U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

73–110 2012

S. HRG. 112–379 

THE EMPLOYMENT SITUATION: JANUARY 2012 

HEARING 

BEFORE THE

JOINT ECONOMIC COMMITTEE 

CONGRESS OF THE UNITED STATES 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

FEBRUARY 3, 2012 

Printed for the use of the Joint Economic Committee 

( 
(II) 

JOINT ECONOMIC COMMITTEE 

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

SENATE 

ROBERT P. CASEY, JR., Pennsylvania, 

Chairman 

JEFF BINGAMAN, New Mexico 

AMY KLOBUCHAR, Minnesota 

JIM WEBB, Virginia 

MARK R. WARNER, Virginia 

BERNARD SANDERS, Vermont 

JIM DEMINT, South Carolina 

DANIEL COATS, Indiana 

MIKE LEE, Utah 

PAT TOOMEY, Pennsylvania 

HOUSE OF REPRESENTATIVES 

KEVIN BRADY, Texas, Vice Chairman 

MICHAEL C. BURGESS, M.D., Texas 

JOHN CAMPBELL, California 

SEAN P. DUFFY, Wisconsin 

JUSTIN AMASH, Michigan 

MICK MULVANEY, South Carolina 

MAURICE D. HINCHEY, New York 

CAROLYN B. MALONEY, New York 

LORETTA SANCHEZ, California 

ELIJAH E. CUMMINGS, Maryland 

WILLIAM E. HANSEN, Executive Director 

ROBERT P. O’QUINN, Republican Staff Director 
(III) 

C O N T E N T S 

OPENING STATEMENTS OF MEMBERS

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

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

Hon. Carolyn B. Maloney, a U.S. Representative from New York ...................... 4 

Hon. Michael C. Burgess, M.D., a U.S. Representative from Texas ................... 4 

WITNESSES

John M. Galvin, Acting Commissioner, Bureau of Labor Statistics, Accompanied by: Michael Horrigan, Associate Commissioner for Prices and Living 

Conditions, Bureau of Labor Statistics; and Thomas Nardone, Acting Associate Commissioner for Employment and Unemployment Statistics, Bureau 

of Labor Statistics ................................................................................................ 8 

SUBMISSIONS FOR THE RECORD

Prepared statement of Representative Elijah E. Cummings ............................... 26 

Chart submitted by Vice Chairman Brady titled ‘‘Total Hires and Layoffs 

Since 2006’’ ........................................................................................................... 28 

Prepared statement of Vice Chairman Kevin Brady ............................................ 29 

Chart submitted by Representative Burgess titled ‘‘U.S. Unemployment Rate 

& Minimum Wage (2002–2011)’’ ......................................................................... 31 

Prepared statement of Acting Commissioner John M. Galvin, together with 

Press Release No. USDL–12–0163 ..................................................................... 32 

Letter dated February 24, 2012, transmitting Acting Commissioner John 

M. Galvin’s response to Representative Carolyn B. Maloney ........................... 76 

Letter dated February 12, 2012, transmitting Acting Commissioner John 

M. Galvin’s response to Representative Michael C. Burgess ........................... 79 

Letter dated February 12, 2012, transmitting Acting Commissioner John 

M. Galvin’s response to Representative Mick Mulvaney .................................. 84 

(1) 

THE EMPLOYMENT SITUATION: JANUARY 2012 

FRIDAY, FEBRUARY 3, 2012 

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

The committee met, pursuant to call, at 9:30 a.m., in Room 210, 

Cannon House Office Building, Hon. Elijah E. Cummings presiding. 

Representatives present: Cummings, Brady, Burgess, Campbell, Mulvaney, Maloney, and Sanchez. 

Staff present: Gail Cohen, Cary Elliott, Will Hansen, Jesse 

Hervitz, Patrick Miller, Ted Boll, and Colleen Healy. 

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

REPRESENTATIVE FROM MARYLAND 

Representative Cummings. Good morning. Chairman Casey 

could not be here today and I am very pleased to stand in for him 

this morning. 

I would like to welcome Acting Commissioner John Galvin this 

morning as well as Mr. Thomas Nardone, Acting Associate Commissioner for Employment and Unemployment Statistics, and Dr. 

Michael Horrigan, Associate Commissioner for Prices and Living 

Conditions. 

I want to make a couple of overall comments about the economic 

recovery before diving into this month’s employment numbers. In 

the second half of 2011, economic momentum picked up. The labor 

market continued to strengthen, adding 100,000 or more jobs for 4 

straight months. 

Additionally, we learned last week that the GDP grew at a 2.8 

percent annual rate in the fourth quarter, an improvement over the 

previous three quarters of 2011, though inventory rebuilding accounted for much of that growth. 

There are other encouraging signs. The manufacturing sector 

continues to show strength. The ISM Manufacturing Index, reading 

54.1 percent in January, marked the thirtieth consecutive month of 

expansion in the manufacturing sector. And the unemployment 

rate has been moving in the right direction. During 2011 the national unemployment rate fell from 9.4 percent to 8.5 percent. However, workers who have been out of work for long periods continue 

to struggle to find new jobs. 

More than 42 percent of the unemployed have been jobless for 6 

months or more. We need to help workers regain their footing and 

bolster the recovery by extending the payroll tax cut for the remainder of the year and continuing unemployment insurance for 
2 

workers who are counting on these benefits to make ends meet. 

Both of these policies put money in people’s pockets, boosting demand, creating jobs, and strengthening our economy. 

As the January jobs report shows, we are making progress. As 

Mark Zandi said just this morning, this report was unambiguously 

positive. But we must continue to invest in education, infrastructure and our workers. As I have said before, we must also take on 

the housing crisis. Without a smart sensible path forward in housing we simply cannot sustain this economic recovery. 

Today’s unemployment report from BLS shows jobs gains. The 

economy added private sector jobs for the twenty-third straight 

month. During January the economy gained 257,000 private sector 

jobs. Due to the loss of government jobs overall the economy added 

243,000 jobs during the month. The manufacturing sector, which 

added 237,000 jobs in 2011, gained 50,000 jobs in January, and 

that is always good news. In addition, the professional and business services sector added 70,000 jobs and hasn’t lost jobs since 

March 2010. 

Employment in State and local government was basically unchanged in January. In 2011, State and local governments shed 

235,000 jobs and continue to face budget challenges that present a 

head wind for the economy. 

The overall unemployment rate was 8.3 percent, the lowest since 

February 2009. Even with this progress more than 12.7 million 

people are looking for work, simply can’t find it. The unemployment rate in the African American community was 13.6 percent, 

among Hispanic workers the unemployment rate was 10.5 percent, 

while the overall unemployment rate for veterans was 7.5 percent. 

Gulf War-era II veterans faced an unemployment rate of 9.1 percent. 

Today’s employment report shows that the labor market continues to recover. The job gains in January continued the momentum from the fourth quarter of 2011. However, unemployment remains too high, unacceptably high, and we need to stay focused on 

creating jobs. 

Acting Commissioner Galvin, I look forward to your testimony. 

Now it gives me pleasure to yield to Mr. Brady. 

[The prepared statement of Representative Cummings appears in 

the Submissions for the Record on page 26.] 

OPENING STATEMENT OF HON. KEVIN BRADY, VICE 

CHAIRMAN, A U.S. REPRESENTATIVE FROM TEXAS 

Vice Chairman Brady. Thank you, Chairman. Commissioner 

Galvin, we welcome you in your new capacity to the Joint Economic 

Committee on unemployment numbers. Of course we know you 

well from your experience in prior employment hearings and as a 

dedicated BLS employee for many years. We appreciate your service and look forward to your testimony. We also welcome the members of your staff. 

Now these new jobs numbers are encouraging, are long overdue, 

but encouraging. The unemployment rate going down slightly is as 

well, but I have to caution you it masks an underlying weakness 

in our economy. Fewer Americans are actually participating in the 

workforce than in almost 28 years. The labor force participation 
3 

rate at 63.7 percent hasn’t been this low since March of 1983. The 

labor market simply isn’t recovering fast enough, considering especially how depressed it has been. 

By comparison, at this point 31 months into the Reagan recovery, 

we had already added 8.7 million new payroll jobs. Today, however, 

the U.S. economy at best is uncertain, stopping and starting. We 

are still 6 million jobs short of where we were before the recession 

began. Labor force participation, as I said, is the lowest in decades. 

Yet unemployed workers still account for more than 8 percent of 

this shrunken workforce. I think whatever claims the President 

has made about how much worse the recession has been, his policies have not stimulated the economy. We now have a huge Federal 

debt, continuing large deficits, and again, a stop and start uncertain job growth. 

More than 21⁄2 years have passed since the recession formally 

ended, yet real GDP growth is now expected to decline this year 

from a less-than-stellar 2.8 percent in the fourth quarter of last 

year. The contrast, we averaged over 6 percent economic growth 

during the first 10 quarters of the Reagan recovery. Business in 

America is still hoarding cash as it still holds investment below 

what it was before the recession began and is still not materially 

stepping up hiring despite what the new payroll job numbers say. 

Well, consider the chart behind me. The top line, the green line, 

shows hires and the bottom line layoffs. The huge churn in this 

chart is striking, over 4 million hires and 1.7 million layoffs, an 

image quite different from that of simply just looking at net job 

changes. The key observations here is the hires still remain where 

they were during the middle of the recession. With all the money 

the White House and Members of Congress have spent to stimulate 

employment, hires are still down about 11⁄2 million per month from 

before the recession. In that light the 243,000 payroll jobs gained 

today just aren’t that impressive. The magnitude of annual benchmark revisions, the most recent of which BLS has introduced with 

today’s report, only underscores this problem. 

[Chart submitted by Vice Chairman Brady titled ‘‘Total Hires 

and Layoffs Since 2006’’ appears in the Submissions for the Record 

on page 28.] 

The low hires help explain why labor force participation is down. 

If hiring has not risen in well over 3 years with the huge pool of 

unemployed competing for jobs, then why stay in the labor force? 

They are simply dropping out. 

The unemployment rate and payroll job numbers are important 

statistics but they don’t reveal the full extent of the problem that 

America faces. The President’s current actions and proposals, in my 

view, are feeble attempts to lift a $15 trillion economy with the 

equivalent of matchsticks at the same time that it is tightening 

regulations, imposes an avalanche of new regulations, and thwarts 

the biggest shovel ready projects such as the Keystone Pipeline. 

They raise taxes all the while adding to our national debt with continued undisciplined deficit spending. 

Strong private investment and job creation requires a balanced 

regulatory environment that actually encourages operation of the 

free market economy and a tax environment that engenders expansion, not retrenchment. The President is working against this free 
4 

market economy with his policies, undermining it with subsidies 

and special favors in some areas and harshly constraining and punishing it in others. That will cause anemic growth, and this labor 

chart shows it. 

According to the CBO, a slowing economic growth will cause the 

unemployment rate to rise this year and next. The Congressional 

Budget Office predicts the unemployment rate will hit 8.9 percent 

in the fourth quarter of this year and over 9 percent next. Americans are eager for work and willing to work hard. The economic 

policies of our President have failed. We need a change in course, 

hard working taxpayers deserve better, and the Federal Government needs to get out of the way so private job creation and hiring 

can accelerate. 

Mr. Galvin, I look forward to hearing your testimony. I yield 

back. 

[The prepared statement of Vice Chairman Brady appears in the 

Submissions for the Record on page 29.] 

Representative Cummings. Thank you very much, and now I 

yield to Mrs. Maloney. 

OPENING STATEMENT OF HON. CAROLYN B. MALONEY, A U.S. 

REPRESENTATIVE FROM NEW YORK 

Representative Maloney. First of all, congratulations on your 

interim appointment, Mr. Galvin. And thank you for your many 

years of hard work for the Joint Economic Committee and testimony and also for the BLS, and also Dr. Horrigan and Mr. 

Nardone, we welcome you. 

And finally we have continuing good news. For the fifth month 

there has been a drop in the unemployment rate to 8.3 percent and 

for the twenty-third month we have been gaining jobs to 243,000 

jobs. So I fail to understand the doomsday testimony of my good 

friend Mr. Brady. With unemployment numbers falling and the 

number of jobs growth gaining, that shows that we are making 

steady progress in recovering from the Great Recession. 

Still we have much more work to do, including extending the 

payroll tax cut through all of 2012, which is a priority of President 

Obama and Democrats. And I am hopeful the House will approve 

that before the current extension expires at the end of the month. 

I look forward to your testimony and I hope it contains even 

more good news than these very encouraging numbers in unemployment and job growth. I yield back. 

Representative Cummings. Yield to Mr. Burgess. 

OPENING STATEMENT OF HON. MICHAEL C. BURGESS, M.D., A 

U.S. REPRESENTATIVE FROM TEXAS 

Representative Burgess. Thank you, Mr. Chairman, and, Mr. 

Galvin, welcome to our committee and to your staff. We welcome 

you here. It goes without saying we all miss Dr. Hall. He certainly 

had a great deal of candor. He was the epitome of impartiality and 

nonpartisanship in his office. I tried several times to bait him, but 

I was never successful, and certainly look forward for your service 

here. 

The job numbers today, good news? I almost feel like I am in a 

Charles Dickens novel: It was the best of times, it was the worst 
5 

of times. The American economy is just hard to keep down. No 

matter what the Congress does to it, no matter what an administration does to it, the American economy has a unique and remarkable ability to recover. I know this having seen what happened to 

the economy when I was in the private sector during the savings 

and loan crash in Texas in the late 1980s. Certainly no government 

action seemed to be responsible for the recovery that eventually occurred there, but it was a fairly strong recovery and lasted for the 

next 20, 25 years and a period of unparalleled prosperity in our 

State. Our State continues to enjoy significant prosperity. People 

move to Texas because of the lower regulation environment, the 

low litigation environment, the lack of State income tax, right-towork State. And as a consequence Texas has added four new congressional districts, essentially a population the size of Arkansas 

which has moved to Texas in the last 10 years. 

So it goes without saying that it is possible for the American 

public to do the right thing as far as job creation is concerned. It 

is not always possible that the government does the right thing. 

In fact, I just think I would align myself obviously close with Mr. 

Brady’s comments than Mrs. Maloney’s comments. But it is the private sector, it is the real economy, it is the folks out there that create something of their own and make it their own. That is what 

drives our economy. 

I really don’t have a lot of faith in the administration’s ability. 

I think the things that they have done and watching through this 

committee, the Joint Economic Committee in the last 3 years, hearing various people from the administration come in and testify, I 

cannot tell you the number of times that we were told by Christina 

Romer that the green shoots were sprouting and the economy was 

recovering only to find that those were weeds proliferating in the 

parking lot because no one was showing up for work because there 

were no jobs. 

Now as far as the administration is concerned, we have examples 

of where they have had the ability to make decisions and made the 

wrong decisions. Vice Chairman Brady referenced the Keystone 

Pipeline. Thousands of new jobs, no government spending required 

at all, just an international boundary that was crossed and therefore the President’s office was involved and he made the wrong decision. 

The President is out even as we speak barnstorming around the 

country, talking about how he is creating jobs, and here was something at his fingertips that would have created thousands of jobs, 

no government spending involved, put people back to work, given 

them jobs where they could have restored some self-dignity and 

some self-worth, and he turned his back on it. 

We have got other examples, the Maximum Achievable Control 

Technology that is now affecting the boiler MACT rules, the utility 

MACT rules, cross-state air pollution rules where Texas was included at the last minute with a group of northeastern states that 

there was no inclination prior to the issuance of the rule that the 

EPA was even considering Texas, and now we may be faced with 

having to close coal fired power plants and rolling brownouts or 

blackouts during our hot summer months. The war on natural gas 

which continues. Let’s face it, domestic energy production is going 
6 

to be part of this economic recovery, whether this administration 

likes it or not. It is high time that they stopped interfering with 

that. 

The Affordable Care Act, I mean I could go on and on about just 

that, and the chilling effect. And I hear it every week when I go 

home. Employer after employer says I don’t know what is ahead, 

I don’t know what you are going to do to me next, what is the court 

going to do, what is the election going to do? People are so uncertain about what they are going to have to be providing in terms 

of employee benefits they are genuinely frightened to add that employee. 

Now the President goes around the country talking about his job 

proposals but they all involve more government. Let’s let the private sector do what it does best. We are America, we have a history 

of doing this over and over again. We need to decrease government 

regulations, taxes and let our economy grow. I have the utmost 

faith in the American people. I think when they are left to their 

own devices they can create jobs. I think whatever Congress does 

is an impediment, and I know whatever the administration does is 

certainly counterproductive. Let’s have faith in the American people. Let them continue to grow. 

I look forward to your testimony today, and I am certain we will 

learn a great deal. I yield back the balance of my time. 

[Chart submitted by Representative Burgess titled ‘‘U.S. Unemployment Rate & Minimum Wage (2002–2011)’’ appears in the Submissions for the Record on page 31.] 

Representative Cummings. Thank you very much. As I turn 

to Ms. Sanchez, I want to let Mr. Burgess know that just a half 

an hour ago on MSNBC Mark Zandi, one of Mr. McCain’s main advisers, said that the business community is definitely starting to 

engage and again he said when he looked at this report it was unambiguously positive. 

Ms. Sanchez. 

Representative Burgess. Would the gentleman yield? 

Vice Chairman Brady. Go ahead, Mr. Burgess. I was going to 

make the point that Mark Zandi was 3 million jobs off in the first 

year of the stimulus in estimations and has been consistently off. 

Mr. Burgess. 

Representative Burgess. Well, I would just point out that the 

President’s own jobs and economic council has beseeched the President to remove some of these regulations and allow things. The 

cross-state air pollution law regulation was something they distinctly referenced in their reports that have come before this committee. 

Representative Cummings. Thank you. 

Representative Burgess. It is time for the administration to 

get out of the way. 

Representative Cummings. The fact is we are going in the 

right direction. You would think this was some doomsday report. 

The fact is that we are going in the right direction, thank God. 

Representative Maloney. Would the gentleman yield? 

Representative Cummings. Very briefly. 

Representative Maloney. My colleague, you have to remember 

that when President Obama took office this country was losing 
7 

700,000 jobs a month. The first 4 months before President Obama 

took office this country lost 4 million jobs. The President has put 

in a recovery package that is moving us in the right direction. 

Can’t we at least agree that it is good news that for 5 months the 

unemployment has fallen and that for 23 months we have been 

gaining jobs in this country? We should be pleased with this news. 

Vice Chairman Brady. Madam Chairman, if I may. My only 

point, I think ours, is we do think these numbers are encouraging. 

Our concern is the unemployment rate is going down because people are giving up, because they are not getting jobs and we think 

that is the wrong reason. 

Representative Cummings. The unemployment rate is 8.3 percent, last month it was 8.5 percent. 

Ms. Sanchez. 

Representative Sanchez. Thank you, Mr. Chairman. I don’t 

have a statement and I will not be putting one in for the record. 

But I came this morning to try to figure out where we really are 

and to get some ideas from people about how we continue the good 

trend that we have seen in these last 5 months with respect to unemployment going down. I really didn’t come here to hear a lot of 

political posturing and babble and everything. I am really struck 

by the fact that this committee’s job I think is really to contemplate 

and think about and suggest and move forward ideas for other legislative writing committees to implement. And, you know, this 

going back and forth and this really degrading, honestly, you guys 

of this committee it is really a frustrating thing for somebody who 

understands that we—that when we see good numbers and that 

when people say economists, all the economists this morning that 

I saw on television and in writing were saying, hey, this is good. 

Let’s just stop it. This is good and what can we do to make it better? 

Mr. Chairman, that is what this committee is charged with, and 

I am really looking forward to hearing from the three gentlemen 

before us to try to figure out where do we go from here. How do 

we go from here? How do we make this a positive thing for the 

American people? So I am open to hear the—you are my friends on 

the other side. So . . . 

Vice Chairman Brady. If I may, I think you are right. 

Representative Sanchez. I hope you will pull away from that. 

Representative Cummings. The gentlelady has a good point. 

Representative Sanchez. Thank you, Mr. Chairman. 

Vice Chairman Brady. I do apologize. 

Representative Sanchez. Thank you, Mr. Chairman. Let’s 

work together on this, guys. 

Representative Cummings. Mr. Campbell. 

Representative Campbell. Oh, no. 

Representative Cummings. Mr. Mulvaney. 

Mr. Galvin, thank you very much for being here and we welcome 

you. 
8 

STATEMENT OF JOHN M. GALVIN, ACTING COMMISSIONER, 

BUREAU OF LABOR STATISTICS; ACCOMPANIED BY MICHAEL HORRIGAN, ASSOCIATE COMMISSIONER FOR PRICES 

AND LIVING CONDITIONS, BUREAU OF LABOR STATISTICS 

AND THOMAS NARDONE, ACTING ASSOCIATE COMMISSIONER FOR EMPLOYMENT AND UNEMPLOYMENT STATISTICS, BUREAU OF LABOR STATISTICS 

Acting Commissioner Galvin. Mr. Chairman, and Members of 

the Committee, thank you for the warm welcome and for the opportunity to discuss the employment and unemployment data that we 

released this morning. 

The unemployment rate decreased to 8.3 percent in January. 

Representative Cummings. A little louder, please. The green 

light should come on. 

Acting Commissioner Galvin. It is on, it is on. 

Representative Cummings. There you go. 

Acting Commissioner Galvin. The unemployment rate decreased to 8.3 percent in January, and nonfarm payroll employment rose by 243,000. In 2011, nonfarm employment increased by 

an average of 152,000 per month. Job growth was widespread in 

the private sector in January, with the largest gains occurring in 

professional and business services, leisure and hospitality, and 

manufacturing. 

Professional and business services added 70,000 jobs over the 

month, compared with an average monthly gain of 48,000 in 2011. 

Nearly half of the January increase occurred in employment services as temporary help employment continued to trend up. Also 

within professional and business services, employment rose in accounting and bookkeeping and in architectural and engineering 

services. 

Employment in leisure and hospitality increased by 44,000, mostly in food services. Health care employment rose by 31,000, with 

job gains in hospitals and ambulatory care services. Employment 

in both wholesale and retail trade continued to trend up over the 

month. 

In the goods-producing sector, manufacturing employment increased by 50,000 in January, nearly all in durable goods manufacturing. Fabricated metal products, machinery, and motor vehicles 

each added jobs. Over the past 2 months, construction employment 

rose by 52,000, mainly among nonresidential specialty trade contractors. Mining employment continued to expand in January. 

Since a recent low point in October 2009, mining has added 

172,000 jobs. 

Government employment was little changed in January. Over the 

last 12 months employment in the sector has decreased by 276,000 

with declines in local government, State government, excluding 

education, and the U.S. Postal Service. 

Average hourly earnings of all employees on private nonfarm 

payrolls increased by $0.04 in January. Over the past 12 months, 

average hourly earnings have risen by 1.9 percent. From December 

2010 to December 2011, the Consumer Price Index for All Urban 

Consumers increased by 3.0 percent. 

In accordance with annual practice, the establishment survey 

data released today reflect the incorporation of benchmark revi-
9 

sions. Each year, BLS reanchors the sample-based survey estimates to full universe accounts of employment, primarily derived 

from administrative records of the unemployment insurance tax 

system. The level of nonfarm payroll employment in March 2011 

was revised up by 162,000, or 0.1 percent. This compares to an average benchmark revision over the past 10 years of plus or minus 

about 0.3 percent. 

Before discussing the data from our survey of households, I 

would note that, as is our annual practice, we have incorporated 

new population controls into the January estimates. Data beginning in January 2012 reflect population controls based on Census 

2010, as well as updated information on net international migration, and some methodological adjustments in the estimation process. Official estimates for December 2011 and earlier months will 

not be revised to incorporate the Census 2010-based controls. The 

impact of the new controls on the unemployment rate is negligible. 

However, two important Household Survey measures, the employment population ratio and the labor force participation rate, are 

lowered by the change in the composition of the population as seen 

in these new controls. The new controls raise the population of persons 55 years and older and, to a lesser extent, persons 16 to 24 

years of age. Both of these groups are less likely to be in the labor 

force than the general population. 

So now returning to the data for January, the unemployment 

rate continued to decline over the month. Since August 2011, the 

jobless rate has fallen from 9.1 to 8.3 percent, and the number of 

unemployed persons has declined by about 1.2 million. In January, 

the number of persons unemployed for 27 weeks or more was little 

changed at 5.5 million and made up 42.9 percent of the total. The 

employment population ratio increased over the months and the 

labor force participation rate was unchanged after accounting for 

the impact of the Census 2010-based population controls. 

To summarize January’s labor market developments, nonfarm 

payroll employment increased by 243,000 and the unemployment 

rate decreased by 8.3 percent. 

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

[The statement of Acting Commissioner Galvin, together with 

Press Release No. USDL–12–0163, appears in the Submissions for 

the Record on page 32.] 

Representative Cummings. Thank you very much. I want you 

to clarify, Mr. Galvin, one point. How much of the drop in the unemployment rate in January was due to people finding jobs and 

how much was due to people dropping out of the labor force? 

Acting Commissioner Galvin. Well, the level was down about 

381,000 in January, and over these 5 months since August, while 

it has been declining, the unemployment rate has been declining, 

the level of unemployment is down about 1.2 million. Over that 

same period employment measured by the Household Survey is up 

about 1.7 million. So, you know, the numbers add up to a story of 

the unemployed finding jobs over this 5-month period. The labor 

force has risen a little bit. 

Representative Cummings. The economic momentum that has 

occurred over the past few months seems to have carried into the 

labor market. In addition to the 100,000 plus jobs being created 
10 

each month, weekly applications for initial unemployment benefits 

fell last week to 367,000 and have remained below 400,000 for 10 

of the last 12 weeks. Furthermore, the unemployment rate last 

month fell to 8.3 percent, the lowest since February, 2009. However, some observers have raised concerns that the improved numbers are a blip, or a reflection of the increased hiring that always 

occurs during the winter holidays or in the case of the unemployment rate it is a reflection of reduced labor force participation. 

Commissioner, what is your perspective regarding the accuracy 

of the positive job creation numbers and the extent to which they 

are attributable to the winter holiday shopping season or other factors? 

Acting Commissioner Galvin. Well, I am confident in the accuracy of the numbers this month and every month. We adjust the 

numbers to remove normal recurring seasonal variation from 

things like winter—Christmastime hiring. 

Representative Cummings. Now, the overall unemployment 

rate has fallen. Are all demographic groups facing lower unemployment rates? In particular how are our African American teenagers 

doing, Hispanic teenagers and African American and Hispanic 

adults? 

Acting Commissioner Galvin. Well, I have easily accessible 

the overall African American unemployment rate. It dropped 2.2 

points this month down to 13.6 percent. 

Representative Cummings. Is that significant? 

Acting Commissioner Galvin. That is significant. 

Representative Cummings. And what do you attribute that to? 

Do you have any idea from what you can see? 

Acting Commissioner Galvin. Well, again the numbers add up 

to African Americans leaving unemployment and finding jobs. 

Representative Cummings. Okay. And Hispanics? 

Acting Commissioner Galvin. Hispanic rate was 10.5 percent 

in January, down about half a point but not a significant difference. 

Representative Cummings. Now one of the most persistent 

challenges since the 2007 economic collapse is the issue of longterm unemployment. As I mentioned in my opening remarks, more 

than 42 percent of the people who are unemployed have been jobless for 6 months or more, and 70 percent of the long-term unemployed have been out of work for a year longer. What long-term unemployment trends are you seeing? And then I will turn it over to 

Mr. Brady. 

Acting Commissioner Galvin. Well, the number of people looking for work for 27 weeks or more has fallen over the last year 

about 700,000 just as unemployment has fallen over the last year. 

But in percentage terms the long-term unemployed still represents 

a large share of the unemployed, well 42.9 percent this month, a 

little different from 43.9 percent a year earlier. 

Representative Cummings. Mr. Brady. 

Vice Chairman Brady. Thank you, Mr. Chairman. Mr. Galvin, 

obviously we are always encouraged by new jobs numbers. We see 

the unemployment rate going down, but again we want it to go 

down because people are getting jobs and not just getting out of the 

workforce. When the recession began the labor participation rate, 
11 

the people who were actively in this workforce, was 66 percent. 

Today it is now according to the latest report 63.7 percent. That 

is the lowest since 1983. Are fewer workers in the workforce indicative of a healthy economy? 

Acting Commissioner Galvin. Well. 

Vice Chairman Brady. I mean honestly, is that a sign of a 

healthy economy that fewer people are working in the workforce? 

Acting Commissioner Galvin. Some of the decline in the labor 

force since the recession is due to demographic reasons. Overall the 

productive capacity of the economy is higher. The more the work 

the more the participation of workers in the labor force. 

Vice Chairman Brady. The CBO this week indicated that unemployment will rise this year and next and that at this pace of 

job growth that America won’t get back to its level of unemployment before the recession until 2015. Do you have any reason to 

disagree with those projections? 

Acting Commissioner Galvin. Well, BLS avoids forecasting 

like that. It is sort of an exercise that requires a lot of assumptions 

and judgments. And we try to stick to the facts of describing the 

current labor market. 

Vice Chairman Brady. In taking a look at the numbers this 

month, in the jobs report numbers you report each month, it is a 

net number, isn’t it, that could go up if businesses lay off fewer 

workers than before even though they may not be hiring more new 

ones. I don’t know if that fact is widely recognized. And could you 

comment on this point on the term ‘‘job creation’’ in this context? 

It doesn’t necessarily mean that everyone keeps their jobs and 

more jobs are filled, does it? 

Acting Commissioner Galvin. Correct. There is lots of churning in the economy each month. This number we report from the 

payroll survey is a net number reflecting the difference between 

the additions to payrolls or hiring and the subtractions from payrolls or separations and quits. 

Vice Chairman Brady. In the chart behind me we are still, 

again, looking at the bigger picture, what does it take to have a 

healthy recovery. Here we are years after the recession officially 

ended, we are still in the stop and start mode and fairly uncertain. 

Clearly the new hires continue to be about where they were in the 

middle of the recession. 

Can you comment? We get these reports. I guess they are called 

the JOLTS report, not as frequently as we get your employment 

situation reports. How could we get more insight into critical numbers like this before the next JOLTS report comes out? How can 

we look more quickly at important indicators like this? 

Acting Commissioner Galvin. You are right, the JOLTS numbers are lagged about a month and a half behind the payroll survey 

numbers. We don’t have any data that is more timely than JOLTS 

to tell you about what is going on beneath this net change in payroll employment from the payroll survey. 

Vice Chairman Brady. Let me finish with this, again going 

back. We are looking for indicators of a healthy economy. The new 

jobs numbers are good, the number of people working is a key indicator. My numbers show that if we actually had a count of those 

who have given up or not in the workforce today, that this month 
12 

their unemployment rate actually would have gone up from 11.6 

percent to 11.7 percent. Do you figure those numbers as you do 

your reports? 

Acting Commissioner Galvin. No, we don’t. 

Vice Chairman Brady. Yield back, Mr. Chairman. 

Representative Cummings. Thank you very much. Mrs. 

Maloney. 

Representative Maloney. Well, thank you for this report. It is 

good news, especially in the number of unemployment rate dropping for 5 straight months. That is very good news and we are 

trending in the right direction with 23 months of job gains, 243,000 

for this month alone. Could you point out other bright spots in this 

report, any other good news that you see that the country is 

trending in the right direction? 

Acting Commissioner Galvin. Well, the rise in payroll employment this month of 243,000 is a sizable one compared to the path 

of payroll employment last year, which averaged monthly gains of 

152,000. Some of the gains this month in the private sector were 

widespread. Notably we saw large gains in professional and business services, and leisure and hospitality, and health care employment, in manufacturing which gained 50,000 jobs. And in construction which has been flat since early 2010, but has now recorded a 

couple of increases totaling 52,000, mostly in nonresidential specialty trade contractors. 

Representative Maloney. Often January numbers don’t show 

this kind of gains; is this unusual for January numbers? 

Acting Commissioner Galvin. No, we adjust the numbers for 

normal recurring seasonal variation in January and any month. 

We try to take that normal variation out of there so what you are 

looking at is the underlying labor trend in the labor market. 

Representative Maloney. And Mr. Galvin, I am interested in 

making sure that the economy improves for all sectors. Can you tell 

me whether the unemployment rate has been dropping for women 

or just men seeing this unemployment rate drop? 

Acting Commissioner Galvin. I will get right with you on 

that. 

Mr. Nardone. We have seen the unemployment rate for men 

has dropped a bit more than for women. It went up more during 

the recession than the rate for women did. Although both went up, 

they are both lower than they were; they are not as low as they 

were at the start of the recession obviously. 

Representative Maloney. Well, we know that many State and 

local governments have been laying off workers and women predominantly work in State and local governments. Do you think 

that is part of the cause, the women’s unemployment rate? 

Mr. Nardone. I think the fact that the men’s rate has come 

down more than the women’s is that it is a reflection of the fact 

that men were more affected in industries that were very hard hit 

cyclically like manufacturing and construction. 

Representative Maloney. Now, when you were talking about 

the long-term unemployed and you said earlier that the long-term 

unemployed was continuing, do you have a breakdown in age of the 

people that are saying they are—and the people who are giving up? 
13 

Is it predominantly 55 and older? Do you have a breakdown in age 

in the long-term unemployed? Is there a trend in that sector? 

Acting Commissioner Galvin. One second, we do have that. 

Let’s move on and Mr. Nardone will find that. 

Representative Maloney. Okay. And also do you see any—do 

you break down regions? Are there certain regions that are booming or doing better with the employment and the dropping of the 

unemployed rate? Do you see the South, the East, the West or any 

areas that are urban areas, are they more hard hit than others? 

Do you have any trends in geography and how the workers of our 

country are faring? 

Acting Commissioner Galvin. We will have to get back to you 

on the breakdown of the long-term unemployed. It is not something 

we brought today. As well we can get back to you on the geographic 

differentials and the dropping of the unemployment rate. 

[Letter dated February 24, 2012, transmitting Acting Commissioner John M. Galvin’s response to Representative Carolyn B. 

Maloney appears in the Submissions for the Record on page 76.] 

Representative Maloney. Thank you for your hard work. My 

time has expired, thank you. 

Representative Cummings. Mr. Campbell. 

Representative Campbell. Thank you, Mr. Chairman. You 

know, sometimes we get these statistics, it happens with CPI as 

well, and the feel on the ground is different than what the statistic 

is. And certainly recently where CPI was kind of low but the feel 

on the ground was that the things that people were buying were 

going up at a faster rate than CPI. Now I admittedly come from 

one of the states with the highest unemployment rates, California. 

But as much as these statistics are good—the feel on the ground 

isn’t as good. One of the things I wanted to ask about, and correct 

me if I am wrong on this, but where is the employment in the percentage drop, from 8.5 to 8.3, since the widest measure of unemployment, which includes discouraged, marginally attached, and 

part-time people who would prefer to be full time, actually increased slightly to 23.8 percent if I have my numbers correct. So 

how—what does that mean or how does that happen? So this sort 

of headline number went down but the broader number went up? 

Acting Commissioner Galvin. Well, the widest measure that 

BLS produces we refer to as U–6, which does include all of the 

marginally attached and the part-time for economic reasons, and 

that is at 15.1 percent in January as compared to 8.3 percent for 

the base unemployment rate. That was unchanged over the month, 

the widest measure. 

Representative Campbell. Okay. So that was unchanged but 

the other went down. So that means that maybe some of these people who became employed became employed as part-time; is that 

what that means? And by the way what does marginally attached 

mean? 

Acting Commissioner Galvin. That means workers who want 

and are available for work, they have looked in the last year for 

jobs but they haven’t looked in the last month. 

Representative Campbell. They have looked in the last year 

but haven’t looked in the last month. 
14 

Acting Commissioner Galvin. They need to have looked in the 

last month to be counted as unemployed. 

Representative Campbell. I see. All right. So they aren’t employed but you don’t count them in the number that includes the 

8.3. 

Acting Commissioner Galvin. Correct. 

Representative Campbell. So on the broadest number, and I 

read the wrong number, but 15.1 percent of the population is the 

broad number that is unemployed or under employed with the 

part-time and that didn’t change from last? 

Acting Commissioner Galvin. Correct. It has declined pretty 

much in step with the decline in the regular unemployment rate 

over the last 5 months. 

Representative Campbell. All right, okay. And then the total 

workforce, civilian labor force was actually up, was it, so the total 

labor force was up as well; is that right? I am trying to understand. 

Acting Commissioner Galvin. Uh-huh. 

Representative Campbell. Sometimes, as we know, the numerator and the denominator of unemployment drop when people drop 

out of the workforce and it makes it look like we are doing better 

but we are actually not employing more people. 

Acting Commissioner Galvin. Well, over these 5 months 

where the unemployment rate has come down eight-tenths of a percent the level of unemployed has declined by 1.2 million, but at the 

same time the level of employed from the Household Survey is up 

1.7 million. So the sum of those is the labor force. So you have got 

the unemployed subtracted from the employed and you get a rise 

in the labor force of about a half million over this time period. 

Representative Campbell. Thank you. I yield back, Mr. Chairman. 

Representative Cummings. Thank you very much. Ms. 

Sanchez. 

Representative Sanchez. Thank you very much and thank 

you, gentlemen, for being before us today. I want to go along some 

of the discussion points that my colleague from Orange County on 

the other side was talking about. I am interested in, first of all, because you mention population in your report or population groups, 

so I am trying to understand what does that mean. In particular, 

when you look at the overall numbers there is a thing called the 

baby boomers and a lot of them are getting to retirement age, and 

supposedly that was the largest group of people in a particular 

time frame that the United States had seen. So my question to you 

is are we seeing the baby boomers retire and therefore be out of 

the workforce? And is that having some impact to that? And are 

we graduating or are we seeing enough young people enter into the 

workforce that they are making up those numbers, or what is the 

relationship between those two ends of the employment line? 

And then my next question is could you in some way characterize 

what is going on with the youth in particular, those without a college degree and maybe those with a college degree, because it does 

seem that on—that in the weeds where we are when we go home 

that kids aren’t getting employment despite getting an education. 

Acting Commissioner Galvin. I will have my colleague, Mr. 

Nardone, handle that. 
15 

Mr. Nardone. In terms of looking at—one thing that will be useful is to look at labor force participation rates and taking a somewhat longer view. One thing that is been happening is the labor 

force participation rates for people age 55 and over, which would 

include that baby boom group, has actually been going up a little 

bit over time. Labor force participation rates for younger people 

over a longer period have been trending down, partly—there has 

also been an increase in school enrollment of those young people, 

too. Young people who are in school can be in the labor force obviously, they are having a part-time job or they can be looking for 

work, but in general people who are in school are less likely to be 

in the labor force than those who aren’t. 

Representative Sanchez. So what you are basically telling me 

is—and do you think that would be attributed to the fact that 

maybe people who thought they had a retirement sort of lost their 

retirement or they don’t feel as comfortable, maybe they are living 

longer, whether it is a McDonald’s job or part-time consultant, or 

what have you, and they tend to take up those places that we 

might have seen young people before? Could that be what is going 

on? 

Mr. Nardone. We don’t really know the exact reasons. One 

thing we do know is that the increase in labor force participation 

rate for people 55 and over actually predated the recession. It had 

been going on since the 1990s really. 

Representative Sanchez. Interesting, okay. I know that Mrs. 

Maloney I think asked about this, this is about geography. It seems 

to me, can we tell where these jobs are being created? Because it 

seems to me like a lot of these jobs that are being created may be 

moving south or southwest in the country. Do we have numbers on 

that or would you be able to get us numbers so that we could take 

a look at where jobs are really be creating and where we are really 

losing them. 

Acting Commissioner Galvin. I do have some numbers on that 

with me today. Now our State numbers are lagged a month, so we 

reported the national number for January today but our State 

numbers are only available through December. But looking at the 

December numbers the States with the largest gain since the national employment trough in early 2010 job basis have been Texas, 

California, Florida, simply the largest States. On a percentage 

basis, percentage growth basis, the States with the largest change, 

North Dakota, Utah, Texas, Oklahoma, Wyoming. 

Representative Sanchez. Thank you. And my last question, 

real fast, when we talk about going back to this whole maybe underemployed or still searching for the real job you want, do we 

have—I know you gave us a particular cost or average per wage 

of $23 or $24, but does that include benefits? And are we seeing 

any changes in the type of jobs we are getting and what type—is 

there a smaller benefit package going with those jobs? Are there 

any numbers available with that in the aggregate? 

Acting Commissioner Galvin. Yeah, those numbers I gave you 

are wages only. We issued an employment cost index report earlier 

this week, I believe it was, which showed the continuation of the 

trend of the cost of benefits to employers growing faster than the 

cost of wages. I don’t have any information though about the na-
16 

ture of the benefit packages of jobs that are being created right 

now. 

Representative Sanchez. So let me just rephrase that. So you 

are saying that if I am an average employer and I am getting an 

average person on the payroll for the first time, I am paying them 

about $24 but the benefit package to them is actually costing me 

more than it used to per employee? 

Acting Commissioner Galvin. Correct. 

Representative Sanchez. Thank you. Thank you, Mr. Chairman I appreciate that. Mr. Mulvaney. 

Representative Mulvaney. Thank you, Mr. Chairman. 

Mr. Galvin, I am going to stay away from the policy issues and 

just make sure I can understand the data. So I am going to run 

down a list relatively quickly and make sure I am reading it correctly. The labor force participation rate dropped last month from 

64 percent to 63.7 percent. 

Acting Commissioner Galvin. Correct. 

Representative Mulvaney. The number of discouraged workers 

was up from roughly 945,000 to 1.05 million people; is that correct? 

Acting Commissioner Galvin. Correct. 

Representative Mulvaney. That the number of other marginally attached workers grew from 1.595 million to 1.75 million last 

month, U5? 

Acting Commissioner Galvin. Yeah. The other—I have to do 

the math there. That looks right. 

Representative Mulvaney. The number of folks who are employed part time for economic reasons grew from 8.098 million people to 8.23 million people last month? 

Acting Commissioner Galvin. Correct. 

Representative Mulvaney. And that the unemployed by the 

widest measure grew then from 23.74 million to 23.8 million people 

last month; is that correct? 

Acting Commissioner Galvin. I have to dig for that level. I 

have the rate. 

Representative Mulvaney. The rate went from 15.2 to 15.1? 

Acting Commissioner Galvin. Correct. 

Representative Mulvaney. That the percent of total long-term 

unemployed—excuse me, the long-term as a percentage of the total 

unemployed last month rose from 42.7 percent to 43.3 percent. 

That is defined by folks out of work more than 6 months, 27 

weeks? 

Acting Commissioner Galvin. It rose four-tenths of a percent 

to 42.9 percent. 

Representative Mulvaney. Okay. And then the graph that 

Vice Chairman Brady offered, is up here behind us, shows that the 

number of total hires is roughly the same now on a monthly basis 

as it was in late 2008. Would you agree with that, sir? 

Acting Commissioner Galvin. If those numbers are correct, 

yes, I would. I have some data from our JOLT survey which show 

that JOLT hires have increased some since the end of the recession. It doesn’t appear that that line is going up. 

Representative Mulvaney. I think that is correct, sir. That is 

the end of the recession. Those were the new hires last month. So 

I think your statement is probably correct but I think mine is as 
17 

well. If you go back to late 2008, which is the blue dotted vertical 

line there. 

Acting Commissioner Galvin. Current hires are below that 

level. 

Representative Mulvaney. Exactly. If we add this discouraged 

workers, other marginally attached workers and folks who are unemployed part time for economic reasons, then the unemployment 

rate in this country is 15.1 percent this month? 

Acting Commissioner Galvin. Correct. 

Representative Mulvaney. Thank you, sir. 

You mentioned earlier that the labor force has grown slightly 

and it looks like it has from 15.—excuse me 153.9 million people 

to 154.4. Given the population growth over the same period of time, 

is that the growth in the size of the labor force that you would expect to see? 

Acting Commissioner Galvin. That depends on the degree to 

which the growth and the population participates in the labor 

force, but generally you would expect an increase of somewhere 

from 100 to 150,000 per month just to keep up with the population 

and their rate of participating. 

Representative Mulvaney. I am sorry. Say that again. You 

would expect the job, the number of jobs to grow 150,000 jobs per 

month? 

Acting Commissioner Galvin. You would expect the labor 

force—well, you need about 100 to 150,000 jobs per month to keep 

up with the growth in the labor force. 

Representative Mulvaney. So if we had 150,000 jobs per 

month, all other things being equal, the unemployment rate will 

not come down? 

Acting Commissioner Galvin. Correct. All other things being 

equal, the participation rate will stay the same and the jobs being 

found will go to the new folks coming into the labor force. 

Representative Mulvaney. So at the rate of job creation last 

month, all other things being equal, how long will it take for to us 

get employment down to say 61⁄2 percent? 

Acting Commissioner Galvin. Yeah, that requires a lot of 

speculation I need to avoid because I really can’t predict the rates 

at which people will enter the labor force. I can tell you that the 

job growth we have seen since employment turned around is measured by the Payroll Survey. It is still about 5.6 million below, there 

is still about a 5.6 million drop or loss from—there is still 5.6 million jobs to be gained in order for us to regain all of the jobs lost 

during this downturn. 

Representative Mulvaney. Thank you, Mr. Galvin. 

Lastly, on page 3 of your report you indicate that government 

jobs are down considerably since—over the course of the last 12 

months, 276,000 jobs lost, with declines in local government, State 

government, excluding education and the U.S. Postal Service. If 

you add education back into those numbers, what does that job loss 

within the government sector look like? 

Acting Commissioner Galvin. One second, I will get that for 

you. Well, that is the total over the year that you just gave me. 

Representative Mulvaney. Yes, sir. 
18 

Acting Commissioner Galvin. 276,000 jobs were lost in government for January 2011 to January 2012, and that is the total 

of Federal, State, both the education and the non-education components, and local, both the education and non-education components. 

Representative Mulvaney. I am sorry. I am looking at your 

notes on page 3, and it specifically says State government, excluding education. So I took that to mean that any gains in education 

were excluded from that number, is that not correct? 

Acting Commissioner Galvin. No, that is just a way of breaking down the State government total, because some people are interested in that. The education sector and then the non-education 

sector of the State government. 

Representative Mulvaney. I guess I apologize for going a little 

long, Mr. Chairman. I guess my question is where are the education jobs contained on the list on page 3? If we added one education job—it looks like we have added education jobs since the beginning of the recession, we added education jobs from November 

to December. So on the list on page 3 if we hire a teacher what 

category does it go into? 

Mr. Nardone. I think just in terms of local government education, looking over the year, currently there are 7.8 million in 

local government education. That is down from 7.9 million a year 

ago. State government education, you had—it is essentially flat, 

about 2.4 million. Private education has gone up 80,000. 

Representative Mulvaney. Okay. So education is roughly flat 

over the course of the last year? 

Mr. Nardone. If you are looking at government education, State 

and local, it is down mainly in local areas. The State government 

education is flat over the year. 

Representative Mulvaney. I gotcha. Gentlemen, thank you 

very much. 

Representative Cummings. Mr. Burgess. 

Representative Burgess. Thank you, Mr. Chairman. Mr. 

Galvin, the current state of the economy when we look at this recession and compare it to the previous recessions and the recovery—and I apologize for not having the graphics here, but everyone 

understands that the recovery has been slower and much more prolonged than other recessions, certainly that have occurred during 

my lifetime and in years preceding that. Can you give us some reasons why the recovery has been so painfully slow in occurring? 

Acting Commissioner Galvin. Well, I don’t know that I have 

the reasons, but I certainly can confirm that as compared, say, to 

the recessions in 1975 and 1982 job recovery in this recession is 

much slower as compared to the recessions of 1991 and 2003, or 

that ended in 1991 and 2003. Job recovery after this recession is 

somewhat slower. 

Representative Burgess. Well, I did take the liberty of preparing some economic data, and I realize that is not my forte, and 

at the risk of relating two things that are not related I decided to 

plot the unemployment rate for the last 10 years and I put on the 

graph also, since it has been the subject of some national discussion, the minimum wage increases that have recently occurred, and 

you can see there that there does appear to be a parallel. Now, I 

realize there is a risk in relating two things that may not be re-
19 

lated, but do you have a comment on the association of those two 

lines on the graph? 

Acting Commissioner Galvin. Yeah. We don’t engage in that 

sort of policy analysis. We don’t want to do anything to undermine 

your trust in our objectivity and fairness. 

Representative Burgess. The reality is, though, that this 

changes the unemployment rate. You know, I referenced in my 

opening statement that there are some things the administration 

has done, but there are other things that the Congress has done. 

There are some things that the Congress did during the last administration when Speaker Pelosi took over as Speaker of the 

House, and this was one of those things. 

Now, it is relevant because it also—people are discussing maybe 

we should just index the minimum wage to inflation, and what I 

see in looking at this is a period of relative stability while the minimum wage stayed at $5.15 an hour. Perhaps we are achieving a 

new equilibrium up at the other end of the graph. And if you index 

the minimum wage to inflation, would it likely have this disruptive 

effect that perhaps occurred during 2007, 2008, 2009 and 2010? 

Acting Commissioner Galvin. Again, I really can’t comment 

on policy questions like that. 

Representative Burgess. Let me ask you this: Did the size of 

the labor force change this past month? 

Acting Commissioner Galvin. It did. 

Representative Burgess. The civilian labor force. 

Acting Commissioner Galvin. Yes—well, after adjustment for 

the population controls it was up 250,000. That is a small change. 

Representative Burgess. But another way of looking at it 

those not in the labor force increased from 86.7 million to 87.9 million; is that an accurate reflection? 

Mr. Nardone. There is an issue with this month’s numbers. As 

was mentioned in the testimony, we incorporated new population 

estimates that are based on the Census 2010, which makes the difference between December and January not strictly comparable. 

Essentially those new population controls show that there were 

more people who were over the age of 55 and more people who 

were between the ages of 16 to 24, groups that are less likely to 

be in the labor force than the general population. So you have what 

looks like a big bump-up in the number of people not in the labor 

force. If you adjust for that artificial—for population control it is 

actually down by 75,000, the size—the population that is not in the 

labor force. 

Representative Burgess. This may fall into that broad category of lies, darn lies and statistics, but still 1.2 million people lost 

from the labor force. That is a big chunk of folks. Okay, we massage numbers and make it look not so bad, but, you know, you just 

have to worry if we are losing people from the labor force at that 

rate, yeah, you make your numbers look better as far as the unemployment rate if your goalpost is November 2012, but what people 

are feeling out in the country, what people are experiencing out in 

the country, and this is what I encounter when I go home, people 

say don’t talk to me about the economic recovery because even in 

Texas we are not feeling it. And I rather suspect that if I was vis-
20 

iting California or Ohio or Michigan I would hear those same sentiments perhaps even a little more strongly. 

Let me just ask you in the time I have remaining, the fact that 

there are fewer payroll jobs than there were pre-recession and this 

month you gain 200,000, so coming back at a rate of 200,000 a 

month, say this month is the new normal, this is the new benchmark, every month is going to be just like this month going forward. When do we get back to the pre-recession level? 

Acting Commissioner Galvin. It would take 23 more months 

of growth at this month’s pace, 243,000 per month, to regain all 

those jobs. 

Representative Burgess. And if the number drifted down from 

that obviously, the length of time is going to extend. What do you 

look to—let me ask you this, you referenced in your figures the 

mining, is that the oil and gas development that occurs also? 

Acting Commissioner Galvin. Uh-huh. 

Representative Burgess. We did some positive reflection there; 

is that correct? 

Acting Commissioner Galvin. Correct. 

Representative Burgess. Even with the price of natural gas 

fairly low, the price of oil has maintained a high level, but the overall outlook for that sector is it something that is positive or negative? 

Acting Commissioner Galvin. Well, we avoid forecasting, but 

mining has been growing recently due to oil—support activities for 

oil and gas mining. 

Representative Burgess. And again I would just reemphasize 

the administration could go a long way toward the economic recovery of this country, producing American jobs and American energy, 

and I think your data today supports that. 

Mr. Chairman, I cannot see the clock so I have no earthly idea 

of whether I am yielding back time or whether I have run over. 

Representative Cummings. About 2 minutes over. 

Representative Burgess. I appreciate your indulgence and I 

yield back whatever time remains. We might in the future try to 

have the clock visible. 

Representative Cummings. I agree. 

Just one last question. Let me just pick up on something that 

Mr. Mulvaney was talking about, the public sector jobs. We have 

lost a lot of jobs in the public sector, have we not? What did you 

say, 276,000? 

Acting Commissioner Galvin. Correct, over the year. That was 

lost. 

That is correct, 276,000 government jobs lost over the year. 

Representative Cummings. And do you see a trend with regard to the loss of those jobs? In other words, is that a steady trend 

going down? We hear a lot of complaints about public service workers and making government smaller. I know we are talking 

about—I think you said State, local and Federal; is that right? 

Acting Commissioner Galvin. Correct. Government has been 

losing since—well, pretty steadily since near the end of 2010. State 

and local government had employment peaks in August 2008 and 

USPS has been losing jobs for far longer. 
21 

Representative Cummings. All right, the question that I always ask is if somebody were watching this today and they were 

trying to find employment based upon what you see there, what 

are the areas, fields that you would tell them are—not that you 

would be giving them advice, you would be telling them what 

seems to be growing, the fields that seem to be growing, and the 

geographic areas, somebody who is really desperate for a job and 

trying to get something out of this hearing as to where they might 

go to get a job? 

Acting Commissioner Galvin. Well, this week BLS just published our employment projections for the period ending 2020. So 

they provide sort of a job outlook for occupations. Just to summarize, these projections showed the largest number of jobs are in 

three sort of classes of occupations. One is called office and administrative support occupations; these are jobs like customer service 

representatives and bookkeeping clerks. Second big category of projected growth is in health care practitioners and technical occupations. Jobs like registered nurses, which we project to grow by 

700,000 jobs by 2020. And physicians and surgeons are in that 

group, too. The group with the third largest rate of increase or projected growth is sales and related occupations, like sales representatives and cashiers. 

Representative Cummings. And what about geographic areas? 

If somebody wants to move from a State that has a very high unemployment rate—I think you mentioned a little bit earlier a few 

States that were doing pretty good with regard to jobs, what States 

would you tell them that they might want to look at? 

Acting Commissioner Galvin. We don’t do—— 

Representative Cummings. I know Texas would be one. 

Acting Commissioner Galvin. Uh-huh. We don’t do these projections by State but regarding unemployment rates, States with 

the lowest unemployment rates in our most recent release, December 2011, were North Dakota, Nebraska, South Dakota, New 

Hampshire, Vermont, Iowa, Minnesota. 

Representative Cummings. Mr. Mulvaney, just 2 minutes, 3 

minutes. 

Representative Mulvaney. I won’t need that much time, Mr. 

Chairman. Mr. Galvin, just to follow up on a question the chairman 

asked you a second ago, the 276,000 government jobs that were lost 

in 2011, approximately what percentage of the overall government 

workforce does that number represent? 

Acting Commissioner Galvin. We will have to dig that up. 

Representative Mulvaney. I thought I had seen a number of 

roughly 22 million government jobs as of last month. 

Representative Cummings. Is that State, local and Federal? 

Representative Mulvaney. Uh-huh. Yes, sir, I believe it to be. 

Mr. Nardone. That would be a decline of 1.2 percent of the level 

in January 2011. 

Representative Mulvaney. So for all of 2011 the size of the 

government workforce, Federal, State and local, shrank by 1.2 percent? 

Mr. Nardone. I believe that is correct. 

Representative Mulvaney. Mr. Galvin said earlier in his testimony that we are still 5.6 million jobs short in the overall economy 
22 

from the beginning of the recession. What percentage does that 

represent of the overall workforce? 

Mr. Nardone. That is about 4 percent of the current workforce. 

I don’t really have what it was, the decline from the start. 

Representative Mulvaney. It would be a little bit higher but 

about the same. Thank you, gentlemen. That is all I have. 

Representative Burgess. Could I just? 

Representative Cummings. Mr. Burgess for 2 minutes. 

Representative Burgess. One last question. We are grappling 

with the unemployment insurance extension here on the floor this 

week, next week. Typically in your experience, just purely from a 

statistical perspective and not a policy perspective, I am not asking 

you to speculate, but when unemployment benefits run out, what 

typically happens to the unemployment rate? 

Acting Commissioner Galvin. Well, that is a policy question. 

Representative Burgess. No, I am asking you for statistical 

analysis. You have looked at it from previous years. Is there a 

trend or is this a non sequitur? 

Acting Commissioner Galvin. We really haven’t looked at the 

relationship between the rise in the unemployment rate and the 

rise in unemployment insurance. 

Representative Burgess. Would you be good enough to look at 

that for me and respond to me between this month and next 

month? It is something I know that holds a lot of interest for a lot 

of us. 

Acting Commissioner Galvin. It is not something BLS does, 

but we can certainly look around at what other studies are out 

there and bring it to your attention. 

Representative Burgess. I would appreciate it. 

[Letter dated dated February 12, 2012, transmitting Acting Commissioner John M. Galvin’s response to Representative Michael C. 

Burgess appears in the Submissions for the Record on page 79.] 

Representative Cummings. Mr. Mulvaney. 

Representative Mulvaney. The Bureau clearly tracks the 

length of period of time that folks are on unemployment. Is there 

data available that would or could show us when folks on the average come off of employment and go back into the workforce, whether it would be in week 2 or 8 or 27? 

Mr. Nardone. We don’t actually track when people are on unemployment insurance. We do have some statistics for people who are 

unemployed, how long they are unemployed before they either find 

employment or go out. We developed that over the past year and 

we could provide an article that we wrote about that to you. 

[Letter dated February 12, 2012, transmitting Acting Commissioner John M. Galvin’s response to Representative Mick Mulvaney 

appears in the Submissions for the Record on page 84.] 

Representative Mulvaney. Thank you, gentlemen. I appreciate 

that. 

Representative Cummings. Gentlemen, I want to thank you 

very much. And Mr. Galvin, welcome again. It does appear that we 

are moving in the right direction, not moving as fast as all of us 

would like because there are so many people unemployed. I know 

particularly in my district I see it every day, I live I amongst it, 
23 

high rate of unemployment, but the fact is we are moving in the 

right direction, and I want to thank you very much. 

[Whereupon, at 10:43 a.m., the committee was adjourned.] 

(25) 

SUBMISSIONS FOR THE RECORD 
26 

PREPARED STATEMENT OF REPRESENTATIVE ELIJAH CUMMINGS

Good morning. Chairman Casey couldn’t be here today and I’m pleased to stand 

in for him this morning. 

I’d like to welcome Acting Commissioner John Galvin this morning as well as Mr. 

Thomas Nardone, Acting Associate Commissioner for Employment and Unemployment Statistics, and Dr. Michael Horrigan, Associate Commissioner for Prices and 

Living Conditions. 

I want to make a couple of overall comments about the economic recovery before 

diving into this month’s employment numbers. 

In the second half of 2011, economic momentum picked up. 

The labor market continued to strengthen—adding 100,000 or more jobs for four 

straight months. 

Additionally, we learned last week that GDP grew at a 2.8 percent annual rate 

in the fourth quarter, an improvement over the previous three quarters of 2011, 

though inventory rebuilding accounted for much of the growth. 

There are other encouraging signs. The manufacturing sector continues to show 

strength. 

• The ISM Manufacturing Index reading of 54.1 percent in January marked the 

30th consecutive month of expansion in the manufacturing sector. 

And the unemployment rate has been moving in the right direction. During 2011, 

the national unemployment rate fell from 9.4 percent to 8.5 percent. 

However, workers who have been out of work for long periods continue to struggle 

to find new jobs. More than 42 percent of the unemployed have been jobless for six 

months or more. 

We need to help workers regain their footing and bolster the recovery by extending the payroll tax cut for the remainder of the year and continuing unemployment 

insurance for workers who are counting on these benefits to make ends meet. 

Both of these policies put money in people’s pockets—boosting demand, creating 

jobs and strengthening our economy. 

As the January Jobs report shows, we are making progress. But we must continue 

to invest in education, infrastructure and our workers. 

As I have said before, we must also take on the housing crisis. Without a smart, 

sensible path forward in housing, we cannot sustain this economic recovery. 

TODAY’S EMPLOYMENT REPORT FROM BLS

Job Gains 

• The economy added private-sector jobs for the 23rd straight month. • During January, the economy gained 257,000 private sector jobs. Due to the 

loss of government jobs, overall, the economy added 243,000 jobs during the 

month. • The manufacturing sector, which added 237,000 jobs in 2011, gained 50,000 jobs 

in January. • In addition, the professional and business services sector added 70,000 jobs, and 

hasn’t lost jobs since March 2010. • Employment in state and local government was basically unchanged in January. In 2011, state and local governments shed 235,000 jobs and continue to 

face budget challenges that present a headwind for the economy. 

Unemployment 

• The overall unemployment rate was 8.3 percent, the lowest since February, 

2009. • Even with this progress, more than 12.7 million people are looking for work, 

but can’t find it. • The unemployment rate in the African-American community was 13.6 percent. • Among Hispanic workers, the unemployment rate was 10.5 percent. • While the unemployment rate for Veterans was 7.5 percent, Gulf War-era II 

Veterans faced an unemployment rate of 9.1 percent. 

Summary 

• Today’s employment report shows that the labor market continues to recover. 

The job gains in January continued the momentum from the fourth quarter of 

2011. • However, unemployment remains too high, unacceptably high, and we need to 

stay focused on creating jobs. 
27 

• Acting Commissioner Galvin, I look forward to your testimony. 

I would like to introduce today’s witness. Mr. John M. (Jack) Galvin serves as Acting Commissioner of the Bureau of Labor Statistics. He has worked at the BLS 

since 1978 in various capacities including Deputy Commissioner, Associate Commissioner for Employment and Unemployment Statistics and Assistant Commissioner 

for Producer Price Indexes. Mr. Galvin holds a B.A. in Economics from the University of Illinois and an M.A. in Economics from George Washington University. 
28 
29 

PREPARED STATEMENT OF REPRESENTATIVE KEVIN BRADY, VICE CHAIRMAN, JOINT

ECONOMIC COMMITTEE

Commissioner Galvin, we welcome you in your new capacity to the Joint Economic 

Committee’s hearing on the employment situation. Of course, we know you well 

from your appearances at prior employment hearings and as a dedicated BLS employee for many years. We appreciate your service and look forward to your testimony. We also welcome the members of your staff. 

The labor market is not recovering fast enough considering how depressed it has 

been. Thirty-one months into the Reagan recovery, we had added 8.7 million new 

payroll jobs. Today, however, the economy, at best, is at a crawl. We still are 6 million jobs short of the prerecession employment level; labor force participation is the 

lowest in decades; and yet unemployed workers still account for more than 8% of 

the shrunken workforce. Whatever claims that President Obama makes about how 

much worse the recession could have been, his policies have not ‘‘stimulated’’ the 

economy. We now have a huge federal debt, continuing large deficits, and sluggish 

growth. 

More than 21⁄2 years have passed since the recession formally ended, yet real GDP 

growth is now expected to decline this year from a less-than-stellar 2.8% in the last 

quarter. In contrast, we averaged 6.1% real GDP growth during the first 10 quarters of the Reagan recovery. Business is hoarding cash as it still holds investments 

below pre-recession levels, and it still is not materially stepping up hiring, despite 

what the payroll job number says. 

Consider the chart behind me. The top line shows hires and the bottom line layoffs. The huge churn is striking: over 4 million hires and 1.7 million layoffs, an 

image quite different from that of simply looking at net job changes. 

But the key observation is that hires remain at the mid-recession level. With all 

the money the Administration has spent to stimulate employment, hires are still 

down about 1.4 million per month from before the recession. In that light, the 

243,000 payroll jobs gained today are not that impressive. The magnitude of annual 

benchmark revisions, the most recent of which BLS is introducing with today’s report on the employment situation, only underscores this point. 

The low hires help to explain why labor force participation is down. If hiring has 

not risen in well over three years with a huge pool of unemployed competing for 

jobs, then why stay in the labor force? 

The unemployment rate and the payroll jobs number are important statistics, but 

they do not reveal the full extent of the problem we have. 

The President’s current actions and proposals are feeble attempts to lift a $15 trillion economy and with the equivalent of matchsticks at the same time that it is 

tightening regulations, imposes an avalanche of new regulations, and thwarts the 

biggest shovel ready project, the Keystone pipeline, in the country. It threatens to 
30 

raise taxes all the while adding to our national debt with continued undisciplined 

deficit spending. 

Strong private investment and job creation require a regulatory environment that 

facilitates operation of the free market economy and a tax environment that engenders expansion, not retrenchment. President Obama is working against the free 

market economy, undermining it with subsidies and special favors in some areas 

and harshly constraining and punishing it in others. That will cause anemic growth, 

and the labor market shows it. 

According to the Congressional Budget Office (CBO) slowing economic growth will 

cause the unemployment rate to rise during this year and the next. The CBO 

projects that the unemployment rate will hit 8.9% in the fourth quarter and 9.2% 

in the last quarter of 2013. Americans are eager for work and willing to work hard. 

The economic policies of President Obama and congressional Democrats have failed. 

Hardworking taxpayers deserve better. The federal government needs to get out of 

the way so private job creation and hiring can accelerate. 

Mr. Galvin, I look forward to hearing your testimony. 
31 
32 

PREPARED STATEMENT OF JOHN M. GALVIN, ACTING 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. 

The unemployment rate decreased to 8.3 percent in January, and nonfarm payroll 

employment rose by 243,000. In 2011, nonfarm employment increased by an average 

of 152,000 per month. Job growth was widespread in the private sector in January, 

with the largest gains occurring in professional and business services, leisure and 

hospitality, and manufacturing. 

Professional and business services added 70,000 jobs over the month, compared 

with an average monthly gain of 48,000 in 2011. Nearly half of the January increase 

occurred in employment services (+33,000), as temporary help employment continued to trend up. Also within professional and business services, employment rose 

in accounting and bookkeeping (+13,000) and in architectural and engineering services (+7,000). 

Employment in leisure and hospitality increased by 44,000, mostly in food services 

(+33,000). Health care employment rose by 31,000, with job gains in hospitals 

(+13,000) and ambulatory care services (+13,000). Employment in both wholesale 

and retail trade continued to trend up over the month. 

In the goods-producing sector, manufacturing employment increased by 50,000 in 

January, nearly all in durable goods manufacturing. Fabricated metal products, machinery, and motor vehicles each added jobs. Over the past 2 months, construction 

employment rose by 52,000, mainly among nonresidential specialty trade contractors. Mining employment continued to expand in January (+10,000). Since a recent 

low point in October 2009, mining has added 172,000 jobs. 

Government employment changed little in January. Over the last 12 months, employment in the sector has decreased by 276,000 with declines in local government; 

state government, excluding education; and the U.S. Postal Service. 

Average hourly earnings of all employees on private nonfarm payrolls increased 

by 4 cents in January to $23.29. Over the past 12 months, average hourly earnings 

have risen by 1.9 percent. From December 2010 to December 2011, the Consumer 

Price Index for All Urban Consumers (CPI-U) increased by 3.0 percent. 

In accordance with annual practice, the establishment survey data released today 

reflect the incorporation of benchmark revisions. Each year, BLS re-anchors the 

sample-based survey estimates to full universe counts of employment, primarily derived from administrative records of the unemployment insurance tax system. The 

level of nonfarm payroll employment in March 2011 was revised up by 162,000 (not 

seasonally adjusted) or 0.1 percent. The average benchmark revision over the past 

10 years was plus or minus 0.3 percent. (Further information about the impact of 

the benchmark revision is contained in our news release and on our Web site at 

http://www.bls.gov/web/empsit/cesbmart.htm.) 

Before discussing the data from our survey of households, I would note that, as 

is our annual practice, we have incorporated new population controls into the January estimates. Data beginning in January 2012 reflect population controls based on 

Census 2010, updated information on net international migration, and some methodological adjustments in the estimation process. Official estimates for December 

2011 and earlier months will not be revised to incorporate the Census 2010-based 

controls. The impact of the new controls on the unemployment rate is negligible. 

However, two important household survey measures, the employment-population 

ratio and the labor force participation rate, are lowered by a change in the composition of the population (based on comparisons of December 2011 estimates computed 

using the old and new controls). The new controls raise the population of persons 

55 years and older and, to a lesser extent, persons 16-24 years of age. Both of these 

groups are less likely to be in the labor force than the general population. (Additional information about the Census 2010-based population controls and impact can 

be found in our news release and on our Web site at http://www.bls.gov/cps/ 

cps12adj.pdf.) 

Returning to the data for January, the unemployment rate continued to decline 

over the month. Since August 2011, the jobless rate has fallen from 9.1 to 8.3 percent, and the number of unemployed persons has declined by about 1.2 million. In 

January, the number of persons unemployed for 27 weeks or more was little 

changed at 5.5 million and made up 42.9 percent of the total. The employment-population ratio increased over the month, and the labor force participation rate was unchanged, after accounting for the impact of Census 2010-based population controls. 

To summarize January’s labor market developments, nonfarm payroll employment 

increased by 243,000, and the unemployment rate decreased to 8.3 percent. 
33 

My colleagues and I now would be glad to answer your questions. 
34 
35 
36 
37 
38 
39 
40 
41 
42 
43 
44 
45 
46 
47 
48 
49 
50 
51 
52 
53 
54 
55 
56 
57 
58 
59 
60 
61 
62 
63 
64 
65 
66 
67 
68 
69 
70 
71 
72 
73 
74 
75 
76 
77 
78 
79 
80 
81 
82 
83 
84 
85 
86 
87 
88 

Æ