TEXT

 
 
 
                                FOR DELIVERY:  9:30 A.M., E.S.T.
                                FRIDAY, FEBRUARY 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 time.
 
 
 
                        Statement of
 
                    Katharine G. Abraham
                        Commissioner
                 Bureau of Labor Statistics
 
                         before the
 
                  Joint Economic Committee
 
                   UNITED STATES CONGRESS
 
                      February 2, 1996
 
 
 
 
Mr. Chairman and Members of the Committee:
I appreciate this opportunity to comment on the January
1996 employment and unemployment data that were released
this morning.
Payroll employment was down by 201,000 and the
unemployment rate edged up to 5.8 percent in January.
Extremely heavy snowstorms in the eastern part of the
country caused many establishments to close or operate with
reduced staff during the payroll survey reference period.
Employment estimates from the payroll survey include only
workers paid during the reference period.  Even for many of
the workers who remained on payrolls in January, the weather
conditions caused a reduction in their work hours; the
average workweek -- a measure of the number of hours paid --
fell by six-tenths of an hour.  In addition to the weather
effects, a strike that involved building maintenance workers
in both the building services and real estate industries
accounted for 20,000 of the overall employment decline.
The largest employment decline occurred in the services
industry.  Employment in help supply services was 61,000
below the December level, reflecting both the severe weather
and recent sluggishness in the industry.  Employment in
private educational services was down by 25,000, due at
least in part to weather-related school closings.  Health
services gained only 9,000 jobs, well below its average
increase of 24,000 jobs per month during 1995.  Personal
services added 20,000 jobs in January, reflecting strong
seasonal hiring among tax preparers.
Manufacturing employment decreased by 72,000 in
January, as bad weather caused employment declines in some
industries and exacerbated the recent weakness in others.
Manufacturing industries that lost jobs included textiles,
apparel, food products, lumber, printing and publishing, and
rubber and plastics.  Transportation equipment employment
declined by 22,000, mostly because automobile plants were
shut down to reduce inventories.  Only the electronic
components industry continued its growth trend.  The bad
weather caused a 1.4-hour decline in the factory workweek.
Retail trade employment was down by 41,000.  Eating and
drinking places and miscellaneous retail establishments
experienced sharp employment declines, due at least in part
to the weather.  Employment in apparel stores showed a
seasonally adjusted increase of 10,000, reflecting the fact
that seasonal hiring before the holidays was weaker than
normal and subsequently there were fewer layoffs in January.
The construction industry gained 13,000 jobs on a
seasonally adjusted basis in January.  Although weather
conditions in the eastern United States curtailed building
activity, employment in highway construction actually rose
because many of the firms in that industry performed snow-
removal services.  In addition, the weather in the western
part of the country was unusually warm and dry during
January, allowing construction activity there to continue.
The finance industry gained 10,000 jobs in January,
with increases among commercial banks, security brokers, and
mortgage bankers.  Real estate employment would have shown a
small gain had it not been for the strike of building
maintenance workers in that industry.
Turning now to the household survey, the unemployment
rate edged up to 5.8 percent in January, still within the
relatively narrow range of 5.4 to 5.8 percent that we have
seen for more than a year.  The rate for adult women rose by
half a percentage point, to 5.1 percent, but the rates for
the other major demographic groups showed little or no
change.  The civilian labor force increased by 553,000 in
January, though it is still just 0.5 percent larger than a
year earlier.
I would like to mention two points concerning the
January household survey data.  First, the seasonal factors
that we used to adjust the January 1996 data are the same as
those that we had published for the January 1995 estimates.
Normally, we already would have calculated new seasonal
factors for the January to June 1996 period and completed
our annual revisions to the seasonally adjusted historical
series, but the recent government shutdown delayed this
process.  The new seasonal factors will be introduced with
the data for February, which will be issued on March 8.  At
that time, we also will publish revised historical estimates
of seasonally adjusted employment, unemployment, and other
household survey series.
Also, as we had previously announced, the size of the
household survey sample was reduced beginning in January,
from 56,000 to 50,000.  The principal effect of this
reduction is that the sample is no longer of sufficient size
to provide monthly labor force estimates for all of the
largest states directly from the survey.  Monthly labor
force estimates for these states now will be derived from
the model-based procedure already in use for 39 states and
the District of Columbia.  The sample reduction slightly
increases the margin of sampling error for the national
labor force estimates.
In summary, payroll employment was down in January and
unemployment edged up.  The effects of the severe weather,
which unfortunately I am unable to quantify with any degree
of confidence, make it difficult to determine whether a
change has occurred in underlying labor market trends.
My colleagues and I now would be glad to answer your
questions.