FOR DELIVERY: 9:30 A.M., E.S.T.
                         FRIDAY, MARCH 7, 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 Standard Time.


                        Statement of
                              
                     Kathleen P. Utgoff
                        Commissioner
                 Bureau of Labor Statistics
                              
                         before the
                              
                  Joint Economic Committee
                              
                   UNITED STATES CONGRESS
                              
                    Friday, March 7, 2003
                              
                              
                              
                              
                              
Mr. Chairman and Members of the Committee:

     I appreciate this opportunity to comment on the
February employment and unemployment data that the BLS
released this morning.  I look forward to working with you
and the other Committee members during the next 2 years.
Since this is my first opportunity to testify before the
Joint Economic Committee in this new Congress, I have tried
to put this month's labor market developments into the
longer-term context of the recent economic downturn.

     Nonfarm payroll employment fell by 308,000 in February,
after seasonal adjustment.  Since the recent employment peak
in March 2001, payroll employment has declined by 1.9
million.  The vast majority of that loss (1.6 million)
occurred in 2001.  In 2002, payroll employment turned toward
slow growth around midyear, but losses returned late in the
year.
     
     The widespread declines in February reflected continued
weakness in manufacturing and substantial job losses in
construction, retail trade, services, and transportation.
The unemployment rate, which is obtained from a separate
survey, was 5.8 percent in February, little different than
the January estimate and similar to the rates that prevailed
throughout much of 2002.
     
     Looking at the details of the February data from our
survey of employers, monthly employment declines continued
in manufacturing (-53,000).  Factory job losses have been
nearly continuous since April 1998 and have totaled nearly
2.5 million; most of the losses have occurred since the
recession began in March 2001.  Last month, job losses were
widespread in manufacturing, with continued declines in
industrial machinery, electronic equipment, fabricated
metals, furniture and fixtures, and chemical products.
Since November 2000, electronic equipment and industrial
machinery have accounted for about two in every five jobs
lost in manufacturing.
     
     A sharp employment decline of 48,000 in construction
followed a gain of half that magnitude in January.  Since
March 2001, the number of construction jobs has declined by
3.8 percent, substantially less than the declines posted in
most other labor market downturns.  Over the month, the
relatively small mining industry shed another 3,000 jobs;
since September 2001, job losses have totaled 24,000.

     Within the service-producing sector, retail trade
employment declined by 92,000 in February.  Eating and
drinking places (-85,000) accounted for most of the decline.
In retail trade overall, which has a holiday buildup and
layoff pattern, it is probably best to compare the February
figure with last July, before seasonal hiring began.  From
that perspective, retail employment is down by 163,000,
about half coming from losses in eating and drinking places.
     
     Employment in services had grown throughout most of
2002, but fell by 86,000 in February, the largest monthly
job loss since the fall of 2001.  Amusement and recreation
services and hotels and lodging places each fell
considerably short of their normal February hiring.
Industries that showed modest job growth included
engineering and management services, legal services, and
health services, although health services recorded its
smallest increase since 1999.
     
     Over the month, transportation employment declined by
29,000.  Since January 2001, job losses in the industry have
totaled nearly 300,000.  The string of job losses in
communications that began in May 2001 continued, with a
decline of 7,000 in February.
     
     Mortgage banking, an industry that has bolstered
employment in finance for the last few years, added 8,000
jobs in February.  Since January 2001, employment in this
industry has risen by 122,000, reflecting high levels of
refinancing activity and strength in the housing market.
     
     In February, average hourly earnings for production and
nonsupervisory workers rose 11 cents to $15.08.  When
combined with an unusual decline in January, the 2-month
average is fairly close to its recent pace, which has seen
hourly earnings grow by 3.2 percent over the year.

     Looking at some of our measures obtained from the
survey of households, the February unemployment rate of 5.8
percent was about the same as in January and within the 5.6-
to-6.0-percent range that prevailed throughout 2002.
     
     In February, 8.5 million persons were unemployed, a 2.8
million increase since the fall of 2000.  As unemployment
grew over this period, the number of long-term jobless
tripled.  In February, about 1.9 million persons had been
jobless for 27 weeks or longer and comprised about 22
percent of total unemployment.
     
     In summary, the labor market experienced renewed
weakness in February, as payroll employment declined
sharply.  Job losses were widely distributed across
industries.  The unemployment rate was 5.8 percent, similar
to the rates that prevailed throughout much of 2002.
     
     My colleagues and I now would be glad to answer your
questions.
     


        Note on the impact of the call-up of military
             reservists on the employment data.
                              
     
     According to information released by the U. S.
Department of Defense, about 150,000 reservists had been
called into active duty as of mid-February.  BLS is unable
to quantify the impact of this call-up on its employment
figures.  With regard to the payroll survey:
     
  --In concept, persons on active military duty for the entire 
    survey reference period are not included on employer
    payrolls.

  --Some reservists would have held jobs not covered by the
    payroll survey--such as the self employed or those in
    agriculture--and others may not have held jobs at all.

  --Many of the reservists have been called up quite recently.  
    Any who worked at all for their regular employer during the 
    survey reference period would have been counted on the 
    employer's payroll.

  --If reservists are replaced by new workers on an employer's 
    payroll, there would be no net change in the number of jobs 
    counted.  If reservists are not replaced, a net decline in 
    the employer's job count would result.
   
     
     With regard to the household survey, the Current
Population Survey only measures the civilian
noninstitutional population.  Also, the population levels to
which the labor force estimates are controlled are not
adjusted to reflect the call-up of reservists.  As a result,
the survey will not register the impact of these call-ups.