TEXT

 
 FOR DELIVERY: 9:30 A.M., E.D.T.
                           FRIDAY, AUGUST 2, 1996
 
 
 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
 
 Katharine G. Abraham
 Commissioner
 Bureau of Labor Statistics
 
 before the
 
 Joint Economic Committee
 
 UNITED STATES CONGRESS
 
 Friday, August 2, 1996
 
 
 
 
 Mr. Chairman and Members of the Committee:
         I appreciate this opportunity to comment on the
 labor market data released this morning.
         Nonfarm payroll employment increased by 193,000 in
 July, somewhat below the average monthly pace of job
 growth in the second quarter of this year (273,000).  The
 unemployment rate, at 5.4 percent, was about unchanged
 over the month.
         Almost half of the July increase in payroll
 employment occurred in retail trade, which added 89,000
 jobs, and nearly half of that was in eating and drinking
 places.  There also were substantial job gains in food
 stores, auto dealers and service stations, and among
 furniture retailers.  Overall, some 331,000 jobs have
 been added in retail trade since employment growth in the
 industry began to accelerate this past April.
         In contrast, job growth in services was quite weak
 in July, with an increase of only 28,000.  Employment
 declined in hotels and in social services.  There was
 little job growth in health services for the second month
 in a row.  In the preceding year, job growth in health
 services had been robust.  The over-the-month job gain
 of 35,000 in business services was about equal to the
 average for the past year, and there was an increase of
 10,000 in auto repair services.
         Elsewhere in the service-producing sector,
 employment in finance rose by 13,000 in July.  As a
 result of sustained growth since June 1995, the finance
 industry has more than regained job losses during the
 prior 15 months that totaled nearly 100,000.  Virtually
 all of the gains this past year have been outside of
 banking -- particularly among mortgage brokers, security
 dealers, and holding companies.  Wholesale trade added
 12,000 jobs in July and now has had nearly 3 years of
 uninterrupted job growth.  Total government employment
 rose by 37,000.  Employment in state and local education
 rose 66,000 after seasonal adjustment, but it should be
 noted that the large swings in employment associated with
 the school year make precise seasonal adjustment of the
 data for these industries somewhat difficult.  Federal
 employment continued to decline in July.
         In the goods-producing sector of the economy,
 employment in construction rose by 25,000 in July.  This
 continues the recent pattern of solid job growth in the
 industry which has yielded a net addition of more than
 200,000 jobs so far this year.  Manufacturing employment
 declined by 20,000, as small declines were widespread
 among component industries.  Notable exceptions were
 fabricated metals, which added 7,000 jobs in July, and
 aircraft and parts, which added 5,000 jobs.  Overall,
 manufacturing has lost 282,000 jobs since its most recent
 peak in March 1995, with the net loss concentrated almost
 entirely among nondurable goods industries.  Within
 mining, oil and gas extraction has lost 6,000 jobs over
 the past 2 months, negating gains made over the first 5
 months of this year.
         The workweek for private nonfarm workers fell four-
 tenths of an hour in July to 34.3 hours, largely
 offsetting the unusually large increase in June.  The
 factory workweek, which had been trending upward in
 recent months, declined three-tenths of an hour to 41.6
 hours.  Average overtime in manufacturing fell to 4.4
 hours.  Average hourly earnings slipped 2 cents in July,
 following a particularly sharp increase in June.  Over
 the past year, hourly earnings were up 2.9 percent.
         Moving on to the data from our household survey, the
 unemployment rate, as I already have noted, was
 essentially unchanged in July at 5.4 percent.  Jobless
 rates for major demographic groups also showed little
 movement over the month.  There were 4.4 million workers
 employed part time who would have preferred full-time
 work, not much different from the June level, and the
 number of discouraged workers was 423,000 (not seasonally
 adjusted), about the same as a year earlier.
         In summary, payroll employment rose in July, albeit
 somewhat less than in recent months, and the unemployment
 rate was little changed at 5.4 percent.
 
         My colleagues and I now would be glad to answer your
 questions.