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FOR DELIVERY: 9:30 A.M., E.D.T.
FRIDAY, SEPTEMBER 6, 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 Daylight Time.
Statement of
Katharine G. Abraham
Commissioner
Bureau of Labor Statistics
before the
Joint Economic Committee
UNITED STATES CONGRESS
Friday, September 6, 1996
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.
The unemployment rate fell to 5.1 percent in August,
from 5.4 percent in July. Nonfarm payroll employment
rose by 250,000 in August, about in line with the average
monthly gains thus far this year. The August increase of
173,000 in private sector employment, however, fell short
of the 215,000 monthly gain for the seven months ending
in July.
For the second month in a row, employment growth in
services was somewhat slower than normal. Still, with an
addition of 81,000 jobs, it accounted for nearly half of
the over-the-month rise in private nonfarm employment.
During the first half of 1996, monthly gains in the
industry averaged about 120,000. Business services
sustained its long-term upward trend, led by continued
strength in help supply and computer services. Growth
also continued in the related engineering and management
services industry. Employment in most other services
industries was relatively weak in August. Health
services posted its third consecutive month of anemic
growth, and private education lost jobs following strong
gains in each of the preceding two months.
An increase of 77,000 in government employment was
concentrated in local government, particularly education.
It should be noted that precise seasonal adjustment for
local education is problematic during the summer and
fall, when the industry sheds and then adds large numbers
of employees. The seasonally adjusted employment
estimates are very sensitive to the timing of school
openings and to changing school schedules more generally.
Robust growth in finance, insurance, and real estate
continued in August. Over the last 12 months, employment
in this industry has risen by 174,000. Continued
activity in the finance and real estate components
accounted for an overall gain of 20,000 jobs over the
month. Retail trade added only 21,000 jobs in August
after several months of larger gains. Growth in general
merchandise stores, food stores, and auto dealers and
service stations was partially offset by a loss of 28,000
jobs in eating and drinking places. Employment in that
industry had risen by 70,000 over the prior two months.
In the goods-producing sector, manufacturing had an
employment gain of 25,000 in August, offsetting a decline
of similar magnitude in the prior month. Plants
reopening from vacation shutdowns were partly responsible
for an employment rise of 24,000 in motor vehicles and
equipment. This was twice the size of the previous
months decrease. Smaller job gains were scattered
throughout durable goods manufacturing, although there
was a decline of 6,000 jobs in electronic equipment.
Among nondurable goods industries, rubber and
miscellaneous plastics added 7,000 workers. In apparel
and other textile products, employment fell by 13,000;
the industry has lost nearly 10 percent of its employment
over the past year.
Average hours of production and nonsupervisory
workers edged up by a tenth of an hour to 34.4 hours per
week. Average hourly earnings of workers on private
nonfarm payrolls rose 6 cents in August. Though erratic
on a month-to-month basis, the rate of increase in hourly
earnings has drifted upwards over the last several years.
Turning to data from the household survey, the
unemployment rate fell by three-tenths of a percentage
point to 5.1 percent, after seasonal adjustment. The
number of unemployed persons dropped by 467,000 to 6.8
million. The decline in unemployment was particularly
large among persons 20 to 24 years old and among those
aged 55 and over. Some of the fall in unemployment may
be explained by the late timing of the August survey
reference week. This likely caused the survey to capture
more of the seasonal movement of both employed and
unemployed youth out of the labor force at the end of
summer than it would have captured had the survey week
fallen earlier in the month (as it did in each of the
prior 3 years). The large drop in the number of persons
unemployed due to job loss and the declines in
joblessness among adults suggest, however, that at least
some of the improvement in the unemployment rate is
unrelated to the timing of the survey reference period.
In summary, the labor market continued to improve in
August. Payroll employment continued to grow, though the
pace of private sector employment growth has slowed
somewhat. The unemployment rate fell, reaching its
lowest level since 1989.
My colleagues and I now would be glad to answer your
questions.