TEXT

 FOR DELIVERY: 9:30 A.M., E.D.T.
                           FRIDAY, SEPTEMBER 6, 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, September 6, 1996
 
 
 
 
 Mr. Chairman and Members of the Committee:
         I would like to thank you for this opportunity to
 comment on the employment and unemployment data released
 this morning.
         The unemployment rate fell to 5.1 percent in August,
 from 5.4 percent in July.  Nonfarm payroll employment
 rose by 250,000 in August, about in line with the average
 monthly gains thus far this year.  The August increase of
 173,000 in private sector employment, however, fell short
 of the 215,000 monthly gain for the seven months ending
 in July.
         For the second month in a row, employment growth in
 services was somewhat slower than normal.  Still, with an
 addition of 81,000 jobs, it accounted for nearly half of
 the over-the-month rise in private nonfarm employment.
 During the first half of 1996, monthly gains in the
 industry averaged about 120,000.  Business services
 sustained its long-term upward trend, led by continued
 strength in help supply and computer services.  Growth
 also continued in the related engineering and management
 services industry.  Employment in most other services
 industries was relatively weak in August.  Health
 services posted its third consecutive month of anemic
 growth, and private education lost jobs following strong
 gains in each of the preceding two months.
         An increase of 77,000 in government employment was
 concentrated in local government, particularly education.
 It should be noted that precise seasonal adjustment for
 local education is problematic during the summer and
 fall, when the industry sheds and then adds large numbers
 of employees.  The seasonally adjusted employment
 estimates are very sensitive to the timing of school
 openings and to changing school schedules more generally.
 Robust growth in finance, insurance, and real estate
 continued in August.  Over the last 12 months, employment
 in this industry has risen by 174,000.  Continued
 activity in the finance and real estate components
 accounted for an overall gain of 20,000 jobs over the
 month.  Retail trade added only 21,000 jobs in August
 after several months of larger gains.  Growth in general
 merchandise stores, food stores, and auto dealers and
 service stations was partially offset by a loss of 28,000
 jobs in eating and drinking places.  Employment in that
 industry had risen by 70,000 over the prior two months.
         In the goods-producing sector, manufacturing had an
 employment gain of 25,000 in August, offsetting a decline
 of similar magnitude in the prior month.  Plants
 reopening from vacation shutdowns were partly responsible
 for an employment rise of 24,000 in motor vehicles and
 equipment.  This was twice the size of the previous
 months decrease.  Smaller job gains were scattered
 throughout durable goods manufacturing, although there
 was a decline of 6,000 jobs in electronic equipment.
 Among nondurable goods industries, rubber and
 miscellaneous plastics added 7,000 workers.  In apparel
 and other textile products, employment fell by 13,000;
 the industry has lost nearly 10 percent of its employment
 over the past year.
 Average hours of production and nonsupervisory
 workers edged up by a tenth of an hour to 34.4 hours per
 week.  Average hourly earnings of workers on private
 nonfarm payrolls rose 6 cents in August.  Though erratic
 on a month-to-month basis, the rate of increase in hourly
 earnings has drifted upwards over the last several years.
         Turning to data from the household survey, the
 unemployment rate fell by three-tenths of a percentage
 point to 5.1 percent, after seasonal adjustment.  The
 number of unemployed persons dropped by 467,000 to 6.8
 million.  The decline in unemployment was particularly
 large among persons 20 to 24 years old and among those
 aged 55 and over.  Some of the fall in unemployment may
 be explained by the late timing of the August survey
 reference week.  This likely caused the survey to capture
 more of the seasonal movement of both employed and
 unemployed youth out of the labor force at the end of
 summer than it would have captured had the survey week
 fallen earlier in the month (as it did in each of the
 prior 3 years).  The large drop in the number of persons
 unemployed due to job loss and the declines in
 joblessness among adults suggest, however, that at least
 some of the improvement in the unemployment rate is
 unrelated to the timing of the survey reference period.
         In summary, the labor market continued to improve in
 August.  Payroll employment continued to grow, though the
 pace of private sector employment growth has slowed
 somewhat.  The unemployment rate fell, reaching its
 lowest level since 1989.
 
         My colleagues and I now would be glad to answer your
 questions.