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                             FOR DELIVERY: 9:30 A.M., E.D.T.
                             FRIDAY, AUGUST 5, 1994
 
 
 
 ___________________________________________________________
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                         Statement of
 
                     Katharine G. Abraham
                         Commissioner
                  Bureau of Labor Statistics
 
                          before the
 
                   JOINT ECONOMIC COMMITTEE
 
                    UNITED STATES CONGRESS
 
                        August 5, 1994
 
 
 
 Mr. Chairman and Members of the Committee:
 
      Once again, I would like to thank you for the
 
 opportunity to offer a few comments on the Nation's
 
 employment situation.
 
      Payroll employment continued to grow at a healthy pace
 
 in July, and the unemployment rate held about steady for the
 
 second straight month.
 
      The number of payroll jobs rose by 259,000 last month,
 
 following an even larger gain in June.  As I reported to you
 
 at the Committee's previous hearing, some of the strong June
 
 increase resulted from the relatively late timing of the
 
 survey, which picked up extra hiring in some highly seasonal
 
 industries that more typically would not have been counted
 
 
                              -2-
 
 until July.  Thus, the size of the June increase probably is
 
 somewhat overstated and that of July somewhat understated.
 
 Over the 2 months, job growth averaged about 310,000.  So
 
 far this year, payroll job increases have totaled nearly 2.0
 
 million.
 
      As in June, the bulk of the job growth in July occurred
 
 in the services (138,000) and retail trade (75,000)
 
 industries.  Within services, the number of jobs in business
 
 services, especially personnel supply, rose sharply.  There
 
 also was continued job growth in health and social services,
 
 consistent with the recent trend in each industry.  In
 
 retail trade, as in services, the large July gain followed
 
 an even larger June increase.  Jobs in eating and drinking
 
 places continued to expand, and there were also substantial
 
 gains in furniture and food stores.  Employment in retail
 
 trade has been strong over the past year and a half.
 
      The number of construction jobs rose by 25,000 in July,
 
 continuing the pace of moderate gains evident in recent
 
 months.  Employment in the Nation's factories edged up only
 
 slightly in July, following fairly strong growth in June.
 
 July's gains were dampened by an increase of 12,000 in the
 
 number of workers on strike (primarily in the construction
 
 machinery industry).  In addition, auto plant closings for
 
 vacations and model changeovers during the July survey
 
 period held down hiring by these plants and led to temporary
 
 layoffs at auto parts suppliers.  There were job gains in
 
 
                              -3-
 
 the furniture, printing and publishing, rubber and plastics,
 
 and food processing industries.  Factory hours were off by
 
 another tenth of an hour and are now down by three-tenths of
 
 an hour over the past 3 months; at 41.9 hours, however, the
 
 factory workweek continues to be high by historical
 
 standards.
 
      Data from the household survey show a quite different
 
 picture of recent employment trends.  Following a large
 
 decline in June, total employment was unchanged on a
 
 seasonally adjusted basis in July.  Since January, the
 
 household survey has shown an employment increase of about
 
 half a million, only a quarter of that shown by the payroll
 
 survey.  As I mentioned in my testimony last month, short-
 
 term movements in employment as measured by the two surveys
 
 often differ.  In the longer run, however, they usually
 
 track more closely.
 
      After trending downward through May, the overall
 
 unemployment rate--at 6.1 percent in July--has been at about
 
 the same level for the past 3 months.  The rate for adult
 
 men rose by three-tenths of a percentage point in July to
 
 5.6 percent.  Rates for adult women and teenagers, at 5.3
 
 and 17.7 percent, respectively, were little changed.  The
 
 total number of unemployed persons, at 8.0 million, was
 
 about 700,000 below the January level.
 
      I would like to spend a few minutes talking about two
 
 groups of people who are not counted in the official
 
                              -4-
 
 unemployment total but who have shown some interest in
 
 acquiring a job.  Discouraged workers--the more familiar
 
 group--are persons who want jobs but have given up searching
 
 because they do not think they could find work, giving
 
 reasons for not currently searching such as believing that
 
 no suitable work is available or that they lack the
 
 necessary training, skills, or experience to land a job.
 
 There were about 550,000 discouraged workers in July (on a
 
 not seasonally adjusted basis).  The number has hovered
 
 between 400,000 and 600,000 since the new, more restrictive,
 
 definition of discouragement was introduced as part of the
 
 overall redesign of the household survey in January.  Two
 
 new requirements were added to classify a person as
 
 discouraged:  they must have engaged in some job search
 
 within the previous year, and they must indicate directly
 
 that they are currently available to take a job.  The effect
 
 of the new definition has been to lower the estimate of the
 
 number of discouraged workers by more than one-half as
 
 compared with the former measure.
 
      In addition to those people who are formally classified
 
 as discouraged, there is a larger number of people not
 
 currently in the labor force who have shown some interest in
 
 a job and say they are available for work, but are not
 
 currently engaged in active job search for reasons such as
 
 family responsibilities.  In July, there were some 1.3
 
 million persons in this latter category.  As we acquire more
 
                              -5-
 
 data from the redesigned household survey, we will be
 
 studying the behavior of these and other groups who are out
 
 of the labor force but have expressed some interest in work.
 
      In summary, the July data show continued strength in
 
 the Nation's labor market.  Payroll employment expanded and
 
 the unemployment rate held about steady at 6.1 percent.
 
 
 
      My colleagues and I now will be happy to answer any
 
 questions you may have.