TEXT

 
 
 
                                       FOR DELIVERY: 9:30 A.M., E.D.T.
                                       FRIDAY, MAY 5, 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
 
                                   May 5, 1995
 
 
 
 
 
           Mr. Chairman and Members of the Committee:
 
                I appreciate this opportunity to comment on the labor
 
           market data released this morning.
 
                Payroll employment was essentially unchanged in April,
 
           at 115.8 million, and the unemployment rate rose three-
 
           tenths of a percentage point to 5.8 percent.
 
                Although our published estimate of seasonally adjusted
 
           payroll employment was little changed over the month, there
 
           were some special circumstances that need to be considered
 
           to set this lack of growth into proper context.  The period
 
           between our March and April surveys is always a time of
 
           employment buildup in certain seasonal industries, such as
 
           construction, services, and retail trade.  Our seasonal
 
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           adjustment process is designed to remove such seasonal
 
           growth and allow us to discern the underlying trend in
 
           employment.  It does so by examining past seasonal
 
           movements.
 
                As we discussed here last month, the growth of
 
           employment in March was boosted by mild weather, which
 
           contributed to an earlier than normal seasonal buildup both
 
           in construction and in amusements and recreation.  Some of
 
           the job gains recorded in March, therefore, likely reflected
 
           growth that otherwise would have been recorded in April.  In
 
           addition, our seasonal expectation for this April is much
 
           higher than it has been in recent years.  One reason is that
 
           in each of the past 3 years, that is, 1992-94, there were 5
 
           weeks between our March and April surveys, and those years
 
           were given the predominant weight in the construction of our
 
           current seasonal adjustment factors.  This year, there were
 
           only 4 weeks between the March and April surveys and, thus,
 
           one less week of seasonal hiring.  Partly as a result, the
 
           seasonal employment buildup expected for this April probably
 
           was too large.
 
                We have made some very rough attempts to quantify the
 
           impact of the unusual calendar pattern on the seasonal
 
           expectation of March to April employment change, although,
 
           as will become apparent, there is a large range of
 
           uncertainty connected with our estimates.  One approach was
 
           to examine our historical data to assess employment growth
 
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           from March to April, differentiating  between 4- and 5-week
 
           survey intervals.  Using several techniques, we found that
 
           we might expect about 70,000 less growth in years with 4
 
           weeks between surveys than in years with 5-week intervals.
 
                Another approach was to assume that the 841,000
 
           seasonal growth expected for April would have occurred
 
           evenly over a 5-week survey period.  This would suggest that
 
           a one-week shortfall might have depressed our seasonally
 
           adjusted employment estimate by about 168,000 jobs.
 
                Still another approach was to apply the seasonal
 
           factors for 1992 to the 1995 data.  The year 1992 was the
 
           last time that the seasonal factors were based predominantly
 
           on March and April surveys separated by 4 weeks.  Applying
 
           the 1992 factors to the 1995 data yields an expected
 
           seasonal increase in employment of 607,000 -- 234,000 less
 
           than the expectation implied by the actual 1995 factors.
 
           Using the old seasonal factors, then, we have a high-side
 
           estimated shortfall of 234,000 in the seasonally adjusted
 
           March-April employment changes we are reporting.
 
                Although it does seem clear that there was a "calendar
 
           effect" in April's data, given the diversity of the
 
           estimates I have just described, I cannot make a precise
 
           statement concerning its magnitude.  Even allowing for the
 
           possible impact of imperfect seasonal adjustment, however,
 
           the trend in payroll employment growth clearly is down from
 
           last year's rapid pace.
 
 
                                        -4-
 
 
                A noteworthy development in this regard is the emerging
 
           slowdown in manufacturing (an industry relatively immune
 
           from the seasonal issues we have been discussing).
 
           Employment in the nation's factories had been on a steady
 
           upward trend since the fall of 1993, with growth picking up
 
           substantially between September of last year and this
 
           February.  Over the last 2 months, however, factory
 
           employment has fallen by 39,000.  In addition, manufacturing
 
           weekly hours and overtime appear to be edging down from the
 
           extraordinarily high levels of recent months, although the
 
           decline for April may have been overstated due to imperfect
 
           adjustment for the Easter and Passover observances that
 
           occurred during the reference period.  Of the manufacturing
 
           industries that have been adding jobs recently, only
 
           industrial machinery continued to grow in April.  Industries
 
           tied to home building and buying, such as lumber and wood
 
           products and furniture and fixtures, experienced losses over
 
           the month.
 
                Turning to the data from our survey of households, the
 
           unemployment rate increased to 5.8 percent.  Although still
 
           well below the level at the beginning of 1994 -- 6.7
 
           percent -- the rate is now higher than the 5.4 percent
 
           figure attained in December and February.  Over the month,
 
           jobless rates edged up for all the major worker groups,
 
           except Hispanics.  The increase in unemployment in April was
 
 
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           concentrated among reentrants to the labor force and those
 
           on temporary layoffs from jobs.
 
                In summary, the special factors affecting the April
 
           figures notwithstanding, our data suggest that payroll
 
           employment growth has slowed from the strong pace set last
 
           year.  Manufacturing is showing signs of weakness, and
 
           unemployment has increased from its recent lows.
 
 
 
                My colleagues and I now would be glad to answer any
 
           questions you might have.