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70–623 2012

S. HRG. 112–190 

THE EMPLOYMENT SITUATION: JULY 2011 

HEARING 

BEFORE THE

JOINT ECONOMIC COMMITTEE 

CONGRESS OF THE UNITED STATES 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

AUGUST 5, 2011 

Printed for the use of the Joint Economic Committee 

( 

(II) 

JOINT ECONOMIC COMMITTEE 

[Created pursuant to Sec. 5(a) of Public Law 304, 79th Congress] 

SENATE 

ROBERT P. CASEY, JR., Pennsylvania, 

Chairman 

JEFF BINGAMAN, New Mexico 

AMY KLOBUCHAR, Minnesota 

JIM WEBB, Virginia 

MARK R. WARNER, Virginia, 

BERNARD SANDERS, Vermont 

JIM DEMINT, South Carolina 

DANIEL COATS, Indiana 

MIKE LEE, Utah 

PAT TOOMEY, Pennsylvania 

HOUSE OF REPRESENTATIVES 

KEVIN BRADY, Texas, Vice Chairman 

MICHAEL C. BURGESS, M.D., Texas 

JOHN CAMPBELL, California 

SEAN P. DUFFY, Wisconsin 

JUSTIN AMASH, Michigan 

MICK MULVANEY, South Carolina 

MAURICE D. HINCHEY, New York 

CAROLYN B. MALONEY, New York 

LORETTA SANCHEZ, California 

ELIJAH E. CUMMINGS, Maryland 

WILLIAM E. HANSEN, Executive Director 

ROBERT P. O’QUINN, Republican Staff Director 

(III) 

C O N T E N T S 

OPENING STATEMENT OF MEMBERS

Hon. Robert P. Casey, Jr., Chairman, a U.S. Senator from Pennsylvania ......... 1 

Hon. Kevin Brady, Vice Chairman, a U.S. Representative from Texas .............. 3 

Hon. Elijah E. Cummings, a U.S. Representative from Maryland ...................... 5 

WITNESSES

Dr. Keith Hall, Commissioner, Bureau of Labor Statistics; accompanied by 

Dr. Michael Horrigan, Associate Commissioner for Prices and Living Conditions, Bureau of Labor Statistics; and Mr. Philip Rones, Deputy Commissioner, Bureau of Labor Statistics ...................................................................... 7 

SUBMISSIONS FOR THE RECORD

Prepared statement of Representative Kevin Brady ............................................ 20 

Chart titled ‘‘May to June Change in Sector Employment’’ .......................... 22 

Chart titled ‘‘Employment Change in Government Since the Beginning 

of the Recession’’ ........................................................................................... 23 

Chart titled ‘‘Employment Change in Various Sectors Since the Beginning 

of the Recession’’ ........................................................................................... 24 

Prepared statement of Representative Elijah E. Cummings ............................... 25 

Prepared statement of Dr. Keith Hall, Commissioner, Bureau of Labor Statistics, together with Press Release No. 11–1151 .................................................. 26 

(1) 

THE EMPLOYMENT SITUATION: JULY 2011 

FRIDAY, AUGUST 5, 2011 

CONGRESS OF THE UNITED STATES, JOINT ECONOMIC COMMITTEE, Washington, DC. 

The committee met, pursuant to call, at 12:46 p.m. in Room 106 

of the Dirksen Senate Office Building, the Honorable Robert P. 

Casey, Jr., Chairman, presiding. 

Senators present: Casey. 

Representatives present: Brady and Cummings. 

Staff present: Gail Cohen, Will Hansen, Colleen Healy, Jesse 

Hervitz, Matt Solomon, Connie Foster, and Robert O’Quinn. 

OPENING STATEMENT OF HON. ROBERT P. CASEY, JR., 

CHAIRMAN, A U.S. SENATOR FROM PENNSYLVANIA 

Chairman Casey. The Committee hearing will come to order. I 

want to thank everyone for being here. Today I am pleased to have 

Commissioner Hall with us again. We are all pleased by that, and 

we are also here to recognize Deputy Commissioner Phil Rones, 

who is retiring at the end of this month. We just had a picture 

taken. Phil, if it does not turn out, we will do it again. 

[Laughter.] 

But we are grateful for your many years of service. I am told 

that Phil has been working at BLS—for those who do not know in 

the television audience, the Bureau of Labor Statistics, BLS—since 

1974. And he has served as the Deputy Commissioner since 2003, 

including a year-and-a-half as Acting Commissioner during the 

Bush Administration. 

So thank you, Phil, for your years of service and your dedicated 

commitment to the United States of America. We are grateful for 

that service. 

Is this your last hearing in Congress? 

Mr. Rones. Yes, it is. 

Chairman Casey. We will try to make it memorable for you. 

[Laughter.] 

Mr. Rones. That’s okay. 

[Laughter.] 

Chairman Casey. In the past few weeks we have gotten a number of economic reports, including today’s Employment Report 

about which we will talk mostly about, and no matter what report 

it is I think so many of them indicate to us the fragility of this 

economy, and some of the basic weaknesses that we are seeing. 

The Gross Domestic Product numbers released last Friday 

showed the economic growth in the first half of this year was weak, 

2 

growing at an annual rate of less than—unfortunately, less than 

one percent during the first half of 2011. 

This week we have received additional data that suggest that the 

pace of the recovery is decelerating. Months ago we were saying it 

was moving too slowly; now there is some evidence to indicate actual deceleration of it. 

Two examples of that, or two highlights: 

First, the so-called ISM Manufacturing Index dropped to 50.9 

percent in July. While this marked the 24th consecutive month of 

expansion in the manufacturing sector, it was the lowest reading 

since 2009, since July of 2009. 

On Tuesday we learned that in the month of June consumer 

spending declined for the first time since September of 2009. Consumer spending, as many of you know, accounts for 70 percent of 

U.S. economic activity. So that needs to be growing and not shrinking, obviously. 

I know that the Committee members and those in the audience 

agree that we need much, much stronger economic growth. And 

there will be, and there should be, and will continue to be a vigorous debate about how to achieve that. 

The labor market we know—and we will get further into this 

today—faces significant challenges. More than eight quarters into 

the recovery, unemployment remains above 9 percent, and nearly 

45 percent of the unemployed have been out of work for six months 

or longer. It is hard to comprehend that, that almost half of them, 

out of work for six months or longer. 

We need to be immediately focused on providing incentives for 

job creation. Just yesterday this Committee, the Joint Economic 

Committee, released a report on the near-record long-term unemployment workers continue to face. Just a couple of highlights from 

that: 

First of all, while so many groups within this study are having 

a great difficulty, if you are one of the following your challenges are 

even greater than the population at large. The following categories: 

Those with a high school degree or less, older workers, construction 

workers, and African Americans. Those categories, those groups of 

unemployed Americans face disproportionately high rates of longterm unemployment. 

Second, the longer an individual is unemployed, the harder it is 

to find work. If you look at both ends of the spectrum—those out 

of work for more than six months, and those out of work at the 

other end of the spectrum for as little as five weeks—those who are 

at that end of the spectrum are three times as likely to find work 

in comparison to those at the other end. 

Third, employers report that they are having difficulty finding 

skilled workers. We know that that is a continuing problem. So I 

think we can move quickly, despite all that bad news, I think we 

can move very quickly on a couple of strategies that will help. 

I and others have been pushing for a small business jobs—the socalled Small Business Jobs Tax Credit Act, which would create a 

one-year quarterly tax credit equal to 20 percent of the total increase in employee wages. So if you are hiring and you are increasing your payroll, you are increasing your wage levels in total, you 

can get a tax credit for that. 

3 

Certainly Vice Chairman Brady and I and others have been 

working on the Life Sciences Jobs and Investment Act, a good idea. 

It is a way to both create high-paying jobs in all parts of the country, but also to move forward on healing and hope that comes from 

the discovery of new scientific advancements. And thirdly, I would 

say it is a way to get jobs back from overseas. 

Many people here agree—both Democrats and Republicans—that 

we ought to make the Research and Development Tax Credit permanent. It makes a lot of sense to do that. I don’t know why we 

have not, but we should. 

We also I believe need a new approach to manufacturing, and actually have a strategy to make sure that we are following in the 

years ahead, and especially in the next year, because one of the 

small glimmers of hope in some of this bad economic and jobs data 

has been manufacturing. 

Since the end of 2009 manufacturing has added 290,000 jobs, a 

little bit of good news in the midst of all this bad news. 

So we are going to hear a lot more about today’s report. We know 

that during the month of July the economy added 154,000 privatesector jobs. That is good news, but obviously not enough. The overall number, when you net it out, is 117,000, a lot better than 

maybe the last two months individually, but certainly not nearly 

enough. 

So we have got a long way to go with strategies to create jobs 

and incentivize the creation of jobs. 

And with that, I will turn to our Vice Chairman, Vice Chairman 

Brady. 

OPENING STATEMENT OF HON. KEVIN BRADY, VICE 

CHAIRMAN, A U.S. REPRESENTATIVE FROM TEXAS 

Vice Chairman Brady. Thank you, Chairman. 

Commissioner Hall, members of your staff, welcome back to the 

Joint Economic Committee for another hearing on the jobs situation. 

Mr. Rones, thank you for your many years of service to our country. You will be missed, and we appreciate all that you have done 

for the Committee. 

Clearly today’s increase in the number of payroll jobs provided 

relief to the market, mainly because it exceeded such very low expectations. It is certainly nothing to celebrate today. And the unemployment rate fell largely because of a 193,000 decline in the 

labor force. The actual number of employed people in the household 

survey fell by 38,000. The broader measure of unemployment remains over 16 percent. And what troubles me is that we have the 

fewest—we have the fewest number of people participating in the 

workforce than in a quarter of a century. Those are not signals of 

a healthy economy. 

Two and a half years ago this month, President Obama signed 

his historic stimulus bill, promising to jump-start the economy, restore consumer confidence, and put people back to work. Today, 

with historic numbers of Americans desperate for work, consumer 

confidence plunging, the risk of a double-dip recession growing, and 

the stock market reeling, it is long past time to pull the plug on 

the President’s failed economic policies. 

4 

I do not fault the President for trying. Lord knows he has thrown 

every big government solution at this economy. But it has not 

worked, as we warned, and I now have concluded that the White 

House simply does not understand how to create jobs in America— 

or certainly at least not government jobs in America. 

How much longer must Americans watch their economy stumble? 

After trillions of dollars in poorly designed stimulus and monetary 

intervention, must 9 percent unemployment be the new norm? 

After all the big-government bullets have been spent, how many 

more years will families and businesses suffer until America enjoys 

a strong, prosperous economy again? 

Mr. President, America is fair. It has been patient, more than patient. But after two and a half years, enough is enough. You have 

tried and failed to revive this economy. America deserves better 

than a second-rate economy that is held up to ridicule by other nations. 

When the economy is headed in the wrong direction, common 

sense dictates you change course. Instead of threatening to raise 

taxes on job creators along Main Street, we need to lower the cost 

of capital to increase business investment that has proven time and 

time again to create real jobs. 

Instead of branding companies as somehow un-American for competing in the global marketplace, we should tear down the barriers 

to sales abroad, reduce the cost of regulation and taxes that place 

them miles behind at the starting line, and lower the tax gate so 

an estimated one trillion dollars in American profits stranded 

abroad can flow back home to be invested here in America right 

now in new jobs, more research, business expansions, and a stronger financial future. 

Passing the three pending trade agreements will create 250,000 

new American jobs. Putting our energy companies back to work in 

the Gulf, Alaska, and in abundant American fields onshore and off 

will create more than one million new American jobs this decade. 

Another 800,000 jobs will be saved this decade merely by calling 

a halt to the President’s new national health care law. That will 

also eliminate a costly cloud of worry among small, medium, and 

large job creators throughout the country. 

There is much more that needs to be done, but perhaps nothing 

more important that the White House ending its campaign of demonizing in press conferences the free market and our job creators 

who built the greatest economy in the world and can do so again 

if Washington will simply get out of its way. 

It is telling that news reports on the economy today are often 

given with the Capitol or the White House as a backdrop—not 

along Main Street or in front of the headquarters of an American 

company. The entrepreneurs who make the critical decisions that 

create jobs have been forced to become Washington-centric because 

Washington is directing this economy to a degree not seen in our 

lifetimes. 

That is the problem. Washington needs to get out of the way. It 

needs to end its job-killing rhetoric, the regulations, and intervention and give Americans confidence to do what we do best: innovate 

and lead the world in creating economic opportunity based on what 

the market demands, not on what Washington demands. 

5 

Finally, America’s financial health does matter. We know our 

perilous debt and deficits are shaking markets and confidence at 

home and abroad. We also know from 40 years of economic study 

that our global competitors in similar straits have boosted their 

economies significantly and quickly by reducing their debt, by cutting spending, and restoring business and consumer confidence. 

Congress has taken an important first step to reduce the size of 

government this decade with passage of the Budget Control Act, 

which the President signed. Excluding the winding down of the 

wars in Iraq and Afghanistan, without recent passage of the Budget Control Act, the government would grow to over 23 percent of 

the size of our economy this decade. With its passage, the Federal 

Government will shrink to 21.6 percent of GDP this decade. 

President Reagan began to reduce the size of the Federal Government relative to the economy, as well. As Federal spending 

shrank from 22.2 percent of GDP in 1981 to around 18 percent in 

2001, entrepreneurs on Main Street created 37 million—37 million—new private-sector jobs. But since the Federal Government 

began to grow again, adding $5.5 trillion in new debt just in the 

last 4 years, we have lost almost 3 million private sector jobs. 

I will conclude with this: America deserves a strong, growing 

economy that fully employs our people and is the envy of the world. 

We cannot do that until we pry Washington’s hands off the throats 

of America’s job creators. Our free market economy will create jobs, 

Mr. President, if we change course today and get government out 

of the way. 

Dr. Hall, I look forward to your testimony. 

[The prepared statement of Representative Brady appears in the 

Submissions for the Record on page 20.] 

[Chart titled ‘‘May to June Change in Sector Employment’’ appears in the Submissions for the Record on page 22.] 

[Chart titled ‘‘Employment Change in Government Since the Beginning of the Recession’’ appears in the Submissions for the 

Record on page 23.] 

[Chart titled ‘‘Employment Change in Various Sectors Since the 

Beginning of the Recession’’ appears in the Submissions for the 

Record on page 24.] 

Chairman Casey. Thank you, Vice Chairman Brady. 

Congressman Cummings. 

OPENING STATEMENT OF HON. ELIJAH E. CUMMINGS, A U.S. 

REPRESENTATIVE FROM MARYLAND 

Representative Cummings. Thank you very much, Mr. Chairman. 

It is good to be with you again, Commissioner Hall. 

To Mr. Rones, I want to thank you for your service since 1974. 

I am sure you have given your blood, sweat, and tears to support 

our Nation. And in a time when so many of our public employees 

are being called everything but a Child of God, I pause here to 

thank you. I thank you for what you have given. I thank you for 

the lives you have touched. And I say thank you for a grateful Congress, and certainly a grateful Senate, but also a grateful Nation. 

I also want to take a moment to talk about the issue before us. 

Today’s report indicates that in July employers created 117,000 

6 

jobs, and the unemployment rate dropped to 9.1 percent. These 

numbers are moving in the right direction, but obviously we have 

a long way to go to resolve our economic challenges and to ensure 

that everyone who wants to work can work. 

Last week we learned that the economy grew just .4 percent in 

the first three months of this year, and only 1.3 percent in the second quarter. In June, American consumers decreased their spending. Additionally, the already battered housing market, which continues to be a severe drag on the economy and thus on job creation, 

took another hit in June as existing home sales fell sharply due to 

cancelled sales contracts. 

Unfortunately, the policies coming out of Congress are doing 

nothing to rebuild confidence or spur economic growth. According 

to many experts, they may even hinder the recovery and cause us 

to give up the small gains we have already won. 

Thus, an economist at Barclays Capital has warned that the debt 

deal that Congress struck earlier this week could reduce economic 

growth by a tenth of a percent in the first year alone. He said, and 

I quote, ‘‘When the economy is only growing a point and a half, a 

lot of economists feel that this is not the right time to be finding 

fiscal restraint.’’ 

Similarly, a chief global economy’s Deutsche Bank advisor asked: 

‘‘Why would you want to impose restraint on an economic recovery 

that is already fragile? You are removing spending power from the 

economy at a time when it needs it. It is likely to make the economy weaker and, in turn, the budget gets weaker because tax revenues are going slow.’’ 

The recent nosedive in the Dow suggests others may agree with 

this assessment, and that investors like frankly all Americans are 

worried that Congress is unable or unwilling to address the most 

important issue facing this Nation: the need to create jobs, jobs, 

jobs. 

Some of the terrible consequences of our failure to focus on restoring economic growth are made clear in the results of a recent 

Pew Research Center analysis which found that the wealth gap between white households and African American and Hispanic households is the largest since the government began reporting on income a quarter of a century ago. 

Specifically, the analysis finds that the housing bubble and the 

Great Recession took a much deeper toll on Black families and Hispanic families than it did on White families. We can do better, and 

we must do better. 

I voted against the debt deal because I could not in good conscience support the use of a manufactured crisis to implement ideologically based policies that will further threaten our Nation’s economic growth and job creation potential. 

Further, the debt deal intends to reduce our debt by limiting discretionary spending, potentially requiring deep cuts in programs 

critical to our most vulnerable citizens. At the same time, the deal 

demands nothing—nothing—from the wealthiest Americans, or 

from corporations that are receiving billions in tax breaks. 

I believe that, as we work to reduce what certainly is an 

unsustainable level of debt, we need a balanced plan that 

prioritizes the restoration of economic growth and that upholds the 

7 

full faith and credit of the United States through what should be 

a national commitment that entails shared sacrifice. 

I believe this is only fair, given that the national debt we now 

face has been created both by increased spending and by foregone 

revenues resulting from tax cuts provided to the wealthiest among 

us. 

With that, Mr. Chairman, I yield back. 

[The prepared statement of Representative Cummings appears in 

the Submissions for the Record on page 25.] 

Chairman Casey. Thank you, Congressman. 

I want to introduce Dr. Keith Hall before his testimony. Dr. 

Keith Hall is the Commissioner of Labor Statistics for the U.S. Department of Labor. As I mentioned before, the BLS is an independent national statistical agency that collects, processes, analyzes, and disseminates essential statistical data to the American 

public, the U.S. Congress, other Federal agencies, state and local 

governments, business, and labor. 

Dr. Hall served as the Chief Economist for the White House 

Council of Economic Advisers for two years under President George 

W. Bush. And prior to that he was Chief Economist for the United 

States Department of Labor. Dr. Hall also spent 10 years at the 

U.S. International Trade Commission. He received his B.A. Degree 

from the University of Virginia and his M.S. and Ph.D. Degrees in 

Economics from Purdue University. 

Dr. Hall, we are grateful you are here with us again, and we look 

forward to your testimony. 

STATEMENT OF DR. KEITH HALL, COMMISSIONER, BUREAU OF 

LABOR STATISTICS, U.S. DEPARTMENT OF LABOR; ACCOMPANIED BY: DR. MICHAEL HORRIGAN, ASSOCIATE COMMISSIONER FOR PRICES AND LIVING CONDITIONS, BUREAU OF 

LABOR STATISTICS; AND MR. PHILIP RONES, DEPUTY COMMISSIONER, BUREAU OF LABOR STATISTICS 

Commissioner Hall. Thank you Mr. Chairman and Members of 

the Committee: 

Thank you for the opportunity to discuss the employment and 

unemployment data that we released this morning. 

Nonfarm payroll employment rose by 117,000 in July, following 

2 months of little change. The unemployment rate was 9.1 percent 

in July and has shown little definitive movement since April. Private-sector employment increased by 154,000 over the month. 

Health care employment rose by 31,000 in July, as both hospitals 

and ambulatory care services added jobs. Retail trade employment 

increased by 26,000. In the manufacturing sector, employment expanded by 24,000, with gains in motor vehicles and semiconductors. 

Mining employment grew by 9,000 over the month and was up 

by 140,000 since the most recent low in October 2009. Employment 

in professional and technical services continued to trend up in July; 

this industry has added 246,000 jobs since a recent low in March 

of 2010. 

Employment in temporary help services was flat over the month 

and on net has changed little in 2011. Other private-sector industries showed little or no change in July. 

8 

Employment in state government decreased by 23,000 over the 

month. The decline was almost entirely due to the partial government shutdown in Minnesota. Local government employment continued to trend down over the month. Since an employment peak 

in September 2008, local government has shed 475,000 jobs. 

Turning to measures from the survey of households, the unemployment rate was 9.1 percent in July. The jobless rate has held 

in a narrow range between 9.0 and 9.2 percent since April. 

Of the 13.9 million persons unemployed in July, 44.4 percent 

have been out of work for 27 weeks or longer. This proportion was 

unchanged over the month and essentially unchanged over the 

year. 

Labor force participation edged down from 64.1 to 63.9 percent 

in July. The proportion of the population that was employed was 

essentially unchanged over the month at 58.1 percent. 

In summary, nonfarm payroll employment rose by 117,000 in 

July, with the private sector adding 154,000 jobs. The unemployment rate was little changed at 9.1 percent. 

As I close my official statement, I also would like to take a moment to recognize my colleague, Phil Rones, the Deputy Commissioner of BLS. 

As you have noted, this is his last appearance before the Joint 

Economic Committee after a 37-year career with the Bureau of 

Labor Statistics. Phil is retiring on August 26th, and I thought I 

would just take a moment to voice my appreciation for his work 

and make a note about his career and accomplishments over the 

years. 

As you have noted, Phil joined BLS in 1974, graduating from the 

University of Maryland’s system with degrees in economics and social work. His first position was a GS–7 economist position in the 

Office of Employment and Unemployment Statistics, and he has 

now risen almost entirely through the ranks. 

He has held several positions, including Supervisory Economist, 

Chief of The Division of Labor Force Statistics, and Assistant Commissioner for Current Employment Analysis. He has been the Deputy Commissioner since 2003, and served as the Acting Commissioner between 2006 and 2008. 

And during my three-and-a-half years as Commissioner, Phil has 

been by my side not only at these hearings but in the day-to-day 

operations of the Bureau. 

Throughout his career, Phil has directly worked with literally 

most of the members of the BLS family. He has always—even now, 

he continually meets with every new staff member to welcome 

them to the Bureau as part of our new employee orientation. 

He has actually been I think a really big part of our long, rich 

tradition as an independent agency charged with providing impartial, timely, and accurate data free of political considerations or 

manipulations. He has been a big part of that, and he will be 

missed. 

And on behalf of all BLS employees, I want to convey our sincere 

gratitude to Phil for a career of dedicated and exemplary service 

to the Bureau and to the American People. We at the Bureau wish 

him a long and happy retirement. 

9 

[The prepared statement of Commissioner Hall, together with 

Press Release No. 11–1151, appears in the Submissions for the 

Record on page 26.] 

Mr. Rones. Thank you, very much. 

Chairman Casey. Dr. Hall, thank you very much for your testimony, as well as your tribute to Phil. I wish some of the economic 

news was as upbeat as your tribute to Phil, but we have to look 

at only the numbers. But thank you very much for that. 

I wanted to start with—there is a lot to talk about, and a lot to 

be concerned about, frankly. One of the sentences from your statement that just jumps off the page is at the bottom of page 2, and 

I am quoting: ‘‘Of the 13.9 million persons unemployed in July, 

44.4 percent had been out of work for 27 weeks or longer.’’ Unquote. 

That is a stunning number, and I know it has been a recurring 

problem about long-term unemployment. And as I mentioned before, our Committee has taken a close look at this. 

Can you put that in some historical context in terms of the 

length of months of those who were in the category of long-term 

unemployed? 

Commissioner Hall. Sure. I will start with the basic facts. The 

number of long-term unemployed, the share of the unemployed that 

are long-term unemployed, were at easily record levels. It has 

never been nearly this high in the history that we have been collecting this data. So the number is extremely high. 

It is particularly concerning because one of the things that economic research has pretty consistently shown is the longer somebody is unemployed the longer it takes to get them re-employed. So 

this is going to be a real challenge going forward. 

To give you some idea, the median week of unemployment before 

someone finds a job has basically doubled during this Recession. It 

has gone from about 5 weeks to 10 weeks. And we are at a very 

high share of the long-term unemployed, or the people who are unemployed for longer than a year. 

So these numbers are clearly very concerning. 

Chairman Casey. And you said they are historic numbers? 

Commissioner Hall. Yes. Both in level and percent and almost 

any way you look at it, yes. 

Chairman Casey. In the testimony I gave today, I mentioned a 

couple of categories where the numbers are disproportionately 

higher. I just wanted to—I didn’t put the numbers in, but I wanted 

to review those. 

The African American unemployment rate in this report is what, 

by way of percentage? 

Commissioner Hall. It is 15.9 percent. 

Chairman Casey. 15.9. What was it the month before? 

Commissioner Hall. It actually declined three-tenths of a percent, but that is not really statistically significant. So I would call 

it essentially unchanged. 

Chairman Casey. But that number alone, the African American 

number for most of the last year seems like it has been in the 14 

to 15 range? Is that about right? 

Commissioner Hall. Yes. It has been probably over 15 for most 

of the time. 

10 

Chairman Casey. And I also mentioned a few other categories. 

I will just mention one more to get the number. Those Americans 

who were unemployed and have a high school diploma or less, what 

number is that? 

Commissioner Hall. The unemployment rate for those folks is 

15 percent. 

Chairman Casey. And that has been about—it has been that 

high that long? 

Commissioner Hall. Yes. 

Chairman Casey. For awhile. I wanted to ask you about, I 

think we—because there are so many reports, so much data out 

there and sometimes it is hard for even people that follow it closely 

to keep it straight—we know that we get the unemployment rate, 

it is derived from the so-called Household Survey. And that of 

course those numbers have not been very encouraging. 

That Household Survey has indicated a weaker employment situation than the Survey of Employers. Can you talk about that in 

terms of comparing the two sets of data and what that means, if 

anything, that would be relevant? 

Commissioner Hall. Sure. From month to month you will sometimes see different signals between the Household and the Payroll, 

but I find that if you look at it over slightly longer time periods, 

say three months, they do tend to move together pretty well. So 

you do not typically get a conflicting picture for very long between 

the two. 

Chairman Casey. And in terms of, if you could just describe the 

Survey of Employers, how that is arrived at, that number? 

Commissioner Hall. Sure. The Employer Survey is an establishment survey. So what we are doing is we are surveying places 

of work, businesses, establishments, and it is a very large survey. 

In fact, it is something on the order of 440,000 establishments, but 

it represents something like 40 million people that we are counting 

directly every month. So it actually really is a very large survey. 

So the number is really pretty accurate. 

But the drawback of it is that we are surveying employers. So 

we are just looking at the number of jobs on payroll, what their average hourly earnings are doing, et cetera. When we want to get 

more rich detail, we go to the Household Survey where we collect 

all sorts of demographic information about education, ethnicity, et 

cetera. 

So the two together really give you a complete picture, I think, 

or as complete a picture as we can of the labor market by month. 

Chairman Casey. Thank you very much. 

Vice Chairman Brady. 

Vice Chairman Brady. I share Chairman Casey’s concerns 

about the long-term unemployed. Clearly the longer they are without a job, the bigger the challenge it is getting them back to work. 

One of the areas that continues to trouble me, because it is the 

sign of weakness in the labor market rather than strength, is the 

labor force participation—how many people are actually in the 

labor force, or are actively participating. It has declined yet again 

in July to about 63.9 percent. This is the lowest since the early 

1980s, and it continues to stay there. 

11 

So just an editorial question. Are we, Commissioner, settling into 

a new norm where there are, going forward, going to be fewer people participating in the workforce and where there is a higher unemployment rate? 

Commissioner Hall. Well obviously I hope not. To tell the 

truth, I don’t know. But I can tell you that so far in this recovery 

we have really seen no recovery at all in the labor force participation. That is something that is typically starting to rise at some 

point during a recovery. And I think as I have noted before, I think 

that is an important phase of the recovery, is when we start to get 

people entering back into the labor force. 

I think once that starts to happen, we may get a better idea of 

what the new norm will be; what the new labor force participate 

rate is going to be like. 

Vice Chairman Brady. Well it looks like it may take awhile, 

because I think the decline is twice that of any previous recession. 

Any ideas what the factors are for that lower participation rate? 

Commissioner Hall. It is not obvious to me that it is anything 

but this has been a very severe, long Recession and we have had 

a very large number of long-term unemployed. And although the 

long-term unemployed have stayed in the labor market a bit longer 

than they have in the past, we have still had quite a few people 

exit the labor force entirely. 

So I just think it is the severity and the length of the Recession. 

Vice Chairman Brady. At the current rate this month, for example, of 117,000 net jobs, how—just for the average person back 

home wondering how long we are going to be stuck in a tough economic time—at the current rate of 117,000 per month, how long 

would it take to regain the payroll jobs total we had prior to the 

Recession? I understand it will be years. 

Commissioner Hall. Yes. I don’t want to be flip, but at 117,000 

we would never regain. You need about 130,000, at least by my 

rough calculation, to keep up with the population growth. 

So really, if you are looking in terms of recovery, I think the way 

you should look at these numbers if how far above 130,000 we can 

get. And that is really the recovery. 117,000 still is treading water, 

I think. 

Vice Chairman Brady. Right. Thank you. Yield back, Chairman. 

Chairman Casey. Congressman Cummings. 

Representative Cummings. Thank you very much, Mr. Chairman. 

Commissioner Hall, I was listening to what you were saying in 

response to one of Mr. Brady’s questions with regard to people in 

the labor market, or coming back in. Let’s talk about those who are 

starting out. 

A few months ago, millions of our young people graduated from 

high school and college. And while many of them are pursuing 

higher education—and we have had testimony actually before this 

Committee in the past where young people were—we were told 

that young people, many of them, were basically kind of suspending going into the job market and actually depending upon 

their parents and staying in school to get masters and graduate degrees. 

12 

And I am just wondering what kind of pressure does the influx 

of job seekers place on the labor market? And what are the employment prospects for recent high school or college graduates? 

Commissioner Hall. Well first of all I think our data supports 

what you said, that the new entrants into the labor market are 

having a very difficult time finding work. 

If you look at something like the employment-to-population ratio 

and break it out by age range, those members of the population 

that are working age, that are let’s say 25 and below, the employment-to-population ratio is very low and has declined considerably 

during this Recession. 

And of course the big concern of course is that at some point you 

start to feel like you are getting a generation, a cohort of high 

school and college graduates who are not finding work. And that 

could put a real strain on the labor market going forward. I would 

say it is something that we should be concerned about. 

Representative Cummings. A significant part of the 2009 Recovery Act was a provision to aid the state and local governments 

to protect jobs for teachers, fire fighters, police officers, et cetera. 

As we know, much of that aid is coming to an end. 

How is the state and local government job market trending? And 

how much are the trends in this market contributing to the overall 

rise in unemployment? 

Commissioner Hall. Well I would say that right now in most 

industries we are no longer losing jobs. We are at least holding constant. We are growing in some. But one notable area where we do 

continue to lose jobs is in government employment, and in particular with both state government employment and local government employment. 

They both lost significant numbers of jobs. More so for state government than in most past recessions; probably with state government it might be the biggest decline we have had ever during a recession. 

Representative Cummings. It appears that less money will be 

going to the states. And, you know, it has always puzzled me, you 

know we hear these comments that we should not raise taxes on 

the richest of the rich during a fragile economy, but at the same 

time in my State we have had to lay off people, and we had furloughs, and I am sure that is happening in a number of states. And 

yet these people—and even on the Hill, in our committee, the committee I am the Ranking Member over, we have got employees who 

have taken a 5 percent to 10 percent cut. And we have got Federal 

employees who their wages have been frozen—in a fragile economy, 

by the way. 

And I am just wondering, can you talk about this Minnesota situation? You referenced it. Tell me about that as it relates to state 

jobs. 

Commissioner Hall. Sure. 

Representative Cummings. Your statistics. 

Commissioner Hall. Right. We have not produced official statistics yet for Minnesota, but the Governor’s office has released the 

numbers; that the State of Minnesota laid off about 22,000 workers. I believe they held on to about 13,000. But that was a pretty 

13 

significant layoff. And that was, as I mentioned, that was pretty 

much the bulk of the decline in state employment this month. 

Representative Cummings. And we are about to—we have got 

some folks who are getting ready to run out of unemployment benefits, and it is predicted that it is possible that those unextended 

may have a point five percent decrease in GDP. 

How might that affect this jobs situation? 

Commissioner Hall. I do not want to speculate too much on 

that. Certainly the Unemployment Insurance benefits is a real serious policy concern and such, but I am not sure I want to try to 

make a connection between the two. 

Representative Cummings. Thank you very much. 

Chairman Casey. Thank you, Congressman. 

Commissioner, I wanted to look at some of the areas where there 

has been an increase, trying to add some good news here. The private sector number is up 154,000. That is good news—but let’s call 

it good news, but not good enough. That number I noticed, and I 

just want to see if you have this information nearby. I do not have 

it right in front of me, but I remember going back into kind of the 

January to April period we were getting at least three months that 

I can recall in a row where private-sector job creation, or privatesector job growth was above 220, I think three months in a row, 

it was like 220, 230, 240, somewhere in there. 

Commissioner Hall. Yes, your memory is good. It averaged 

about 240,000 jobs per month over that period. 

Chairman Casey. Basically January to April. 

Commissioner Hall. That’s right. 

Chairman Casey. And this month is a good number. But I was 

also noticing where we got growth—in other words, the reason we 

got 154,000 private-sector, and then if you net it out for the overall 

number 117,000, health care is up by 31,000, right? 

Commissioner Hall. Yes. 

Chairman Casey. Retail trade is up 26,000. 

Commissioner Hall. Yes. 

Chairman Casey. Manufacturing is up 24,000. And Mining is 

up 9,000. The one that took the biggest hit, I guess, was government, and I guess that is all government, right, the 37,000? 

Commissioner Hall. That is correct. 

Chairman Casey. I guess in terms of the private-sector number, 

which I think is a pretty important number for us to watch, ideally 

what would we want? Maybe not the ideal number, but what would 

be a healthier number? In other words, if we were averaging just 

on the private sector increase, say 125 to 150 the next few months. 

Would that be enough? Or does the private number have to be very 

close to what the overall number is? In other words, we know we 

cannot recover on the 117,000—— 

Commissioner Hall. Right. 

Chairman Casey [continuing]. We know we have got to get that 

closer to 200,000 or more. But any correlation between private-sector growth and the health of the economy? Or is it better to focus 

on the overall number? 

Commissioner Hall. Well I think it is fine to focus on either 

one. Obviously the private sector is giving you some idea of privatesector job creation; whereas, you know, the government numbers, 

14 

while they are also important, they are an indication obviously of 

government employment but not quite the private-sector. 

In terms of strong job growth, we are so deep into job loss—we 

have really lost quite a few jobs; we have really fallen really behind—that we really need really significantly higher job growth 

than we have had to make a dent, and even then it would probably 

take years to recover the jobs. 

Chairman Casey. I was noticing as well the manufacturing 

numbers I mentioned was up. I guess part of that, or a good part 

of that is automobile manufacturing? Is that up? 

Commissioner Hall. Yes. This month motor vehicles were about 

half that. 

Chairman Casey. Half? Okay. And I was wondering if you 

think that this part of the manufacturing number going up, the 

automobile manufacturing number, is the rebound partly the result 

of supply issues as it relates to what happened in Japan? Or do you 

think, is there any way to attribute it to that? 

Commissioner Hall. I think it would have been hard to figure 

out much of the impact of Japan all along, but I do think the evidence now is, if you look at something like motor vehicle inventories, that whatever Japan effect there was before, it is now out 

of the system; that inventories are back up to normal levels. 

So certainly now, and maybe going forward, we are probably not 

going to see any impact. 

Chairman Casey. And I am over time, but just one question, 

one more question. On the government number, can you tell us 

what the overall government number, the decline, has been say 

from July 2009 to July 2010 to now? In other words, over the last 

year, or the last two years? In other words, how many government 

jobs have we lost? 

Commissioner Hall. We are down about a half a million jobs 

in that period. 

Chairman Casey. A half a million. Thank you. 

Vice Chairman Brady. 

Vice Chairman Brady. Thank you, Chairman. I can’t resist 

asking this. Earlier this morning when the jobs numbers came out, 

Mark Zandi, one of the White House’s chief economic cheerleaders, 

called these numbers ‘‘fabulous.’’ 

Commissioner, would you call these numbers fabulous? 

Commissioner Hall. I would say it is welcome to see the numbers, the job growth increase, but, no, they are not fabulous. They 

are still not strong. 

Vice Chairman Brady. It is Mr. Rones’ last meeting. Can I ask 

him that, as well? No, I’m kidding. You don’t need to go there. 

[Laughter.] 

I agree. I think it provides some relief only because we were so 

worried about, especially in the last few days, where this economy 

is headed. 

It is no secret that I am not a big fan of the stimulus. A lot of 

money. A lot of debt. Few jobs. The impact was pretty minor and 

pretty limited. We were told if we passed it that unemployment 

would be about 6.3 percent today. Way off. We are about 6 million 

jobs short of the claims we would have in new jobs if we passed 

that stimulus. So I felt like—continue to feel like we were told: 

15 

Take the debt; you will get jobs. We certainly got the debt, and now 

that too is a drag on our economy, on business confidence and on 

family confidence. 

And when you look at the job gains in today’s report, you know 

one view of the job market is that, as layoffs return to what they 

were before the Recession, the job numbers improved because separations didn’t exceed any more the hires. But new hires have increased very little. They are far below what there were before the 

Recession. 

So it seems to me premature to speak of a real job market recovery to begin with, and the meager job gains recently really are not 

a surprise. This is an argument that the former Council of Economic Advisers Chairman Professor Ed Lazear of Stanford makes, 

and I agree with that. 

As you look at this report, Commissioner, is there a way to distinguish between job gains that result from fewer people leaving 

their jobs and job gains from a sustained increase in hiring? Because they send significantly different signals of the health of our 

labor market. 

Commissioner Hall. We do collect data—we call them Gross 

Flows—where we look at how many people are exiting jobs, and 

how many people are entering the labor market. And actually your 

observation is correct. Most of the improvement has been that the 

number of people losing jobs has leveled out and stopped going 

down, but we have not yet gotten a significant increase in the number of people entering the employed. 

Vice Chairman Brady. And the second portion is critical. 

Commissioner Hall. Yes. 

Vice Chairman Brady. And the fact that that is struggling, is 

that also why we have fewer people in that market while we again 

had 190-some-thousand step back out of the labor market this 

month? 

Commissioner Hall. Yes, I think that is consistent with what 

I mentioned about the labor force. You know, I think one of the 

things we would like—we need to see at some point is the labor 

force start to grow because people think they are going to get jobs, 

and we are going to see—people are going to start to expect, reasonably expect that they are going to be able to move from unemployed to employed, and that has not happened very strongly yet. 

Vice Chairman Brady. You know, I noticed—and I will finish 

with this—I noticed that retail jobs were up slightly in the report. 

But recent reports have the consumer spending and consumption 

down for the first time in a long time. Is there a mismatch there? 

Or maybe it’s a timing issue because of when the survey was taken 

versus the lastest data on consumer demand? 

Commissioner Hall. There is certainly a timing issue. This is 

some of the very earliest data we have for July, and this is the 

start of the third quarter; and the consumer spending numbers are 

back from say the second quarter. So there is a timing issue there. 

Vice Chairman Brady. What kind of seasonal adjustments do 

you make this time of the year in the Jobs Report? 

Commissioner Hall. It sort of depends by industry. For example, in motor vehicle production there is a pretty good seasonal beVerDate Nov 24 2008 13:18 Jan 18, 2012 Jkt 070623 PO 00000 Frm 00019 Fmt 6633 Sfmt 6633 C:\DOCS\70623.TXT DPROCT
16 

cause plants often close down in July to retool, and they reopen in 

August. So there is a part of it there. 

There are workers in education that leave the labor market for 

the summer. So we have a seasonal there. Last month’s seasonal 

actually was the really big one. That one overall was about a million. So we expect the labor employment to go down by a million 

because of seasonal job loss in June. 

Vice Chairman Brady. So you adjust for that? 

Commissioner Hall. We adjust for that. The seasonal this 

month is not quite so big. 

Vice Chairman Brady. Good. Thank you, Commissioner. Chairman. 

Chairman Casey. Congressman Cummings. 

Representative Cummings. Do you think that when you look 

at the rate of loss of government jobs and when you look at that 

as a portion of all jobs lost, is it trending pretty much the same 

over the last year or so? Do you follow my question? In other 

words, if you lose 50,000 jobs and 10,000 of them are government 

jobs, is that 20 percent pretty much the norm for the last say several months, or year? 

Commissioner Hall. For example, say over the last two years 

we have grown about 700,000 jobs, but we have lost about a half 

a million government jobs. So the job growth would have been not 

double, but it would have been close to double what it has been 

without the loss of government jobs. 

Representative Cummings. You know, I also heard Mr. Zandi, 

who was one of John McCain’s—at first people used to say he was 

John McCain’s advisor; now John McCain, Senator McCain has 

made it clear that he was ‘‘one’’ of his advisors during the campaign. So one of his advisors, Mr. Zandi. I also heard his testimony, 

his comments this morning. And one of the things he said is: We’ve 

got to move from cutting to creating, creating jobs. 

And, you know, I was just trying to figure out if we continue to 

go at the rate we are going—in other words, if we do not come up 

with methodologies to create jobs and push that, we are going to 

find ourselves in some real difficulty. And we can only slide downward. And I do not want to see that happen. 

I know the numbers are not great, but can you tell us, what 

would you tell the President today if he called you right now and 

said, you know, I usually do not bother you but since Mr. Rones 

is leaving today, could both of you all get on the phone and tell me 

what the deal is? What would you say? 

Commissioner Hall. Well I would say that it is of course welcome news that the job growth in July accelerated over the May 

and June growth. So that is good news. But it is not yet strong. 

In fact, this is pretty tepid job growth. And going forward, we really are going to have to do better in job growth in order to start to 

really recover in the labor market. 

Representative Cummings. And the African American numbers are pretty stubborn, aren’t they? 

Commissioner Hall. Yes, they are. 

Representative Cummings. And what about the Hispanic 

numbers? 

17 

Commissioner Hall. Yes, the unemployment rate there is above 

average, too. That is about 11.3 percent. And let me just mention, 

I just throw this out, but those unemployment rates to some degree 

underestimate the problem because the labor force participation 

rates for both those groups are below average as well. 

So actually they sound bad, but it actually may be worse than 

it sounds. 

Representative Cummings. Yes. And I would venture to guess 

that there are some areas in my District where the African American male unemployment rate may be as much as 50 percent. And 

so whenever I see those numbers, I am, you know, I say to myself 

that they are probably very, very low. 

The Chairman talked briefly about this whole correlation between the amount of education and the impact that this recession 

has had on folks. And do you see that trend continuing? In other 

words, the less education you have, the more negative impact the 

Recession has on folks? 

Commissioner Hall. Absolutely. For example, the unemployment rate for those with less than a high school diploma is about 

15 percent. For those with a bachelor’s degree or higher it is only 

about 4 percent. So that is a pretty significant difference. 

Representative Cummings. And finally, let me ask you this. I 

always ask you if someone was watching us right now and they 

were trying to figure out what kind of field they might want to go 

into, what kind of training they might want to get, what area they 

might want to move to to get a job, what would you say, just based 

upon—I know you do not like to draw a lot of conclusions, but just 

tell me based on what you have there in front of you, what would 

you say? 

Commissioner Hall. Well obviously education pays off and is 

very important. And the United States is, like other wealthy countries, we are a country of service jobs, service-providing jobs. Something like 70 to 80 percent of our jobs are in fact in the serviceproviding sector. So that is important. 

And then you get into, you know, some of the things like some 

of the demographics that we have got going on. So a lot of the 

health care jobs are, I would expect are going to have strong 

growth going forward as we have an aging population, some things 

like that. That is the sort of thing I think is the sort of advice I 

would give. 

Representative Cummings. Thank you very much. 

Chairman Casey. Unless there are further questions, Dr. Hall, 

Commissioner Hall, we are grateful for your testimony again. Dr. 

Horrigan, your colleague, we didn’t say hello earlier. And, Phil, we 

hope you can come back here in your years of retirement. You said 

you were going to be fishing a lot. If you can squeeze in a couple 

of hearings between fishing, we would love to have you back. 

But unless there any further questions or comments, we are adjourned. 

[Whereupon, at 1:41 p.m., Friday, August 5, 2011, the hearing 

was adjourned.] 

(19) 

SUBMISSIONS FOR THE RECORD 

20 

PREPARED STATEMENT OF REPRESENTATIVE KEVIN BRADY, VICE CHAIRMAN, JOINT

ECONOMIC COMMITTEE

Commissioner Hall, members of your staff, welcome back to the Joint Economic 

Committee for another hearing on the employment situation. Today’s increase in the 

number of payroll jobs barely exceeded very low expectations, and the unemployment rate fell largely because of a 193,000 decline in the labor force. The actual 

number of employed people in the household survey fell by 38,000. 

Two and half years ago President Obama signed his historic stimulus bill, promising to jump-start the economy, restore consumer confidence, and put people back 

to work. Today, with historic numbers of Americans desperate for work, consumer 

confidence plunging, the risk of a double-dip recession growing, and the stock market reeling, it is long past time to pull the plug on the President’s failed economic 

experiment. 

How much longer must Americans watch their economy stumble? After trillions 

of dollars in poorly designed stimulus and monetary intervention, must nine percent 

unemployment be the ‘‘new norm’’? After all of the big-government bullets have been 

spent, how many more years will families and businesses suffer until America enjoys a strong, prosperous economy again? 

Mr. President, America is fair. It has been patient, more than patient. But after 

two and a half years, enough is enough. You’ve tried and failed to revive this economy. America deserves better than a second-rate economy that’s held up to ridicule 

by other nations. 

When the country is headed in the wrong direction, common-sense dictates that 

you should change course. 

Instead of threatening to raise taxes on job creators along Main Street, we need 

to lower the cost of capital to increase business investment that has proven time 

and time again to create real jobs. 

Instead of branding companies as somehow un-American for competing in the 

global marketplace, we should tear down the barriers to sales abroad, reduce the 

cost of regulation and taxes that place them miles behind at the starting line, and 

lower the tax gate so an estimated one trillion dollars in American profits stranded 

abroad can flow back home—to be invested here in America right now in new jobs, 

more research, business expansions, and a stronger financial future. 

Passing the three pending trade agreements will create 250,000 new American 

jobs. Putting our energy companies back to work in the Gulf, Alaska, and in abundant American fields onshore and off will create more than one million new American jobs. 

Another 800,000 jobs will be saved this decade merely by calling a halt to the 

President’s new national health care law. That will eliminate a costly cloud of worry 

among small, medium and large job creators throughout the nation. 

There’s much more that needs to be done, but perhaps nothing more important 

than the White House ending its campaign of demonizing the free market and the 

job creators—who built the greatest economy in the world—and can do so again if 

Washington will get out of its way. 

It’s telling that news reports on the economy today are given with the Capitol or 

the White House as a backdrop—not along Main Street or in front of the headquarters of an American company. The entrepreneurs who make the critical decisions that create jobs have been forced to become Washington-centric because Washington is directing this economy to a degree not seen in our lifetimes. 

That’s the problem. Government needs to get out of the way. It needs to end its 

job-killing rhetoric, regulations, and intervention and give Americans confidence to 

do what we do best—innovate and lead the world in creating economic opportunity 

based on what the market demands—not what Washington demands. 

Finally, America’s financial health matters. We know our perilous debt and deficits are shaking markets and confidence at home and abroad. We also know from 

forty years of economic study that our global competitors in similar straits have 

boosted their economies significantly and soon by reducing their debt, cutting spending, and restoring business and consumer confidence. 

Congress has taken an important first step to reduce the size of government this 

decade with passage of the Budget Control Act, which the President signed. Excluding the winding down of the wars in Iraq and Afghanistan—without recent passage 

of the Budget Control Act, the government would grow to over 23% of the size of 

our economy. With its passage, the federal government will shrink to 21.6% of GDP 

this decade. 

President Reagan began to reduce the size of the federal government relative to 

the economy. As federal spending shrank from 22.2% of GDP in 1981 to 18.2% of 

GDP in 2001, entrepreneurs on Main Street created 37 million new private-sector 

21 

jobs. Since the federal government began to grow again—adding five and a half trillion dollars in new debt the last four years—we have lost almost three million private-sector jobs. 

America deserves a strong, growing economy that fully employs our people and 

is the envy of the world. We cannot do that until we pry Washington’s hands off 

the throats of America’s job creators. Our free market economy will create jobs, Mr. 

President, if we change course today and get government out of the way. 

Dr. Hall, I look forward to hearing your testimony. 

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PREPARED STATEMENT OF REPRESENTATIVE ELIJAH E. CUMMINGS

I thank Chairman Casey for holding today’s hearing to examine the most recent 

data on the employment situation across America. I also thank Commissioner Hall 

for joining us today—it is always nice to see you. Today’s report indicates that in 

July, employers created 117,000 jobs and the unemployment rate dropped to 9.1 percent. These numbers are moving in the right direction—but obviously we have a 

long way to go to resolve our economic challenges and to ensure that everyone who 

wants to work can work. 

Last week, we learned that the economy grew just .4 percent in the first three 

months of this year, and only 1.3 percent in the second quarter. In June, American 

consumers decreased their spending. Additionally, the already-battered housing 

market, which continues to be a severe drag on the economy—and thus on job creation—took another hit in June as existing home sales fell sharply due to canceled 

sales contracts. 

Unfortunately, the policies coming out of Congress are doing nothing to rebuild 

confidence or spur economic growth. According to many experts, they may even 

hinder the recovery and cause us to give up the small gains we have won. Thus, 

an economist at Barclays Capital has warned that the debt deal that Congress 

struck earlier this week could reduce economic growth by a tenth of a percent in 

the first year alone. He said, ‘‘When the economy is only growing a point and half, 

a lot of economists feel that this is not the right time to be finding fiscal restraint.’’ 

Similarly, a chief global economist at Deutsche Bank Advisors, asked: ‘‘Why would 

you want to impose restraint on an economic recovery that’s already fragile? You’re 

removing spending power from the economy at a time when it needs it. That’s likely 

to make the economy weaker . . . [and in turn] the budget gets weaker, because tax 

revenues are going to slow.’’ 

The recent nosedive in the Dow suggests others may agree with this assessment— 

and that investors, like frankly almost all Americans—are worried that Congress is 

unable or unwilling to address the most important issue facing this nation: the need 

to create jobs. 

Some of the terrible consequences of our failure to focus on restoring economic 

growth are made clear in the results of a recent Pew Research Center analysis, 

which found that the wealth gap between white households and African American 

and Hispanic households is the largest since the government began reporting on income a quarter century ago. 

Specifically, the analysis finds that the housing bubble and Great Recession took 

a much deeper toll on Black families and Hispanic families than it did on white 

families. 

We can do better, and we must do better. I voted against the debt deal because 

I could not, in good conscience, support the use of a manufactured crisis to implement ideologically based policies that will further threaten our nation’s economic 

growth and job creation potential. 

Further, the debt deal intends to reduce our debt by limiting discretionary spending, potentially requiring deep cuts in programs critical to our most vulnerable citizens. At the same time, the deal demands nothing from the wealthiest Americans 

or from corporations that are receiving billions in tax breaks. 

I believe that as we work to reduce what certainly is an unsustainable level of 

debt, we need a balanced plan that prioritizes the restoration of economic growth 

and that upholds the full faith and credit of the United States through what should 

be a national commitment that entails a shared sacrifice. 

I believe this is only fair given that the national debt we now face has been created both by increased spending and by forgone revenues resulting from tax cuts 

provided to the wealthiest among us. 

Again, I thank the Chairman and I yield back. 

26 

PREPARED STATEMENT OF KEITH HALL, COMMISSIONER, BUREAU OF LABOR

STATISTICS

Mr. Chairman and Members of the Committee: 

Thank you for the opportunity to discuss the employment and unemployment data 

we released this morning. 

Nonfarm payroll employment rose by 117,000 in July, following 2 months of little 

change. The unemployment rate was 9.1 percent in July and has shown little definitive movement since April. Private-sector employment increased by 154,000 over the 

month. 

Health care employment rose by 31,000 in July, as both hospitals and ambulatory 

care services added jobs. Retail trade employment increased by 26,000. In the manufacturing sector, employment expanded by 24,000, with gains in motor vehicles and 

semiconductors. Mining employment grew by 9,000 over the month and was up by 

140,000 since the most recent low in October 2009. Employment in professional and 

technical services continued to trend up in July; this industry has added 246,000 

jobs since a recent low in March 2010. Employment in temporary help services was 

flat over the month and on net has changed little in 2011. Other private-sector industries showed little or no change in July. 

Employment in state government decreased by 23,000 over the month. The decline was almost entirely due to the partial government shutdown in Minnesota. 

Local government employment continued to trend down over the month. Since an 

employment peak in September 2008, local government has shed 475,000 jobs. 

Average hourly earnings of all employees on private nonfarm payrolls were up by 

10 cents in July to $23.13. Over the past 12 months, average hourly earnings have 

risen by 2.3 percent. From June 2010 to June 2011, the Consumer Price Index for 

All Urban Consumers (CPI-U) increased by 3.4 percent. 

Turning to measures from the survey of households, the unemployment rate was 

9.1 percent in July. The jobless rate has held in a narrow range between 9.0 and 

9.2 percent since April. 

Of the 13.9 million persons unemployed in July, 44.4 percent had been out of 

work for 27 weeks or longer. This proportion was unchanged over the month and 

essentially unchanged over the year. 

Labor force participation edged down from 64.1 to 63.9 percent in July. The proportion of the population that was employed was essentially unchanged over the 

month at 58.1 percent. 

In summary, nonfarm payroll employment rose by 117,000 in July, with the private sector adding 154,000 jobs. The unemployment rate was little changed at 9.1 

percent. 

My colleagues and I now would be glad to answer your questions. 

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64 

Æ 


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