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58–298 2010

S. HRG. 111–670 

THE EMPLOYMENT SITUATION: JULY 2010 

HEARING 

BEFORE THE

JOINT ECONOMIC COMMITTEE 

CONGRESS OF THE UNITED STATES 

ONE HUNDRED ELEVENTH CONGRESS 

SECOND SESSION 

AUGUST 6, 2010 

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] 

HOUSE OF REPRESENTATIVES 

CAROLYN B. MALONEY, New York, Chair 

MAURICE D. HINCHEY, New York 

BARON P. HILL, Indiana 

LORETTA SANCHEZ, California 

ELIJAH E. CUMMINGS, Maryland 

VIC SNYDER, Arkansas 

KEVIN BRADY, Texas 

RON PAUL, Texas 

MICHAEL C. BURGESS, M.D., Texas 

JOHN CAMPBELL, California 

SENATE 

CHARLES E. SCHUMER, New York, Vice 

Chairman 

JEFF BINGAMAN, New Mexico 

AMY KLOBUCHAR, Minnesota 

ROBERT P. CASEY, JR., Pennsylvania 

JIM WEBB, Virginia 

MARK R. WARNER, Virginia 

SAM BROWNBACK, Kansas, Ranking Minority 

JIM DEMINT, South Carolina 

JAMES E. RISCH, Idaho 

ROBERT F. BENNETT, Utah 

ANDREA CAMP, Executive Director 

JEFF SCHLAGENHAUF, Minority Staff Director 

(III) 

C O N T E N T S 

MEMBERS

Hon. Carolyn B. Maloney, Chair, a U.S. Representative from New York .......... 1 

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

WITNESS

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 ..... 5 

SUBMISSIONS FOR THE RECORD

Prepared statement of Representative Carolyn B. Maloney, Chair .................... 18 

Chart titled ‘‘Monthly Change in Private Payrolls’’ ....................................... 20 

Prepared statement of Representative Kevin Brady ............................................ 21 

Prepared statement of Dr. Keith Hall, Commissioner, Bureau of Labor Statistics, together with Press Release No. USDL–10–1076 ...................................... 22 

(1) 

THE EMPLOYMENT SITUATION: JULY 2010 

FRIDAY, AUGUST 6, 2010 

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

The committee met, pursuant to call, at 9:34 a.m. in Room 106 

of the Dirksen Senate Office Building, The Honorable Carolyn B. 

Maloney (Chair) presiding. 

Representatives present: Maloney and Brady. 

Staff present: Andrea Camp, Gail Cohen, Colleen Healy, Jessica 

Knowles, Lydia Mashburn, Jeff Schlagenhauf, Ted Boll, Dan Miller, and Robert O’Quinn. 

OPENING STATEMENT OF THE HONORABLE CAROLYN B. 

MALONEY, CHAIR, A U.S. REPRESENTATIVE FROM NEW YORK 

Chair Maloney. The meeting will come to order. 

Today’s employment report from the Bureau of Labor Statistics 

shows that in July the economy added 71,000 private-sector jobs, 

the seventh straight month of employment gains in the private sector. And we see that in our famous chart. We are continuing to 

gain jobs. 

[Chart titled ‘‘Monthly Change in Private Payrolls’’ appears in 

the Submissions for the Record on page 20.] 

Since the beginning of the year, the economy has added 630,000 

jobs in the private sector. As expected, the June report also showed 

a sharp decline in temporary Census workers, causing nonfarm 

payrolls to decline for the second month this year. 

Additionally, the June employment report shows that the unemployment rate remained unchanged at 9.5 percent. Although the 

overall unemployment rate has declined from its peak of 10.1 percent in October 2009, not all demographic groups are seeing the 

same trends in unemployment rates. 

For example, the unemployment rate for African American workers continued to rise after October 2009, although the current unemployment rate of 15.6 percent is lower than the peak of 16.5 percent. 

In addition to overall private-sector job gains, manufacturing employment has risen for seven months in a row, after falling three 

straight years. The last time this sector gained jobs for seven 

months in a row or longer was in 1998. 

GDP grew for the fourth consecutive quarter in the second quarter of 2010 with businesses’ purchases of equipment and software 

growing by 20 percent for the second quarter in a row. 

2 

Surveys of both the service sector and the manufacturing sector 

show that growth is expected to continue, but we have to be patient. The path to recovery is never a straight line. For the millions 

of workers who lost their jobs, it will take time for them to become 

employed again. 

The recent GDP report from the Bureau of Economic Analysis 

also told us that this Recession was even more severe than previously reported. We now know that GDP fell by 6.8 percent in the 

fourth quarter of 2008, and fell by 4.9 percent in the first quarter 

of 2009. 

A recent study by the noted economists Alan Blinder and Mark 

Zandi shows that without the actions taken by the Administration, 

Congress, and the Federal Reserve, this Recession would have been 

another Great Depression. Without these actions, we would have 

lost an additional 8.5 million jobs by the end of 2010. 

We have made real progress in the past year. While today’s job 

gains are not as robust as earlier this year, the trend is in the right 

direction. But we cannot let down our guard. The recovery is still 

fragile, and our economy is still vulnerable. 

The policies that Democrats in Congress quickly put into place 

over the last year are working. Policies do matter. That is one reason I am glad to see that yesterday the Senate passed legislation 

to extend funding to states to pay for their increased Medicaid 

costs, and to provide additional funding for teachers. 

The Department of Education estimates that 140,000 teacher 

jobs will be saved because of this increase in funding. The House 

will be reconvening on Tuesday of next week to pass this needed 

legislation so that it will be in place before the school year begins. 

This legislation will also help the economy grow. According to the 

Council of Economic Advisers’ fourth quarterly report, aid given to 

the states in the Recovery Act was quickly implemented and provided a large boost to the growing economy. 

Recently the JEC Majority staff took a deeper look into the employment increases in the manufacturing sector in 2010, and we 

did this report on the manufacturing growth and the promising 

signs of recovery from it. 

Most of the job creation in the manufacturing sector is in the durable goods sector, and may be due to inventory restocking or temporary export surges due to fiscal stimulus in other countries. Manufacturing is a key source of good jobs that can play an important 

role in spurring growth in other sectors in our economy. 

This JEC report shows that Congress and the Administration 

need to take further actions to create a robust rebound in manufacturing employment. 

Some actions have been taken by the House of Representatives 

already, but we need to do more. In particular, more actions are 

needed to help small businesses. The House has already passed 

legislation to help small businesses get credit and provide tax credits for these engines of job growth. 

It is time for all Members of Congress to work together to pass 

legislation that will create jobs and put the American people first. 

I yield back, and I would now like to introduce Commissioner 

Hall, and recognize the other members of the Committee. There are 

not many here, but Mr. Brady flew all the way in from Texas for 

3 

this meeting, even when we were not in session, and I am deeply 

grateful that he is here. And he is recognized for as much time as 

he may consume. 

[The prepared statement of Representative Maloney appears in 

the Submissions for the Record on page 18.] 

OPENING STATEMENT OF THE HONORABLE KEVIN BRADY, A 

U.S. REPRESENTATIVE FROM TEXAS 

Representative Brady. Great. Thank you, Madam Chairman. 

Thank you for your leadership of the Committee. 

I am pleased to join with you in welcoming Dr. Hall before the 

Committee this morning. 

Unfortunately, today we received more bad news for American 

workers and their families. The unemployment rate shows no sign 

of improving and remains elevated at 9.5 percent. Total job losses 

were 131,000. And after excluding the layoffs of temporary Census 

workers, private sector payroll job growth remains anemic at 

71,000. At this slow pace, it will take much of the decade to return 

to normal employment levels. 

Despite the promises, the economic plan of President Obama and 

Congressional Democrats has failed to restore consumer confidence—a key element to economic recovery. 

The University of Michigan’s July Index of Consumer Sentiment 

fell dramatically by 10.8 percent to 67.8, the lowest level in a year. 

The Index of Consumer Expectations fell even further to the lowest 

level since March of last year, the month after Congress enacted 

the Stimulus. 

According to Richard Curtin, the economist in charge of producing these indices: 

Rather than the economy gaining strength, consumers now 

anticipate a slowing pace of growth, and rather than economic policies acting to improve prospects, the policies of 

the Obama Administration have increased economic uncertainty among consumers. Overall, the data suggest that 

the current slowdown in spending is likely to persist well 

into 2011 as it reflects a widespread and general realignment of job and wage expectations. While a double dip is 

still unlikely, it now has a nonignorable 25% probability. 

End of quote. 

It is discouraging to American workers and small businesses that 

this unusually sluggish, sub-par recovery will persist well into next 

year. But it is not surprising. 

Along with the failure of the massive Democratic stimulus to put 

people back to work—except in Federal Government jobs—families 

and businesses fear the dangerous levels of debt incurred by this 

Congress and a host of job-killing, anti-growth policies coming out 

of Washington, including higher taxes, higher energy prices, burdensome regulations, and constant bailouts of special interests. 

While tens of thousands of American energy workers risk losing 

their jobs right now due to the White House moratorium on drilling 

in the Gulf of Mexico, Congress next week will consider another 

$26 billion bailout of state and local government workers. The signal this Democratic Congress is sending is clear: We’ll spend whatVerDate Nov 24 2008 14:18 Oct 28, 2010 Jkt 058298 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 C:\DOCS\58298.TXT SHAUN PsN: DPROCT
4 

ever taxpayer money it takes to save a government job; the rest of 

you American workers can take a hike. 

And three weeks after we extended the invitation to President 

Obama to travel to Houston to meet face-to-face with energy workers and small businesses whose livelihoods are threatened by the 

President’s moratorium, we have heard nothing but silence. 

To add insult to injury, this President is coming to Texas next 

week to raise campaign cash but apparently does not have an 

hour—not even 15 minutes—to spare for our American workers 

whose jobs he is killing. 

Maybe if our energy workers worked for the government they 

could get a bailout, too. But that is not what they are asking. They 

just want to go back to work on the rigs the President has idled 

and some that now are forced to leave America for foreign countries. 

The prospects for other workers who have lost their jobs isn’t 

much better. Real economic growth slowed by more than one-half 

from 5 percent in the fourth quarter of last year to 2.4 percent in 

the second quarter of this year. 

One-off inventory restocking accounted for 59 percent of real 

GDP growth during the last three quarters. Restocking your 

shelves isn’t a sustainable basis for job creation, but consumers 

confident in the recovery are. 

Unfortunately real final sales growth—which is a better indicator 

of the underlying trend than real GDP—averaged an anemic 1.5 

percent during the last three quarters. Consequently, economists 

are downgrading their forecasts for the remainder of this year and 

next. 

Earlier this week, Committee Democrats released a report stating that manufacturing payroll jobs increased by 136,000 during 

the first half of 2010. I rejoice that some American workers have 

found new manufacturing jobs. 

However, this report tells only one-half of the story. Actually, 

manufacturing payroll jobs have decreased by 660,000 since the 

Obama stimulus was enacted. Moreover, manufacturing payroll 

jobs fell by 2.3 million since the Democrats took control of Congress 

in 2007. 

With so many families struggling and having lost their jobs in 

manufacturing, how can Congressional Democrats possibly be 

proud of these devastating economic failures? 

Ironically, the slight improvement in the manufacturing sector is 

not due to sales here in America, but rather foreign demand, especially in Canada, Mexico, and rapidly growing countries in Asia. 

Monthly U.S. manufacturing exports are up 31 percent from February to May of this year—February of last year to May of this 

year. To satisfy higher foreign demand, U.S. manufacturers boosted 

their output by 6 percent during the same period. 

Since the beginning of the year, this export-driven recovery is beginning to reverse the decline in manufacturing employment under 

the failed White House economic plan. 

In contrast, demand here in America, which the Obama stimulus 

was supposed to boost, remains lackluster. So unless Speaker 

Pelosi and Majority Leader Reid want to pat themselves on the 

back for increasing demand in foreign countries, which is preposVerDate Nov 24 2008 14:18 Oct 28, 2010 Jkt 058298 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 C:\DOCS\58298.TXT SHAUN PsN: DPROCT
5 

terous, Democrats can claim little credit for the improving outlook 

in manufacturing. 

Indeed, many Congressional Democrats oppose selling more 

American goods and services overseas by failing to pass the pending free trade agreements with Columbia, Panama, and South 

Korea that would accelerate export-driven job creation. 

Dr. Hall, amid this grim economic data I look forward to hearing 

your testimony. I yield back. 

[The prepared statement of Representative Brady appears in the 

Submissions for the Record on page 21.] 

Chair Maloney. Thank you. I would now like to welcome the 

panelists and introduce Commissioner Hall. Dr. Keith Hall is the 

Commissioner of the Bureau of Labor Statistics for the U.S. Department of Labor. 

The BLS is an independent national statistical agency that collects, processes, analyzes, and disseminates essential statistical 

data to the American public, the United States Congress, other 

Federal agencies, state and local governments, businesses, and 

labor. 

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

Council of Economic Advisers for two years under President Bush. 

Prior to that he was Chief Economist for the U.S. Department of 

Commerce. Dr. Hall also spent 10 years at the U.S. International 

Trade Commission. 

Welcome. 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. Madam Chair and Members of 

the Committee: 

Thank you for the opportunity to discuss the employment and 

unemployment data we released this morning. Nonfarm payroll 

employment declined by 131,000 in July, and the unemployment 

rate remained at 9.5 percent. 

The decrease in employment largely reflects continued cuts in 

the number of temporary workers previously hired for the Census 

2010. Private sector employment edged up over the month. Thus 

far in 2010, private sector employment has risen by 630,000, although nearly two-thirds of that gain occurred in March and April. 

In July, employment in the Federal Government fell for the second month in a row. The number of temporary Census 2010 workers decreased by 143,000, following a decline of 225,000 in June. 

This leaves 196,000 temporary decennial Census workers on the 

payroll. 

Within the private sector, employment gains continued in manufacturing, health care, and mining. Manufacturing employment 

rose by 36,000. Most of the gain occurred in motor vehicles and 

parts, as some plants deviated from the normal practice of shutting 

down in July for retooling. 

6 

Motor vehicles and parts had added 32,000 jobs during the first 

half of the year. Employment in fabricated metals increased by 

9,000 over the month. The manufacturing workweek rose by onetenth of an hour in July, after falling by half an hour in June. 

Health care employment grew by 27,000 over the month. Since 

the recession began in December 2007, health care has added 

665,000 jobs. Employment in mining rose by 7,000 in July, largely 

in support services. 

Employment in temporary help services was nearly unchanged 

for the second month in a row. Job gains had averaged 45,000 per 

month from October through May. 

Construction employment was little changed in July. A strike in 

the industry reduced payrolls by about 10,000. Financial sector employment continued to trend down over the month, though the pace 

of job loss has been slower this year. Thus far in 2010, monthly job 

declines have averaged 12,000 compared with 29,000 in 2009. Employment in most other private sector industries was little changed 

in July. 

Turning now to the data from our Survey of Households, most 

key labor force measures were essentially unchanged in July. The 

jobless rate remained at 9.5 percent, and the number of unemployed held at 14.6 million. 

The unemployment rate has declined from 9.9 percent in April, 

reflecting decreasing labor force participation. The participation 

rate had risen during the first 4 months of the year to 65.2 percent 

in April, but has now returned to 64.6 percent—its December 2009 

level. 

Among the employed, the number of individuals working parttime who preferred full-time work was nearly unchanged over the 

month at 8.5 million. Since April, the number of such workers has 

declined by 623,000. However, the level remains 3.9 million above 

that of December 2007 when the Recession began. 

In summary, payroll employment declined by 131,000 in July, 

largely reflecting a decrease in the number of temporary Census 

workers. Small job gains continued in the private sector. The unemployment rate held at 9.5 percent. 

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

[The prepared statement of Commissioner Hall, together with 

Press Release No. USDL–10–1076, appears in the Submissions for 

the Record on page 22.] 

Chair Maloney. I thank you very much for your testimony. As 

you know, I always like to start with the positives. So would you 

really focus on the bright spots and the areas that you feel are particularly encouraging in this jobs report? 

Commissioner Hall. Sure. While the private sector employment 

was not strong, it did increase this month, and it has increased 

now for seven months in a row. 

Manufacturing employment once again edged up, and that has 

been increasing now for seven months in a row as well and that 

is actually quite unusual. Manufacturing employment has not risen 

in quite awhile, so that is a good sign. 

Chair Maloney. Why do you think that is happening? 

Commissioner Hall. It is just hard to say. I can tell you it has 

happened. It’s been fairly broad. This month in particular motor 

7 

vehicles and parts added 21,000 jobs, which is most of that manufacturing increase. So I think that is a good sign. 

Manufacturing took quite a hit during most of the Recession, so 

the last seven months have been welcome. 

Chair Maloney. What other sectors are experiencing more job 

creation than loss? 

Commissioner Hall. The health care industry continues to grow 

jobs. This month it grew about 27,000 jobs. And it has pretty consistently throughout the whole Recession. 

Chair Maloney. You mentioned that manufacturing was very 

encouraging. Do you have any breakdowns on the subsectors in 

manufacturing that showed significant changes to help us understand how we can support manufacturing, and the subsectors? Do 

you have any numbers or information on that? 

Commissioner Hall. Sure. Over the month we had gains in a 

number of areas. We had fabricated metal products, machinery, 

computer and electronic products, electrical equipment and appliances. So it was fairly broad. It wasn’t strong growth in every one 

of those sectors, but there was growth especially as you mentioned 

in your earlier statement in durable goods. 

Chair Maloney. And are there any further indicators that overall job gains will continue in the coming months? Do you see any 

trends there you could report? 

Commissioner Hall. You know, I think the fact that, although 

the job gains the last three months have been fairly modest, they 

have been gains so far. I think that is encouraging. And the manufacturing work week continues to hold. It hasn’t declined any. So 

I think that is encouraging, as well. 

Chair Maloney. Well I feel that we really are going to be coming into session this coming Tuesday to vote for the state government support, and I think that is critically important given the 

fragile economy we are confronting. 

State governments have reduced payrolls by 169,000 since the 

beginning of the year, and this I believe underscores the importance of the state aid package that was passed by the Senate yesterday, and will be passed by the House on Tuesday, will prevent 

the layoffs of tens of thousands of teachers, and help states provide 

for vital health care services, and have the teachers in place for the 

school year beginning in September. So in my own State they estimate that it will save the jobs of 7,000 teachers, and that is critically important. 

In the first six months of 2010 I believe that employment of the 

states declined dramatically. Did state and local governments see 

further employment declines in July? Did you track that? 

Commissioner Hall. Yes. In fact, they both did. State government lost about 10,000 jobs; and local government lost about 

38,000 jobs, which is a pretty large number for local government. 

Chair Maloney. And how would you characterize recent months’ 

trends in these sectors? 

Commissioner Hall. Both sectors have lost jobs, continued to 

lose jobs even this year, actually, despite the fact that we have had 

some growth in the private sector. 

8 

Chair Maloney. And are you able in your numbers to separate 

out changes in education employment from the other types of state 

and local jobs? 

Commissioner Hall. Yes. For example, of the 38,000 jobs lost 

in local government this month, 27,000 were in education, and 

2,000 were in state government in education. 

Chair Maloney. And has the Bureau of Labor Statistics done 

any research on spillover effects associated with state and local 

government employment? 

Commissioner Hall. There almost certainly are spillover effects, but we haven’t done any research on that. It is something 

that probably someone could do, but we haven’t done that. 

Chair Maloney. Well my time has expired. Thank you. 

Representative Brady. Thank you, Madam Chairman. 

Why is it that only government workers, Commissioner, get a 

bailout? You know, why do you have to have a government check 

before Congress comes back from its recess to try to rescue your 

job? 

You know, what about Americans along Main Street who just 

want to go back to work? Who have seen, gosh, some 3.5 million, 

almost 3.5 million jobs lost along Main Street since the stimulus 

took effect. The only sector that’s gained is the Federal Government. They’ve gotten jobs; everyone else gets pink slips. 

What about the energy workers who are losing their jobs due to 

the drilling moratorium the President has in place today? And the 

small businesses who hire all the workers who supply those rigs? 

What about them? They’re not asking for a bailout. They just want 

to go back to work. 

You have pointed out you don’t know why manufacturing improvement is occurring, but other economists say that the balance 

of manufacturing has come from, one, restocking their inventories, 

about 60 percent, 59 percent of growth for the last three quarters 

came from restocking their shelves. 

The rest of it, the bulk of the rest of it has come from export 

sales to other countries. And none of which, you know, is created 

by the stimulus. And the manufacturing this week, we’ve lost since 

the stimulus began 660,000 manufacturing jobs. The improvement 

this month, according to your numbers in manufacturing, comes 

mainly from autos. And according to your briefing, the majority of 

that is a seasonally adjusted situation where normally at this time 

of year they are shutting plants down for retooling and maintenance. They did that earlier. And had them actually operating. So 

even that’s not as good news as we would like. 

So my question is: The economy weakened significantly during 

the second quarter of this year. It is half what it was at the beginning of the year. Real GDP growth slowed to 2.4 percent. Last 

month consumer confidence fell dramatically, the lowest it has 

been since February of last year. Since the Housing Tax Credit expired, housing starts, existing new home sales, are all down. Durable goods’ orders are down for two months in a row. 

We are all looking for positive signs, but do these weakening economic data indicate that job growth will slow and the unemployment rate will remain stubbornly high for the rest of this year? Do 

you see unemployment staying high through the rest of this year? 

9 

Commissioner Hall. I would not want to spec—since we 

produce the data, I would not want to speculate on what the data 

might show. So with respect to talking about the rest of the year, 

I would not want to offer an opinion on that. 

But I can tell you that it is true that certainly in the last three 

months there has been private sector job growth but it has not 

been strong yet. 

Representative Brady. May I ask, the White House predicted 

that employment in construction, for example, would make up a 

major component of the total number of jobs created or saved by 

the stimulus. What change has occurred in the level of payroll employment in construction since the stimulus was enacted last—February of last year? 

Commissioner Hall. We’re going to have to look it up, since 

February—I will tell you what I can really quickly, and we’ll see 

if we can get the more precise number. Construction has continued 

to lose jobs. It has lost about—this month it lost about 11,000 jobs, 

and I think over the last three months it has lost about 20,000 jobs 

a month. So we have not had consistent job growth in construction 

lately. 

Representative Brady. Not job growth. We have actually had 

consistent job loss in construction? 

Commissioner Hall. That’s February of ’09? 

Representative Brady. Yes. 

Commissioner Hall. He will give you the number in just a 

minute if you want to go ahead and go on. 

Representative Brady. Let me ask. We have lost 660,000 jobs 

in the manufacturing sector since the stimulus took place. Retail 

trade, we were told if that massive stimulus was passed, would be 

expected to see a large increase. Is that happening? Are we seeing 

large increases in retail trade? Because consumer confidence is 

very low, the lowest it has been in a year. 

Commissioner Hall. Yeah, retail trade was not greatly changed 

this month. It grew about 7,000 jobs this month. And over the past 

three months we have averaged the loss of about 7,000 jobs in retail trade. 

Representative Brady. So it is consistently, like construction, 

losing jobs in retail trade? 

Commissioner Hall. Over the last few months it has. 

Representative Brady. We were told that 90 percent of the 

jobs from the stimulus that were created or saved would be in the 

private sector. Is it true that the Federal Government is the only 

economic sector to experience payroll job growth since February of 

the stimulus last year? 

Commissioner Hall. Yeah, I think other than the health care 

sector I do think the total payroll jobs have declined since February 

of last year. 

Representative Brady. In the private sector? 

Commissioner Hall. In the private sector. 

Representative Brady. And Federal jobs, government job 

growth, though is the only positive at this point? 

Commissioner Hall. Well I think education and health care 

and the federal government, I think that is right, since February, 

overall. 

10 

Representative Brady. Thank you, Commissioner, appreciate 

it. 

Chair Maloney. Thank you. 

In terms of construction jobs that were saved due to the stimulus, as you know a third of the stimulus went to infrastructure 

projects which are construction jobs. Can you contrast the average 

job loss in construction in 2008 and the first half of 2009 to more 

recent months? And are we still losing as many construction jobs? 

And what would have happened if we didn’t have the stimulus supporting infrastructure jobs? 

Commissioner Hall. The job loss through 2008 and the first 

half of 2009 in construction was very high. It got as high as 

153,000 in a single month. It was very, very high. And the job loss 

since the middle of last year has declined. Although job loss has 

continued, it has moderated a fair amount. 

Chair Maloney. And we are still losing quite a few jobs. 

Okay, in the Recession in the labor market, at last month’s hearing you testified that coming out of a recession it’s fairly typical to 

average about 100,000 private sector jobs per month. And we have 

another month behind us. Is the recovery in the labor market still 

similar to what we have seen coming out of recent recessions? 

Commissioner Hall. It is actually not completely out of line. 

The labor market, at this moment the labor market troughed in 

December of last year, and since then we have averaged about 

90,000 jobs a month. 

During the last recession, we averaged something like 140 thousand jobs per month over the first seven months. In the prior recession we actually continued to lose some private sector jobs in the 

first seven months. So it is not inconsistent with other stretches 

past the labor market trough. 

Chair Maloney. And how would you characterize the labor market today? 

Commissioner Hall. Well obviously the large job loss has 

ended. We do have some sectors that are losing jobs, but we have 

sectors that are now gaining jobs. The job growth in the private 

sector has been 630,000. It just has not gotten strong yet, but it 

is job growth. 

Chair Maloney. Is there anything in your data that you could 

call attention to as a potential pitfall in this recovery? 

Commissioner Hall. Yes. I think my biggest concern would be 

that a lot of the strength this year has come from just a couple of 

months. We had two months there where a lot of the numbers 

early in the year looked up, the payroll job growth strengthened, 

and the labor force participation rose. But that seems to have 

backed off a little bit now, so we are in a weaker spot I think than 

we were a few months ago. 

Chair Maloney. Last month I asked you about the impact of the 

oil spill on jobs in the Gulf region. You mentioned that BLS is 

doing some tracking and that you would be able to show areas that 

could be affected. I truly do understand that it is difficult to determine the precise impact, as there are job losses relating, for example, to tourism, fishing, and other industries. Do you have anything 

at this point on the employment impact of the spill in the Gulf that 

you are able to share with the Committee? 

11 

Commissioner Hall. Well what we have done, and we have actually put it up on our web site so it’s publicly available, is that 

we’ve identified the number of jobs that are on the Coast areas, the 

county employment levels, to get some idea of the kinds of jobs that 

are potentially at risk. 

And we mentioned that a number of the jobs that could be affected, like commercial fishing vessels, and independent contractors, are not part of the scope, they aren’t payroll jobs so they 

wouldn’t be captured here. So we have got the levels up. 

It is not obvious to see a big impact. There might well be an impact there, but we don’t see a real obvious impact. For example, we 

haven’t seen any real spikes in the unemployment insurance filings, for example, like that. And from talking with our state partners a little bit in the Gulf States, one of the things they mentioned that has helped somewhat with leisure and hospitality is 

that workers working on the oil spill have sort of moved into hotels 

and restaurants, and that has actually helped some of the leisure 

and hospitality numbers that normally would have gone down more 

because of lost tourism. 

So the bottom line is, it is not an obvious impact that I can see 

there. That does not mean that there isn’t an impact there, and if 

somebody does a more sophisticated look they might be able to find 

a little something. 

Chair Maloney. Well, my time has expired. 

Representative Brady. Commissioner, you had said in your 

testimony that—or comments, that the unemployment rate has declined from 9.9 percent in April to 9.5 percent this month. But did 

you also say that’s not exactly good news? That that decline is because fewer Americans have simply given up looking for work? 

Last month it was 650,000 people who had given up looking for 

work. 

Commissioner Hall. Right, right. 

Representative Brady. This month, it stayed fairly stable but 

jobs claims were up again last week. But the major reason for the 

decline is at this point fewer people looking for work? 

Commissioner Hall. That’s actually correct. I would say early 

in the year we had a drop in the unemployment rate—I’m sorry, 

a rise in the unemployment rate from around 9.7 to 9.9. And that 

was primarily because of people entering the labor force. 

So that wasn’t necessarily as bad news as it looked. But now 

we’ve seen an unwinding of that, where people have now left the 

labor force and left unemployment. So the unemployment rate 

going down and holding isn’t necessarily good news because of that. 

Representative Brady. That’s what I see at home. I see a lot 

of people who are discouraged and have just given up work. We see 

more who will likely lose their jobs because of the drilling moratorium in the Gulf of Mexico. Very devastating. Economic disaster. 

That one is a government-made economic disaster, unfortunately. 

I see consumers who are frightened by the debt, reluctant to 

come back shopping. And I see businesses reluctant to hire. And 

as a result, that seems to be reflected in your data. The consumer 

confidence is the lowest it’s been in years, so retail sales are very 

anemic growth. 

12 

Job creators are very impacted by the uncertainty of all these 

wild policies in Washington, so they are not creating jobs. The initial jobs’ claims again were up last week, which caught everyone 

by surprise. 

Back in May you suggested that small- and medium-sized firms 

were not driving economic growth like they used to; instead, large 

firms were creating more private sector jobs. And of course government was the only sector that had grown significantly. 

Why do you think—well, let me ask this. Are small- and medium-sized businesses hiring more, doing better now in this regard 

than they were in May? 

Commissioner Hall. The data we have on that lags a fair 

amount, but the hires in small businesses actually has declined in 

May a little bit while medium- and large establishments increased 

slightly. 

Representative Brady. I’m sorry? Run that first part by me 

again? 

Commissioner Hall. Sure. Hiring in small establishments declined; the hire rate declined from about 3.8 percent to 3.5 percent 

in May. That’s our most recent data—between February and May 

while with medium and large establishments, the hire rates went 

up a little bit. 

So most of that hiring that occurred that I mentioned in those 

two strong months was in medium and large establishments. 

Representative Brady. So small businesses are hiring less. Medium size slightly more? 

Commissioner Hall. Yes. 

Representative Brady. At this point. Good. Why is it that consumer confidence, you think, is so far down? You would think after 

a year of, you know, stimulus spending, all sorts of huge government bailouts, and now more of them next week, that consumer 

confidence would be higher than this. What is the reason for that? 

Commissioner Hall. You know, I can’t speculate on what drives 

that. You know, I just know a lot of things affect consumer confidence, but as far as trying to guess as to what’s caused that, I 

don’t know. 

Representative Brady. Okay. Are there any other points about 

this month’s report you want to comment upon? 

Commissioner Hall. No. I think this report in its way is pretty 

similar to the last two months—that we do have some private sector job growth, but there is just not strong job growth yet. 

Representative Brady. Are you able to identify in your report 

why the economy has slowed by half since the beginning of the 

year? I mean, obviously we want the recovery to go in the right direction. Right now it is actually slowing fairly significantly. What 

are the reasons for that? 

Commissioner Hall. I don’t know. I can tell you that the pickup 

in March and April, and the slowdown in the last three months has 

been fairly broad. It has not been in particular sectors. 

Construction has been a big part of that, but it has also been in 

retail trade, leisure and hospitality. So there’s not an obvious explanation for the slowdown. 

Representative Brady. Okay. Well, great. Thank you, Commissioner. 

13 

Chair Maloney. Thank you very much, Commissioner. I think 

it is important to put this in perspective. When you look at the V 

chart, or the deep red valley chart, you see the first month that 

President Obama took office, the last month that President Bush 

was in office, this country shed 790,000 jobs. 

And as you see the chart trending in the right direction in the 

light blue, it shows the overall job gains in the private sector. We 

are moving in the right direction, and I would say it is because of 

the policies of the Democratic Majority, most specifically the stimulus—the Economic Recovery Act. 

Last week, two economists, bipartisan economists, Blinder, a 

former Democratic appointment to the Federal Reserve and now a 

professor, and Mark Zandi, the economic adviser to McCain during 

his Presidential bid, came out with a joint report that showed that 

if we had not taken the steps in the recovery we would be in a 

Great Depression, not a Recession, and this country would have 

lost 8.5 million jobs. 

What we do know is that America cannot afford to go back to the 

policies of the prior Administration where we were shedding so 

many jobs. 

Do you agree with the Zandi/Blinder report, Commissioner Hall? 

Commissioner Hall. I wouldn’t want to—in my role, I wouldn’t 

want to speculate on what the labor market would look like under 

different circumstances, since we just report the data. 

Chair Maloney. Well just reporting the data, you have said in 

our prior hearings that female single heads of households were particularly hard hit. I would like to know, is that continuing? Is there 

a difference between male heads of households and female heads 

of households in terms of employment, and in terms of men and 

women? Are they faring about the same? Or are men more hurt 

than women in this recovery? Are women more hurt than men? In 

terms of just the numbers, how is it breaking down? 

Commissioner Hall. The unemployment rate for the female 

head of household is about 13.4 percent, which is a bit higher than 

the 9.5 percent overall unemployment rate. And in terms of job 

loss, although men have lost a lot more jobs than women, women 

have lost significant numbers of jobs during this Recession. And to 

be honest, that doesn’t always happen because of the industry distribution. 

So women have—— 

Chair Maloney. So women have achieved equality in job loss? 

Commissioner Hall [continuing]. I would say that’s fair, yes. 

Chair Maloney. And is there any difference with male heads of 

households? Are single male heads of households, are they more 

hurt than a regular male? Do you understand what I’m saying? 

Commissioner Hall. Yes. And I don’t have that information 

with me. We can, if you like we can follow up. 

Chair Maloney. Because that directly affects families. 

Commissioner Hall. Sure. 

Chair Maloney. We call it sometimes the ‘‘mom bomb,’’ because 

women who have children often do not, according to statistics, continue to proceed economically in a better light. 

14 

Could you make a comparison and give us an analysis of how 

Hispanics are doing in this recovery? And African Americans? And 

put that in perspective for us? 

Commissioner Hall. Sure. The African American unemployment rate remains high, 15.6 percent. And that has increased 

about 6.6 percentage points since the Recession. So they have been 

hit very hard by the Recession. 

Hispanics, their unemployment rate is 12.1 percent, which is a 

5.8 percentage point increase. So both have had a larger percentage 

point increase in unemployment than Whites have. 

Chair Maloney. Also, your statement on small businesses was 

very interesting. How do you define a small business? What is your 

definition of a small business? 

Commissioner Hall. In the numbers I have quoted you, it was 

below 50. 

Chair Maloney. Below 50 employees? 

Commissioner Hall. Yes, that’s correct. 

Chair Maloney. So below 50 employees is your description of a 

small business. 

Commissioner Hall. Yes. 

Chair Maloney. But in prior economies, it’s fair to say that a 

lot of the recovery came from small businesses which employ, I’ve 

been told, 98 percent of the workers in America. Is that true? 

Commissioner Hall. That’s true. 

Chair Maloney. So 98 percent of the workers in America are in 

small businesses. We are not going to really recover until they 

start recovering. And I have been told that usually it is the small 

businesses that rebound, not the middle and large businesses. Is 

that true in this Recession? I think you said that earlier to my colleague that that’s not true. Do you have any economic data that explains why that is happening, this break in trends? 

Commissioner Hall. I don’t have any data that shows why that 

has happened, but you’re right that small businesses have borne a 

bit bigger brunt of the job loss than in past recessions. 

Chair Maloney. And more importantly, they are not gaining. 

Commissioner Hall. Correct. 

Chair Maloney. They’re not gaining. 

Commissioner Hall. And they’re not yet participating in the recovery so far quite as much as they usually do. That’s correct. 

Chair Maloney. That’s why the Democratic Congress passed the 

HIRE Act that gave incentive to small businesses and large businesses to hire unemployed workers with a tax credit. We have 

passed in the House a $30 billion loan fund that would be directed 

completely to lending to small businesses to get the liquidity back 

into the markets and to help them continue—help them to grow, 

and hire, and be stronger participants in the economy. 

My time has expired. 

Representative Brady. Commissioner, we were told if we spent 

that $862 billion of stimulus—or a trillion dollars when you count 

the interest; it’s all borrowed—that it would jump start the economy and restore consumer confidence. 

As for jump starting the economy, it is now slowing and every 

sector has lost jobs, unless you’re a government worker. As for restoring consumer confidence, 90 percent of Americans believe that 

15 

the economy is in bad shape. Almost 3 out of every 4 believe it 

won’t get better anytime soon. 

Consumer confidence is back—has lost so much, it is back to 

where it was when the stimulus was passed. We have lost a yearand-a-half of consumer confidence. They are clearly not going back 

to the stores. 

Have you seen anything in your statistics that show consumer 

confidence has been restored? 

Commissioner Hall. Um—— 

Representative Brady. Because I don’t see it in real sales 

growth. I don’t see it in retail growth. I just don’t see it. 

Commissioner Hall [continuing]. Yes. In terms of the employment, the changes in employment have been pretty broad. That’s 

about all I can say about that, that large job growth—large job loss 

from last year was broad, and now the moderation has been broad 

as well. 

Representative Brady. What is the impact—obviously consumer confidence is lost at this point. The stimulus didn’t restart 

and jump start the economy, except if you are a government worker. 

Next week again we will come back and bail out more government workers, while Main Street continues to suffer. The average 

American worker does not get a bailout. They just get a pink slip 

these days. 

My question is: What impact will the tax bomb, the $3.8 trillion 

tax increase that will hit the American public at the end of this 

year if it is not extended, and there’s considerable debate among 

our Democrats whether they will extend it or not, what would be 

the impact of increasing taxes, income taxes, on most Americans? 

On cutting the child tax credit in half? 

In bringing back the marriage penalty, which is about a $600 hit 

for most families? What’s the impact of capital gains, and dividends’ rates skyrocketing? If the death tax comes back in full force? 

The alternative minimum tax, that second tax, the double tax, on 

families, middle class Americans? What is the economic impact if 

Americans find themselves, wake up on January 1st and that tax 

bomb has gone off? 

Commissioner Hall. I wouldn’t want to speculate on the possible impact of anything like that. 

Representative Brady. Do tax increases on families—for example, if the tax bomb does go off at the end of this year, Congress 

fails to act, the average Texas family will see increases, tax increase of about $3,000 a year—that may not be big by Washington 

standards; it’s huge for our families—if you raise taxes $3,000 for 

a family, does that restore consumer confidence? Does that increase 

retail sales? 

Commissioner Hall. Again, I wouldn’t want to talk about tax 

policy. 

Representative Brady. Well if you take $3,000 a family out of 

people’s pockets, they send it here to Washington rather than going 

to the local store, or the mall, or eating out, or buying an iPod for 

their children, does that improve retail sales when money is diverted from the local economy up to Washington? 

16 

Commissioner Hall. Again, I wouldn’t want to talk about the 

impact of something like that. 

Representative Brady. What are you seeing in the energy sector? Speaking of people who are losing their jobs, right now the energy sector for last month stayed fairly even. We’ve seen announcements in the Gulf of companies redeploying workers overseas because the rigs are no longer being able to work in the Gulf of Mexico. 

Small businesses tell us that they have begun layoffs because 

they cannot go until the end of November, six months, without 

their primary source of revenue. And each of the rigs that is idle 

in the Gulf has between 1,000 and 1,500 workers tied directly to 

it, as well as on average 1,000 vendors who supply those services. 

Those rigs are now idle. 

As well as in the shallow water, the Interior Department has a 

de facto moratorium that has virtually shut down exploration in 

the shallow waters, again tens of thousands of workers and many 

independent energy production workers looking forward. If the 

moratorium holds until the end of November, or if Washington succeeds in driving independent contractors, or independent producers 

out of the Gulf, what will be the job losses in the energy sector 

going forward? 

Commissioner Hall. I wouldn’t want to speculate on that. 

Representative Brady. But the companies that do drill in the 

Gulf, especially the independents that make up about 80 percent, 

the largest shareholder in 80 percent of those wells, those are almost all U.S. American companies, if those companies lay off workers, those will be Americans—— 

Chair Maloney. The gentleman’s time has expired, but, Commissioner Hall, you may answer. 

Commissioner Hall. Again, I wouldn’t want to speculate on 

what could happen. 

Representative Brady [continuing]. Okay. Thank you. 

Chair Maloney. Well, one way that we do not speculate is when 

we look at numbers. Numbers do not lie. And when we look at this 

monthly change in private payrolls, it shows that in the last month 

that the former President was in office we lost over 700,000 jobs. 

Because of Democratic policies and helping to get the economy 

moving again, we are trending in the right direction. And it is clear 

that actions taken by the Democrats in Congress have helped to 

get our economy back on track. But the recovery is fragile, and the 

pace of growth is modest. 

While business investment is picking up, consumers continue to 

face challenges and remain very cautious. Job creation is number 

one on the top of my list, and I would say job creation is the number one top of the list, the to-do list, of all Democrats, where it will 

remain until every American who wants a job has a job. 

This hearing is adjourned. 

[Whereupon, at 10:25 a.m., Friday, August 6, 2010, the hearing 

was adjourned.] 

(17) 

SUBMISSIONS FOR THE RECORD 

18 

STATEMENT OF CAROLYN MALONEY, CHAIR, JOINT ECONOMIC COMMITTEE

Today’s Employment Report from the Bureau of Labor Statistics shows that in 

July, the economy added 71,000 private sector jobs, the seventh straight month of 

employment gains in the private sector. Since the beginning of the year, the economy has added 630,000 jobs in the private sector. 

As expected, the June report also showed a sharp decline in temporary Census 

workers causing total nonfarm payrolls to decline for the second month this year. 

Additionally, the June employment report showed that the unemployment rate remained unchanged at 9.5 percent. 

Although the overall unemployment rate has declined from its peak of 10.1 percent in October, not all demographic groups are seeing the same trends in unemployment rates. 

For example, the unemployment rate for African American workers continued to 

rise after October, although the current unemployment rate of 15.6 percent is lower 

the peak of 16.5 percent. 

In addition to overall private sector job gains, 

• Manufacturing employment has risen for seven months in a row, after falling 

3 straight years. The last time this sector gained jobs for 7 months in a row 

or longer was in 1998. 

• GDP grew for the fourth consecutive quarter in the second quarter of 2010 with 

businesses’ purchases of equipment and software growing by 20 percent for the 

second quarter in a row. 

• Surveys of both the service sector and the manufacturing sector show that 

growth is expected to continue. 

But we have to be patient. The path to recovery is never a straight line. For the 

millions of workers who lost their jobs, it will take time for them to become employed again. 

The recent GDP report from the Bureau of Economic Analysis also told us that 

this recession was even more severe than previously reported. 

We now know that GDP fell by 6.8 percent in the fourth quarter of 2008 and fell 

by 4.9 percent in the first quarter of 2009. 

A recent study by noted economists Alan Blinder and Mark Zandi shows that 

without the actions taken by the Administration, Congress and the Fed, this recession would have been another Great Depression. Without these actions, we would 

have lost another 81⁄2 million jobs by the end of 2010. 

We have made real progress in the past year. While today’s job gains are not as 

robust as earlier this year, the trend is in the right direction. 

But we cannot let down our guard. The recovery is still fragile and our economy 

is still vulnerable. 

The policies that Democrats in Congress quickly put into place over the last year 

are working. 

Policies DO matter. 

That is one reason I am glad to see that yesterday, the Senate passed legislation 

to extend funding to states to pay for their increased Medicaid costs and to provide 

additional funding for teachers. 

The Department of Education estimates that 140,000 teacher jobs will be saved 

because of this increase in funding. 

The House will be reconvening on Tuesday to pass this legislation so that it will 

be in place before the school year begins. 

This legislation will also help the economy grow. According to the CEA’s fourth 

quarterly report, aid given to the states in the Recovery Act was quickly implemented and provided a large boost to the economy. 

Recently, the JEC Majority Staff took a deeper look into the employment increases in the manufacturing sector seen in 2010. 

Most of the job creation in the manufacturing sector is in the durable goods sector, and may be due to inventory restocking or temporary export surges due to fiscal 

stimulus in other countries. 

Manufacturing is a key source of good jobs that can play an important role in 

spurring growth in other sectors of the economy. 

This JEC report shows that Congress and the Administration need to take further 

actions to create a robust rebound in manufacturing employment. 

Some actions have been taken by the House of Representatives already but we 

need to do more. 

In particular, more actions are needed to help small businesses. The House has 

already passed legislation to help small businesses get credit and provide tax credits 

19 

for these engines of job creation. It is time for all members of Congress to work together to pass legislation that will create jobs and put the American people first. 

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PREPARED STATEMENT OF REPRESENTATIVE KEVIN BRADY

I am pleased once again to join in welcoming Dr. Hall before the Committee this 

morning. 

Unfortunately, today we received more bad news for American workers and their 

families. The unemployment rate remained elevated at 9.5 percent. Total nonfarm 

payroll employment decreased by 131,000. After excluding the layoffs of 143,000 

temporary Census workers, private sector payroll job growth remains anemic at 

71,000. At this slow pace it will take much of the decade to return to normal employment levels. 

Despite their promises, the economic plan of President Obama and Congressional 

Democrats has failed to restore consumer confidence—a key element to economic recovery. 

The University of Michigan’s July Index of Consumer Sentiment fell dramatically 

by 10.8 percent to 67.8, the lowest level in a year. The Index of Consumer Expectations fell even further to 62.3, the lowest level since March of last year—the month 

after Congress enacted the stimulus. 

According to Richard Curtin, the economist in charge of producing theses indices: 

Rather than the economy gaining strength, consumers now anticipate a 

slowing pace of growth, and rather than economic policies acting to improve 

prospects, the policies of the Obama Administration have increased economic 

uncertainty among consumers. Overall, the data suggest that the current 

slowdown in spending is likely to persist well into 2011 as it reflects a widespread and general realignment of job and wage expectations. While a double dip is still unlikely, it now has a non-ignorable 25% probability. 

It’s discouraging to American workers and small businesses that this unusually 

sluggish, sub-par recovery will persist well into next year. 

But it’s not surprising. 

Along with the failure of the massive Democratic stimulus to put people back to 

work—except in federal government jobs—families and businesses fear the dangerous levels of debt incurred by this Congress and a host of job-killing, anti-growth 

policies coming out of Washington including higher taxes, higher energy prices, burdensome regulations, and constant bailouts of special interests. 

While tens of thousands of American energy workers risk losing their jobs right 

now due to the White House moratorium on drilling in the Gulf of Mexico, Congress 

next week will consider another $26 billion bailout of state and local government 

workers. The signal this Democratic Congress is sending is clear: we’ll spend whatever taxpayer money it takes to save a government job, the rest of you American 

workers can take a hike. 

And three weeks after we extended the invitation to President Obama to travel 

to Houston to meet face-to-face with energy workers and small businesses whose 

livelihoods are threatened by the President’s moratorium—we have heard nothing 

but silence. To add insult to injury, the President is coming to Texas next week to 

raise campaign cash but apparently does not have an hour—not even 15 minutes— 

to spare for our American workers whose jobs he is killing. 

Maybe if our energy workers worked for the government, they could get a bailout, 

too. But that’s not what they are asking. They just want to go back to work on the 

rigs the President has idled and some that now are forced to leave America for foreign countries. 

So much for ‘‘hope and change.’’ 

The prospects for other workers who have lost their jobs isn’t much better. Real 

GDP growth slowed by more than one-half from 5.0 percent in the fourth quarter 

of last year to 2.4 percent in the second quarter of this year. One-off inventory restocking accounted for 59 percent of real GDP growth during the last three quarters. 

Restocking your shelves isn’t a sustainable basis for job creation, but consumers 

confident in the recovery are. 

Unfortunately, real final sales growth, which is a better indicator of the underlying trend than real GDP, averaged an anemic 1.5 percent during the last three 

quarters. Consequently, economists are downgrading their forecasts for the remainder of 2010 and for 2011. 

Earlier this week, Committee Democrats released a report stating that manufacturing payroll jobs increased by 136,000 during the first half of 2010. I rejoice that 

some American workers have found new manufacturing jobs. 

However, this report tells only one-half of the story. Actually, manufacturing payroll jobs decreased by 660,000 since the Obama stimulus was enacted. Moreover, 

manufacturing payroll jobs fell by 2.3 million since the Democrats took control of 

Congress in 2007. 

22 

With so many families struggling, how can Congressional Democrats possibly be 

proud of these devastating economic failures? 

Ironically, the slight improvement in the manufacturing sector isn’t due to sales 

here in America but rather foreign demand, especially in Canada, Mexico, and rapidly growing countries in Asia. 

Monthly U.S. manufacturing exports are up 31 percent from February 2009 to 

May of this year. To satisfy higher foreign demand, U.S. manufacturers boosted 

their output by 6 percent during the same period. Since the beginning of the year 

this export-driven recovery is beginning to reverse the decline in manufacturing employment under the failed White House economic plan. 

In contrast, demand here in America, which the Obama stimulus was supposed 

to boost, remains lackluster. So unless Speaker Pelosi and Majority Leader Reid 

want to pat themselves on the back for increasing demand in foreign countries, 

which is preposterous, Democrats can claim little credit for the improving outlook 

in manufacturing. 

Indeed, many Congressional Democrats oppose selling more American goods and 

services overseas by failing to pass the pending free trade agreements with Colombia, Panama, and South Korea that would accelerate export-driven job creation. 

Dr. Hall, amid this grim economic data I look forward to hearing your testimony. 

PREPARED STATEMENT OF KEITH HALL, COMMISSIONER, BUREAU OF LABOR

STATISTICS

Madam Chair and Members of the Committee: 

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

we released this morning. 

Nonfarm payroll employment declined by 131,000 in July, and the unemployment 

rate remained at 9.5 percent. The decrease in employment largely reflects continued 

cuts in the number of temporary workers previously hired for Census 2010. Private 

sector employment edged up (+71,000) over the month. Thus far in 2010, private 

sector employment has risen by 630,000, although nearly two-thirds of that gain occurred in March and April. 

In July, employment in the Federal government fell for the second month in a 

row. The number of temporary Census 2010 workers decreased by 143,000, following 

a decline of 225,000 in June. This leaves 196,000 temporary decennial census workers on the payroll. 

Within the private sector, employment gains continued in manufacturing, health 

care, and mining. Manufacturing employment rose by 36,000. Most of the gain occurred in motor vehicles and parts manufacturing (+21,000), as some plants deviated from their normal practice of shutting down in July for retooling. Motor vehicles had added 32,000 jobs during the first half of the year. Employment in fabricated metals increased by 9,000 over the month. The manufacturing workweek 

rose by one-tenth of an hour in July, after falling by half an hour in June. 

Health care employment grew by 27,000 over the month. Since the recession 

began in December 2007, health care has added 665,000 jobs. Employment in mining rose by 7,000 in July, largely in support activities. 

Employment in temporary help services was nearly unchanged for the second 

month in a row. Job gains had averaged 45,000 per month from October 2009 

through May. 

Construction employment was little changed in July (¥11,000). A strike in the 

industry reduced payrolls by 10,000. Financial sector employment continued to 

trend down over the month (¥17,000), though the pace of job loss has been slower 

this year. Thus far in 2010, monthly job declines have averaged 12,000, compared 

with 29,000 in 2009. Employment in most other private sector industries was little 

changed in July. 

Average hourly earnings of all employees on private nonfarm payrolls rose by 4 

cents in July to $22.59. Over the past 12 months, average hourly earnings have 

risen by 1.8 percent. From June 2009 to June 2010, the Consumer Price Index for 

All Urban Consumers (CPI-U) rose by 1.1 percent. 

Turning now to data from our survey of households, most key labor force measures were essentially unchanged in July. The jobless rate remained at 9.5 percent, 

and the number of unemployed held at 14.6 million. The rate has declined from 9.9 

percent in April, reflecting decreasing labor force participation. The participation 

rate had risen during the first 4 months of this year, to 65.2 percent in April, but 

has now returned to 64.6 percent, its December 2009 level. 

Among the employed, the number of individuals working part time who preferred 

full-time work was nearly unchanged over the month at 8.5 million. Since April, the 

23 

number of such workers has declined by 623,000. However, the level remains 3.9 

million above that of December 2007 when the recession began. 

In summary, payroll employment declined by 131,000 in July, largely reflecting 

a decrease in the number of temporary census workers (¥143,000). Small job gains 

continued in the private sector. The unemployment rate held at 9.5 percent. 

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

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