both the number unemployed and the unemployment rate fell in February. The number of jobless persons declined by 322,000 to fewer than 7.4 million, and the unemployment rate was down three-tenths of a percentage point to 5.5 percent. Unemployment rates declined for both adult women and teenagers. Like the overall unemployment rate, however, the rates for all the major worker groups have been fluctuating within relatively narrow bands for some time. Before my colleagues and I take your questions, I would like to mention two items concerning our household data. First, the revised, seasonally adjusted data series from the household survey that normally accompany the release of the December figures are now available. These revised estimates were delayed because of the federal shutdown and the work time lost during the January blizzard. In addition to recalculating the estimates based on updated seasonal factors, we also have revised the estimates for 1990 through 1993 using 1990 census-based population controls adjusted for the estimated undercount. The new population controls previously had been used in the estimation process only for the data from January 1994 forward. Second, as we announced last fall, we are reintroducing to our press release this month a table showing a range of alternative indicators of labor underutilization. A set of alternative indicators had been published for many years. Their publication was temporarily suspended when the revised household survey questionnaire was introduced in January 1994. The new set of measures takes advantage of the improved data from the revised survey. It is worth noting that, although their levels differ, the historical movements in these measures generally have closely followed those of the official unemployment rate. In summary, there was a substantial gain in payroll employment in February following Januarys weather-related decline. The unemployment rate fell back to 5.5 percent. My colleagues and I now would be glad to answer your questions.