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                                    FOR DELIVERY: 9:30 A.M., E.S.T.                                                                 
                                    FRIDAY, JANUARY 7, 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                                                                                   
                                                                                                                                    
                              January 7, 1994                                                                                       
                                                                                                                                    
                                                                                                                                    
                                                                                                                                    
                                                                                                                                    
        Mr. Chairman and Members of the Committee:                                                                                  
                                                                                                                                    
             Once again, I would like to thank you for the                                                                          
                                                                                                                                    
        opportunity to offer a few comments about the employment and                                                                
                                                                                                                                    
        unemployment data released this morning.                                                                                    
                                                                                                                                    
             The nation's labor market showed clear signs of                                                                        
                                                                                                                                    
        continuing improvement in December.  Employment as measured                                                                 
                                                                                                                                    
        by both our employer survey and our household survey grew                                                                   
                                                                                                                                    
        over the month.  At 6.4 percent, the December unemployment                                                                  
                                                                                                                                    
        rate was little changed from November, though it now lies                                                                   
                                                                                                                                    
        almost a full percentage point below its level of a year                                                                    
                                                                                                                                    
        ago.                                                                                                                        
                                                                                                                                    
                                     -2-                                                                                            
                                                                                                                                    
                                                                                                                                    
             The 183,000 over-the-month gain in payroll employment                                                                  
                                                                                                                                    
        was concentrated in the service-providing sector of the                                                                     
                                                                                                                                    
        economy.  Each major industry group in this sector had job                                                                  
                                                                                                                                    
        growth.                                                                                                                     
                                                                                                                                    
             The biggest gain numerically was in the services                                                                       
                                                                                                                                    
        industry, a diverse grouping that added 68,000 jobs.  This                                                                  
                                                                                                                                    
        included an increase of 36,000 in its personnel supply                                                                      
                                                                                                                                    
        component.  Retail trade added somewhat more workers than                                                                   
                                                                                                                                    
        normal for the month; a seasonally adjusted increase of                                                                     
                                                                                                                                    
        32,000 followed a small decline in November.  As has been                                                                   
                                                                                                                                    
        true throughout the year, the employment gains in retail                                                                    
                                                                                                                                    
        establishments were concentrated in eating and drinking                                                                     
                                                                                                                                    
        places.                                                                                                                     
                                                                                                                                    
             Elsewhere in the services sector, finance continued to                                                                 
                                                                                                                                    
        show broadbased job growth and transportation continued an                                                                  
                                                                                                                                    
        uptrend that now totals 33,000 jobs over the past 4 months.                                                                 
                                                                                                                                    
             Following gains in October and November, both                                                                          
                                                                                                                                    
        manufacturing and construction employment held steady in                                                                    
                                                                                                                                    
        December.  The extraordinarily high factory workweek and                                                                    
                                                                                                                                    
        overtime levels achieved in November were sustained in                                                                      
                                                                                                                                    
        December.                                                                                                                   
                                                                                                                                    
             As already noted, the unemployment rate was 6.4 percent                                                                
                                                                                                                                    
        in December, little changed from the revised November level                                                                 
                                                                                                                                    
        of 6.5 percent.  (As is our normal practice, seasonally                                                                     
                                                                                                                                    
        adjusted estimates from the household survey have been                                                                      
                                                                                                                                    
        revised at the end of the year to reflect updated seasonal                                                                  
                                                                                                                                    
                                     -3-                                                                                            
                                                                                                                                    
                                                                                                                                    
        factors.  Data for the last 5 years are affected by these                                                                   
                                                                                                                                    
        revisions.)  The jobless rate for adult men, 5.8 percent in                                                                 
                                                                                                                                    
        December, has shown slow but steady improvement over the                                                                    
                                                                                                                                    
        past few months.  The rate for adult women, however, has                                                                    
                                                                                                                                    
        held at about the current 5.7 percent since midyear.                                                                        
                                                                                                                                    
             The number of discouraged workers was 1.1 million in                                                                   
                                                                                                                                    
        the fourth quarter, essentially the level that has prevailed                                                                
                                                                                                                                    
        for more than 2 years.  The number of involuntary part-time                                                                 
                                                                                                                                    
        workers--those who would prefer to work full time--was                                                                      
                                                                                                                                    
        6.2 million, slightly below the levels that prevailed for                                                                   
                                                                                                                                    
        most of the year.  Long-term unemployment (the number of                                                                    
                                                                                                                                    
        persons unemployed more than 6 months) was little changed at                                                                
                                                                                                                                    
        1.7 million.                                                                                                                
                                                                                                                                    
             The start of the new year provides an opportune time to                                                                
                                                                                                                                    
        look back at labor market developments during 1993 as a                                                                     
                                                                                                                                    
        whole.  While the detailed picture changed somewhat from                                                                    
                                                                                                                                    
        month to month, some clear patterns are apparent in the data                                                                
                                                                                                                                    
        for the year.  Unemployment improved slowly but steadily                                                                    
                                                                                                                                    
        throughout the year, with the rate falling by nearly a full                                                                 
                                                                                                                                    
        percentage point, from 7.3 percent in December 1992 to 6.4                                                                  
                                                                                                                                    
        percent this past month.  This steady improvement continued                                                                 
                                                                                                                                    
        a downward trend that had begun in mid-1992, when the                                                                       
                                                                                                                                    
        jobless rate peaked at 7.7 percent.                                                                                         
                                                                                                                                    
             The employment growth registered by both the payroll                                                                   
                                                                                                                                    
        and the household surveys was considerably stronger than it                                                                 
                                                                                                                                    
        had been in 1992.  The rise in payroll employment of nearly                                                                 
                                                                                                                                    
                                     -4-                                                                                            
                                                                                                                                    
                                                                                                                                    
        2 million jobs was double that of the previous year.  Total                                                                 
                                                                                                                                    
        1993 employment growth as measured by the household survey                                                                  
                                                                                                                                    
        was about 2-1/2 million, and the pace of growth was                                                                         
                                                                                                                                    
        particularly brisk in the fourth quarter.  This is cheering                                                                 
                                                                                                                                    
        news in light of the major restructuring occurring in the                                                                   
                                                                                                                                    
        economy.                                                                                                                    
                                                                                                                                    
             Though faster than in 1992, the rate of job growth                                                                     
                                                                                                                                    
        still is not as high as in some previous years.  Further,                                                                   
                                                                                                                                    
        many of these jobs are temporary placements through                                                                         
                                                                                                                                    
        personnel supply firms.  In addition, the numbers of                                                                        
                                                                                                                                    
        discouraged workers and persons working part time who would                                                                 
                                                                                                                                    
        prefer full-time work changed relatively little over the                                                                    
                                                                                                                                    
        year, and long-term unemployment has declined at a slower                                                                   
                                                                                                                                    
        pace than in other expansionary periods.  Overall, however,                                                                 
                                                                                                                                    
        the labor market is clearly stronger than it was a year ago.                                                                
                                                                                                                                    
             On another important matter, I would like to remind the                                                                
                                                                                                                                    
        Committee that our long-term effort to improve the quality                                                                  
                                                                                                                                    
        of our household survey data comes to fruition next month                                                                   
                                                                                                                                    
        with the release of the January data.  Week after next,                                                                     
                                                                                                                                    
        Census Bureau interviewers will take their laptop computers                                                                 
                                                                                                                                    
        into the field and begin to collect data from our full                                                                      
                                                                                                                                    
        60,000 household sample using a substantially revised                                                                       
                                                                                                                                    
        questionnaire.  In previous testimony, I have indicated that                                                                
                                                                                                                                    
        the revised survey is likely to produce higher estimates of                                                                 
                                                                                                                                    
        both employment and unemployment than were obtained from the                                                                
                                                                                                                                    
        current survey.                                                                                                             
                                                                                                                                    
                                     -5-                                                                                            
                                                                                                                                    
                                                                                                                                    
             In addition, the incorporation of estimates based on                                                                   
                                                                                                                                    
        the 1990 census, including adjustments for the population                                                                   
                                                                                                                                    
        undercount, will have the effect of increasing population,                                                                  
                                                                                                                                    
        labor force, and employment levels.  It also is expected to                                                                 
                                                                                                                                    
        raise the jobless rate by a tenth of a percentage point.                                                                    
                                                                                                                                    
             As part of our continuing efforts to help users                                                                        
                                                                                                                                    
        interpret the data from the new survey, we have developed                                                                   
                                                                                                                                    
        plans to do three things in preparation for the release of                                                                  
                                                                                                                                    
        January data on February 4:                                                                                                 
                                                                                                                                    
                                                                                                                                    
             --   develop an estimate, based upon the historical                                                                    
                  relationship between changes in the unemployment                                                                  
                  rate and changes in other economic indicators, of                                                                 
                  what the January 1994 rate would have been had the                                                                
                  old survey been continued;                                                                                        
                                                                                                                                    
             --   using information from the 12,000 household survey                                                                
                  conducted during 1992 and 1993 to test the new                                                                    
                  methods, develop estimates of what the                                                                            
                  unemployment rate would have been had the new                                                                     
                  survey been in place during that period; and,                                                                     
                  finally,                                                                                                          
                                                                                                                                    
                                                                                                                                    
             --   assess, as best we can, the special factors                                                                       
                  related to the survey being fielded for the first                                                                 
                  time that may impinge upon the January 1994                                                                       
                  estimates.                                                                                                        
                                                                                                                                    
                                                                                                                                    
        Additional work, leading to the production of a variety of                                                                  
                                                                                                                                    
        historical series suitable for use by analysts and                                                                          
                                                                                                                                    
        researchers, will be completed over the next 12 to 18                                                                       
                                                                                                                                    
        months.                                                                                                                     
                                                                                                                                    
             Lastly, I am pleased to report that we have finalized                                                                  
                                                                                                                                    
        the plans for a 12,000 household survey, to begin this                                                                      
                                                                                                                                    
        month, that continues the old CPS methods.  Because of                                                                      
                                                                                                                                    
                                     -6-                                                                                            
                                                                                                                                    
                                                                                                                                    
        potential problems related to the initiation of this                                                                        
                                                                                                                                    
        activity, the first planned release of data from this survey                                                                
                                                                                                                                    
        will take place in early summer.  At the time that the                                                                      
                                                                                                                                    
        official unemployment numbers for June are released, and                                                                    
                                                                                                                                    
        each month thereafter for some period of time, we plan to                                                                   
                                                                                                                                    
        report a 3-month average unemployment rate based on the                                                                     
                                                                                                                                    
        survey using the old methods that can be compared to the                                                                    
                                                                                                                                    
        most recent 3-month average rate from the new official                                                                      
                                                                                                                                    
        survey.                                                                                                                     
                                                                                                                                    
                                                                                                                                    
                                                                                                                                    
             My colleagues and I now would be glad to answer any                                                                    
                                                                                                                                    
        questions the Committee may have.