FOR DELIVERY: 9:30 A.M., E.S.T.

FRIDAY, NOVEMBER 4, 2005

Advance copies of this statement are made available to the 

press under lock-up conditions with the explicit 

understanding that the data are embargoed until 8:30 a.m. 

Eastern Standard Time.

Statement of

Kathleen P. Utgoff

Commissioner

Bureau of Labor Statistics

before the

Joint Economic Committee

UNITED STATES CONGRESS

Friday, November 4, 2005

Mr. Chairman and Members of the Committee:

I appreciate this opportunity to comment on the labor 

market data we released this morning.

Nonfarm payroll employment was little changed in 

October (+56,000), and the jobless rate was 5.0 percent. 

Payroll employment was flat in September (-8,000, as 

revised).

Before discussing the payroll survey data in detail, I 

would note that the October estimates were prepared using 

the same modified procedures that we introduced in 

September to better gauge employment developments in areas 

affected by Hurricane Katrina. We will continue to 
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evaluate our data collection and estimating procedures and 

will resume standard survey operations when it is 

appropriate.

You will recall that in our analysis of the September 

employment data, we concluded that the weakness was largely 

due to the job loss in areas devastated by Hurricane 

Katrina. This conclusion was based on an estimate of the 

change in payroll employment excluding all of the sample 

units in the disaster areas. That exercise showed that job 

growth outside the disaster areas was in line with the 

average monthly increase for the nation as a whole during

the prior year (about 200,000). We did a similar exercise 

for October and concluded that the relatively weak increase 

was not attributable to the areas directly affected by 

Katrina. Rather, job growth in the remainder of the 

country appeared to be below trend in October. In 

addition, the direct impact of Hurricane Rita on the 

national employment data for October was judged to be 

minimal. It is possible, of course, that employment growth 

for the nation could have been held down by indirect 

effects of Hurricanes Katrina and Rita, for example, 

because of their impact on gas prices. (Hurricane Wilma 

made landfall after the October survey reference period.) 
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Turning to the national developments by industry, 

leisure and hospitality employment edged down in October. 

This followed a substantial decline in September, at least 

some of which was hurricane related. Employment in retail 

trade was basically unchanged in October after a large 

decline in September. In addition, there was little job 

growth in professional and business services in October; 

the number of jobs in its temporary help component showed 

little movement over the month.

A few major industries posted notable job gains in 

October. Employment in the construction industry rose by 

33,000 over the month, compared with average growth of 

about 21,000 jobs per month during the first 9 months of 

the year. Some of the October gain reflects post-hurricane 

rebuilding and clean-up efforts. Employment in financial 

activities continued to increase, rising by 22,000; about 

half of this gain occurred in credit intermediation. 

Employment in health care and social assistance also 

continued to expand in October, rising by 23,000. 

Elsewhere in the economy, employment in the 

information industry fell by 15,000 over the month, mostly 

because of a large decline in motion pictures and sound 

recording. 
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Factory employment edged up in October because of the

return of aerospace workers from a strike. The 

manufacturing workweek rose by an unusually large amount, 

0.4 hour; increases in the factory workweek occurred 

throughout most of the component industries. 

Average hourly earnings of private production or 

nonsupervisory workers on private nonfarm payrolls rose by 

8 cents in October to $16.27, following a 2-cent increase 

in September. Over the year, average hourly earnings were 

up by 2.9 percent.

Looking at some major household survey indicators, the 

jobless rate was 5.0 percent in October. The unemployment 

rate basically has held steady since May of this year. 

Both the labor force participation rate and employmentpopulation ratio were little changed in October, at 66.1 

percent and 62.9 percent, respectively.

I’d also like to discuss some preliminary findings on 

the employment status of persons directly affected by 

Hurricane Katrina. Shortly after the hurricane struck, 

Bureau analysts, together with our colleagues at the Census 

Bureau, devised a short series of hurricane-related 

questions for inclusion in the October Current Population 

Survey. These questions were designed to identify and 

solicit information from survey respondents who had 
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evacuated from their homes, even temporarily, because of 

Hurricane Katrina. 

It is important to note that the estimates based on 

these questions are not representative of all evacuees, but 

only those who were interviewed through normal household 

survey procedures. Some evacuees reside outside the scope 

of the survey, such as those currently living in hotels or 

shelters.

Based on information collected from CPS-sampled 

households, there were about 800,000 persons age 16 and 

over who had evacuated from where they were living in 

August due to Hurricane Katrina. About 300,000 of these 

persons had returned to the home from which they had 

evacuated, and the remaining 500,000 had not returned to 

their August residence. 

Of the 800,000 evacuees, 55.7 percent were in the 

labor force in October, and their unemployment rate was 

24.5 percent. The jobless rate among those who have not 

been able to return home (33.4 percent) was substantially 

higher than the rate for those who had returned to their 

August place of residence (10.5 percent). Again, these 

figures do not reflect the situation of persons still 

residing in shelters, hotels, or other places out of the 

scope of the household survey.
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Even with their limitations, we believe that these 

data provide useful information about the employment status 

of those persons affected by Hurricane Katrina. As people 

make the transition to more permanent housing, the 

estimates may become more representative of the situation 

of all evacuees. We plan to keep these special Katrinarelated questions in the survey at least through January

2006. 

Summarizing labor market developments for October, 

nonfarm payroll employment was little changed over the 

month, and the unemployment rate was 5.0 percent. 

My colleagues and I now would be glad to address your 

questions.