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54–572 2010

S. HRG. 111–438 

THE EMPLOYMENT SITUATION: SEPTEMBER 2009 

HEARING 

BEFORE THE

JOINT ECONOMIC COMMITTEE 

CONGRESS OF THE UNITED STATES 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

OCTOBER 2, 2009 

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 

NAN GIBSON, Executive Director 

JEFF SCHLAGENHAUF, Minority Staff Director 

CHRISTOPHER FRENZE, House Republican Staff Director 

(III) 

C O N T E N T S 

MEMBERS

Hon. Elijah E. Cummings, a U.S. Representative from Maryland, presiding .... 1 

Hon. Kevin Brady, a U.S. Representative from Texas ......................................... 2 

Hon. Amy Klobuchar, a U.S. Senator from Minnesota ......................................... 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, U.S. Department of Labor ........................ 6 

SUBMISSIONS FOR THE RECORD

Prepared statement of Representative Elijah E. Cummings ............................... 28 

Prepared statement of Representative Kevin Brady ............................................ 28 

Prepared statement of Dr. Keith Hall, Commissioner, Bureau of Labor Statistics, together with Press Release No. 09–1180 .................................................. 30 

Table titled ‘‘Employment statues of the civilian noninstitutional population 

by educational attainment, age, sex, race, and Hispanic or Latino and 

Non-Hispanic ethnicity, September 2009’’ ......................................................... 62 

(1) 

THE EMPLOYMENT SITUATION: SEPTEMBER 

2009 

FRIDAY, OCTOBER 2, 2009 

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

The committee met, pursuant to call, at 9:30 a.m. in Room 106 

of the Dirksen Senate Office Building, the Honorable Elijah E. 

Cummings, presiding. 

Representatives present: Cummings and Brady. 

Senators present: Klobuchar. 

Staff present: Gail Cohen, Nan Gibson, Colleen Healy, Michael 

Neal, Annabelle Tamerjan, Andrew Wilson, Chris Frenze, and Robert O’Quinn. 

OPENING STATEMENT OF THE HONORABLE ELIJAH E. 

CUMMINGS, A U.S. REPRESENTATIVE FROM MARYLAND 

Representative Cummings. The Committee will come to order. 

Good morning. 

I’m pleased to welcome back, Commissioner Hall, this morning, 

though I wish that my presiding over this hearing had come under 

different circumstances. 

As many of you already know, Chair Maloney could not be here 

today, due to her husband’s tragic passing over the weekend. I’m 

sure the Committee members will join me and my staff in expressing our deepest sympathies. Our thoughts and our prayers are with 

the Congresswoman and her family during these very, very difficult 

days. 

I ask unanimous consent to keep the hearing record open, so that 

Chairman Maloney may include remarks for the record, when she 

resumes her duties. Without objection, so ordered. 

Representative Cummings. Despite 7.2 million jobs lost in the 

current recession, 9.8 percent unemployment, job losses have moderated since January. As today’s numbers show, it will be a long 

road to recovery, but we are finally seeing selected signs of recovery. 

After the first quarter of 2009, when the real Gross Domestic 

Product fell by 6.4 percent; the second quarter numbers reveal that 

GDP fell by only 0.7 percent. Additionally, the Institute for Supply 

Management’s monthly index shows an expansion in the manufacturing sector for the second consecutive month, after contracting 

from February of 2008 to July of 2009. 

Finally, yesterday, I participated in an extraordinary hearing of 

the House Transportation and Infrastructure Committee, looking 

2 

at the Administration’s progress in getting our projects funded with 

the American Recovery and Reinvestment Act. 

At that hearing, Secretary Ray LaHood, our former House colleague, presented tremendous evidence of the benefits created by 

the stimulus, both in terms of improved infrastructure and true 

economic recovery. 

The transportation portion of the stimulus alone has created an 

estimated 122,000 jobs already. 

I want to highlight a few things presented by Secretary LaHood, 

as well as to congratulate the Secretary, President Obama, and all 

the local transportation agencies that have made the progress possible. 

Secretary LaHood spoke of nearly $20 billion in stimulus funds 

obligated for projects through the Federal Highway Administration. 

Specifically, he briefed us on the $128-million, third phase of the 

Interstate 215 widening project in San Bernardino, California, 

which is on its way to creating 2,000 jobs in its first year. 

He also noted that Atlanta’s Mass Transit Administration received $10.9 million as a part of the transit investment for greenhouse gas and energy reduction program. The Atlanta program will 

renovate a bus maintenance facility with photovoltaic solar power 

cells, creating energy savings, better working conditions for employees, and many new jobs. 

Another success story is the Federal Maritime Administration, 

an agency that falls under our jurisdiction at the Coast Guard Subcommittee, upon which I sit and chair. As part of the stimulus 

Small Shipyard Grant Program, the Maritime Administration has 

already issued for grants for $98 million of its total $100 million 

allocated for dry docks, steelworking machinery, and other infrastructure improvements. 

Finally, though not part of the stimulus, the Car Allowance Rebate System, better known as ‘‘Cash for Clunkers,’’ is estimated to 

have created or saved between 40,000 and 120,000 jobs in the second half of 2009, and not just the auto dealership jobs, but the 

whole United States economy was given a boost by nearly 700,000 

cars being sold at 21,000 dealerships across our nation. 

So as we await Commissioner Hall’s testimony on the September 

employment statistics, I’d like to close with the acknowledgement 

that, despite the progress we’ve made through the transportation 

portion of the stimulus, we know how far we still have to go. 

When we faced the most dire of circumstances, we took immediate action to provide for those most at risk. However, now we 

must build off of that success and work toward a real long-term recovery. 

[The prepared statement of Representative Cummings appears in 

the Submissions for the Record on page 28.] 

With that, I yield to Mr. Brady. 

OPENING STATEMENT OF THE HONORABLE KEVIN BRADY, A 

U.S. REPRESENTATIVE FROM TEXAS 

Representative Brady. Thank you, Mr. Cummings. Like you, 

on behalf of the Republican members and the staff of the Joint Economic Committee, we would like to express our profound sympathy 

to our Chairman, Carolyn Maloney, and her family, for the loss of 

3 

her husband, Cliff. We will all keep her and her family in our 

thoughts and in our prayers. 

I’m pleased to join in welcoming Commissioner Hall to the Committee this morning. The loss of 263,000 payroll jobs and an increasing unemployment rate to 9.8 percent is bad news for American workers and their families. 

Unemployment is a severe hardship. Even if the recession is near 

its trough, the high unemployment rate is likely to persist for 

many months, if not years. A jobless recovery is no recovery for 

American workers and their families. 

Last January, top Obama Administration economists predicted 

that if Congress were to pass the stimulus bill, the unemployment 

rate would not exceed eight percent. Congress did enact the Obama 

bill, but, unfortunately, as we see once again, the stimulus plan did 

not perform as the Administration had predicted. 

Nevertheless, we are all looking for encouraging signs that the 

economy, while contracting, is decelerating that contraction. Financial market conditions seem to be improving, stock prices are up, 

and job losses at least are slowing. 

However, personal consumption remains anemic, and business 

and residential investment continue to fall. These factors contribute to a very weak and stressed labor market. 

Like others, I’m hopeful that the current recession may have run 

its course. Given the normal lag time between monetary actions 

and the appearance of their effects in the rest of the economy, the 

Federal Reserve’s injection of $1.3 trillion into the financial markets between September and December of last year should boost 

real economic growth during the second half of this year. 

However, liquidity injections or fiscal stimulus, for that matter, 

cannot turn a recovery into a long and strong expansion. As the 

Chief Executive and Co-Chief Investment Officer of Pimco, Mr. ElErian noted that temporary government interventions are 

unsustainable sugar highs. For the U.S. economy to enjoy a sustained expansion, instead of slipping back into W-shaped recession, 

the private sector, the private sector must once again become the 

driver of economic growth. 

However, the balance sheets of U.S. families remain damaged 

from the collapse of housing prices and excessive debts accumulated during the bubble years. The growth of personal consumption 

is likely to remain tepid, as families increase their savings rates to 

repair their balance sheets. 

Although housing prices may be stabilizing, the large inventory 

of foreclosed homes is likely to restrain housing investment for 

some time. Therefore, a vigorous and sustained expansion will depend on a major turnaround in both business investment and net 

exports. 

With regard to business investments and net exports, the economic policies of the Obama Administration and the priorities of 

the Congressional Democrats are quite troubling. 

Business people make investment decisions based on their expectations of risk and return. In turn, government policies affect these 

perceptions. 

Unfortunately for the American people, the White House and 

Congressional Democrats have simultaneously decreased the exVerDate Nov 24 2008 15:30 May 25, 2010 Jkt 054937 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 C:\DOCS\54572.TXT SHAUN PsN: DPROCT
4 

pected return and increased risk associated with new business investment, through their actions and inactions. 

As a result, many firms are delaying investment decisions. Since 

new business investment propels job creation, first in manufacturing equipment, designing the software, building the structures, 

and then in hiring new employees to operate the equipment, the 

business investment created, these delays add to unemployment 

and they delay the recovery. 

Higher income tax rates and higher taxes on capital gains and 

dividends will begin in 2011. Congress has not yet moved, though 

it is the end of the year, to extend the Research and Development 

Tax Credit and the Homeowners Tax Credit, as well as increase 

the net operating loss carryback time from two to five years. 

These tax policies slash expected returns, causing firms to forgo 

job-creating investments. For example, one major corporation, 

which spends close to $10 billion per year on R&D to pursue cutting-edge technology, may lay off some of its researchers if Congress does not act to renew the R&D Tax Credit soon. 

Confusion about Cap-and-Tax and healthcare legislation adds to 

uncertainty, further depressing business investment. Business people fear the additional energy costs associated with the Cap-andTax bill that passed the House, and aren’t sure of what the Senate 

may do. 

The multiple healthcare bills of the Democrats leave business 

people confused about what additional taxes firms, especially small 

businesses, may pay, or what regulatory burdens they may now 

bear. 

The prospect for a sustained boost from net exports is also dim. 

The Doha Round of trade liberalization negotiations at the WTO 

remains stalled. Three pending free-trade agreements with Colombia, Panama, and South Korea have not been acted upon, although 

recent studies show that they could cumulatively create 500,000 

new jobs within the country—our country. 

Moreover, the President has proposed a number of very counterproductive tax increases on U.S. multinational corporations that 

create American jobs through foreign sales of our American-made 

goods and services. In one corporation, for example, American sales 

generate only 25 percent of their revenues, but nearly one-half of 

its jobs are located in the United States. 

The President’s international tax proposals are, in my view, 

naive. They would reduce U.S. exports and jobs in export-related 

industries. 

The U.S. economy must move from the sugar high of 

unsustainable government intervention, to sound, private-sector-led 

growth. Given the ongoing weaknesses in personal consumption 

and the housing sector, business investment in net exports must 

lead the way if the unemployment rate is to fall substantially. 

Ironically, many of the policies in Washington today are undermining these two private-sector drivers of job creation, perhaps 

condemning American workers and their families to a very weak, 

jobless recovery. 

I yield back. 

[The prepared statement of Representative Brady appears in the 

Submissions for the Record on page 28.] 

5 

Representative Cummings. Thank you very much. The Chair 

recognizes Senator Klobuchar. 

OPENING STATEMENT OF THE HONORABLE AMY KLOBUCHAR, 

A U.S. SENATOR FROM MINNESOTA 

Senator Klobuchar. Thank you very much, Mr. Chairman, and 

on behalf of the Senate, I would also like to offer my deepest condolences to Chairwoman Maloney and her family. To lose her husband that suddenly, in a faraway place, I can only imagine how difficult this is for her, and our thoughts and prayers are with her 

family. 

As I was listening to Congressman Brady, I was thinking back 

to January, when we were losing 700,000 jobs a month, and I was 

thinking back to the policies that got us there. We had eight years 

where, basically—there’s plenty of blame to go around, but deals 

that no one understood, Wall Street did things that everyone 

agrees now were wrong, and we got to the point in this country, 

where, what was it someone said, Wall Street sneezed and Main 

Street got a pneumonia. 

That’s what’s been happening in this country, so when I look at 

what got us there, again, I think that both sides of the aisle—I 

wasn’t here—should have been doing much more about subprimes 

and regulating those mortgage rates. 

But I am much more interested in looking forward, and, from 

what I’ve heard from economists, this idea—and we’ve seen it in 

countries all over the world—of stimulating the economy is part of 

the solution, but, also, getting the credit markets going again and 

then fiscal responsibility on behalf of this country, and having middle-class families facing doubling of their insurance premiums for 

healthcare, cannot be the answer here, and that’s why we’re tackling this difficult problem. 

What I want to look at here today, is just where this rate is 

going. We have seen again, some tapering off of the unemployment 

in this country. We know there are certain sectors—I know the 

area in Minnesota, in northern Minnesota, mining and home construction, logging, has particularly suffered, but I will be interested 

in asking more about the trends we seek across this country. 

We also are struggling in Congress right now, Commissioner 

Hall, with the extension of unemployment benefits. The House 

passed a bill that limited the extension to states that have 8.5 percent unemployment. 

Coming from an area where we have some regions that are significantly below that and some areas of our state that are significantly above that, I don’t believe that that is the answer. So, in the 

Senate, we’re looking at how we can extend unemployment benefits 

to all states, to get at some of the people from my state that I’ve 

heard from in recent months. 

Someone who wrote in recently from Woodbury: ‘‘I’ve applied to 

over 500 jobs since last July and have personally walked into over 

60 companies with resumes in hand. Companies don’t even get 

back to me regarding my letter and resume submissions.’’ 

We are discouraged and we are isolated, so we have to remember 

that, while we are starting to see some recovery and there have 

been some dramatic changes and signs of hope all over this counVerDate Nov 24 2008 15:30 May 25, 2010 Jkt 054937 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 C:\DOCS\54572.TXT SHAUN PsN: DPROCT
6 

try, which are good for our economy, and the stock market is doing 

a little better right now, there are still many people out there out 

of work and I am looking forward to hearing about the recent data, 

the trends that it shows, so we can look at the facts and not just 

the political rhetoric. Thank you very much. 

Representative Cummings. Thank you, Ms. Klobuchar. 

Dr. Keith Hall is the Commissioner of Labor Statistics for the 

United States Department of Labor. The Bureau of Labor Statistics 

is an independent national statistical agency that collects and processes, analyzes, and disseminates essential data to the American 

public, United States Congress and other federal agencies, state 

and local governments, business, and labor. 

Dr. Hall also served as 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 Commerce. 

Dr. Hall also spent ten 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. 

It’s good to be with you again, Dr. Hall. We will hear from you 

now. 

STATEMENT OF 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, UNITED STATES DEPARTMENT OF 

LABOR, WASHINGTON, DC 

Commissioner Hall. Let me start by saying that on behalf of 

all of us at the Bureau of Labor Statistics, I join with the members 

of the Committee in offering our condolences to Congresswoman 

Maloney and her family. They have our deepest sympathy, and our 

thoughts and prayers are with them. 

Mr. Chairman and members of the Committee, thank you for the 

opportunity to discuss the employment and unemployment data we 

released this morning. 

Job losses continued in September, and the unemployment rate 

continued to trend up, reaching 9.8 percent. Non-farm payroll employment fell by 263,000 over the month, and losses have now averaged 307,000 per month since May. 

Payroll employment has fallen for 21 consecutive months, with 

declines totalling 7.2 million. In September, notable job losses occurred in construction, manufacturing, government, and retail 

trade. 

Construction employment decreased by 64,000 in September. Job 

losses averaged 66,000 per month from May through September, 

compared with an average of 117,000 lost per month from November 2008 through April. 

Employment in manufacturing declined by 51,000 in September. 

Job losses in factories averaged 53,000 per month over the past 

three months, about one-third of the average monthly decline from 

October through June. 

7 

In September, retail trade employment fell by 39,000. The industry has lost an average of 29,000 jobs per month since April, down 

from an average loss of 68,000 for the prior six-month period. Employment in government decreased by 53,000 in September. Much 

of the decline was in local government. 

Employment continued to increase in healthcare, by 19,000 in 

September. The average monthly job gain thus far in 2009 is 

22,000 compared with an average monthly gain of 30,000 during 

2008. 

Turning now to some of the measures from our household survey, 

the unemployment rate continued to trend up in September. The 

jobless rate has doubled since the start of the recession, to 9.8 percent. 

A total of 15.1 million persons were unemployed in September, 

twice the number as at the start of the recession. The number of 

long-term unemployed rose to 5.4 million in September. This group 

has grown more than fourfold since the start of the recession. 

In September, the employment-to-population ratio continued to 

decline. At 58.8 percent, the ratio has fallen by 3.9 percentage 

points since the recession began, and is at its lowest level since 

January of 1984. 

Among the employed, there were 9.2 million persons working 

part-time in September who would have preferred full-time work. 

While the number of such workers has been little changed since 

March, it has nearly doubled since the start of the recession. 

In keeping with standard practice, we are announcing the preliminary estimate for the next benchmark revision to payroll employment. The benchmark process annually revises the payroll survey’s sample-based employment estimates to incorporate universe 

employment counts derived primarily from unemployment insurance tax reports. 

Preliminary tabulations indicate that the estimate of total nonfarm payroll employment for March of this year will require a 

downward revision of approximately 824,000 jobs or 6/10ths of one 

percent. 

The historical average for the benchmark revision over the prior 

ten years has been plus or minus 2/10ths of one percent. Most of 

the additional job loss occurred in the first quarter of 2009, when 

payroll employment was declining most steeply, and it appears to 

be due, in part, to an increase in the number of business closings. 

The final benchmark revision will be incorporated into the payroll survey, with the publication of January data on February 5, 

2010. The historical data series will be revised at that time. 

In summary, the labor market remained weak in September. 

Payroll employment fell and the unemployment rate continued to 

trend up. 

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

[The prepared statement of Commissioner Hall appears in the 

Submissions for the Record on page 30.] 

Representative Cummings. Dr. Hall, thank you very much. 

The falling of wages, what is the significance of that, Dr. Hall? 

Commissioner Hall. The falling of wages, surely, of real wages, 

would be an indication of a weak labor market, and, certainly, that 

has implications beyond that, because, of course, consumers’ buying 

8 

power doesn’t grow so quickly that way, and so that can have further implications. 

Typically, in recessions, nominal wages continue to rise, and they 

have continued to rise, but the rise in nominal wages has slowed 

a bit; it’s only about 2.5 percent right now. 

Representative Cummings. Now, the national unemployment 

rate is 9.8 percent; is that correct? 

Commissioner Hall. Yes. 

Representative Cummings. And for whites, it’s—for white people, it’s 9 percent; is that correct? 

Commissioner Hall. Yes. 

Representative Cummings. And, for African Americans, it’s 

15.4 percent; is that correct? 

Commissioner Hall. That’s correct. 

Representative Cummings. And Hispanic is 12.7 percent; is 

that correct? 

Commissioner Hall. Yes. 

Representative Cummings. For men, it’s 10.3 percent? 

Commissioner Hall. For men, total, it’s 11 percent. 

Representative Cummings. Eleven percent? 

Commissioner Hall. Yes. 

Representative Cummings. And how about for women? 

Commissioner Hall. That’s 8.4 percent. 

Representative Cummings. Last month, the Council of Economic Advisers released their first report on the effects of the Recovery Act. According to them, government stimulus created between 300,000 and 500,000 jobs in the second quarter of this year, 

and just as many jobs in the first two months of the third quarter. 

As I mentioned in my opening statement, I was in a hearing with 

Secretary of Transportation LaHood yesterday, who said that many 

transportation projects had started because of the stimulus, and 

these projects were creating jobs. If I heard you correctly, you said 

that there was a decline in construction jobs. Is that right? 

Commissioner Hall. Yes, that’s correct. 

Representative Cummings. Well, let me ask you this: Do you 

see any evidence of increasing employment in construction and 

other sectors affected by the transportation in September’s numbers? 

Commissioner Hall. Yeah, it’s hard for us to tease that out because we’re so based on getting this current level. 

Representative Cummings. Right. 

Commissioner Hall. And our surveys really aren’t designed to 

capture the impact of particular policy issues. We’re actually mostly surveying establishments and just asking what their payroll levels are. We don’t, at any time, try to ask establishments what their 

levels would have been. 

Representative Cummings. I got you. So the CEA also said 

that the stimulus created jobs in the temporary employment services, retail trade, and manufacturing. Is there any evidence of this 

in the September numbers, or would that fall into the same category you just said? 

Commissioner Hall. It does fall into the same category, but I 

will say that temporary help services, the job loss there, has moderated a fair amount. 

9 

Representative Cummings. And what is the significance of 

that? 

Commissioner Hall. Well, one of the significances of that is 

that’s a leading indicator, and often, when changes in temporary 

help services, whether the job loss increases or decreases, like it 

has been lately, that’s generally a sign of improvement or possible 

future improvement. 

Representative Cummings. Recently, the Bureau of Economic 

Analysis reported its advance estimate for second-quarter GDP, reporting that the GDP declined by 0.7 percent in the second quarter 

of 2009. In addition to this glimmer of hope, they reported that personal consumption expenditures rose each month from May 

through August. 

Are any sectors experiencing more job creations than job losses, 

currently, or are there any signs that any sector will start expanding in the near future? Essentially, what is the good news, if any, 

to take from this report? 

Commissioner Hall. Sure. The job loss this month was actually 

fairly reasonably concentrated in four sectors: construction, manufacturing, retail trade, and government. Outside those four sectors, 

the other major sectors either had very small job loss or approximately zero job loss, so that actually is a good sign that the job loss 

is not so broad as it was, say, six months ago. 

Representative Cummings. And those four categories that you 

stated now, what did you say about those? 

Commissioner Hall. That’s where most of the job loss this 

month was concentrated. Almost 80 percent of the job loss was in 

either construction, manufacturing, or retail trade or government. 

Representative Cummings. And what’s the significance of the 

losses in government? 

Commissioner Hall. Well, for government, the notable thing 

about government was the job loss was focused in local government. In fact, the job loss is kind of accelerating in recent months, 

and it has been local government. Of the 53,000 jobs lost in government, 37,000 were in local government. 

Representative Cummings. So that means that our local folks, 

in cities and local towns, are suffering, is that right? 

Commissioner Hall. Yes. 

Representative Cummings. Were there any surprises? I mean, 

what about state government? 

Commissioner Hall. State governments, they are losing jobs, as 

well, but not quite at the pace of local governments. We lost about 

10,000 jobs in state government this month. 

Representative Cummings. I see. My time is up. I now yield 

to Mr. Brady. 

Representative Brady. Thank you, Mr. Chairman. If I may, I’d 

like to say one thing at the outset: A long-time public servant of 

this Committee has recently decided to retire and deserves to be 

recognized. That’s House Republican Staff Director, Chris Frenze. 

Chris has been a tremendous asset to both my office and to this 

Congressional body. He joined the Joint Economic Committee staff 

in 1981, and served under 12 different JEC Chairmen in his 28- 

plus years of service. 

10 

He actually first began staffing the employment situation hearings in 1982, beginning with BLS Commissioner Janet Norwood, 

appointed by President Carter. Today marks his final employment 

hearing. 

Chris represents the very best in public service, and, needless to 

say, his expertise, vast institutional knowledge, and constant professionalism, will be sorely missed. I and others wish him the very 

best. Thank you, Chris. 

If we could have that chart, we were told again and urged to 

pass the federal stimulus, and told, assured that it would control 

unemployment in America. 

[The chart was not available at the time of publication.] 

This chart shows, the blue line shows what was projected by the 

White House and the Economic Advisers, if only we passed the 

stimulus. The red line shows what’s actually happened in real life. 

We’ve seen a tremendous increase in unemployment, job losses 

continue, and, ironically, Christina Romer, Chairman of the Economic Advisers, sat where you sat and testified that job gains 

would be highest in manufacturing and construction. 

And, in your testimony, as it has been for several months, actually, the greater job losses have occurred in manufacturing and 

construction, the very two areas the stimulus was proclaimed 

would have a jolt to America’s economy. 

What I think is happening in real life is that you have one stimulus that’s so small compared to the rest of the economy. If the 

U.S. economy is the size of a football field, the stimulus spending 

so far is about that of the one-yard line, so it’s hard to claim that 

that’s stimulating the economy. 

The second problem we’ve got, is that—I meet each Monday with 

a number of our businesses in the Houston region to try to determine what they’re experiencing and what they’re forecasting. And, 

week-in/week-out, even though they are different groups, they come 

to the same conclusion, which is that their customers and clients 

are delaying business and investment decisions, waiting to see 

what Washington will do. 

They’re afraid of making key investments in areas where they 

might later see increased energy taxes, increased utility taxes, increased taxes on capital gains and dividends, increased income and 

healthcare taxes. They are being—a lot of companies think we sell 

American products around the world, but the White House and this 

Congress has proposed to make them absolutely uncompetitive 

with tax increases that would devastate their jobs. 

In my region, the Houston region, we have 340 companies that 

employ 150,000 people, who depend upon some type of level playing 

field to sell our U.S. products around this world, and they’re not 

going to make investments if they will be punished for actually 

selling American throughout the world. 

I think that the invisible hand of government, rather than the 

visible hand of the market, is now dramatically slowing our recovery and delaying those investment decisions. You see that, I think, 

in unemployment numbers today. 

According to the household survey, employment declined by 

785,000 in September, and, Commissioner, I’d like to ask you to 

11 

put that in perspective. Is that an average or an unusually large 

monthly decline? 

Commissioner Hall. Well, we tend to focus at looking at monthto-month employment changes, and we tend to focus on the Payroll 

Survey, since it’s a bit more accurate on the monthly case. 

But I’d say that, certainly, the payroll job loss at 263,000, is a 

little bit better, but roughly in line with the past five months. 

Representative Brady. What have the household surveys been 

in the past month? 

Commissioner Hall. Let me see. The household survey—we 

have to look the numbers up for one second here. 

Representative Brady. Is one of the reasons the unemployment rate did not increase more in September is that those who 

were no longer in the labor force increased by 807,000? 

Commissioner Hall. Yes, there was a decline in the labor force. 

Representative Brady. So if those people were staying in there 

looking for jobs, unemployment would like be somewhat higher? 

Commissioner Hall. Yes. 

Representative Brady. The Administration’s model simulations 

claim job growth, even as actual data continued to show job losses. 

Do you know what was the number of unemployed in September, 

and how much has it increased from January? What is that number? 

Commissioner Hall. Sure. The total unemployed in September, 

was 15.1 million, and that’s an increase of about 200,000. 

Representative Cummings. The gentleman’s time has expired. 

Representative Brady. Thank you, Mr. Chairman. Ms. Klobuchar? 

Senator Klobuchar. Thank you very much, Mr. Chairman. 

Thank you for being here, Commissioner Hall. 

I appreciate you going through the four areas in which we’ve 

seen job loss. I think some people, with the recovery package, think 

that all that money went into government workers, and I think it 

will be interesting for them to know there’s actually been a decrease in government workers. Is that correct? 

Commissioner Hall. Yes, that’s correct. 

Senator Klobuchar. And I think that’s because most of the 

money was used in the private sector. A third of it was tax cuts, 

a third of it was helping with state budget issues, and then a third 

of it was the spending on roads and bridges and broadband, which 

still hasn’t gone out yet, and other things which essentially went 

to the private sector, the vast majority of it; is that correct? 

Commissioner Hall. I believe so. 

Senator Klobuchar. Okay. The retail trade number, where 

you’ve seen a decrease in that, is that—you’re talking just about 

people buying things? 

Commissioner Hall. Basically, yes. 

Senator Klobuchar. Okay. And I was just reading an article 

about this, that individual spending has gone down as the savings 

rate has gone up. Is that right? 

Commissioner Hall. I believe that’s true. 

Senator Klobuchar. Do you see this with other recessions that 

we’ve had in the past? 

12 

Commissioner Hall. That’s a good question. I’m not sure I 

know the answer really well. I believe that’s correct. The data 

doesn’t come to mind, but that does sound right; people do tend to 

sort of repair their balance sheets, so they might, in fact, increase 

their savings for awhile. 

Senator Klobuchar. And then manufacturing, I think we’re 

aware of that issue, and construction, as you’ve pointed out. Is 

there a trend in parts of the country? 

Say, is the unemployment rate higher in the West or the South, 

or do you see any trend. I know that when you and I have discussed this before, it has been sort of a patchwork of states; it 

didn’t really have one part of the country that was faring worse. 

Commissioner Hall. Sure. I can tell you generally about the regions. Of the regions that have been hardest hit in this recession, 

the hardest-hit region has been the West and then maybe the Midwest. The Northeast has been maybe the least hard-hit. 

The West, for example, lost about almost six percent of their jobs, 

while the Northeast lost about three percent. 

Senator Klobuchar. You know, one of the things we’re debating 

right now is an extension of the unemployment benefits, and 

there’s a proposal out there—well, actually, the House-passed proposal says only those unemployed in states that have 8.5 percent 

or over unemployment, will get an extension. 

I got an interesting letter from one of my constituents that said 

that, well, maybe Minnesota’s rate is eight percent, but at her 

household, it’s a hundred percent. And one of things I’m grappling 

with is that regions, say Wisconsin, next door to us, has an 8.8 percent unemployment rate, we’re at eight percent, yet a region that 

stretches across both states has a similar unemployment rate, and 

I’m very concerned about this cutoff, that we look at it that way. 

It doesn’t quite make sense to me. I will say, compared with Wisconsin, we did get one more increase in employment in Minnesota 

when we hired Brett Favre from over Wisconsin into Minnesota, so 

that maybe can account for some of the difference. 

But I’m just wondering if you’ve seen this before, and what kind 

of economic—don’t make some joke about ‘‘Cash for Clunkers,’’ because he has turned out to be very good. [Laughter.] 

All right, so, what I’m wondering about, what I’d like to know, 

is, in the past, have there been these arbitrary cutoffs, and is this 

the way we should go when states—what kind of incentive would 

we be creating in these states? 

Commissioner Hall. Well, yeah, I don’t want to comment on 

the policy aspect, about what—— 

Senator Klobuchar. Oh, please do, Commissioner. [Laughter.] 

Commissioner Hall [continuing]. I will say, though, that the 

change in unemployment rates during recessions in states clearly 

depends on the industry mixes in those states, but there really 

does seem to be a state level, you know, where some states started 

with a higher unemployment rate, even before the recession. 

So, I don’t see a simple story as to which states are going to jump 

up above the level that you talk about, and which aren’t. I don’t 

see a good way of sort of predicting that during a recession. 

13 

Senator Klobuchar. Do you know much about the history of 

these extensions of unemployment benefits, and if they were set at 

a certain rate, which unemployed get them and which don’t? 

Commissioner Hall. I don’t know very much. 

Senator Klobuchar. Okay. The changes in temporary services, 

I think I read somewhere this morning that your numbers are 

going to show that, actually, they’ve seen job loss in temporary 

services. Is that right? 

Commissioner Hall. Yes, temporary help services lost 2,000 

jobs. 

Senator Klobuchar. Didn’t you tell me before that actually an 

increase in temporary help can be a sign; that that’s what companies do first, they hire these temporary workers, so it can be a good 

sign that it’s going to lead later. So what do you think this means? 

Commissioner Hall. Well, this is a moderation, actually, in loss 

in temporary help. In the last five months, temporary help has lost 

something around 9,000 jobs a month, and so 2,000 is a little bit 

of a moderation. 

I would say even a moderation in the job loss in temporary help 

is probably not a bad sign. 

Senator Klobuchar. Okay, so, in other words, it actually has 

moderated? 

Commissioner Hall. Yes. 

Senator Klobuchar. And gotten better, so this argument that 

companies start hiring temporary workers and then eventually hire 

permanent workers could still stand true? 

Commissioner Hall. Yes. 

Senator Klobuchar. Thank you. 

Representative Cummings. Thank you very much. Dr. Hall, I 

just want to talk a little bit about how this economy has affected 

women and people of color. 

In particular, in what industries have women and people of color 

lost the most jobs? 

Commissioner Hall. It varies a bit. African Americans have 

lost a lot of jobs in manufacturing and wholesale trade, in terms 

of percentage—information services, professional and business 

services—it’s actually been pretty broad. 

For Hispanics, it’s also been pretty broad, as well, although their 

notable job loss probably was in construction, more so than other 

groups. 

Representative Cummings. And we—go ahead. Were you finished? 

Commissioner Hall. And, you know, there are some areas 

where there actually hasn’t been job loss for certain groups, you 

know, for example, education and health and leisure and hospitality, for Hispanics. They actually have had some job increase over 

the past year. 

Representative Cummings. One of the most alarming statistics is with regard to African American teen unemployment. I think 

it was up to 40.8 percent in September, and that was up from 34.7 

percent. Is that correct? 

And, while you’re looking, what is the—if that’s accurate, what 

is the significance of that? 

Commissioner Hall. Well, that is accurate. 

14 

Representative Cummings. And, normally, I mean, is the teen 

employment rate significant in regard to—I mean, from what you 

can tell—to contributing towards a family’s stability, financial stability and having the funds to do what they need to do to survive 

and thrive? 

Commissioner Hall. Well, certainly, if African American teens 

are being hit harder by the recession, and they almost always are, 

and the unemployment rate starts probably way too high for that 

group and it’s gone up quite a bit, then, absolutely, it probably 

should have implications for family finances. 

Representative Cummings. And do you—can you—do you 

have any reasonable explanation for that, in other words, why that 

number—I mean, we’re approaching now 50 percent of African 

American teens, and I assume these are people who are ready, willing, and able to work, don’t have jobs. 

Commissioner Hall. I don’t have a good explanation. I’m not 

that familiar with economic research literature that might help explain that. 

Representative Cummings. I understand. Has the unemployment rate for people of color leveled off, or is it still rising at a fast 

clip? 

Commissioner Hall. Yeah, it’s slowed down, pretty much like 

the overall unemployment rate. It’s still probably roughly going up, 

but it’s moderated a little bit. 

Representative Cummings. And women, in recent decades, an 

increasing proportion of women who are 55 and older are working. 

This trend has continued during this recession, while a decreasing 

proportion of men who are 55 and over are working during this recession. Could there be reasons for the difference, other than simply the recession has hit male-dominated industries harder? 

Commissioner Hall. Yeah, there might well be something more 

going on because the differences are fairly surprising. 

Representative Cummings. And why do you say that? 

Commissioner Hall. Well, the big difference for women who are 

55 and older, their unemployment has doubled during this recession, but the employment-to-population ratio, which gives you some 

idea of the labor force participation, that hasn’t gone down for 

women who are 55 and older. 

So, really, what we’ve seen is an increase in labor force participation by women of that age. 

Representative Cummings. Could some of that trend have to 

do with the fact that many 55–64-year old women, are married to 

older men who have retired or taken buyouts or are now Medicareeligible; the younger spouses of women ages 55 to 64 aren’t yet eligible for Medicare, though, and because their husbands are no 

longer working, they no longer have health insurance through a 

spouse, perhaps these older women are returning to the labor force 

or postponing retirement, in order to obtain health insurance? 

Commissioner Hall. That’s quite possible. Our data is not going 

to tease that out and tell you that for sure, but, certainly, the data 

is consistent with that. 

Representative Cummings. My time has expired. Ms. Klobuchar? 

15 

Senator Klobuchar. Thank you very much, Mr. Chairman. 

Commissioner Hall, we’ve talked before about this dramatic difference between unemployment with varying degrees of education. 

And I was looking to see what the trend is here, and I think 

you’ve remarked before, that, compared to other recessions—and, 

correct me if I’m wrong—those without a high school degree were 

really socked hard with this recession. 

What is the employment rate now for—let’s start with college 

graduates—the unemployment rate? 

Commissioner Hall. Sure. The unemployment rate for college 

graduates is 4.9 percent. 

Senator Klobuchar. That’s 4.9 percent, and then what is the 

unemployment rate for high school graduates? 

Commissioner Hall. That’s 10.8 percent, which is more than 

double. 

Senator Klobuchar. And then what is the unemployment rate 

for those without a high school degree? 

Commissioner Hall. Fifteen percent. 

Senator Klobuchar. Fifteen percent, and is that relatively the 

same margin we saw last month, or has there been any change 

there? 

Commissioner Hall. It’s pretty similar. The unemployment rate 

for less than a high school diploma dropped a little bit, but that 

may not be statistically significant, and there may be some issue 

of folks dropping out of the labor force, as well. 

Senator Klobuchar. Do you have post-college degree unemployment rates for people who have an additional degree? 

Commissioner Hall. Yeah, we do, but—— 

Senator Klobuchar. I tricked you this time. 

Commissioner Hall [continuing]. We don’t have the data with 

us. We can find that. 

Senator Klobuchar. I would like to see that. It would be interesting. 

Commissioner Hall. Okay. 

[The table titled ‘‘Employment statues of the civilian noninstitutional population by educational attainment, age, sex, race, and 

Hispanic or Latino and Non-Hispanic ethnicity, September 2009’’ 

appears in the Submissions for the Record on page 62.] 

Senator Klobuchar. I mean, there’s just that literally you have, 

you know, not quite double the unemployment rate, if you don’t 

have a high school degree, but almost, and then it’s really above 

the national unemployment rate, even with a high school degree, 

and then significantly below, if you have a college degree. Is that 

a correct characterization? 

Commissioner Hall. Yes, it is. 

Senator Klobuchar. And you can see why we are so focused 

right now and the President is, on trying to make sure that high 

school students get some college education, and so we’re going to 

continue to pursue that. I think it’s very important. 

The second thing I always like to ask you about, because I think 

people are stunned when they learn that our soldiers that have 

come back from serving in Iraq and Afghanistan, the group that we 

categorize in the age group who have served in the Armed Services 

since September 11th, 2001, that their unemployment rate has 

16 

been traditionally higher than the unemployment rate of your average citizen in the United States. 

So where is that this month? 

Commissioner Hall. Well, for Gulf War Era II Veterans, the 

unemployment rate is 10.6 percent, as opposed to non-Veterans, 

where it’s 9.3 percent. 

Senator Klobuchar. And you and I have talked before about 

how—and this was worse, earlier in the year; is that right, or is 

it always just slightly above the national unemployment rate? 

Commissioner Hall. It’s generally above it. I think—— 

Senator Klobuchar. It’s always above it, I think. I just wonder 

if it’s been more above it. 

Commissioner Hall [continuing]. I’m not sure if it was more. In 

2009, it’s been about the same gap. I’m not sure about whether in 

2008, the gap—— 

Senator Klobuchar. I think there was somewhere it was—well, 

it was up further than this percent rate. 

Commissioner Hall [continuing]. Okay. 

Senator Klobuchar. But I think people would be surprised by 

that because we want to make—when those that serve us, come 

home, we want to make sure they have a job, and it’s difficult because those that left in the middle or the beginning of this recession come back and maybe the company they worked for isn’t there 

anymore, or they have significantly reduced their employment, so 

that’s a change. 

Another thing I wondered about was the discouraged workers. 

These are people who work full-time, who would like to work fulltime, right, but they can only find a part-time job, or people who— 

is that the characterization of ‘‘discouraged worker,’’ or does it include those that can’t find a job at all? 

Commissioner Hall. Yeah, well, there’s a broader category 

called ‘‘marginally attached.’’ 

Senator Klobuchar. Okay, so what’s—and you always—what’s 

‘‘marginally attached’’, again? 

Commissioner Hall. These are people who want to work, but 

they haven’t looked within the past four weeks, so they aren’t 

counted as in the labor force because they haven’t looked lately, but 

they’ve looked within the past year. 

Senator Klobuchar. So they’re not included in this unemployment rate? 

Commissioner Hall. No, they’re not. 

Senator Klobuchar. So this person I mentioned in my opening 

statement, who had sent out 60 resumes to 60 places and gone to 

all these interviews, if, at some point, she just says, I can’t do this 

anymore, and takes a month off from looking, she wouldn’t even be 

included in the unemployment rate? 

Commissioner Hall. That’s right. The 9.8 unemployment rate, 

doesn’t include people who were discouraged or were part-time for 

economic reasons. 

Senator Klobuchar. So, how many—when you include, forgetting the marginally attached ones, if you include these people that 

want to work full-time, but are only working part-time, who have 

significantly reduced hours and significantly reduced money as a 

17 

result, how—what’s the unemployment rate, when you include 

them? 

Commissioner Hall. It goes up to 17 percent. This measure includes the marginally attached as well as involuntary part time 

workers. 

Senator Klobuchar. And where is that, compared to the trend 

of the last year? 

Commissioner Hall. That’s up significantly. As a change over 

the year, it’s up by almost six percentage points over the past year. 

Senator Klobuchar. So, do you think it’s possible that some of 

these people are unemployed, then found part-time jobs, but it’s not 

where they want to be? 

Commissioner Hall. Yes, that’s quite possible, yes. 

Senator Klobuchar. All right, very good, thank you. 

Representative Cummings. Thank you very much. Dr. Hall, 

let me ask you, the last month when you were here or the last time 

you were here, you sounded relatively and cautiously optimistic. Is 

that a fair statement? 

Commissioner Hall. Yes. 

Representative Cummings. How would you describe your position today? 

Commissioner Hall. I think this report is very similar to a couple of months ago. 

Representative Cummings. That’s what I thought. 

Commissioner Hall. Yes. 

Representative Cummings. Yes. 

Commissioner Hall. You know, I was a little more enthusiastic 

because it was a clear moderation from prior. Now, we’re not in an 

uncommon position where we’re at a plateau right now, where the 

job loss is still significant, but it isn’t as high as it was before. 

Representative Cummings. Now, this ‘‘Cash for Clunkers’’ program, when you consider that, did you expect to see more or less 

impact as a result of that, or no impact? I mean, did you have any 

idea? 

I know you don’t have a magic ball, but, certainly, when you see 

all the commercials and hear all the news, you must, considering 

what you do, I’m sure you had some thoughts. 

Commissioner Hall. Well, in August, we did see pickup in employment in automobile dealerships, in particular. We didn’t see a 

lot in the manufacturing of cars, but that wasn’t surprising because 

a lot of those sales were coming out of inventories. 

If there winds up being an impact on production of cars, that’s 

likely to come later than when the actual program was going on. 

Representative Cummings. So, it would not surprise you if 

there was at least a slight pickup in the future report or two, with 

regard to manufacturing, since, I think they said they sold over 

700,000 cars? 

Commissioner Hall. That’s right, although, again, it would be 

really hard for us to measure that, but that’s where I would expect 

to see some sort of impact. 

Representative Cummings. Consumer balance sheets have 

been severely depleted due to the fall in the stock market and declining home values. State budgets have been hit hard by the decline in income taxes, property taxes, and sales tax revenues. 

18 

However, we saw a small increase in personal consumption expenditures in May, June, and July. Will personal consumption 

spending help expand employment in the retail sector? 

Commissioner Hall. Yes, it will. It may not happen immediately, because, sometimes there’s a bit of a delay in bringing on 

employment, so even if consumption picks up, this is part of the 

lagging effect of the labor markets sometimes, where businesses 

will take a little time before they bring on employment, even if 

sales pick up. 

Representative Cummings. And in answering one of Ms. 

Klobuchar’s questions, you were talking briefly about saving, and 

what is the significance of people saving? That means, I guess, that 

they’re not spending, and that doesn’t help too much, or does it? 

Commissioner Hall. No, in the long run, it can be, obviously, 

good, because people have to replenish their savings, but, in the 

short run, it can delay a recovery a little bit because people are 

being cautious and increasing their savings, rather than spending. 

Representative Cummings. In August alone, all retailers saw 

their sales increase by 2.7 percent, due in large part to a 10.6 percent boost in sales of the auto dealers. Most economists agree that 

this bump in auto sales was spurred by the ‘‘Cash for Clunkers,’’ 

and we saw retail job losses slow sharply in August. 

Do you think that there is going to be a continuing slowing in 

the retail job area? 

Commissioner Hall. Yeah, it’s hard to say. You know, we lost 

39,000 this month. We averaged about 28,000 in loss over the last 

five months. 

I would guess that if consumption and retail sales continue to 

stay up, that at some point, we’ll see an employment impact. 

Representative Cummings. So, if President Obama called you 

right after you got out of this hearing, and said, Dr. Hall, just give 

me your assessment of where we are, what would you say? 

Commissioner Hall. I would say, right now, we’re at a bit of 

a plateau, where job loss is significant, but it’s nowhere near what 

it was early in the year. In fact, I think the job loss now is maybe 

in the range of something like a normal recession, whereas that 

six-month period where we had 650,000 jobs lost a month, that was 

beyond any normal recession; that was—in fact, that was unprecedented. 

Representative Cummings. That was like a tsunami-like, I 

take it? 

Commissioner Hall. Yes. 

Representative Cummings. Ms. Klobuchar. 

Senator Klobuchar. Thank you very much. To follow up more 

on this savings issue and this lag, does there come some point 

where consumers, who, I think, smartly, have been saving more 

money and realizing that they have to protect themselves from economic downturns, but does there come some point where people realize they just have these repairs mounting to their homes, or, in 

my case, the Saturn, where last winter, you couldn’t even get the 

window up when it was ten degrees below zero, but I still kept it 

eight years old—is there some point where people realize that they 

have to replace some of these vehicles or make the repairs on their 

house, and they start dipping into those savings? 

19 

Commissioner Hall. Yes. You know, this is one of the characteristics, I think, of recessions. It’s part of why it takes awhile for 

recessions to work out, as people are repairing their balance sheets 

and getting comfortable getting back to normal spending levels, but 

that does always happen. 

Senator Klobuchar. You know, Ben Bernanke, the Chair of the 

Federal Reserve, has been suggesting that our economy may be out 

of recession. He’s predicting some growth, although he still says 

that we would see, I think he predicted, above nine percent unemployment through the end of 2010. Do you agree with those predictions? 

Commissioner Hall. Well, without predicting—— 

Senator Klobuchar. I forgot, you do not do that; you report. 

Commissioner Hall [continuing]. I will say that is the way that 

has worked in the past recessions; that once GDP picks up and income starts to be generated, it does take a little while for the labor 

market to catch up. 

Senator Klobuchar. But I think it is hard for people to understand that, while Wall Street is doing better, the Stock Market is 

doing better, to explain how the economy may be recovering while 

job losses really do continue to mount. I mean, there are predictions that we are going to see an increase in the unemployment, 

so could you explain this? 

Commissioner Hall. I think a lot of it has to do with what we 

have been talking about with consumers. Consumers have to get— 

I think we need to get consumer confidence back up. Consumers 

have to get comfortable increasing their spending levels, getting 

back to spending. 

And then businesses have to work through their typical patterns. 

One of the things that does really happen in the early stages of expansions after recessions is businesses sometimes are slow to bring 

workers back onboard because they take productivity gains for 

awhile. That’s part of why we get this lagging labor market recovery sometimes. 

Senator Klobuchar. You know one of the areas, when we look 

at government policies that we’ve undertaken, one of the ones I 

keep hearing about at home is the First-Time Homebuyers’ Tax 

Credit; that that has been our realtors who are practically cheering 

that they are able to have, I think in the month of June in Minnesota in the metro area we had a 20 percent increase over the 

same month a year before in new-home sales—or homes sales, period. 

What are you seeing in the housing market? Maybe you do not 

collect that data, but I know there have been some increases there. 

But it does not appear to have yet gone into the new-home construction. 

Commissioner Hall. Well let me first say that employment in 

real estate actually increased this month by about 6,000, and I believe that is the first time in awhile—— 

Senator Klobuchar. Oh, that is interesting. 

Commissioner Hall [continuing]. An increase in employment. 

And it does look like the new-home sales, I have looked at that 

data, that it is flat and it may be picking up a little bit. There is 

20 

an issue of inventories, and once sales pick up then there are existing-home sales of course that start to go on the market. 

In terms of the labor market/construction, I can tell you in the 

past when new-home sales pick up, employment in construction 

takes a while for that to pick up. In fact, it takes probably between 

a year and a year-and-a-half for construction employment to start 

to pick up once home sales, new-home sales start to accelerate. 

Senator Klobuchar. All right. Very good. Thank you, very 

much. 

Representative Cummings. Let me ask you this. In talking 

about new-home sales, I assume there would also at some point be 

a relationship between new-home sales and certain manufacturing 

areas such as refrigerators, and stoves, and air conditioners, and 

things of that nature. When do you expect to see that with regard 

to what is happening now with the home sales’s situation? 

Commissioner Hall. I think the story is probably going to be 

similar. It is a little hard to track all those things with new-home 

sales because, you know, obviously people just replace refrigerators; 

they are not always buying a refrigerator for a new home. 

I have not looked at the data. I would suppose it tracks reasonably well with new-home construction. Once new-home construction 

starts to pick up, there will be a broader pick up in some of these 

related areas. 

Representative Cummings. If someone watching this right 

now has a BS degree and is out of work and they were watching 

this right now, if you were to tell them where they would have the 

best chance possibly to get a job—because I am sure there are a 

lot of people in that position—based upon what you see and what 

your research shows, what would you say to them? What areas 

would you tell them that they might want to look in? That is, geographically. And what kind of jobs might they want to look for to 

have their best chance of getting a job? 

Commissioner Hall. That is a good question because it is very 

hard for me to—it is very hard for me to offer advice on that, in 

part because I have not looked at that really carefully. 

Also—— 

Representative Cummings. But we do know that there are 

certain parts of the country where the unemployment rate is low? 

Is that right? 

Commissioner Hall [continuing]. Sure. It is lower in some 

places than others. 

Representative Cummings. And wouldn’t that have a bearing 

on any kind of information you might put out to them? 

Commissioner Hall. Sure. 

Representative Cummings. All right, well why don’t you start 

there. 

Commissioner Hall. Okay, I will do that. 

I can tell you the states that have the lowest unemployment rate. 

In general, the Northeast Region has a lower unemployment rate 

than the rest of the Nation, although it is not a lot lower. It is 

about 9 percent. 

But there are a number of states. There is not a real rhyme or 

reason to it. I will just mention some of the states. And we have 

this up on our web site so people can take a look, but: North DaVerDate Nov 24 2008 15:30 May 25, 2010 Jkt 054937 PO 00000 Frm 00024 Fmt 6633 Sfmt 6633 C:\DOCS\54572.TXT SHAUN PsN: DPROCT
21 

kota, South Dakota, Nebraska, Utah, Virginia, Montana, Wyoming, 

are all the states with the lowest unemployment rates right now. 

And it is a fairly long list of states that have below-average unemployment rates. 

Representative Cummings. This whole idea of consumer confidence I think is so easy, Dr. Hall, for us to say that the sky is 

falling, and if we say the sky is falling it has a tendency to make 

people believe that the sky is falling, and I think it has a tendency 

to add to the problem sometimes. 

That is, I do not think we should be overly optimistic but I think 

we need to call it like it is. If we are moving in the right direction, 

we need to say that so the American People will be clear on that. 

But we also need to keep in mind, as Ms. Klobuchar has so eloquently stated, where we have come from. 

I think it is fair to say that we have come a pretty long way, 

haven’t we? 

Commissioner Hall. Yes, we have. 

Representative Cummings. And why do you say that? 

Commissioner Hall. Well, we really have moved into a, at least 

for right now, we have moved into a period where the job loss is, 

again as I said, somewhat like a normal recession. But we really 

did have a six-month period of job loss that was absolutely unprecedented. In fact, our benchmark revision come January is going to 

add to that job loss over that period. 

We had a lot of businesses closing down, and that is not happening anymore. 

Representative Cummings. And based on the data, what are 

the main differences between the current recession and the two 

prior recessions? For example, do the characteristics of the workers 

who are losing jobs in this recession versus those who lost jobs in 

previous recessions differ? 

Commissioner Hall. Yes. Recessions do wind up affecting everybody, but this particular recession was so broad and so deep 

that it probably—it probably impacted all groups more seriously 

than the past couple of recessions did. 

I thought the last recession was rather notable because it was a 

mild recession, but it was actually a recession where the consumer 

spending never really turned negative. So consumers actually kept 

spending through the last recession. In this recession, that has not 

been the case at all. It is one of the big reasons why this is so much 

more severe than the past recession. 

Representative Cummings. Mr. Brady. 

Representative Brady. Thank you, Mr. Chairman. I know we 

have a lot of national views from up here on employment, again 

going back to these companies, small, medium, large, that I meet 

with almost on a weekly basis. 

Consistently they say, as I ask them what’s happening, what’s 

their experience right now in the economy and what do they see 

going forward, you know separately they arrive at the exact same 

conclusions, two of them. 

One is, you in Congress are the problem. Our clients and customers are delaying decisions because they see proposals to raise 

energy costs dramatically, to increase utility costs, to raise health 

care costs on every size business. They see proposals to raise inVerDate Nov 24 2008 15:30 May 25, 2010 Jkt 054937 PO 00000 Frm 00025 Fmt 6633 Sfmt 6633 C:\DOCS\54572.TXT SHAUN PsN: DPROCT
22 

come taxes on small businesses, and new proposals to really punish 

our U.S. companies that are trying to market their products around 

the world. 

And again, their clients and customers are frozen because they 

are waiting to see what this hand of government is going to do. 

Again, they are convinced we are actually slowing this economic recovery. 

Last week I had a manufacturer, a small manufacturer, a pretty 

good-sized construction company, one was an employment firm that 

was telling me they’re not seeing the orders for part-time employment and rehiring back, not in retail, not in manufacturing. I think 

your numbers today sort of bear that out. The index of total private 

aggregate weekly hours declined sharply last month. The total private hours declined overall, including in manufacturing. 

They do not see some of those indicators that show that people 

are making those rehiring decisions. Can you sort of tell us your 

observations from the numbers today? Private hours are going 

down, correct? 

Commissioner Hall. Yes, they are. 

I would just say that these numbers still do not show a healthy 

labor market. We are still having significant job loss. And although 

we have most of the job loss in four sectors, the weakness is still 

very broad. 

So we still have some work to do. We still have some improvement to go before we see the end of the decline in the labor market. 

I would just say one thing, as well, because I think of the recession maybe as an illness. There are phases that the economy goes 

through during a recession. And we have been in a phase where 

the job loss has been around 300,000—this month it was a little bit 

less than that—in past recessions there almost always has been a 

phase where the job loss is around zero, where it stops for awhile 

and there is a pause, and then the next phase is where you have 

significant job growth. 

If I were trying to be encouraging to folks, I would sort of say 

that there are normal phases for a recession. I don’t want to predict, but in past recessions we have gone through these phases almost every time. 

Representative Brady. Tell me, in the economy you testified 

here recently that our ability to sell our products around the world 

have been a growing part of the economy up until recently. I think 

last year it was about 60 percent of all of our new growth. It is sort 

of the understanding that it is not enough simply to Buy American 

anymore, we have to sell American products and services throughout the world. 

Yet, we have seen a major decline in that. We do not have a 

Trade agenda right now. Other countries, as our businesses tell us, 

are passing America by, signing agreements that give advantages 

to their companies over our American companies. And we have a 

rash of new proposals, one of which is included in the House health 

care bill, that actually punishes companies for selling their products around the world. 

We had an example at this meeting where one of our companies 

has a project in Algeria. It employs 28 workers there, but there’s 

almost 400 workers back in Houston that support that project—deVerDate Nov 24 2008 15:30 May 25, 2010 Jkt 054937 PO 00000 Frm 00026 Fmt 6633 Sfmt 6633 C:\DOCS\54572.TXT SHAUN PsN: DPROCT
23 

signed it, proposed it, operate in a sense, monitor it—and they 

were saying that other countries are aggressively courting our investment. You know, they’re opening up their areas to energy, lowering taxes; yet America is doing just the opposite, shutting off our 

energy resources, increasing potentially energy costs, and actually 

increasing taxes on our U.S. companies. 

Do your numbers track jobs created by selling American products 

throughout the world? 

Commissioner Hall. Well in a sense they do. We can’t tell you 

where the products are sold from these jobs, but the products could 

go anywhere. They could go in the United States. They could go 

abroad. They could even go abroad and come back. 

Representative Brady. But you don’t break out the export jobs, 

do you? We talked about this before. Is there a way—is there a 

model where you can in the future, you know, create, or try to 

make those estimates as you look at—you look at a number of different criteria. Is there a way to start tracking those things? 

Commissioner Hall. It is very, very difficult. Because if you 

think about it, what we are doing is we are sending surveys to establishments. And the people in the establishments may not know 

where their product is winding up. And that gets to be very difficult to actually track that information. 

There are some research studies that could—can and could be 

done, but with our particular surveys there is really no way for us 

to separate out the exports. 

Representative Brady. Okay. Thanks, Commissioner; Mr. 

Chairman. 

Representative Cummings. Thank you. Ms. Klobuchar. 

Senator Klobuchar. Thank you very much, Mr. Chairman. 

I was listening to Congressman Brady’s questions, and I think he 

and I share a belief that we do need to do everything we can to 

promote more American product exports. I actually chair a subcommittee focused on export promotion in the Commerce Committee, and we are having a hearing next week. 

But I was thinking about this argument that somehow the problems we are having right now and this unemployment rate is somehow caused by uncertainty about government policy. 

So the two major areas we have been discussing right now in 

Congress are first of all health care. How is the health care sector 

doing with unemployment? 

Commissioner Hall. The health care sector gained about 19,000 

jobs this month. The last five months it averaged 24,000 jobs. And 

even during the worst of the recession, it still gained about 25,000 

jobs per month. So it has actually looked relatively recession proof. 

Senator Klobuchar. So the major sector that we’re having the 

major debate about and would be arguably facing the greatest uncertainty has actually, in its response to government policies, has 

actually seen increases in employment? 

Commissioner Hall. The health care industry has not shown 

obvious signs of the recession. 

Senator Klobuchar. Okay, how about the energy jobs? How are 

they doing? Because you have not mentioned those before. 

Commissioner Hall. Sure. Let me see here. 

24 

Representative Brady. I’m from Houston. I can tell you how 

our energy jobs are doing—— 

Senator Klobuchar. No, I’m just curious. 

Representative Brady [continuing]. But we will let the Commissioner answer that. 

Senator Klobuchar. Let’s look at the entire country. I know in 

our State we have actually seen increases in some jobs from wind, 

and solar. We actually have gone up in the energy area. 

Commissioner Hall. Yes. I am going to have to get some of that 

information for you, but we do have data on mining employment 

and employment related to things like oil exploration, and things 

like that. 

Senator Klobuchar. Because North Dakota, next to us, has one 

of the lowest unemployment rates? North Dakota? Because I know 

that they are really an energy bastion right now with the renewables and also the oil. 

Commissioner Hall. Yes. And we have had significant job 

growth related to energy even during the worst of this recession 

when gasoline prices were high. I think the employment—for example, the employment in mining and logging this month declined by 

1,000, but there have been months where for periods it actually 

grew a bit. 

Senator Klobuchar. And when you look at past recessions 

where we have had—you said to me before that, as Congressman 

Cummings described it, the tsunami, the effect of this recession, 

near depression, at the beginning was just somewhat catastrophic 

compared to other recessions. But as you have described this 

lengthy recovery which is still going on, it mirrors some other 

ones—maybe not in the length; it is going to be longer, but you see 

similar signs? Is that right? 

Commissioner Hall. Yes. 

Senator Klobuchar. And did those other recessions have major 

economic debates hanging over the heads of the citizens? You 

know, health care, and energy, and those things? 

Commissioner Hall. I’m sure they did. 

Senator Klobuchar. Well, maybe, but this argument that somehow our problems are caused by the fact that we are debating 

major issues that are affecting the middle class to me does not 

quite make sense. But of course you do not have to answer that 

policy question, Commissioner Hall. 

Commissioner Hall. Thank you. 

Senator Klobuchar. I just wanted to end by saying, first of all 

once again I appreciate the detail that you bring to this Committee. 

It has given me, and I hope the people who are watching this on 

C–SPAN or wherever else, some understanding of this issue and 

the long-term complexities of it. 

From my perspective, what you have told us is that we have seen 

a leveling off of this job loss. However, we are still facing significant issues here. And while we are seeing recovery in certain sectors and in certain parts of the country, we are continuing to see 

significant unemployed people. 

I just, as I always do, want to end with just some of these realpeople stories as we look at this extension of Unemployment Benefits’ issue. This is in my State that has 8 percent unemployment. 

25 

Someone wrote in from Sioux, from Red Wing: 

I am worried, as the winter is around the corner now. I have 

worked all my life, and I am 54 years old. I have now been unemployed for 12 months. Where are we to go? We cannot wait for 

years. 

Then a woman named Barbara from Mahtomedi, Minnesota: 

My husband was laid off in March of this year from his union 

construction job and is currently using his Unemployment Benefits. 

Two of our adult children are living with us and are looking for 

work after being laid off. What are we supposed to do? My husband 

has been looking for a job since March. 

So I think we all need to remember that, while some people on 

Wall Street might be recovering, there are plenty of people on Main 

Street that are still going to need help. 

So thank you very much, Commissioner Hall, and thank you, Dr. 

Horrigan, and Mr. Rones. 

Representative Cummings. Thank you very much, Ms. Klobuchar. 

I want to first of all thank you, Commissioner Hall, for the excellent work that you and your staff do consistently. Before I get to 

my concluding remarks, I too want to thank Chris Frenze for all 

of your service. So often, staff folks are unseen, unnoticed, 

unappreciated, and unapplauded, but they are the ones who make 

the difference on Capitol Hill and in so many other places, and 

they bring the balance, and the information, and the things that 

we need to get our jobs done. And so we wish you well, and we 

thank you very much for your service. [Applause.] 

Also, finally let me say this. Yesterday in our Transportation 

Committee hearing with Secretary LaHood, one of the things he 

talked about in the stimulus package, he was getting a lot of complaints from his own Party, his Republican Party. 

What he said was: Look, I am going out there and I now see people who have jobs as a result of the Stimulus. A month ago they 

were drawing Unemployment. 

As I listened to Ms. Klobuchar, I am just reminded that there are 

so many people who are fortunate to have jobs, and there are so 

many people who have lost their jobs, people that never thought 

they would be in this position but they are. But the fact still remains that I believe that this President constantly reminds us that 

he inherited a set of circumstances that were very unfortunate. 

As one great philosopher once said, it’s not the hand that you’re 

dealt, it’s whether you properly rearrange them to work for you. 

And I believe that that is what we are doing. Will that hand yield 

the results that we want tomorrow, or the next day, or next month? 

Probably not. But we do know that we, based upon what I have 

heard here today and last month, we are on the road there. 

One of the things you said, Dr. Hall, and I will finish on this, 

is that these recessions apparently go up and down, just like an illness. Sometimes you have some good days, sometimes you have 

some bad days. My father, a former sharecropper, used to say: Life 

is like a caterpillar. Two steps forward. Three steps back. Five 

steps forward. Two steps back. But eventually it gets to where it 

has to go. 

26 

I do believe that if I listened to you very carefully in the memory 

of my father, I think that is how we are proceeding. But at least 

we are going forward, which is good. So again we thank you, and 

with that this hearing is adjourned. 

[Whereupon, at 10:46 a.m., Friday, October 2, 2009, the hearing 

was adjourned.] 

(27) 

SUBMISSIONS FOR THE RECORD 

28 

PREPARED STATEMENT OF REPRESENTATIVE ELIJAH E. CUMMINGS

Good morning. While I’m pleased to welcome back Commissioner Hall this morning, I wish my presiding over this hearing had come under different circumstances. 

As many of you already know, Chair Maloney could not be here today due to her 

husband’s tragic passing over the weekend. 

I’m sure the Committee members will join me and my staff in expressing our 

deepest sympathies. Our thoughts and prayers are with the Congresswoman and 

her family during these difficult days. 

I ask unanimous consent to keep the hearing record open so that Chair Maloney 

may include remarks for the record when she resumes her duties. 

* * * 

Despite 7.2 million jobs lost in the current recession, and 9.8% national unemployment, job losses have moderated since January. As today’s numbers show, it will 

be a long raod to recovery, but we are finally seeing selected signs of recovery. 

After the first quarter of 2009 when the real gross domestic product fell by 6.4%, 

second quarter numbers reveal that GDP fell by only 0.7 percent. 

Additionally, the Institute for Supply Management’s monthly index shows an expansion in the manufacturing sector for the second consecutive month, after contracting from January 2008 to August 2009. 

Finally, yesterday, I participated in an extraordinary hearing of the Transportation and Infrastructure Committee, looking at the administration’s progress in 

getting out projects funded with the American Recovery and Reinvestment Act. 

Secretary Ray LaHood, our former House colleague, presented tremendous evidence of the benefits created by the stimulus—both in terms of improved infrastructure and true economic recovery. The transportation portion of the stimulus alone 

has created an estimated 122,000 jobs already. 

I want to highlight a few things presented by Secretary LaHood, as well as congratulate Secretary LaHood, President Obama, and all the local transportation 

agencies that have made the progress possible. Secretary LaHood spoke of the nearly $20 billion in stimulus funds obligated for 

projects through the Federal Highway Administration. Specifically, he briefed us on the $128 million third phase of the Interstate 215 

widening project in San Bernardino, California, which is on its way to creating 

2,000 jobs in its first year. He also noted that Atlanta’s mass transit administration received $10.9 million 

as part of the Transit Investments for Greenhouse Gas and Energy Reduction program. 

The Atlanta program will renovate a bus maintenance facility with photovoltaic 

solar power cells, creating energy savings, better working conditions for employees, 

and many new jobs. 

Another success story is the Federal Maritime Administration, an agency that 

falls under our jurisdiction at the Coast Guard subcommittee. 

As part of the Stimulus’ Small Shipyards Grant Program, the Maritime Adminis- tration has already issued grants for $98 million of its total $100 million allocated 

for dry docks, steel working machinery and other infrastructure improvements. 

Finally, though not part of the stimulus, the Car Allowance Rebate System (better 

known as ‘‘Cash for Clunkers’’) raised August retail sales by 2.7 percent. 

Not just auto sales—all retail sales—were boosted by the nearly 700,000 cars sold 

at 21,000 dealerships across America. 

So, as we await Commissioner Hall’s testimony on the September employment 

statistics, I’d like to close with something Chairman Oberstar said at yesterday’s 

hearing: 

We are taking people off of unemployment rolls and onto payrolls, and replacing 

unemployment checks with paychecks. 

We know how far we have to go—there are 263,000 new reasons this month to 

redouble our efforts toward getting folks back to work. 

But it’s equally as important to acknowledge where we have had success—like the 

transportation piece of the stimulus—and identify what we can do to build off that 

success for a long-term recovery. 

PREPARED STATEMENT OF REPRESENTATIVE KEVIN BRADY, SENIOR HOUSE

REPUBLICAN

I am pleased to join in welcoming Commissioner Hall before the Committee this 

morning. 

The loss of 263,000 payroll jobs and the increase in the unemployment rate to 9.8 

percent is bad news for American workers and their families. Unemployment is a 

29 

severe hardship. Even if the recession is near its trough, the high unemployment 

rate is likely to persist for many months, if not years. A jobless recovery is not a 

real recovery for American workers and their families. 

Last January top Obama Administration economists predicted that if the Congress were to pass the stimulus bill, the unemployment rate would not exceed 8.0 

percent. Congress did enact the Obama bill, but unfortunately as we see once again 

the stimulus plan did not perform as the Administration had predicted. 

Nevertheless, there are some encouraging signs that the economic contraction is 

decelerating. Financial market conditions are improving, stock prices are up, and 

job losses are slowing. However, personal consumption remains anemic, and business and residential investment continue to fall. These factors contribute to a very 

weak labor market. 

I am hopeful that the current recession may have run its course. Given the normal lag time between monetary actions and the appearance of their effects in the 

rest of the economy, the Federal Reserve’s injection of $1.3 trillion into financial 

markets between September and December of last year should boost real GDP 

growth during the second half of this year. 

However, liquidity injections, or fiscal stimulus for that matter, cannot turn a recovery into a long and strong expansion. As the Chief Executive and Co-Chief Investment Officer of Pimco Mohamed El-Erian noted, temporary government interventions are unsustainable ‘‘sugar highs.’’ For the U.S. economy to enjoy a sustained 

expansion instead of slipping back into a ‘‘W-shaped’’ recession, the private sector 

must once again become the driver of economic growth. 

However, the balance sheets of U.S. families remain damaged from the collapse 

of housing prices and the excessive debts accumulated during the bubble years. The 

growth of personal consumption is likely to remain tepid as families increase their 

savings rate to repair their balance sheets. Although housing prices may be stabilizing, the large inventory of foreclosed homes is likely to restrain housing investment for some time. Therefore, a vigorous and sustained expansion will depend 

upon a major turnaround in both business investment and net exports. 

With regard to business investment and net exports, the economic policies of the 

Obama Administration and the priorities of Congressional Democrats are quite troubling. Business people make investment decisions based on their expectations of risk 

and return. In turn, government policies affect these perceptions. 

Unfortunately for the American people, the Obama Administration and Congressional Democrats have simultaneously decreased the expected return and increased 

risk associated with new business investment through their actions and inactions. 

As a result, many firms are delaying investment decisions. Since new business investment propels job creation, first in manufacturing the equipment, designing the 

software, and building the structures and then in hiring new employees to operate 

the equipment and facilities that business investment created, these delays add to 

unemployment. 

Higher income tax rates and higher taxes on capital gains and dividends will 

begin in 2011. Congress is blocking extensions of the research and development tax 

credit and the homebuyer’s tax credit, as well as an increase in the net operating 

loss carry-back time from two to five years. These tax policies slash expected returns, causing firms to forgo job-creating investments. For example, one major corporation, which spends close to $10 billion dollars per year on R&D to pursue the 

cutting edge technology, may lay off some of its researchers if Congress does not 

renew the R&D tax credit. 

Confusion about ‘‘cap and tax’’ and healthcare legislation adds to uncertainty, further depressing business investment. Business people fear the additional energy 

costs associated with the ‘‘cap and tax’’ bill that passed the House and are unsure 

what the Senate may do. The multiple healthcare bills of the Democrats leave business people confused about what additional taxes firms, especially small businesses, 

may pay or what regulatory burdens they may bear. 

The prospects for a sustained boost from net exports are also dim. The Doha 

Round of trade liberalization negotiations at the World Trade Organization remains 

stalled. Three completed free-trade agreements with Colombia, Panama, and South 

Korea have not been acted upon. 

Moreover, President Obama has proposed a number of counterproductive tax increases on U.S. multinational corporations that create American jobs through foreign sales of American-made goods and services. In one U.S. multinational corporation, for example, American sales generate only 25 percent of its revenues, but nearly one-half of its jobs are located in the United States. Obama’s international tax 

proposals are extremely naive. They would reduce U.S. exports and jobs in exportrelated industries. 

30 

The U.S. economy must move from the ‘‘sugar high’’ of unsustainable government 

intervention to sound private sector-led growth. Given the ongoing weakness in personal consumption and the housing sector, business investment and net exports 

must lead the way if the unemployment rate is to fall substantially. Ironically, most 

of the policies of the Obama Administration and Congressional Democrats are undermining these two private-sector drivers of job creation, perhaps condemning 

American workers and their families to a very weak, jobless recovery. 

Dr. Hall, I look forward to your testimony. 

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. 

Job losses continued in September, and the unemployment rate continued to trend 

up, reaching 9.8 percent. Nonfarm payroll employment fell by 263,000 over the 

month, and losses have averaged 307,000 per month since May. Payroll employment 

has fallen for 21 consecutive months, with declines totaling 7.2 million. In September, notable job losses occurred in construction, manufacturing, government, and 

retail trade. 

Construction employment decreased by 64,000 in September. Job losses averaged 

66,000 per month from May through September, compared with an average of 

117,000 per month from November 2008 through April. 

Employment in manufacturing declined by 51,000 in September. Job losses in factories averaged 53,000 per month over the past 3 months, about one-third the average monthly decline from October through June. 

In September, retail trade employment fell by 39,000. The industry has lost an 

average of 29,000 jobs per month since April, down from an average loss of 68,000 

for the prior 6-month period. Employment in government decreased by 53,000 in 

September. Much of the decline was in local government. 

Employment continued to increase in health care (19,000). The average monthly 

job gain thus far in 2009 is 22,000, compared with an average monthly gain of 

30,000 during 2008. 

Average hourly earnings of production and nonsupervisory workers in the private 

sector were up by one cent in September to $18.67. This followed a gain of 7 cents 

in August. Over the past 12 months, average hourly earnings have risen by 2.5 percent. From August 2008 to August 2009, the Consumer Price Index for Urban Wage 

Earners and Clerical Workers (CPI-W) declined by 1.9 percent. 

Turning now to some measures from our household survey, the unemployment 

rate continued to trend up in September. The jobless rate has doubled since the 

start of the recession to 9.8 percent. A total of 15.1 million persons were unemployed 

in September, twice the number at the start of the recession. 

The number of long-term unemployed rose to 5.4 million in September. This group 

has grown more than four-fold since the start of the recession. 

In September, the employment-population ratio continued to decline. At 58.8 percent, the ratio has fallen by 3.9 percentage points since the recession began and is 

at its lowest level since January 1984. 

Among the employed, there were 9.2 million persons working part time in September who would have preferred full-time work. While the number of such workers 

has been little changed since March, it has nearly doubled since the start of the recession. 

In keeping with standard practice, we are announcing the preliminary estimate 

for the next benchmark revision to payroll employment. The benchmark process annually revises the payroll survey’s sample-based employment estimates to incorporate universe employment counts derived primarily from unemployment insurance tax reports. 

Preliminary tabulations indicate that the estimate of total nonfarm payroll employment for March 2009 will require a downward revision of approximately 

824,000, or six-tenths of one percent. The historical average for the benchmark revision over the prior 10 years has been plus or minus two-tenths of one percent. Most 

of the additional job loss occurred in the first quarter of 2009, when payroll employment was declining most steeply, and appears to be due in part to an increase in 

the number of business closings. 

The final benchmark revision will be incorporated into the payroll survey with the 

publication of January data on February 5, 2010. Historical data series will be revised at that time. 

31 

In summary, the labor market remained weak in September. Payroll employment 

fell, and the unemployment rate continued to trend up. 

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

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