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

FRIDAY, SEPTEMBER 5, 2003

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 Daylight Time.

Statement of

Kathleen P. Utgoff

Commissioner

Bureau of Labor Statistics

before the

Joint Economic Committee

UNITED STATES CONGRESS

Friday, September 5, 2003

Mr. Chairman and Members of the Committee:

I am pleased to have this opportunity to comment on 

the employment and unemployment data we released this 

morning.

The unemployment rate, at 6.1 percent, was essentially 

unchanged in August. Nonfarm employment declined by 93,000 

over the month. Manufacturers again made substantial job 

cuts, and employment in several other industries continued 

to trend down. On the positive side, employment continued 

to trend up in health care and construction.
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Manufacturing employment fell by 44,000 in August. 

Job losses continued to be pervasive, with some of the more 

notable over-the-month declines occurring in textiles and 

apparel, wood products, and electrical equipment. In the 

past 3 years, some 2.7 million manufacturing jobs have been 

lost, including a decline of 431,000 this year. In August, 

the factory workweek was unchanged at 40.1 hours.

Within the information sector, the telecommunications 

industry continued to shed jobs. Employment in this 

industry has declined by 212,000 from its peak of 1.3 

million in March 2001. Other sectors in which employment 

continued to trend down over the month were wholesale trade 

and transportation and warehousing.

Offsetting some of these losses, employment in the 

health care industry resumed growth, after showing little 

change in July. Health care has added over a quarter of a 

million jobs in the past 12 months. 

Construction sector employment was up by 19,000 in 

August and has increased by 122,000 over the past 6 months. 

Temporary help employment continued to trend up, although 

the increases in July and August were notably smaller than 

the gains in May and June. 
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Average hourly earnings increased by 2 cents in 

August, following a 5-cent increase in July. Over the 

year, hourly earnings have risen by 2.9 percent. 

Turning to data from our household survey, the number 

of unemployed persons and the unemployment rate were 

essentially unchanged over the month. The long-term 

unemployed continued to make up a little more than onefifth of the jobless. 

The civilian labor force was little changed over the 

month. Over the year, the number of persons marginally 

attached to the labor force was up. The subset of these 

persons who cited discouragement over job prospects as 

their reason for not searching for work also rose over the 

year. In August, they numbered half a million. 

As a side note, I would point out that the blackout 

which affected parts of the Northeast and Midwest beginning 

August 14 occurred during the survey periods for both our 

payroll and household surveys. While this event caused 

significant disruptions to economic activities, it is 

unlikely to have had any effect on the employment estimates 

from either survey. In the establishment survey, persons 

paid for any part of the pay period that included the 12th

were considered employed. In the household survey, persons

who worked any part of that week as well as those who were 
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prevented from working because of the blackout were

considered employed.

Business closings resulting from the blackout reduced 

the number of hours people worked. However, some people 

received pay for the hours not worked, and the payroll 

survey measures hours paid, rather than hours actually 

worked. In addition, the blackout required some workers to 

put in extra hours, and other workers made up the time they 

lost. Thus, while the net effect from the blackout on 

payroll hours estimates cannot be quantified, it is likely 

to have been small. In fact, the measure of average weekly 

hours was unchanged over the month.

Before closing, I would like to comment on employment 

trends as measured by the payroll and household surveys, an 

issue that has been receiving some attention recently. 

Since November 2001, the NBER-designated trough of the most 

recent business cycle, payroll employment has fallen while

nonagricultural wage and salary employment from the 

household survey has been essentially flat. Some observers 

have speculated that the household survey provides a better 

indication of the trend in employment at and around turning 

points in the business cycle. It is our judgment that the 

payroll survey provides more reliable information on the 

current trend in wage and salary employment. The payroll 
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survey has a larger sample than the household survey--

400,000 business establishments covering about one-third of 

total nonfarm payroll employment. Moreover, the payroll 

survey estimates are regularly anchored to the 

comprehensive count of nonfarm payroll employment derived 

from the unemployment insurance tax records. 

To summarize the August data released today, payroll 

employment declined over the month, and the unemployment 

rate, at 6.1 percent, was about unchanged.

My colleagues and I would be glad to answer any 

questions you might have.