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86–840 2014

S. HRG. 113–220 

THE EMPLOYMENT SITUATION: DECEMBER 2013 

HEARING 

BEFORE THE

JOINT ECONOMIC COMMITTEE 

CONGRESS OF THE UNITED STATES 

ONE HUNDRED THIRTEENTH CONGRESS 

SECOND SESSION 

JANUARY 10, 2014 

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 

KEVIN BRADY, Texas, Chairman 

JOHN CAMPBELL, California 

SEAN P. DUFFY, Wisconsin 

JUSTIN AMASH, Michigan 

ERIK PAULSEN, Minnesota 

RICHARD L. HANNA, New York 

CAROLYN B. MALONEY, New York 

LORETTA SANCHEZ, California 

ELIJAH E. CUMMINGS, Maryland 

JOHN DELANEY, Maryland 

SENATE 

AMY KLOBUCHAR, Minnesota, Vice Chair 

ROBERT P. CASEY, JR., Pennsylvania 

MARK R. WARNER, Virginia 

BERNARD SANDERS, Vermont 

CHRISTOPHER MURPHY, Connecticut 

MARTIN HEINRICH, New Mexico 

DAN COATS, Indiana 

MIKE LEE, Utah 

ROGER F. WICKER, Mississippi 

PAT TOOMEY, Pennsylvania 

ROBERT P. O’QUINN, Executive Director 

NILES GODES, Democratic Staff Director 
(III) 

C O N T E N T S 

OPENING STATEMENTS OF MEMBERS

Hon. Kevin Brady, Chairman, a U.S. Representative from Texas ...................... 1 

Hon. Amy Klobuchar, Vice Chair, a U.S. Senator from Minnesota ..................... 3 

WITNESSES

Hon. Erica L. Groshen, Commissioner, Bureau of Labor Statistics, U.S. Department of Labor, Washington, DC; accompanied by Dr. Michael Horrigan, 

Associate Commissioner for Prices and Living Conditions, Bureau of Labor 

Statistics; and Mr. Thomas J. Nardone, Jr., Associate Commissioner for 

Employment and Unemployment Statistics, Bureau of Labor Statistics ........ 5 

SUBMISSIONS FOR THE RECORD

Prepared statement of Hon. Kevin Brady ............................................................. 22 

Prepared statement of Hon. Erica L. Groshen ...................................................... 22 

Questions for the record from Representative Coats to Commissioner 

Groshen ................................................................................................................. 23 

Letter dated February 26, 2014, from Commissioner Groshen to Representative Coats .............................................................................................................. 25 

Letter dated January 29, 2014, from Commissioner Groshen to Senator 

Klobuchar .............................................................................................................. 27 

Letter dated January 30, 2014, from Commissioner Groshen to Representative Hanna ............................................................................................................ 29 

Letter dated January 27, 2014, from Commissioner Groshen to Representative Paulsen .......................................................................................................... 31 

(1) 

THE EMPLOYMENT SITUATION: 

DECEMBER 2013 

FRIDAY, JANUARY 10, 2014 

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

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

50 of the Dirksen Senate Office Building, the Honorable Kevin 

Brady, Chairman, presiding. 

Representatives present: Brady of Texas, Duffy, Amash, 

Paulsen, Hanna, Carolyn B. Maloney, Sanchez, Delaney. 

Senators present: Klobuchar. 

Staff present: Ted Boll, Hank Butler, Gail Cohen, Al 

Felzenberg, Niles Godes, Paige Halen, Colleen Healy, Patrick Miller, Robert O’Quinn, and Andrew Silvia. 

OPENING STATEMENT OF HON. KEVIN BRADY, CHAIRMAN, A 

U.S. REPRESENTATIVE FROM TEXAS 

Chairman Brady. Good morning, everyone, Vice Chair 

Klobuchar, Members of the Committee, and Commissioner 

Groshen. Good morning, and welcome to the New Year. 

This is Commissioner Groshen’s first appearance before the Joint 

Economic Committee. On behalf of the millions of Americans who 

cannot yet find jobs, we are hopeful and we hope that you can 

bring us better news in the future. 

I would like to recognize Tom Nardone, who is retiring from the 

Bureau of Labor Statistics after 37 years of service. He has been 

‘‘Mr. Numbers’’ for the Commissioner and this Committee over the 

last several years. 

Tom, we thank you for your dedicated service and wish you the 

very best in your future endeavors—which, by the way, sound wonderful. 

Payroll job growth was, unfortunately, incredibly weak last 

month. December saw a gain of only 87,000 private sector jobs and 

74,000 nonfarm jobs. 

The unemployment rate did fall by 0.3 percentage points to 6.7 

percent. However, this drop was largely due to falling labor force 

participation. More than a half a million Americans left the labor 

force last month. Consequently, the labor force participation rate 

dropped to 62.8 percent, tying a 36-year low. 

While it sounds impressive to boast that the U.S. economy added 

8.2 million private-sector jobs over the past 46 months, economic 

growth in an average recovery during the past half century has 

been 50 percent larger than in the Obama recovery. As a result of 
2 

this growth gap, America today is missing a whopping 4.5 million 

jobs along Main Street—and I don’t think that is acceptable to anyone. 

Consider this: the best—the best—monthly private sector jobs report of the Obama recovery is lower than the equivalent of the average private jobs report of the Reagan recovery. In other words, 

not a single month of the current recovery matches even the equivalent of an average month of the Reagan recovery. And that is disappointing. We all know we have got to do better. 

We should be encouraged that the unemployment rate has declined from its peak of 10 percent in October, 2009, to 6.7 percent 

today. However, that is nowhere near the 5 percent level the White 

House promised the American people when the controversial $800 

billion stimulus was rushed through Congress on a party-line vote. 

Now unfortunately the decline in the unemployment rate is 

largely due to falling labor force participation. If you look at it, if 

the labor force participation rate had not declined since President 

Obama took office, the unemployment rate would be nearly 11 percent. Another disappointing jobs indicator: a smaller percentage of 

Americans are employed today than when the recession ended over 

four-and-a-half years ago. 

The American people are deeply dissatisfied with the President’s 

leadership on the economy. We need solutions that get Washington 

out of the way so Main Street businesses can start hiring with confidence again. 

Raising the minimum wage and forcing small businesses to pay nearly $5,000 more per worker won’t increase hiring. Washington 

mandating the equality of income won’t increase hiring. Extending 

emergency unemployment programs won’t increase hiring because 

what the long-term unemployed really need and are crying for are 

new jobs. 

The emergency unemployment program is designed for extraordinary circumstances when America’s unemployment rate is high 

and going higher. As the White House reminds us, the unemployment rate has declined in all 50 states and is at the lowest since 

2008. 

So you ask why are the President and the Senate seemingly 

turning their backs on job creation? Why doesn’t the Senate pick 

up and pass, and the President sign into law, any of the dozens of 

jobs bills the House has already approved, including the Keystone 

XL pipeline which would create thousands of well-paying middleclass jobs. 

It is not helpful, either, that the White House continues to delay 

bipartisan unemployment reforms the President signed into law 

two years ago to make it easier for states to match local workers 

with local jobs and conduct drug testing for applicants seeking jobs 

that require those tests. 

We all know it is an election year, and some in Washington are 

trying to change the conversation from the disappointing economy 

and the bungled roll-out of the troubled Affordable Care Act. I just 

hope my colleagues on both sides of the aisle remember that the 

measure of America’s compassion is not how long we provide unemployment benefits, but how soon we get people into good-paying 

jobs. That should be Washington’s focus. 
3 

Commissioner Groshen, welcome again, and I look forward to 

your testimony. 

I recognize the Vice Chair. 

[The prepared statement of Chairman Brady appears in the Submissions for the Record on page 22.] 

OPENING STATEMENT OF HON. AMY KLOBUCHAR, VICE 

CHAIR, A U.S. SENATOR FROM MINNESOTA 

Vice Chair Klobuchar. Thank you very much, Chairman 

Brady, and thank you for holding this hearing today. 

I also want to thank Mr. Nardone for his 37 years of numbers, 

of experience crunching numbers for us so we can do our jobs. And 

also, welcome, Dr. Horrigan. 

I am pleased we are having this hearing on the monthly employment situation, and I look forward to hearing from all of you today, 

not just on the past month but really on the past year. This would 

be a good time to talk about the past year. 

These hearings are an opportunity to dig more deeply into the 

numbers and have a chance to get a more complete understanding 

of the employment data. 

I want to make a couple of overall comments first about the economy. As we know, the economy has grown for 10 straight quarters, 

with GDP growing at a 4.1 percent annual rate in the third quarter 

of 2013. Each month, an average of 182,000 jobs were added on average last month, and that would include last month’s numbers. 

Consumer spending, which accounts for about 70 percent of economic activity, was the strongest it has been in nearly two years. 

And as a home state for Target and Best Buy in Minnesota, we like 

that consumers are getting more confidence in buying things. 

Critical industries like housing are recovering. Housing starts 

were up almost 23 percent in November. Home prices in 20 leading 

cities have increased by nearly 14 percent over the past 12 months. 

Manufacturing, which is of course the engine of innovation, has 

rebounded, adding 568,000 jobs since February of 2010. 

Exporting, which Chairman Brady and I were just talking about, 

is another bright spot. Exports are growing in each of the past four 

years, exceeding the pre-recession peak. 

While all this is good news and shows that the economy has improved greatly since the worst of the downturn when, I remember 

in January of 2009 we lost more jobs in a single month, more than 

there were people in the State of Vermont. We have seen great improvement since then. We all know, as the Chairman has pointed 

out, that there is still more work to do. 

Five years later, though, we are still adding jobs. And if you look 

at the chart here, it is showing 46 consecutive months of privatesector job growth. It is not exactly where we want to be, but we 

still have seen 46 straight months of private-sector job growth. 

In that time, 8.2 million private-sector jobs have been created 

since the downturn. 

The number of unemployed workers per job opening has decreased from nearly 7 in July of 2009 to less than 3 approaching 

the pre-recession level of roughly 2 unemployed workers for every 

job opening. 
4 

In 2013, the recovery in the labor market continued to strengthen with the private sector adding 2.2 million jobs during the course 

of the year, including the 87,000 jobs in December. But because of 

the drop in government employment, total nonfarm payrolls increased by only 74,000, which is a number we are talking about 

today. 

The unemployment rate, currently 6.7 percent, is down more 

than a percentage point from last December when it was 7.9 percent. In my State, the unemployment rate is at 4.6 percent. The 

truth is that for most workers the job market is better today than 

it has been for a number of years. 

Commissioner Groshen, I do look forward to your assessment of 

the labor market in 2013. 

Despite the recent progress and the drop in the national unemployment rate to its lowest level in five years, long-term unemployment is still a very real problem. Nearly 4 million Americans, over 

one-third of unemployed workers, have been out of work for more 

than 6 months. Long periods of joblessness do significant damage 

to our Nation’s productivity, as we discussed at our Long-Term Unemployment Hearing last year. In fact, Chairman Bernanke came 

yesterday to speak to some of the Senators, looking back at his 

term, and he talked about the fact that there has been significant 

economic progress but he sees the challenges ahead being productivity and also the income disparity issue. 

I know that we are making progress on an agreement to provide 

a one-year extension of unemployment benefits to people who have 

been out of work for more than six months in the United States 

Senate. That is a bipartisan bill sponsored by Senator Jack Reed 

and Senator Heller, Republican of Nevada. Extending unemployment insurance benefits will ensure that the 1.3 million workers 

whose benefits were cut off on December 28th will get the support 

that they need, allowing them to pay their rent and fill their gas 

tanks as they continue their job search. 

Earlier this week I released a JEC report laying out the economic case for continuing Federal Unemployment Insurance. It 

showed that the long-term unemployment rate is nearly twice what 

it was—nearly twice what it was—when Congress allowed Federal 

Unemployment Insurance to expire after the recessions of 1990 to 

1991 and 2001. And you can see that chart of the level at which 

we had long-term unemployment in past cases, where the unemployment was allowed to expire. 

So I would like to hear about the data you have, Commissioner 

Groshen, on long-term unemployment. The report also showed that 

in several states high long-term unemployment is masked by a 

lower overall unemployment rate. For example, Florida has an unemployment rate below the national rate, but 46 percent of its unemployed have been jobless for more than 6 months. 

This leads us to look at things like ramping up our job training. 

I can tell you in my State 60 percent of our manufacturers say they 

have openings for jobs where they cannot find workers with quite 

the right skills. And I think this is something that is a bipartisan 

issue. 
5 

Senator Hoeven, Republican of North Dakota, and I have a bill 

about investing in effective workforce training. And there are a 

number of other ideas out there. 

So I would say overall today’s employment report shows that we 

still have recovery in the labor market. The economy proved resilient in 2013. The numbers are not, as I have said many times, 

where we want to have them, but we continue, when you look back 

at the entire year to that average gain of about 182,000 jobs a 

month, we have seen significant change that shows we are heading 

in the direction of being a country that does not just churn money 

but a country that makes stuff, invents things, exports to the 

world, and most importantly has a strong private-sector job economy. 

Thank you, very much. I look forward to your testimony. 

Chairman Brady. I would like to welcome the 14th Commissioner of the Bureau of Labor Statistics, Erica Groshen. 

Prior to joining BLS she was a Vice President of the Research 

and Statistics Group at the Federal Reserve Bank of New York. 

She also served on advisory boards for BLS and the U.S. Census 

Bureau. 

She has been a Visiting Assistant Professor of Economics at Barnard College, at Columbia University, and a Visiting Economist at 

the Bank for International Settlements in Basel, Switzerland. 

She earned a Ph.D. in Economics from the Harvard University, 

and a Bachelor’s Degree in Economics and Mathematics at the University of Wisconsin Madison. 

Commissioner, welcome, and we look forward to your testimony. 

STATEMENT OF HON. ERICA L. GROSHEN, COMMISSIONER, BUREAU OF LABOR STATISTICS, U.S. DEPARTMENT OF LABOR, 

WASHINGTON, DC; ACCOMPANIED BY: DR. MICHAEL 

HORRIGAN, ASSOCIATE COMMISSIONER FOR PRICES AND 

LIVING CONDITIONS, BUREAU OF LABOR STATISTICS; AND 

MR. THOMAS J. NARDONE, JR., ASSOCIATE COMMISSIONER 

FOR EMPLOYMENT AND UNEMPLOYMENT STATISTICS, BUREAU OF LABOR STATISTICS, WASHINGTON, DC 

Commissioner Groshen. Mr. Chairman and Members of the 

Committee: 

Thank you for recognizing Tom’s public service and retirement, 

and for the opportunity to discuss the employment and unemployment data that we released this morning. I must say that you had 

very prescient timing in choosing a very interesting report for me 

to discuss. 

So the unemployment rate declined from 7.0 to 6.7 percent in December, and nonfarm payroll employment edged up by 74,000 jobs. 

Monthly job gains averaged 182,000 jobs in 2013, about the same 

as in 2012. In December, employment rose in retail trade and 

wholesale trade but fell in the information industry. 

Incorporating the revisions for October and November, which increased employment by 38,000 on net, monthly job gains have averaged 172,000 over the past 3 months. 

Retail trade added 55,000 jobs in December. Job gains occurred 

in food and beverage stores which added 12,000; clothing stores, 

which also added 12,000 jobs; general merchandise stores, which 
6 

added 8,000 jobs; and motor vehicles and parts dealers, which 

added 7,000 jobs. Retail trade employment increased by an average 

of 32,000 per month in 2013. 

Wholesale trade employment rose by 15,000 in December. Over 

the past year, wholesale trade added an average of 8,000 jobs per 

month. 

Employment in professional and business services continued to 

trend up in December, adding 19,000 new jobs. This industry has 

added 637,000 jobs over the past 12 months. Within this industry, 

temporary help services added 40,000 jobs in December. In contrast, accounting and bookkeeping services lost 25,000 jobs over the 

month. 

Manufacturing employment continued to trend up in December, 

adding 9,000 jobs. Manufacturing added 77,000 jobs in 2013, compared with an increase of 154,000 jobs in 2012. 

Employment in the information industry decreased by 12,000 

jobs in December. This reflected a decline in motion picture and 

sound recording of 14,000 jobs. Employment in the motion picture 

industry can be very volatile from month to month. Over the year, 

employment in information has shown little net change. 

Construction employment edged down in December, losing 16,000 

jobs. However, in 2013 the industry added an average of 10,000 

jobs per month. 

Employment in nonresidential specialty trades contractors declined by 13,000 in December, possibly reflecting unusually cold 

weather in parts of the country. 

Health care employment changed little in December, with a decrease of 6,000 jobs. Over the past year, job growth in this industry 

has slowed to an average of 17,000 per month, compared with an 

average monthly gain of 27,000 in 2012. 

In December, employment in most other major industries 

changed little. 

Average hourly earnings of all employees on private nonfarm 

payrolls edged up by 2 cents in December. Over the past 12 

months, average hourly earnings have risen by 42 cents, or 1.8 percent. From November 2012 to November 2013, the Consumer Price 

Index—a measure for inflation—for All Urban Consumers, the 

CPI–U, rose by 1.2 percent. 

Turning now to our survey of households, the unemployment rate 

decreased by 0.3 percentage points in December to 6.7 percent. 

Over the year, the unemployment rate declined by 1.2 percentage 

points, and the number of unemployed persons fell by 1.9 million. 

In December, there were 3.9 million unemployed persons who 

had been jobless for 27 weeks or more. This was little changed over 

the month, but down by 894,000 over the past year. 

The labor force participation rate declined to 62.8 percent in December. And over the year, this rate has declined by 0.8 percentage 

point. The employment to population ratio, at 58.6 percent, was unchanged in December, and over the past 12 months. In fact, this 

measure has held at or near this level since late 2009. 

Among those neither working nor looking for work in December, 

2.4 million were classified as marginally attached to the labor 

force, and this is little changed from a year earlier. 
7 

These individuals wanted a job, were available for work, and had 

looked for a job within the past 12 months. The number of discouraged workers, which is a subset of the marginally attached who believed that no jobs were available for them, was 917,000 in December, down by 151,000 from a year earlier. 

In summary, the unemployment rate declined from 7 percent to 

6.7 percent in December, and nonfarm payroll employment edged 

up by 74,000. 

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

[The prepared statement of Hon. Erica L. Groshen appears in the 

Submissions for the Record on page 22.] 

Chairman Brady. Thank you, Commissioner. As you know, the 

unemployment rate fell pretty dramatically. Do you see this as— 

would you describe it as an encouraging sign of a sustainable recovery? 

Commissioner Groshen. This is one—this is one month’s number. Of course you don’t want to get hung up on one particular 

number. But most of the change in the unemployment rate, about 

two-thirds of it probably, was due to falling labor force participation, which is—— 

Chairman Brady [continuing]. People simply giving up on the 

market, the workforce? 

Commissioner Groshen. Well the interesting thing is that 

when we looked at flows, it looked like most of the flows into nonparticipation were from employment rather than from unemployment. But generally speaking, it is not as robust a sign as if the 

fall in unemployment had come from creation of a lot of jobs. 

Chairman Brady. Do you think that drop, and the reasons for 

it, is a troubling indicator, or a concerning indicator? 

Commissioner Groshen. Um, well I guess it depends on the 

question you are asking. It is certainly not a sign of strength. 

Chairman Brady. When we look at, in your report you make 

the case that here we are four-and-a-half years after the Recession 

ended and there are still fewer payroll jobs than when the Recession began, which is creating a dramatic gap in jobs in America. 

So at the rate of the 180,000 jobs a month that has occurred over 

the last two years, how long will it take before America is simply 

back to even in payroll jobs? 

Commissioner Groshen. In total payroll jobs, it would take 

about seven months, into July. For private-sector payrolls, it would 

take about four months, to April. 

Chairman Brady. Okay, so we are looking at mid-year before 

we get back to break-even on the pre-Recession payroll—— 

Commissioner Groshen. That’s right. 

Chairman Brady. Good. The numbers of 74,000 and 87,000 private-sector jobs were disappointing I think for most of us who want 

to see a much stronger recovery, far below the consensus for the 

report. From an economic standpoint, I am told that numbers that 

small are statistically insignificant in the sense of what you read. 

What in your report—where were the areas—I think you mentioned retail, information, perhaps wholesale—what areas last 

month were statistically significant that you can tell us about? 

Commissioner Groshen. The 55,000 jobs created in retail trade 

were statistically significant. 
8 

Chairman Brady. And that was in food and clothing, predominantly? 

Commissioner Groshen. Widespread in retail trade. So quite a 

few of the subsectors. 

Wholesale, the wholesale trade increase of 15,000 jobs was also 

statistically significant. 

Chairman Brady. Is there any insight into that number? 

Commissioner Groshen. Well a lot of that was in electronic 

trading. So these are services provided to firms that are buying 

products, and they do it electronically. So they do not actually take 

possession of the products that they purchase on behalf of other 

firms, but they facilitate the purchase of these products by firms. 

Chairman Brady. Right. 

Commissioner Groshen. The other sector that had growth that 

I want to call your attention to is not a super sector but it is very 

important is the temporary help services industry. That added a 

statistically significant 40,000 new jobs. That is often a harbinger 

of further growth. 

Chairman Brady. Right. Thank you. 

Vice Chair Klobuchar. 

Vice Chair Klobuchar. Thank you very much. Thank you, 

Commissioner. 

This morning’s report shows job growth not exactly where it was 

expected, but I think we do know that December marks the 46th 

consecutive month of private-sector job growth. During this time, 

more than 8.2 million private-sector jobs have been added. 

What employment trends did you see in 2013 as a whole in the 

last year? And how would you characterize the state of the labor 

market this year? 

Commissioner Groshen. Okay. Well, yes, well overall today’s 

report is not strongly encouraging. There was growth. And monthto-month variation is normal in our measures. So it is not entirely 

surprising. I don’t think we should—— 

Vice Chair Klobuchar. So you are just basing your assessment 

on December? I was asking about—— 

Commissioner Groshen. About the entire year, yes. 

So over the year, what we have seen is steady, modest growth 

mostly in the services. We do still have a ways to go to return to 

pre-Recession conditions, but we have seen growth in the industries that we talked about, primarily in professional and business 

services, in health care, in leisure and hospitality that are some of 

the areas where we’ve had the strongest growth. 

Vice Chair Klobuchar. One number I did want to ask about for 

December, you made some reference to the construction number, 

and you talked about the severe cold. I am aware of this since people keep citing the number that northern Minnesota was colder 

than Mars for a period of time last week. 

[Laughter.] 

And so what was the—— 

Chairman Brady. We tweeted that a lot, by the way, just so 

you know. 

Vice Chair Klobuchar. Oh, I see Representative Duffy. That 

was probably true of northern Wisconsin, as we know from the 

Green Bay Packers game, but I won’t go into that. 
9 

So could you talk about that construction number and how the 

cold could have affected it? 

Commissioner Groshen. Right. So over the year we have 

added 122,000 jobs in construction. And the average—let me take 

a quick look here—okay, but this particular month most of the decline was in nonresidential specialty trade. And when we looked 

into this further, we found that most of these declines were concentrated in the Northeast and the Midwest, and those were the 

areas that had lower temperatures than normal over the past 

month. 

Vice Chair Klobuchar. But overall there’s been 122,000 jobs 

added in construction? 

Commissioner Groshen. Yes. 

Vice Chair Klobuchar. When you mention the regional issues, 

I remember in the past that at these hearings we’ve discussed that. 

Do you see any regional trends overall, not just construction, with 

the numbers for 2013? 

Commissioner Groshen. I’m not sure. 

Vice Chair Klobuchar. You can get back to me with that in 

writing. 

Commissioner Groshen. Yes, I’m going to let Tom look this up 

for me. 

[The response from Commissioner Groshen to Senator Klobuchar 

appears in the Submissions for the Record on page 27.] 

Vice Chair Klobuchar. All right, and how about Veterans unemployment? Do we know where that is? 

Commissioner Groshen. Yes. Okay, Gulf War Era II Veterans 

had an unemployment rate of 7.3 percent in December. And this 

is down from 10.8 percent a year earlier. In December 2013, there 

were 2.9 million Gulf War Era II Veterans, and they served anywhere in the world since September 2001. 

In December 2013, the unemployment rate for Veterans aged 18 

to 24 was 15.6 percent, which is little different because these sample sizes are so small. This is a little different from the 11.4 percent unemployment rate for non-Veterans of that age. 

Veterans overall make up about 4.6 percent of unemployed persons as of December. 

Vice Chair Klobuchar. Okay. I do remember. We have been 

working hard in various ways on this issue because of the fact that 

for awhile we were having extraordinarily high unemployment 

rates with Veterans, and I know we have seen some improvement. 

Commissioner Groshen. Okay, so let me get back to the regional question. Looking at the November numbers, which is the 

latest for which we have unemployment rates, the states with the 

highest unemployment rates, seasonally adjusted, are Nevada at 9 

percent; Rhode Island at 9 percent; Michigan at 8.8 percent; Illinois 

at 8.7 percent. And the other ones were kind of in that rate: District of Columbia, California, Mississippi, Kentucky, Tennessee, Arizona, New Jersey, they top out, the top group, at 7.8 percent. 

The states with the lowest unemployment rates are North and 

South Dakota at 2.6 percent and 3.6 percent, respectively; Nebraska at 3.7 percent; Utah at 4.3 percent; Hawaii, Iowa, Vermont, 

Wyoming, all at 4.4 percent. Here comes Minnesota at 4.6 percent. 

And then Kansas and New Hampshire at 5.1 percent. 
10 

Vice Chair Klobuchar. All right, I am not going to go into an 

analysis of that because it does not seem to be in a particular region, but I think it does have something to do with what industries 

are in those states, or what type of employment are in those states. 

And that is something that you have mentioned by what you are 

seeing with growth in certain areas and not growth in others. 

Commissioner Groshen. Also the aftermath of the housing crisis. 

Vice Chair Klobuchar. Exactly. And as I have pointed out, we 

have seen some pretty dramatic improvements in just the past year 

in that area. 

So I appreciate it. Thank you, very much. 

Commissioner Groshen. You’re welcome. 

Chairman Brady. Thank you. 

Representative Hanna. 

Representative Hanna. Thank you. Thank you for being here. 

Commissioner, the labor participation rate is pretty well at an 

historic low. And if we took that into consideration based on the 

Bureau of Labor Statistics, the actual unemployment rate would be 

closer to someplace between 10 and 11, closer to 11 percent. 

I want to talk about that in the context of the jobs that you have 

said have been created: food, merchandise, retail, wholesale, service-oriented jobs, and relate that back to what Senator Klobuchar 

talked about, which is something that is generally referred to as a 

skills gap. 

Do you have an idea of what that looks like in the real world? 

We talk about our lack of capacity to provide people to the employment that is available that are higher tech, higher, more technologically oriented jobs, and what that means, and what we should 

be doing differently than we are. 

Chairman Brady. If you could hit the microphone, please? 

Commissioner Groshen. Sorry. You are getting perilously—you 

are getting really into the realm of policy right here, and here I 

want to remind you that the BLS and other statistical agencies 

don’t engage in policy analysis. With all due respect, that’s your 

job. 

Representative Hanna. Right. 

Commissioner Groshen. We, um, in particular we don’t study 

and make determinations about whether policies are achieving 

their goals, or propose policies to achieve those goals, because such 

work could raise questions about our neutrality and our impartiality. 

Chairman Brady. Commissioner, if I could stop you there, I 

may have misheard Representative Hanna’s question, but I think 

it was: How does the growth that you’re seeing in certain of these 

significant industries tie into the labor participation rate, which is, 

we’ve all agreed, is at a very low rate. 

Commissioner Groshen. It’s not obvious what connection there 

is between laborforce participation and where growth is occurring. 

I don’t think I have an answer for that. 

Representative Hanna. So clearly there’s an increasing number of people dropping out of the workforce, and I accept your notion that that’s not necessarily where you’re going with the Bureau 
11 

of Labor Statistics. But as an economist you must have an opinion 

about that. Would you like to talk about that? Maybe not? 

Commissioner Groshen. Well, so I have to, you know, right 

now my job is as Commissioner and I really think it is most important for me to uphold the principles and practices of statistical 

agencies. 

But I can talk a little bit about where growth has been occurring, 

and what we’ve seen in terms of industry wage growth is that by 

and—much of the growth when you divide it up by broad industries, much of the wage growth has been in the lower wage industries. 

When you divide it up by occupations, which is a different kind 

of way to divide up job growth, there you see growth in highwage—more growth in high-wage occupations and low-wage occupations than you see in the middle of the distribution. 

Representative Hanna. Thank you for that. I yield back. 

Chairman Brady. Commissioner, can I ask one question, because again I want to be clear. In your testimony you said the employment rate, or labor participation rate was principally due not 

to people dropping out but people leaving jobs. And Mr. Hanna’s 

question was—— 

Commissioner Groshen. Oh, okay. Yes, I may have misunderstood. 

Chairman Brady [continuing]. You know, in those growth industries, clearly there probably is a relationship between which industries you are seeing contributing to the labor participation rate. 

I think that is what he’s trying to get to; not a policy issue, more 

of an insight into this. 

Commissioner Groshen. Okay, so we can look into that for 

you. That is something that we see. We do track flows, so I think 

we can do that. 

[The response from Commissioner Groshen to Representative 

Hanna appears in the Submissions for the Record on page 29.] 

Chairman Brady. Great. Representative Delaney. 

Representative Delaney. Thank you, Mr. Chairman. And, 

Commissioner, welcome. 

Commissioner Groshen. Thank you. 

Representative Delaney. And I want to tie my comments into 

some of the comments my friend, Mr. Hanna, just made. 

Could you expand upon this disaggregation of the employment 

statistics around low-, middle-, and high-skilled workers? What 

trends that we’ve observed in the last year, and perhaps in the last 

several years, with respect to those categories? 

Commissioner Groshen. All right, let’s see what I’m going to 

look at. I’ll take a quick look by education, yes. I’m going to look 

at—we’re taking a look at what’s happening to unemployment 

rates by education. 

Representative Delaney. Sure. 

Commissioner Groshen. Okay? We have seen declines in unemployment rates by education for all of the categories: for lessthan-high school, for high school graduates, for some college and 

associate degrees. They have all declined. 
12 

The largest decline has been for less-than-a-high school diploma, 

and that is partly a factor because it increased also the most during the recession. 

Representative Delaney. But that is getting into employment 

attainment based on educational attainment and the correlation 

there. I am more getting at the growth in jobs based on the skill 

profile of the jobs. 

Commissioner Groshen. Uh-huh. 

Representative Delaney. So you made the observation that we 

have seen growth in high-skilled jobs—— 

Commissioner Groshen. Um-hmm. 

Representative Delaney [continuing]. And low-skill jobs—— 

Commissioner Groshen. Yes. 

Representative Delaney [continuing]. And a lack of growth in 

these middle-skill jobs, which implies a barbelling of our economy, 

which is something that I have tried to be very focused on in the 

last year or two because I think it reflects a broader trend about 

how highly specialized our economy is becoming and the implications of that. 

But do you have any data to show the materiality of the growth 

of high- versus low- as compared to middle-skill jobs? 

Commissioner Groshen. So I don’t have a single measure of 

skill, but I can tell you which major occupational groups had the 

most wage growth—I’m sorry, most employment growth. 

So in the 2012 to 2013 timeframe, we added 669,000 jobs in management, professional, and related occupations. 

Representative Delaney. And that’s the numerator. What’s the 

denominator of jobs in those areas? 

Commissioner Groshen. Uh, this is not a—oh, I’m sorry. So 

that was a 1.2 percent—— 

Representative Delaney. Growth. 

Commissioner Groshen [continuing]. Growth. 

Representative Delaney. Okay, got it. 

Commissioner Groshen. And in natural resource construction 

maintenance occupation, there was 1.8 percent growth. Sales and 

office occupations, 3/10ths of a percent growth. Production, transportation, and material moving occupations, a decrease of a tenth 

of a percent. And in service occupations, an increase of 1.8 percent. 

Representative Delaney. Got it. Do you broadly categorize jobs 

in these categories of high, middle, or low skilled? Or do you not 

disaggregate the data, generally speaking, that way? 

Commissioner Groshen. Generally, we do not. 

Representative Delaney. Got it. 

Commissioner Groshen. I have, though—— 

Representative Delaney. No, I understand, because that is 

somewhat of a subjective or qualitative assessment. 

Commissioner Groshen. Right. And it may be in the bottom 

part of these distributions, or in the top part, yes. 

Representative Delaney. Do you observe any—as we’ve seen 

the rate of growth of health care has slowed significantly over the 

last several years, has that—does that correlate to growth of jobs 

in the health care sector? 

Commissioner Groshen. We are still adding, although not in 

this past month, but generally we’ve been adding jobs in the health 
13 

care sector. It has just been—the pace has slowed over the past 

year. 

Representative Delaney. So you do see correlations between 

health care expenditures and growth in the health care sector? 

Commissioner Groshen. I haven’t done that correlation. 

Representative Delaney. Got it. Okay, thank you. 

Commissioner Groshen. Yes. 

Chairman Brady. Thank you. 

Representative Paulsen. 

Representative Paulsen. Thank you, Mr. Chairman, and 

thanks also for being here today to testify. 

You know, it goes without saying that today’s employment report 

has some disappointing news. As you mentioned, it’s not strongly 

encouraging. The numbers are well below what the country needs 

to add on a monthly basis—130,000 need to be added per month 

just to keep up with population growth. So I’m sure you’d agree we 

have a long way to go on the road to recovery. 

We are still well over a million jobs short of where we were in 

December of 2007 at the start of the last Recession, and labor force 

participation is still really, really low, just almost dropping 350,000 

last month alone. 

Let me just turn to something that many of us refer to as the 

jobs gap, the difference between the average employment growth 

following a recession and the more anemic employment growth that 

has followed the most recent recession. 

Four-and-a-half years after the Recession ended, there are still 

fewer payroll jobs than pre-Recession. So by various measures 

there is a huge jobs gap. The Brookings Institution, for example, 

estimates that it is as high as 8 million jobs. 

Has the BLS done an estimate at all of that jobs gap, of those 

type of numbers? 

Commissioner Groshen. We have made a comparison to where 

we were when the Recession started, but we generally don’t do the 

kind of forecasting that would be required about what job growth 

would have been in the absence of the Recession. That’s not really 

within our skill set. 

Representative Paulsen. Okay. Chairman Brady mentioned in 

his opening statement that when the stimulus bill was passed— 

and that was controversial for many reasons when it was pushed 

through—the Administration had said at this point we would be at 

about a 5 percent unemployment rate, which we’re not anywhere 

near. At the average rate of job creation during 2013, how much 

longer would it take for unemployment, for the rate to reach 5 percent? How long would it take? 

Commissioner Groshen. I have not done that calculation. I 

know it will take about seven months for us to get back to the total 

payroll, where we were, total payrolls where we were before. 

Representative Paulsen. But there will be a longer period of 

time to get to that 5 percent level? 

Commissioner Groshen. I mean, we can estimate that. We can 

straight-line that for you. 

[The response from Commissioner Groshen to Representative 

Paulsen appears in the Submissions for the Record on page 31.] 
14 

Representative Paulsen. And let me turn a little bit to parttime, because part-time employment and full-time employment 

have been something else discussed with some concerns. I would 

like to ask some questions about that. 

Part-time employment for economic reasons is a measure, some 

would say, of weakness in the labor market. As an economist, 

would you agree that part-time employment could be viewed as a 

weakness in the labor market? 

Commissioner Groshen. Well generally speaking, during recessions you do see an increase in the number of people who are parttime, for economic reasons. These people are not getting as many 

hours as they would like, or that they would prefer to work fulltime, and that’s why they are in that category. 

So either they are not getting as many hours, or they have taken 

a part-time job because they have not found a full-time job. 

Representative Paulsen. And we have been post-Recession 

now for awhile, technically, right, on the technical side? 

Commissioner Groshen. Um-hmm. 

Representative Paulsen. So a lot of employers are unsure they 

need workers long-term, or there are regulatory disincentives for 

employers to hire full-time workers. Is it both of those factors, 

would you say? Or are there other factors as well that would contribute to that measure? 

Commissioner Groshen. Well, so let me make a distinction. 

Actually, the number of part-time workers as a percent of the total 

employed has not changed very much of late. That has been fairly 

constant. 

Representative Paulsen. Okay. 

Commissioner Groshen. So, and so we have had a decline in 

the part-time for economic reasons, although it is still historically 

high. 

Representative Paulsen. One of the things it will be interesting to watch in the near future is the implementation now of the 

Affordable Care Act, or the President’s new health care law. I have 

spoken with several employers in Minnesota, for example, that are 

now concerned about being forced to scale back full-time workers 

into part-time jobs because of the Affordable Care Act. 

And one restaurateur—and restaurants normally have part-time 

workers—there is one restaurateur I spoke with who has 530-some 

employees, and 41 percent of those workers are full-time. But now 

he has essentially looked at moving all of those full-time workers 

into 29 hours, into part-time status. 

And so there are consequences, obviously, of moving good fulltime jobs into part-time jobs. Along those lines what role do mandated employer benefits play in employer decisions to hire workers 

part-time as opposed to full time? 

Commissioner Groshen. Our data wouldn’t allow us to answer 

that question. 

Representative Paulsen. It wouldn’t? Okay. 

Commissioner Groshen. It would be a policy research question. 

Representative Paulsen. Okay. Good. I think we are going to 

be hearing more about that, Mr. Chairman, so I was just curious. 

I yield back. 
15 

Chairman Brady. Thank you, sir. Representative Sanchez. 

Representative Sanchez. Thank you, Mr. Chairman. 

I want to say something before I ask our panel a question. Thank 

you, Mr. Chairman, for this morning, actually trying to delve into 

these numbers instead of, you know, doing real partisan bickering 

and everything, because I think we are all at that point where we 

want to try to understand what is going on. So I appreciate that 

the majority of the Members who have been talking this morning 

have been really trying to stick to what the picture looks like in 

hopes to move and to try and do the policy, as you said, Commissioner, that we are supposed to do. 

I want to go back to something that Mr. Delaney asked about 

and this whole issue of barbelling, or the fact that you said that 

employment has occurred at the higher, at least higher educational 

level, and lower educational level; and that that middle portion I 

guess we’re trying to figure out what types of jobs would those be 

that aren’t growing, and if you have some indication of that. 

And, if you are a—because you have it by education and not necessarily skill set, which of course when we’re looking at it we’re 

trying to figure out skill set—if you are an employer trying to figure out skill sets, not whether somebody went to college or not, so 

my question to you is: When we see these young people coming out 

of university and they have a college degree but they may not have 

a set, a skill set because they maybe don’t have the work experience, would those students fall into that barbell middle portion 

where hiring is not happening? Do you have any statistics on that? 

Commissioner Groshen. Yeah, let me see. Well, the middle, 

the middle area of these very large occupational groups that I am 

talking about are sales and office occupations where we added only 

94,000 jobs. 

Representative Sanchez. So would that be like entry sales person, entry, like, you know, cold calling, entry receptionist, that type 

of thing? 

Commissioner Groshen. Administrative work, it could be. 

Sure. And then the other areas are production, transportation, and 

material moving occupations, which usually you would not associate with a college degree, but actually I am sure some of them 

probably will have. 

Representative Sanchez. Well, logistics maybe, or something 

of the sort. I mean, when you’re trying to get your foot in, if you 

don’t have a lot of work experience, you probably start at the bottom of the rung. 

Commissioner Groshen. Um-hmm. 

Representative Sanchez. My next question for you is: as 

you’ve seen over the last month or two, I am trying to feel—I am 

trying to figure out if companies—because I look at companies’ balance sheets, the ones that we can see, and we see two things happening. And we’ve seen it for awhile now, years now, of capital accumulation, cash on hand, growth, as well as buy-back of stock. 

And this is where at least the public companies, those that I can 

see, are using their cash. 

So do you think that the shutdown we had is reflective in any 

way of these numbers? I know these are policy issues, but did that 

have—do you think that that had anything—and I am trying to fig-
16 

ure out how we get companies to begin to spend cash. I mean, it’s 

a risk. Our Orange County Register, my hometown newspaper for 

the County of Orange where I represent, and they are creating 

journalist jobs. They’ve hired over 400 new people in the newspaper business, which supposedly is totally contrarian to what 

we’ve seen in the news business these days. 

So do you think that when we do certain things that that’s 

maybe what is holding people, companies back? 

Commissioner Groshen. Let me answer something a little related, which is that a characteristic of the market where we are 

now is that we have seen a decline in job destruction rates back 

down to essentially pre-Recession levels. 

So one area in which our labor market has improved is that our 

job destruction rates are now more typical of what you would see 

in an expansion. So what has lagged for us has been job creation. 

And you can see this in new firms, both in the number of new 

firms, and in the number of jobs created by new firms. And you can 

see it also in expansions by firms, and this is from our business 

employment dynamics data. 

So that corroborates some of perhaps what you are picking up. 

We did look at the effect—we have looked at the effect of the shutdown in a very direct way, and we saw an increase in temporary 

layoffs associated with the shutdown, and then a decrease after 

that. 

So we did not see numbers that were suggestive of a lot of very 

quick multiplier effects in the payroll data from the shutdown. We 

think maybe there was some displacement rather than actually 

multiplier effects. 

Representative Sanchez. Thank you, Commissioner. Thank 

you, Mr. Chairman. 

Chairman Brady. Thank you. 

Representative Duffy. 

Representative Duffy. Thank you, Mr. Chairman, and Commissioner thank you for being here today. 

I just want to go back to I think some things that Mr. Paulsen 

brought up. You would agree that with population growth we have 

to see about 130,000 new jobs created every month just to maintain 

the status quo? Is that right? 

Commissioner Groshen. You know, it’s not a very precise number but, you know, there are numbers kind of along those lines, 

yes. 

Representative Duffy. Am I hitting the middle point there? Is 

that a number that is a range, around 130,000? 

Commissioner Groshen. Yes. 

Representative Duffy. Am I off? 

Commissioner Groshen. No, Tom agrees. Therefore, it’s true. 

[Laughter.] 

Representative Duffy. Thank you, Tom. 

And this month we created only 74,000 new jobs, right? 

Commissioner Groshen. Um-hmm. 

Representative Duffy. So if you look at just to maintain our 

employment rate it has to be 130,000, but this month we are at 

74,000. And I think oftentimes America will hear the unemployment rate going from 7 percent down to 6.7 percent and they would 
17 

view that as the country going in the right direction in regard to 

job creation and economic growth, but would you agree that actually the reduction in the unemployment rate is not an indicator of 

strong job growth like many Americans may think? 

Commissioner Groshen. Um, so I am going to unpack things 

just a little bit. 

Representative Duffy. Thank you. 

Commissioner Groshen. So the decline in the unemployment 

rate certainly this month we think is somewhere around two-thirds 

due to the decline in laborforce participation, and about a third to 

job creation. 

Generally speaking, though, the employment to population ratio 

has essentially stayed about the same since late 2009. So that is 

problematic. But we have two different forces acting on employment to population. 

One is demographic changes that would tend to depress participation. Just as Baby Boomers like myself age, our population is 

generally getting older and we are getting into times—we are more 

heavily weighted towards parts of the population that participate 

less. 

So we have to increase employment to population. We not only 

have—we need to compensate for this downward pressure. So that 

is one effect. 

The other effect is the recovery from the Recession, and that 

would require creation of many more jobs. 

Representative Duffy. This may be going back to the question 

for Tom earlier—— 

Commissioner Groshen. Yes, employment. 

Representative Duffy. So since pre-2009 traditionally we needed 130,000 jobs per month to maintain employment with population growth. Are you saying that this year, and the year before, 

that that is actually not true? It’s been static, our population 

growth, so if we actually have a 74,000 dollar—74,000 job gain, 

that’s actually 74,000—we’re moving in the right direction? Are you 

saying that our population growth is taking place at 130,000 roughly per month right now? 

Commissioner Groshen. Well, our average monthly job gain 

has been, over this past year has been 182,000. But Tom is going 

to take a stab at this. 

Mr. Nardone. Just in general, what the EP ratio, Employment 

to Population ratio, that being steady would indicate that job 

growth is basically enough to keep track with population growth— 

the growth of the population 16 and over. 

You’re not—but obviously it’s lower than it was at the start of 

the Recession, so we are not gaining ground in terms of increasing 

the proportion of the population that’s employed, getting it back to 

the pre-Recession levels. But we’re basically keeping track with 

population growth, is a way to look at it. 

Representative Duffy. Okay. I just want to quickly switch 

gears. I think a lot of the disagreement that we find on both sides 

of the aisle over the last several years comes to the economy and 

job growth. 
18 

Do you guys look at statistics and have an analysis on whether 

raising the minimum wage will create more jobs? Or does the effect 

of that create less jobs? 

Commissioner Groshen. This is very much a policy question. 

Representative Duffy. But I’m asking statistically do you look 

at—do you analyze that on the statistics’ front? 

Commissioner Groshen. We do not have any statistics that 

would allow us to answer that question. 

Representative Duffy. Okay. I yield back. 

Chairman Brady. Thank you. A vote has been called in the 

House, and so the former Chairman of the Joint Economic Committee, Representative Maloney, will be our final questioner. 

Representative Maloney. Thank you. 

First of all I want to congratulate you on your appointment. You 

are the fourth woman to head this important panel, building on the 

fine work of Katharine Abraham, whom I believe is still on the 

Council of Economic Advisers. So thank you. 

Commissioner Groshen. You’re welcome. She actually stepped 

down in I think April. 

Representative Maloney. Well, but in the statistics of the 

Women’s Movement, they say more important than the first woman 

appointed is consistent, fine performance of women where it is no 

longer something unexpected. But I believe that you are going to 

be adding to that very important statistic. 

And I think the statistics today are very, very encouraging. With 

the employment increase by 74,000, unemployment fell to 6.7 percent, but if you put it into the context of the overall economy, private-sector jobs have grown for 46 consecutive months, and a total 

of 8.2 million private-sector jobs have been created over that period. 

And I believe that in 2013, private-sector employment increased 

by 2.2 million jobs, largely unchanged from the 2.3 million privatesector jobs added in 2012. So I believe that this shows that the 

economy is steady, it’s durable, it’s improving, and I would also like 

to note that the private-sector job growth has been revised upwards 

generally. In October, from 217,000 and in November to 226,000 for 

an average of 177,000 new jobs per month being created. 

And could you elaborate on how these numbers fit into the overall economy, and comment on the trend? It looks to me like we are 

trending in the right direction. We are trending with an improved 

economy—not as good as we would like—but could you comment in 

the overall context of the economy and trends in the economy? 

Commissioner Groshen. All right. Well, I would say that generally speaking what we have been seeing over the past year is 

very steady, modest job growth that has been primarily in the services. 

And this has led to improvements by many measures. Yet there’s 

still a long ways to go to return to pre-Recession conditions. 

Representative Maloney. Well in the report you say that the 

payroll growth was concentrated in wholesale, retail, temporary 

help services added jobs. 

Commissioner Groshen. Um-hmm. 

Representative Maloney. Last night there were very disturbing numbers out of New York City, that I have the privilege 
19 

of representing, one of our great retail stores, Macy’s, laid off 2,500 

people. Now this is not the trend in New York State where we have 

added more than 140,000 private-sector jobs during the past 12 

months. But the progress in the City, the unemployment rate has 

been slower. We are now at 8.5 percent unemployed to 8.9 percent. 

My question is: Is New York City’s experience, how does that fit 

into the broader perspective, or the broader national picture? Are 

other urban areas experiencing higher rates of unemployment than 

the Nation as a whole? 

Commissioner Groshen. Well the Nation is a combination of 

many different regions and many different cities within those regions. So there’s always quite a variety of experiences because cities are affected both by their long-term secular trends, as well as 

by the cycle that they’re under, that they’re within. 

Representative Maloney. Now in joblessness recovery, is it 

faster usually in rural and suburban parts of the country over 

urban areas? Is there any data on that? 

Commissioner Groshen. (Nods in the negative.) 

Representative Maloney. No? Okay—— 

Commissioner Groshen. I think it varies, yes. 

Representative Maloney. I really want to publicly congratulate 

Senator Klobuchar on the Unemployment Insurance Report that 

she did. And I think our Report also shows that there is a need 

for this type of support. Because of the drop, you said in your testimony the decline was driven primarily by a drop in the laborforce 

participation rate. And it seems that keeping people hoping to find 

a job, working to find a job, having that support system while they 

try to become part of the economy, and also that she noted in her 

report: this is a passthrough. 

Anyone who is unemployed is obviously going to put that money 

right back in to the economy and help to create other jobs, and to 

help the hope of the country in this very difficult time moving forward. 

I do want to note that manufacturing employment rose by 9,000. 

I was thrilled to see the auto industry added jobs. As one that supported the restructuring of the auto industry, to see that it has 

added over 8,000 jobs. But I did note that women have been losing 

jobs in manufacturing, while men have gained them. 

Do you understand? That I noticed in the Report, and I guess basically the question is: Are sectors of the economy where men are 

more heavily represented adding more jobs than other sectors 

where women traditionally have a larger presence? 

Your numbers showed that there’s been a more rapid drop in the 

unemployment rate for men. 

What explains that rapid drop in the unemployment rate for 

men? In the beginning, during the Recession men faced a significantly higher unemployment rate than women, and unemployment 

for men peaked at 11 percent in October of 2009, while the unemployment rate for women never exceeded 9 percent. 

Chairman Brady. Commissioner, this is a very important question. We have run out of time. Could you briefly answer, but provide a written response to Representative Maloney? 

Representative Maloney. Thank you, Mr. Chairman. 

Commissioner Groshen. Right. We certainly can. 
20 

Commissioner Groshen. The basic answer we found is that, is 

that there’s no very strong pattern of job growth being concentrated in male- or female-dominated industries. So it doesn’t 

seem to be a simple industry mix story. 

Chairman Brady. Commissioner, thank you for your professional presentation. This was a cakewalk, and we look forward to 

having you back. 

Tom, best of luck in retirement. 

The hearing is adjourned. 

(Whereupon, at 10:35 a.m., Friday, January 10, 2014, the hearing was adjourned.) 
(21) 

SUBMISSIONS FOR THE RECORD 
22 

PREPARED STATEMENT OF HON. KEVIN BRADY, CHAIR, JOINT ECONOMIC COMMITTEE

Vice Chair Klobuchar, Members of the Committee, and Commissioner Groshen, 

good morning and welcome to the New Year. 

This is Commissioner Groshen’s first appearance before the Joint Economic Committee. On behalf of the millions of Americans who cannot yet find jobs, we hope 

that you can bring us better news in the future. 

I would like to recognize Tom Nardone, who is retiring from the Bureau of Labor 

Statistics after 37 years of service. He has been ‘‘Mr. Numbers’’ for the Commissioner and this Committee over the last several years. Tom, we thank you for your 

dedicated service, and wish you the very best in your future endeavors. 

Payroll job growth was incredibly weak last month. December saw a gain of only 

87,000 private-sector jobs and 74,000 nonfarm jobs. 

The unemployment rate fell by 0.3 percentage points to 6.7%. However, this drop 

was largely due to falling labor force participation. More than 1⁄2 million Americans 

left the labor force in December. Consequently, the labor force participation rate 

dropped to 62.8%, tying a 36-year low. 

While it sounds impressive to boast that the U.S. economy added 8.2 million private-sector jobs over the past 46 months, economic growth in an average recovery 

during the past half century has been 50% larger than in the Obama recovery. As 

a result of this growth gap, America today is missing a whopping 4.5 million jobs 

along Main Street—and that’s not acceptable. 

Consider this: the best monthly private sector jobs report of the Obama recovery 

is lower than the equivalent of the average private jobs report of the Reagan recovery. In other words, not a single month of the current recovery matches even the 

equivalent of an average month of the Reagan recovery. That’s disappointing. We’ve 

got to do better. 

We should be encouraged that the unemployment rate has declined from its peak 

of 10.0% in October 2009 to 6.7% today. However, that is nowhere near the 5% level 

the White House promised the American people when the controversial $800 billion 

stimulus was rushed through Congress on a party-line vote. 

Unfortunately, the decline in the unemployment rate is largely due to falling labor 

force participation. If the labor force participation rate had not declined since President Obama took office, the unemployment rate would be nearly 11%. Another disappointing jobs indicator: a smaller percentage of Americans are employed today 

than when the recession ended over four and a half years ago. 

The American people are deeply dissatisfied with the President’s leadership on 

the economy. We need solutions that get Washington out of the way so Main Street 

businesses can start hiring with confidence again. 

Raising the minimum wage and forcing small businesses to pay nearly $5,000 

more per worker won’t increase hiring. Washington mandating the equality of income won’t increase hiring. Extending emergency unemployment programs won’t increase hiring because what the long-term unemployed really need are new jobs. 

The emergency unemployment program is designed for extraordinary circumstances, when America’s unemployment rate is high and rising. As the White 

House reminds us, the unemployment rate has declined in all 50 states and is at 

the lowest since 2008. 

Why are the President and the Senate turning their backs on job creation? Why 

doesn’t the Senate pick up and pass and the President sign into law any of the dozens of jobs bills the House has already approved, including the Keystone XL pipeline, which would create thousands of well-paying middle-class jobs. 

It’s not helpful, either, that the White House continues to delay bipartisan unemployment reforms the President signed into law two years ago to make it easier for 

states to match local workers with local jobs and conduct drug testing for applicants 

seeking jobs that require such tests. 

We all know it’s an election year, and some in Washington are trying to change 

the conversation from the disappointing economy and the bungled roll-out of the 

troubled Affordable Care Act. I just hope my colleagues remember that the measure 

of America’s compassion is not how long we provide unemployment benefits, but 

how soon we get people into good-paying jobs. That should be Washington’s focus. 

Commissioner Groshen, welcome again, and I look forward to your testimony. 

STATEMENT OF ERICA L. GROSHEN, 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. 
23 

The unemployment rate declined from 7.0 to 6.7 percent in December, and nonfarm payroll employment edged up (+74,000). Monthly job gains averaged 182,000 

in 2013, about the same as in 2012. In December, employment rose in retail trade 

and wholesale trade but fell in the information industry. 

Incorporating the revisions for October and November, which increased employment by 38,000 on net, monthly job gains have averaged 172,000 over the past 3 

months. 

Retail trade added 55,000 jobs in December. Job gains occurred in food and beverage stores (+12,000), clothing stores (+12,000), general merchandise stores 

(+8,000), and motor vehicle and parts dealers (+7,000). Retail trade employment increased by an average of 32,000 per month in 2013. 

Wholesale trade employment rose by 15,000 in December. Over the past year, 

wholesale trade added an average of 8,000 jobs per month. 

Employment in professional and business services continued to trend up in December (+19,000). This industry has added 637,000 jobs over the past 12 months. 

Within this industry, temporary help services added 40,000 jobs in December. In 

contrast, accounting and bookkeeping services lost 25,000 jobs over the month. 

Manufacturing employment continued to trend up in December (+9,000). Manufacturing added 77,000 jobs in 2013, compared with an increase of 154,000 jobs in 

2012. 

Employment in the information industry decreased by 12,000 in December, reflecting a decline in motion picture and sound recording (¥14,000). Employment in 

the motion picture industry can be volatile from month to month. Over the year, 

employment in information has shown little net change. 

Construction employment edged down in December (¥16,000). However, in 2013, 

the industry added an average of 10,000 jobs per month. Employment in nonresidential specialty trade contractors declined by 13,000 in December, possibly reflecting unusually cold weather in parts of the country. 

Health care employment changed little in December (¥6,000). Over the past year, 

job growth in this industry slowed to an average of 17,000 per month, compared 

with an average monthly gain of 27,000 in 2012. 

In December, employment in most other major industries changed little. 

Average hourly earnings of all employees on private nonfarm payrolls edged up 

by 2 cents in December. Over the past 12 months, average hourly earnings have 

risen by 42 cents, or 1.8 percent. From November 2012 to November 2013, the Consumer Price Index for All Urban Consumers (CPI–U) rose by 1.2 percent. 

Turning now to our survey of households, the unemployment rate decreased by 

0.3 percentage point in December to 6.7 percent. Over the year, the unemployment 

rate declined by 1.2 percentage points, and the number of unemployed persons fell 

by 1.9 million. In December, there were 3.9 million unemployed persons who had 

been jobless for 27 weeks or more, little changed over the month but down by 

894,000 over the past year. 

The labor force participation rate declined to 62.8 percent in December. Over the 

year, this rate declined by 0.8 percentage point. The employment-population ratio, 

at 58.6 percent, was unchanged in December and over the past 12 months. In fact, 

this measure has held at or near this level since late 2009. 

Among those neither working nor looking for work in December, 2.4 million were 

classified as marginally attached to the labor force, little changed from a year earlier. These individuals wanted a job, were available for work, and had looked for 

a job within the last 12 months. The number of discouraged workers, a subset of 

the marginally attached who believed that no jobs were available for them, was 

917,000 in December, down by 151,000 from a year earlier. 

I would like to note that seasonal adjustment factors for the household survey are 

updated each year with the release of the December data. Seasonally adjusted estimates going back 5 years (to January 2009) were subject to revision. 

In summary, the unemployment rate declined from 7.0 to 6.7 percent in December, and nonfarm payroll employment edged up (+74,000). 

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

QUESTIONS FOR THE RECORD

Senior Senate Republican Dan Coats 

Hearing on ‘‘The Employment Situation: December 2013’’ 

The Honorable Erica L. Groshen, Commissioner, Bureau of Labor Statistics 

Friday, January 10, 2014 

Coats staff contact: paigelhallen@jec.senate.gov 
24 

• EPA’s fossil fuel restrictions have greatly increased the cost of power to Hoosiers. How many Hoosier jobs may be lost as a result of increased power costs? 

• What is the economic multiplier of a lost Hoosier job? 

• What is the rate of college tuition inflation in Indiana and how does this compare to other states? 
25 

U.S. Department of Labor 

FEB 26 20fIt 

The Honorable Dan Coats 

United States Senate 

Washington, D.C. 20510 

Dear Senator Coats: 

Commissioner 

Bureau of labor Statistics 

Washington. D.C. 20212 

I appreciated the opportunity to participate in the Joint 

Economic Committee's January 10, 2014, hearing on the Employment 

Situation report. I am following up with information regarding 

the questions you asked after the hearing on February 3, 2014. 

You stated "EPA's fossil fuel restrictions have greatly 

increased the cost of power to Hoosiers,- and then asked how 

many jobs located in Indiana may be lost as a result of 

increased power costs? The Bureau of Labor Statistics (BLS) 

does measure at the state level the net job change by industry 

as captured by the Current Employment Statistics (CBS) survey 

and gross job gains or losses as released by the Business 

Employment Dynamics (BED) program. Neither of those programs or 

any other program within the Bureau measure jobs in relation to 

the impact of power costs. Indiana data from the CES program 

can be found here http://www.bls.gov/sae/ and data from the BED 

program can be found here http://www.bls.gov/bdm/. 

Additionally you inquired about the economic multiplier of "a 

lost Hoosier job.- The BLS does not publish data related to 

multipliers, however, the Bureau of Economic Analysis releases 

regional input-output multipliers, which can be found online at 

https:1/bea.gov/regional/rims/index.cf~. 

Finally, you asked how Indiana college tuition compares with 

other states in regards to inflation. BLS does not publish the 

index 'College tuition and fees' for Indiana or any other state. 

Over the past ten years (Dec. 2003-Dec. 2013), the U.S. City 

Average index for 'College tuition and fees' has increased 

75.7 percent, or an average annual rate of 5.8 percent. College 

tuition inflation has outpaced overall inflation over the past 

10 years. The 'All items' index has increased 26.5 percent over 

the last 10 years or an average annual rate of 2.4 percent. 
26 

The Honorable Dan Coats--2 

I hope you find this 

continued discussions 

developments. If 

to contact me on 

::::ommissioner 

economic 

not hesitate 
27 

The Klobuchar 

Senator 

to participate in the Joint 

Economic Committee's January 201 I hearing on the 

Situation news release. that 

whether labor markets trends differed across 

and unemployment data recent years have 

variation by state, and have highlighted some of 

these differences below. 

National nonfarm reached a 

February 

decreases in 

increases were in 

and the District of Columbia 

From February the most recent 

month available), 50 states and the District Columbia 

had increases in nonfarm payrol employment. {See Table 

The percent increases employment were in 

North Dakota ( 3. percent), percent), and 

Texas (+ percent). Seventeen states and District 

Columbia have jobs nOI" than when recession 

started. 

Between January 

rose in all states 

an .2 

percentage 

States with 

unemployment rates 

Columbia, 

Nevada to 1-

Table 
28 

The Honorable Amy 

(Hi,5 each); and North Carol.ina 

6.2 States wi th increases of 

2 and 

points 

and Arkansas 

Dakota-now 

recession started. 

yours, 

L. GROSHEN 

Commissioner 

Enclosures 

Mason, R.F. t 
29 
30 

The Honorable Richard Hanna-- 2 

JA . 3 r20f~ 

I hope you wil1findthislnfo:rmation u$e£ulJ and 1 look 

fontard to continueddisc~s$ions with you and the Committee 

about economic de'velopments . 

Sincerely yours, 

ERICA. L. GROSH EN 

Commissi oner 

Enclosures 

f}LS!OEtJS!OCEAIDLFS 

A.L.LARD/btt X16378 

co: c<;>rtun . ote ., Nardone , Mason , .Allard, R. F . , D.L 
31 

Æ 

JAN Z 7 ?m4 

The Honorable Erik Paulsen 

U.S. House of Representatives 

Washington, D.C. 20515 

Dear Congressman Paulsen: 

I appreciated the opportunity to participate in the Joint 

Economic Committee's January 10, 2014, hearing on the 

Employment Situation news release. At that hearing, you 

asked how long it would take to reach an unemployment rate 

of 5.0 percent given our current rate of job growth. 

The Bureau of Labor Statistics does not produce these types 

of estimates because calculations of this nature involve 

making a number of assumptions about short-term trends i.n 

the economy. However, the Federal Reserve Bank of Atlanta 

has developed a ~jobs calculator- that allows people to 

these types of questions (available on their website 

. Assuming 

at its 

current level, 62.8 percent, and that job growth continues 

to average about 180,000 jobs per month, the calculator 

estimates that it will take 33 months for the unemployment 

rate to reach 5.0 percent. 

I hope you will find this information useful, and I look 

forward to continued discussions with you and the Committee 

about economic developments. 

Sincerely yours, 

ERICA L. GROSHEN 

Commissioner 

BLS/OEUS/OCEA!DLFS 

ALLARD/btf X16378 

cc: Comm. Ofc., Nardone, Mason, Allard, R.F., D.F.