TEXT

 
 
                              FOR DELIVERY: 10:00 A.M., E.S.T.
                              FRIDAY, NOVEMBER 3, 1995
 
 
 
  ___________________________________________________________
  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 time.  ____________________________________________
 
 
 
                          Statement of
 
                      Katharine G. Abraham
                          Commissioner
                   Bureau of Labor Statistics
 
                           before the
 
                    Joint Economic Committee
 
                     UNITED STATES CONGRESS
 
                        November 3, 1995
 
 
 
 
  Mr. Chairman and Members of the Committee:
 
       I appreciate this opportunity to comment on the labor
 
  market data released earlier this morning.
 
       Payroll employment rose by 116,000 in October and the
 
  unemployment rate was little changed at 5.5 percent.
 
  Overall job growth would have been somewhat larger were it
 
  not for a net increase in strike activity that reduced the
 
  number of workers on payrolls by 23,000.
 
       Job growth in the services industry totaled 57,000 in
 
  October, the second straight month of gains below the past
 
  year's monthly average.  Employment in health services and
 
  in engineering and management services continued to expand
                               -2-
 
 
 
 
  in October, but employment in business services was about
 
  unchanged, following large back-to-back increases.  Within
 
  business services, a decline in personnel supply employment
 
  offset continued expansion in computer services.  October
 
  job growth in services was further tempered by declines in
 
  other component industries, such as hotels and motion
 
  pictures.
 
       Employment developments elsewhere in the service-
 
  producing sector of the economy varied widely.  The number
 
  of jobs in transportation advanced by 15,000 (though 5,000
 
  of this increase reflected workers returning from a strike)
 
  and wholesale trade added 12,000 jobs.  There were also job
 
  gains in finance and real estate, probably reflecting the
 
  recent declines in mortgage interest rates.  In retail
 
  trade, employment essentially held steady in October,
 
  following an increase in the prior month.  Federal
 
  government employment continued to edge downward.
 
       In construction, employment rose by 28,000 in October,
 
  after seasonal adjustment, on the heels of a similar
 
  increase in September.  The construction job gains have been
 
  confined largely to special trade contractors.  There has
 
  been some indication in recent months of a pick-up in the
 
  housing market, again reflecting favorable home financing
 
  conditions.  Despite the gains in the past two months, the
 
  pace of job growth in construction remains substantially
 
  below that set last year.
 
                               -3-
 
 
 
 
       Employment declined by 21,000 in manufacturing, but the
 
  decrease reflects the absence from the payroll count of
 
  28,000 striking workers, mostly in aircraft manufacturing.
 
  Had it not been for this strike activity, manufacturing
 
  employment would have been about unchanged in October,
 
  following job declines between March and September that
 
  totaled about 200,000.  There were employment increases in
 
  several manufacturing industries in October, notably
 
  industrial machinery, fabricated metals, and food products,
 
  but employment continued to fall in apparel.  Both the
 
  factory workweek and factory overtime declined by two-tenths
 
  of an hour in October.  Neither of these measures has shown
 
  any clear trend in recent months.
 
       Average hourly earnings, as measured by the payroll
 
  survey, rose 6 cents in October, following fairly sharp
 
  increases in 3 of the prior 4 months.  I would note,
 
  however, that this series is highly volatile from month to
 
  month and that the over-the-year increase in hourly earnings
 
  of 3.0 percent for October is only slightly higher than the
 
  over-the-year gains registered earlier in the year.
 
       Turning to the data from the household survey, the
 
  unemployment rate was about unchanged in October at 5.5
 
  percent and has shown little definitive movement for some
 
  time.  Jobless rates for most major demographic groups held
 
  steady in October, though the rates for adult men and blacks
 
                               -4-
 
 
 
 
  fell slightly.  Total employment and the labor force were
 
  basically unchanged over the month.
 
       Other measures of labor market difficulty from the
 
  household survey also showed little change over the month.
 
  The number of persons employed part time even though they
 
  would have preferred full-time work slipped a bit to 4.4
 
  million, but has not shown any meaningful trend over the
 
  past year.  Among those outside the labor force, the number
 
  of persons marginally attached to the labor market--those
 
  who are not currently looking for work but indicate that
 
  they want and are available for work and have looked for
 
  employment sometime in the recent past--was little changed
 
  over the year at 1.6 million.  The number of discouraged
 
  workers--a subset of the marginally attached who give a job
 
  market reason for not currently looking for work--was
 
  412,000, about the same as a year earlier.
 
       In summary, the job market changed little in October.
 
  Employment continued to expand at a modest pace, and the
 
  unemployment rate of 5.5 percent was basically in line with
 
  recent levels.
 
       Before responding to any questions you may have about
 
  the October data, I would like to spend a few moments
 
  discussing preliminary estimates of our benchmark revisions
 
  scheduled for release next June.  Once a year, the Bureau
 
  adjusts the payroll survey's sample-based employment
 
  estimates to incorporate the previous year's March universe
 
                               -5-
 
 
 
 
  employment counts in a process known as benchmarking.  These
 
  universe employment counts are derived principally from
 
  state unemployment insurance tax reports that nearly all
 
  employers are required to file.  By early November of each
 
  year, we typically have completed preliminary tabulations of
 
  these universe counts for the first quarter of the year.  We
 
  routinely share our estimate of the anticipated size of the
 
  benchmark revision for the prior March at the time we
 
  release our October Employment Situation report.
 
       Preliminary 1995 first quarter universe tabulations
 
  suggest that there was stronger job growth than we
 
  previously reported for the 12-month period ending in March
 
  1995.  Indications at this time are that the March 1995
 
  payroll employment estimates will be revised upwards by
 
  approximately 590,000 or 0.5 percent.  The historical
 
  average for benchmark revisions over the past decade has
 
  been plus or minus 0.3 percent, with the absolute value of
 
  the revisions ranging in size from zero to 0.7 percent.
 
       Final benchmark adjustments for March 1995 are
 
  scheduled to be formally introduced next June.  In the
 
  interim, BLS will continue to validate the UI universe
 
  counts and other benchmark source material.  At this time,
 
  it appears that approximately one-quarter of the total
 
  benchmark revision stems from an updated estimate of
 
  employment in the sectors not covered by the UI universe
 
  tabulations, for which employment counts must be developed
 
                               -6-
 
 
 
 
  from alternative sources.  Over the coming months, the
 
  Bureau will continue benchmark development and analysis
 
  activities which will include a focus on estimation
 
  procedures in this area.
 
 
 
       My colleagues and I now would be glad to answer your
 
  questions.