TEXT FOR DELIVERY: 9:30 A.M., E.D.T. FRIDAY, JULY 8, 1994 ___________________________________________________________ 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 July 8, 1994 Mr. Chairman and Members of the Committee: I appreciate this opportunity to offer a few comments on the Nation's current employment situation. In June, the number of payroll jobs continued to expand, rising by 379,000, and the unemployment rate, which had declined sharply in May, held steady at 6.0 percent. Most of the June increase in the payroll job count was in the services and retail trade industries, though there was also a notable increase in manufacturing. Services employment rose by 186,000 over the month. Much of this gain occurred in business services, including the personnel supply component, but there was also growth in health services, educational services, social services, amusement -2- and recreation, hotels, and motion pictures. In retail trade, a large share of the 102,000 increase was in eating and drinking places, where seasonal hiring was greater than normal. Some of the job growth in both services and retail trade was a result of the timing of the June survey, which led to our picking up some hiring that otherwise would not have been reported until the July survey. Employment in the nation's factories rose by 34,000 in June. There were substantial gains in durable goods industries, including fabricated metals, industrial machinery, electronic equipment, and motor vehicles. Losses continued, however, in aircraft and other defense-related industries. The number of factory jobs has risen by about 100,000 since last October. Although relatively modest, these job gains contrast markedly with the declines totaling about 1-1/2 million which had taken place over the prior 4- 1/2 year period. The length of the factory workweek has fallen by 0.2 hour over the past 2 months but remains high by historical standards. Construction employment increased moderately in June, as it had in May. The slowing in construction job growth over the past 2 months seems likely to be linked to the effect of higher interest rates. Turning to the data from the household survey, as I mentioned at the outset of my remarks, there was little change in the unemployment picture from May to June. There -3- were 7.8 million unemployed persons in June, and the nation's jobless rate remained at 6.0 percent. Jobless rates for adult men (5.3 percent) and adult women (5.4 percent) were steady over the month, while the rate for teenagers (16.9 percent) was down for the second month in a row, following a sharp increase in April. Unemployment among both black and white workers was little changed over the month, with the rate for blacks (11.2 percent) continuing to be more than double the rate for whites (5.3 percent). The rate for Hispanic workers (10.3 percent) edged back up to the level that had prevailed over the past several months. The overall jobless rate has declined by seven-tenths of a percentage point since January, when the new household survey procedures went into effect. As measured under the former survey procedures, the jobless rate had fallen by 1.3 percentage points between June 1992 and December 1993. In contrast to the strong job growth shown by the payroll survey in June, total employment as estimated by the household survey fell by 442,000. Although the month-to- month movements of employment as measured by the two surveys commonly differ in size and occasionally in direction, large movements in opposite directions such as those that took place this month are unusual. It should be noted, however, that it is especially difficult to interpret monthly labor force movements from -4- the household survey at this time of the year, primarily because millions of individuals always move into and out of employment and unemployment during the early summer, with the exact timing of these movements differing slightly from year to year. For this reason, and because of our continued uncertainty about the precise effects of the survey redesign on the household data, we continue to emphasize the data from the payroll survey in our monthly analyses. In summary, the nation's labor market continues to show improvement. Payroll employment grew substantially in June, and the unemployment rate was unchanged. Since January, payroll employment has risen by 1.6 million and the unemployment rate has declined by seven-tenths of a percentage point to 6.0 percent. My colleagues and I now will be happy to answer any questions you may have.