TEXT

 
 
                              FOR DELIVERY: 9:30 A.M., E.S.T.
                              FRIDAY, APRIL 1, 1994
 
 
 
  ___________________________________________________________
  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
 
                         April 1, 1994
 
 
 
 
  Mr. Chairman and Members of the Committee:
 
 
       It is again a pleasure to be here to offer a few
 
  comments on the Nation's employment situation.
 
       Nonfarm payroll employment jumped by 456,000 in March,
 
  and the unemployment rate was 6.5 percent, the same as in
 
  the prior month.  The substantial rise in payroll employment
 
  in part reflects a rebound from the unusually severe winter
 
  weather in January and February, but also signals a
 
  continuation of the pace of job creation that was evident
 
  toward the end of last year.  Over the 4-month period from
 
  August through December of last year, payroll employment
 
  rose by 805,000--an average increase of about 200,000 a
 
 
                               -2-
 
 
  month.  The March gain brings the increase since December to
 
  623,000 jobs--also about 200,000 a month.
 
       Most of the major industry divisions added jobs in
 
  March, but the largest increase by far--223,000 jobs--took
 
  place in the services industry.  Within services, employment
 
  in business services rose sharply for the second month in a
 
  row, due mainly to a large increase in its personnel supply
 
  component, which includes the rapidly growing temporary help
 
  and employee leasing industry.  Personnel supply has
 
  accounted for one-fifth of the 3.7 million net new jobs
 
  added since the employment expansion began in early 1992.
 
  Health services also had a particularly large jobs increase
 
  over the month.   Employment in amusement and recreation
 
  services rose markedly for the second straight month, and
 
  the industry has now more than recovered from its weather-
 
  related job loss in January.
 
       Retail employment was up sharply in March, with gains
 
  in most of its major components.  The largest increase was
 
  in eating and drinking places, where bad weather had
 
  affected employment in the prior 2 months.
 
       Accompanying the improved weather in March was a large
 
  gain in construction jobs.  The increase of 74,000 more than
 
  offset the small losses of January and February, putting
 
  construction employment well above the level that prevailed
 
  before the bad weather took hold.
 
 
                               -3-
 
 
 
 
       Better weather also brought a sharp rebound in the
 
  factory workweek, which increased a whole hour to a post-
 
  World War II high of 42.2 hours.  Factory overtime hours
 
  increased to a series high of 4.8 hours.  Manufacturing
 
  employment rose for the sixth straight month, with the gains
 
  since September totaling 88,000 jobs.  Fabricated metal,
 
  industrial machinery, and electronic equipment all continued
 
  to add jobs.  Although this recent string of increases in
 
  factory employment certainly is encouraging, it also should
 
  be remembered that manufacturing employment fell by 1.8
 
  million between the beginning of 1989 and last September.
 
       Other industries that have shown increases in
 
  employment in recent months and continued to do so in March
 
  include wholesale trade, trucking, and finance.  Within
 
  finance, however, the mortgage banking industry failed to
 
  add jobs for the first time in a year, as the recent rise in
 
  interest rates slowed the pace of refinancing.
 
       Small employment losses occurred in mining and the
 
  Federal government.  Over the last 2 years, the Federal
 
  government has shed 106,000 jobs, mostly in the Department
 
  of Defense.
 
       Turning to the data from our survey of households,
 
  unemployment was essentially unchanged in March, and the
 
  jobless rate remained at 6.5 percent.  Unemployment rates
 
  for most worker groups also were little changed.  There was
 
  an increase in the number of persons working part time for
 
                               -4-
 
 
  economic reasons (sometimes called the partially
 
  unemployed); this followed an unusually sharp drop in
 
  February.
 
       As I have mentioned on several occasions, the
 
  substantial changes put into effect in the household survey
 
  in January may affect its data for some time.  That is the
 
  main reason why the Bureau's analysis of the past few
 
  months' developments has emphasized the data from our
 
  employer survey.  I would make special note of the potential
 
  impact of the large movement of jobseekers into the summer
 
  labor market on our unemployment counts.  While we know that
 
  the revised household survey provides a better measure of
 
  job search activity, our seasonal adjustment factors of
 
  necessity are based on the data collected using the old
 
  methods.  As you can see from the attached chart, it was
 
  during the summer months of last year that the largest
 
  differences occurred between the unemployment rate from the
 
  "old" household survey and the rate from model estimates
 
  based on the parallel survey that used the new
 
  questionnaire.  Hence, the seasonal factors we are using may
 
  not fully account for the influx of jobseekers measured by
 
  our new survey during the summer months.
 
       Again this month, we have prepared a projection of the
 
  unemployment rate based on the relationship between the
 
  "old" unemployment rate and other economic data.  The
 
  projected rate for March, shown on the attached chart,
 
 
                               -5-
 
 
  is 6.3 percent, essentially the same as that for February,
 
  though it should be noted that the range of error for this
 
  projection is increasing as we get further from the last of
 
  the "old" household survey data on which the relationship
 
  used to make the projection is based.  The chart also shows
 
  that, whether measured on the new or the old basis, the
 
  overall unemployment rate has dropped considerably over the
 
  past year.
 
       In summary, the nation's labor market continues to
 
  improve.  The average payroll employment gain of 200,000 per
 
  month so far this year sustains the fairly robust pace of
 
  growth registered over the last 4 months of 1993.  And,
 
  taking survey changes into account, recent unemployment
 
  rates are lower than we have seen for some time.
 
 
 
       My colleagues and I will now be happy to answer any
 
  questions you may have.