[Joint House and Senate Hearing, 108 Congress]
[From the U.S. Government Publishing Office]
S. Hrg. 108-689
THE EMPLOYMENT SITUATION: APRIL 2004
=======================================================================
HEARING
BEFORE THE
JOINT ECONOMIC COMMITTEE
CONGRESS OF THE UNITED STATES
ONE HUNDRED EIGHTH CONGRESS
SECOND SESSION
__________
MAY 7, 2004
__________
Printed for the use of the Joint Economic Committee
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JOINT ECONOMIC COMMITTEE
[Created pursuant to Sec. 5(a) of Public Law 304, 79th Congress]
SENATE HOUSE OF REPRESENTATIVES
Robert F. Bennett, Utah, Chairman Jim Saxton, New Jersey, Vice
Sam Brownback, Kansas Chairman
Jeff Sessions, Alabama Paul Ryan, Wisconsin
John Sununu, New Hampshire Jennifer Dunn, Washington
Lamar Alexander, Tennessee Phil English, Pennsylvania
Susan Collins, Maine Adam H. Putnam, Florida
Jack Reed, Rhode Island Ron Paul, Texas
Edward M. Kennedy, Massachusetts Pete Stark, California
Paul S. Sarbanes, Maryland Carolyn B. Maloney, New York
Jeff Bingaman, New Mexico Melvin L. Watt, North Carolina
Baron P. Hill, Indiana
Donald B. Marron, Executive Director and Chief Economist
Wendell Primus, Minority Staff Director
Christopher J. Frenze, Chief Economist to the Vice Chairman
C O N T E N T S
----------
Opening Statement of Members
Representative Jim Saxton, Vice Chairman......................... 1
Senator Jack Reed, U.S. Senator from Rhode Island................ 2
Witness
Statement of Hon. Kathleen P. Utgoff, Commissioner, Bureau of
Labor
Statistics, accompanied by Dr. John Greenlees, Associate
Commissioner, Office of Prices and Living Conditions, and John
Galvin, Associate Commissioner, Employment and Unemployment
Statistics..................................................... 3
Submissions for the Record
Prepared statement of Representative Jim Saxton, Vice Chairman... 11
Prepared Statement of Senator Jack Reed, U.S. Senator from Rhode
Island......................................................... 11
Prepared Statement of Commissioner Kathleen P. Utgoff, together
with Press Release No. 04-818, entitled, ``The Employment
Situation: April 2004,''
Bureau of Labor Statistics, Department of Labor................ 12
THE EMPLOYMENT SITUATION:
APRIL 2004
----------
FRIDAY, MAY 7, 2004
Congress of the United States,
Joint Economic Committee,
Washington, DC
The committee met, pursuant to call, at 9:27 a.m., in room
1334, Longworth House Office Building, the Honorable Jim
Saxton, Vice Chairman of the Committee, presiding.
Senator present: Senator Reed.
Representative present: Representative Saxton.
Staff Present: Chris Frenze, Robert Keleher, Brian
Higginbotham, Colleen J. Healy, Mike Ashton, Chad Stone, Matt
Salomon, and Nan Gibson.
OPENING STATEMENT OF REPRESENTATIVE JIM SAXTON,
VICE CHAIRMAN
Representative Saxton. Good morning. I am pleased to
welcome Commissioner Utgoff once again to testify on the
monthly employment statistics.
According to the payroll survey, economic employment
increased by 288,000 jobs in April following a revised gain of
337,000 new jobs in March. The April payroll employment gains
were broad-based, as reflected in the diffusion index,
remaining well over 50 percent in April. The 1-month diffusion
index has been well above 50 for the last 4 months. The
manufacturing employment increased for the third consecutive
month. Overall, 1.1 million payroll jobs have been created
since last August.
Separately, the household survey showed a similar monthly
increase in employment, and the unemployment rate went from 5.7
percent in March to 5.6 in April. The unemployment population
ratio edged up to 62.2 percent in April.
The employment data reported today follow the release of
many other economic figures that reflect a healthy pace of
economic expansion. Investment has been strong in recent
quarters, providing a faster and more balanced pattern of
economic growth. Overall, the economy has grown at a rate of
about 5 percent during the last year.
The rebound in business investment is reflected in the
manufacturing sector where capital goods are produced. The
Institute for Supply Management (ISM) index of manufacturing
activity has trended upward for many months and remains at
historically high levels. Meanwhile, consumption remains
strong, as reflected by retail sales and other measures.
Housing and construction activity is robust. Independent
economists note the important contributions of tax relief and
low interest rates in improving economic conditions.
The consensus of Blue Chip economic forecasters projects
that economic growth will be nearly 5 percent in 2004. This
sustained period of economic growth will continue to improve
the opportunities of both workers and businesses. The outlook
for the U.S. economy remains very positive for the foreseeable
future.
[The prepared statement of Representative Saxton appears in
the Submissions for the Record on page 11.]
Representative Saxton. Senator Reed, do you have an opening
statement?
OPENING STATEMENT OF SENATOR JACK REED,
U.S. SENATOR FROM RHODE ISLAND
Senator Reed. Thank you very much, Chairman Saxton. I want
to welcome Commissioner Utgoff and thank her for testifying
here today.
It is encouraging to note that 288,000 payroll jobs were
created. But we still have a significant jobs deficit, and
long-term unemployment remains high.
Although the recession officially ended nearly two-and-a-
half years ago, we still have a payroll unemployment gap of 1.5
million jobs since President Bush took office. We have not seen
such persistent job loss since the 1930s. It appears that job
creation has turned the corner, and that is very good news. But
it will take many months of solid payroll growth to erase the
huge gap that has developed since early 2001.
Meanwhile, we are waiting for another gap to close; that is
the wage gap. Most measures of workers' earnings have barely
kept up with inflation over the past 3 years despite remarkable
productivity growth. The gap between the growth in productivity
and growth in real hourly wages is unusually wide.
For example, the productivity data reported yesterday show
that since the start of the recession in early 2001, output per
hour in non-farm businesses has grown at a staggering 4.5
percent average annual rate. However, those same data show
that, once you take out inflation, workers' hourly compensation
has grown at just a 1.1 percent annual rate over that same
period.
Moreover, some of that growth in compensation reflects the
rising costs of benefits, like employer contributions to health
insurance. For some time now, wages and salaries, which is what
shows up in the workers' paychecks, have been growing more
slowly than benefits. Thus far, at least, strong productivity
growth has done more for the bottom line of companies than it
has done for the take-home pay of workers.
Another nagging concern in the labor market is that long-
term unemployment remains stubbornly high. April was the 19th
consecutive month in which at least 20 percent of the
unemployed had been without work for more than 6 months. That
is the longest such streak in the more than six decades that
the Labor Department has kept these records.
Congress can do something now to help the long-term
unemployed by extending federal unemployment benefits. With
bipartisan majorities in both Houses of Congress and the
support of Federal Reserve Chairman Alan Greenspan, it is
stunning that the President and Congress have been yet to
decide this important issue for American workers.
The economy is growing, but middle-class families still
face an uncertain jobs picture, stagnant wages, higher prices
at the pump, and rising consumer interest rates. It may be some
time before workers and their families experience the benefits
of this emerging recovery firsthand.
I look forward to the Commissioner's testimony.
[The prepared statement of Senator Reed appears in the
Submissions for the Record on page 11.]
Representative Saxton. Commissioner, thank you for being
with us this morning. I could not help but think how good it
must feel after all this time. It was the second half of the
last year of the Clinton Administration when the economy turned
and headed toward a recession. So last month and today were the
first really good months, real good-news months that we have
had since the second half of 2000. So thank you for being here
with us. We are anxious to hear your good news.
OPENING STATEMENT OF HON. KATHLEEN P. UTGOFF, Ph.D.,
COMMISSIONER, BUREAU OF LABOR STATISTICS, ACCOMPANIED BY DR.
JOHN GREENLEES, ASSOCIATE COMMISSIONER, OFFICE OF PRICES AND
LIVING CONDITIONS, AND JOHN GALVIN, ASSOCIATE COMMISSIONER,
EMPLOYMENT AND UNEMPLOYMENT STATISTICS
Commissioner Utgoff. Thank you very much, Mr. Chairman. I
appreciate this opportunity to comment on the labor market data
that we released this morning.
As you already said, non-farm payroll employment rose by
288,000 in April, on the heels of an even larger job gain in
March. Since August 2003, payroll employment has risen by 1.1
million. In April, job growth was widespread for the second
consecutive month. Employment increased substantially in
several service-providing industries, construction employment
continued to expand, and there was a noteworthy job gain in
durable goods manufacturing. The unemployment rate, at 5.6
percent in April, was little changed over the month.
Among the goods-producing industries, construction
employment continued to trend upward in April. Since March
2003, the industry has added 213,000 jobs, bringing
construction employment slightly above its most recent peak in
March 2001.
Following a protracted period of job decline, factory
employment edged up over the past 3 months. I would note that
the data for February and March were revised slightly upward
into positive territory. The recent improvement in
manufacturing employment has occurred largely in the durable
goods components. In April, durable goods employment rose by
20,000, with notable job gains in both fabricated metals and
machinery.
A number of service-providing industries added jobs over
the month. Employment in professional and business services
increased by 123,000 and has risen by about a half million
since March 2003. Roughly half of the over-the-month gain in
this diverse sector occurred in employment services, where the
temporary help industry added 35,000 jobs. Employment in
temporary help has grown by 261,000 over the past year. In
April, employment increased by 7,000 in architectural and
engineering services and by 8,000 in management consulting. In
addition, employment in businesses that supply services to
buildings and dwellings rose by 30,000, with most of the gain
occurring in landscaping services.
Within education and health services, employment increased
by 30,000 in health care and social assistance. Job gains
occurred in hospitals and in outpatient care centers. In
leisure and hospitality, the food services industry continued
to add jobs in April. So far this year, employment increases in
food services have averaged 28,000 a month, twice the average
monthly increase for 2003.
Elsewhere in the service-providing industries, employment
in retail trade edged up over the month, following a sizable
increase in March. In April, building material and garden
supply stores added 10,000 jobs, and employment in motor
vehicle and parts dealerships rose by 6,000. Wholesale trade
employment was little changed in April, but the industry has
added 49,000 jobs since October. Within the financial sector,
employment in credit intermediation and in real estate
continued to edge up, reflecting strength in the housing
market.
In April, average hourly earnings for production or
nonsupervisory workers rose by 5 cents to $15.59. Over the
year, average hourly earnings grew by 2.2 percent.
Looking at some of our measures obtained from the survey of
households, the April unemployment rate was 5.6 percent. The
jobless rate has shown essentially no movement since last
December.
In April, the labor force participation rate was 65.9
percent for the third consecutive month. Nearly 8.2 million
persons were unemployed in April. The number of persons who had
been jobless for 27 weeks or longer declined by 188,000, to 1.8
million.
In summary, non-farm payroll employment increased by
288,000 and is up by 1.1 million since last August. The
unemployment rate was little changed over the month, at 5.6
percent.
Thank you. My colleagues and I now would be glad to answer
your questions.
[The prepared statement of Commissoner Utgoff, together
with Press Release 04-818, appears in the Submissions for the
Record on page 12.]
Representative Saxton. Thank you very much, Commissioner.
Given the health of the economy reflected in other economic
statistics, it is not surprising that employment has finally
begun to pick up. Strong productivity growth had delayed the
resumption of healthy employment growth, but it is now evident
that the lag in employment growth is over.
In your testimony, you describe the April payroll gain as
widespread. Is this statement supported by the level of the
April diffusion index? And in your opinion, what does the
diffusion index say to us?
Commissioner Utgoff. My statement was supported by the
diffusion index. And what that says is how widespread the
increase is over the different industries that we tracked. So a
number above 50 indicates more widespread diffusion.
Representative Saxton. So this is not limited to a sector
two. It is generally widespread across all sectors.
Commissioner Utgoff. Yes.
Representative Saxton. What does the level of the diffusion
index in manufacturing suggest about the improving situation in
that sector?
Commissioner Utgoff. Well, as you know, manufacturing had
declined, before the last 3 months, for more than 3 years. And
now we see small increases in the prior 2 months and an
increase of 21,000 this month, which is significant. And one of
the significant sectors among that was machinery, which is
considered a good portent for the future.
Representative Saxton. And the diffusion index in
manufacturing, if I am not mistaken, has been over 50 for the
last several months. Is that correct?
Commissioner Utgoff. Yes. It has been 3 months above 50.
Representative Saxton. Thank you. What are the greatest
areas of strength in the April payroll data?
Commissioner Utgoff. The business services area increased
significantly, and construction has reached a new high level.
And there were significant increases in health care. As I said,
it was fairly widespread.
Representative Saxton. And how significant is the upward
revision in payroll employment for March?
Commissioner Utgoff. It was not significant, but it was
positive. In the stream of things, when you get a revision of
30,000 or so, that is very small compared to the overall base
of 131 million. But it was positive, adding to the increases
since August.
Representative Saxton. Certainly significant is that the
average increase in employment over the past 2 months has been
over 300,000 jobs. That is significant.
Commissioner Utgoff. Yes. Yes.
Representative Saxton. In February, the monthly consecutive
declines in manufacturing ended. Didn't the consecutive
declines in manufacturing employment begin in August of 2000?
Commissioner Utgoff. Yes.
Representative Saxton. Aren't the payroll numbers reported
today consistent with other data showing expansion of the
economy? And how significant do you believe these numbers are?
Commissioner Utgoff. These numbers are, as you say, in a
somewhat lagged fashion consistent with other positive signs in
the economy. The initial claims for unemployment insurance
dropped to very low rates yesterday for the latest weekly
period for which they are calculated.
Representative Saxton. Let me move to another element here.
What does the April index in the index of aggregate weekly
hours suggest about the current state of the economy?
Commissioner Utgoff. The index of hours went up.
Representative Saxton. Right.
Commissioner Utgoff. I thought you were talking about the
average number of hours. The index, which is the hours
multiplied by the employment, went up.
Representative Saxton. And that is also a significant
positive indicator?
Commissioner Utgoff. Yes.
Representative Saxton. Aren't the construction employment
figures consistent with other data showing strong construction
activity?
Commissioner Utgoff. Yes.
Representative Saxton. Let me just move to another issue.
The unemployment rate decreased this month from 5.7 to 6
percent. We would probably say that one-tenth of 1 percent is
not statistically significant. Is that right?
Commissioner Utgoff. That is correct.
Representative Saxton. However, if we look back to last
June and note that the unemployment rate was 6.3 percent, to
see it drop today to 5.6 percent, that would be statistically
significant, would it not?
Commissioner Utgoff. Yes.
Representative Saxton. That would be, obviously, a positive
sign.
To review the data reported today: Payrolls are up.
Household employment is up. Diffusion indices remain well above
50. Positive employment revisions occurred for March.
Manufacturing employment is up for 3 months in a row.
Unemployment has been trending downward. These are all very
positive signs.
Isn't the employment gain reported today consistent with
other recent positive economic data?
Commissioner Utgoff. Yes.
Representative Saxton. Thank you, Commissioner.
Senator Reed.
Senator Reed. Thank you very much, Mr. Chairman.
Thank you, Commissioner, for your testimony. How does the
current unemployment rate compare with the unemployment rate in
March 2001 when the recession began?
Commissioner Utgoff. I will have to look up that number.
Just a moment.
Senator Reed. And March 2001 was the official beginning of
the recession?
Commissioner Utgoff. Yes, that is right--4.3 percent. It
was 4.3 percent in March of 2001.
Senator Reed. So it is 1.3 percent higher.
Commissioner Utgoff. Yes, that is right.
Senator Reed. The recent trend in labor force participation
rate, has the labor force been growing rapidly or just keeping
up with population growth?
Commissioner Utgoff. Are you asking about the participation
rate?
Senator Reed. The labor rate, the labor force participation
rate.
Commissioner Utgoff. Yes. The participation rate since
March 2001 has declined.
Senator Reed. So fewer people are actually working, based
on population.
Commissioner Utgoff. That is right.
Senator Reed. How does the current labor force
participation rate compare with the rate in March of 2001 when
the recession began?
Commissioner Utgoff. The decline in the participation rate
has been 1 full percentage point.
Senator Reed. So we have, essentially, fewer people
working.
Commissioner Utgoff. Yes.
Senator Reed. Do you think that is voluntary?
Commissioner Utgoff. It is very hard to say whether that is
voluntary or not. A great deal of that decline has been among
young people, teenagers and those in their early 20s. And there
is some indication that that may be related to increased school
participation, but we really do not know.
There have been significant declines in participation in
all groups except for age 55 and older men. They seem to be
coming back into the labor market.
Senator Reed. This suggests, I believe, that there is
considerable slack in the labor market. Is that fair, that
there is a considerable untapped potential of people who could
work?
Commissioner Utgoff. It is very hard to predict whether
there will be an increase in the participation rate. The
conventional wisdom is that when the participation rate goes
up, the unemployment rate will go up also. But if you look at
historical trends where you compare the participation rate and
the unemployment rate, they do not follow that pattern.
So in the future, it will depend upon how fast the labor
demand grows relative to the labor supply. And in many
recoveries, the labor demand has grown faster than the labor
supply, so that the unemployment rate has not gone up when the
participation rate goes up.
Senator Reed. Is this one of those situations where we have
an unusually large number of people who have left the labor
force?
Commissioner Utgoff. Participation rates have declined
considerably since March 2001.
Senator Reed. So at least this might represent a situation
where as the economy picks up and people enter the labor force,
the unemployment rate could go up.
Commissioner Utgoff. That is a possibility.
Senator Reed. Let me ask you a few questions about
inflation rates. What were the reasons for the spike in the CPI
last month?
Commissioner Utgoff. Energy is a principal factor behind
increases in the CPI.
Senator Reed. And my impression is that wages have not been
contributing significantly to increased inflationary pressures.
Is that accurate?
Commissioner Utgoff. When we compute the CPI, we do not
take wages into account. It is consumer goods. So wages would
not be contributing to that measure of inflation.
Senator Reed. But in terms of--since it is a component of
production of consumer goods, at least there is a notion that,
as wages go up, that would be reflected in the prices of
consumer goods.
Commissioner Utgoff. That can be true, yes.
Senator Reed. But you have not noticed any increase in
terms of wage pressures in your statistics?
Commissioner Utgoff. No.
Senator Reed. There is tremendous productivity growth,
which my estimate--which I think it is accurate--is 4.5 percent
at an annual rate.
Commissioner Utgoff. That is right.
Senator Reed. Those productivity gains do not appear to be
reflected yet in wages. Is that correct?
Commissioner Utgoff. That is correct.
Senator Reed. The other aspect of this, benefits, seem to
be rising faster than wages and salaries. And is that accurate
also?
Commissioner Utgoff. Yes.
Senator Reed. Also it seems to me, and particularly
troubling to families, I think, across the country, it is not
only the cost of benefits, particularly health care, for the
employer, but more and more employees are paying larger
portions of their health care benefits. Is that accurate?
Commissioner Utgoff. Yes.
Senator Reed. So that they are getting very insignificant
increases in wages, and yet they, too, are paying more and more
for their health care benefits. Is that an accurate sort of
description?
Commissioner Utgoff. Yes.
Senator Reed. Which puts a tremendous squeeze on family
incomes.
Let me ask another question, about investment. We have
seen, over the last several months, a significant increase in
profits. And there are some good signs, as the Chairman noted,
of increased investment. But is investment at the level you
would expect it to be given the profitability we have seen over
the last several quarters for companies?
Commissioner Utgoff. I am sorry, the BLS does not track
investment, so I am not the person to be speaking to that.
Senator Reed. The Chairman mentioned the ISM data. Is that
a statistic that you----
Commissioner Utgoff. No, it is not.
Senator Reed. So you have no insights into the ISM data or
the investment?
Commissioner Utgoff. We do watch the ISM data as one other
indication, particularly of the labor market. A subpart of
these indexes are future employment projections. And I keep
track of that. We all do.
Senator Reed. Let me ask, Commissioner, in that context, to
continue robust growth in employment would presume that
corporate profits will begin to be directed more and more to
investment in new plant and equipment expansion; is that fair?
Commissioner Utgoff. I cannot speak to that.
Senator Reed. I do not want to take you on terrain that is
unfamiliar. You are already ahead of me in the march.
Let me thank the Chairman for his gracious hospitality this
morning. And thank you, Commissioner.
Representative Saxton. Commissioner, thank you.
We are just going to thank you for being here this morning
and bringing us this strong news.
I would like to close on this note. I note that the top
unemployment rate during the decade of the 1970s was 8.5
percent. The top unemployment rate during the 1980s was 9.7
percent. The top unemployment rate during the 1990s was 7.5
percent. And we have peaked and are now declining from the peak
rate in the decade of 2000s at 6.3 percent.
So we have topped out at 8.5, 9.7, 7.5 and now just 6.3,
and now we have fallen back to 5.6 percent unemployment. So we
think that is because you are the Commissioner and want to
thank you for the great job you are doing. Thank you very much.
Commissioner Utgoff. Let me correct the record. When
Senator Reed asked what the decline in the participation rate
was, I said 1 percentage point. It is 1.2 percentage points.
Representative Saxton. Commissioner, thank you. It has been
a pleasure.
When we have this strong news, it seems like our hearings
do not last as long, but not because we do not appreciate you
being here and the fine job you are doing.
[Whereupon, at 9:53 a.m., the hearing was adjourned.]
Submissions for the Record
=======================================================================
Prepared Statement of Representative Jim Saxton,
Vice Chairman
I am pleased to welcome Commissioner Utgoff once again to testify
on the monthly employment statistics.
According to the payroll survey, employment increased by 288,000 in
April, following a revised gain of 337,000 in March. The April payroll
employment gains were broad-based, as reflected in the diffusion index
remaining well over 50 in April. The one-month diffusion index has been
above 50 for the last four months. Manufacturing employment increased
for the third consecutive month. Overall, 1.1 million payroll jobs have
been created since last August.
Separately, the household survey showed a similar monthly increase
in employment, and the unemployment rate went from 5.7 percent in March
to 5.6 percent in April. The employment-population ratio edged up to
62.2 percent in April.
The employment data reported today follow the release of many other
economic figures that reflect a healthy pace of economic expansion.
Investment has been strong in recent quarters, providing a faster and
more balanced pattern of economic growth. Overall, the economy has
grown at a rate of about 5 percent in the last year.
The rebound in business investment is reflected in the
manufacturing sector, where capital goods are produced. The ISM index
of manufacturing activity has trended upward for many months, and
remains at historically high levels. Meanwhile, consumption remains
strong, as reflected in retail sales and other measures. Housing and
construction activity is robust. Independent economists note the
important contributions of tax relief and low interest rates in
improving economic conditions.
The consensus of Blue Chip economic forecasters projects that
economic growth will be nearly 5 percent in 2004. This sustained period
of economic growth will continue to improve the opportunities of both
workers and businesses. The outlook for the U.S. economy remains very
positive for the foreseeable future.
__________
Prepared Statement of Senator Jack Reed,
U.S. Senator from Rhode Island
Thank you, Chairman Bennett. I want to welcome Commissioner Utgoff
and thank her for testifying here today.
The Bureau of Labor Statistics' (BLS) April employment situation
shows that the unemployment rate was little changed at 5.6 percent.
More than 8 million Americans remain unemployed--with nearly 2 million
out of work for 6 months or more. While 288,000 payroll jobs were
created, we still have a jobs deficit and long-term unemployment
remains high.
Although the recession officially ended nearly 2\1/2\ years ago, we
still have a payroll employment gap of 1.5 million jobs since President
Bush took office. We haven't seen such persistent job loss since the
1930s. It appears that job creation has turned a corner, but it will
take many months of solid payroll growth to erase the huge gap that has
developed since early 2001.
Meanwhile we are also waiting for another gap to close--the wage
gap. Most measures of workers' earnings have barely kept up with
inflation over the past three years, despite remarkable productivity
growth. The gap between the growth of productivity and growth in real
hourly wages is unusually wide.
For example, the productivity data reported yesterday show that
since the start of the recession in early 2001, output per hour in
nonfarm businesses has grown at a staggering 4.5 percent average annual
rate. However, those same data show that once you take out inflation,
workers' hourly compensation has grown at just a 1.1 percent annual
rate over that same period.
Moreover, some of that growth in compensation reflects the rising
costs of benefits like employer contributions to health insurance. For
some time now, wages and salaries--which is what shows up in workers'
paychecks--have been growing more slowly than benefits. Thus far, at
least, strong productivity growth has done more for the bottom line of
companies than it has done for the take-home pay of workers.
Another nagging concern in the labor market is that long-term
unemployment remains stubbornly high. April was the 19th consecutive
month in which at least 20 percent of the unemployed had been without
work for more than 6 months. That is the longest such streak in the
more than six decades that the Labor Department has kept these records.
Congress can do something now to help the long-term unemployed by
extending federal unemployment benefits. With bipartisan majorities in
both houses of Congress and the support of Federal Reserve Chairman
Alan Greenspan, it's stunning that the President and the Republican-
controlled Congress have been dragging their feet on this.
The economy is growing, but middle-class families still face an
uncertain jobs picture, stagnant wages, higher prices at the pump, and
rising consumer interest rates. It may be some time before workers and
their families experience the benefits of this recovery firsthand.
I look forward to the Commissioner's testimony.
__________
Prepared Statement of Kathleen P. Utgoff, Commissioner,
Bureau of Labor Statistics
Mr. Chairman and Members of the Committee: I appreciate this
opportunity to comment on the labor market data that we released this
morning.
Nonfarm payroll employment rose by 288,000 in April, on the heels
of an even larger job gain in March (337,000). Since August 2003,
payroll employment has risen by 1.1 million. In April, job growth was
widespread for the second consecutive month. Employment increased
substantially in several service-providing industries, construction
employment continued to expand, and there was a noteworthy job gain in
durable goods manufacturing. The unemployment rate, at 5.6 percent in
April, was little changed over the month.
Among the goods-producing industries, construction employment
continued to trend upward in April (18,000). Since March 2003, the
industry has added 213,000 jobs, bringing construction employment
slightly above its most recent peak in March 2001.
Following a protracted period of job decline, factory employment
edged up over the past 3 months. I would note that data for both
February and March were revised slightly upward into positive
territory. The recent improvement in manufacturing employment has
occurred largely in the durable goods component. In April, durable
goods employment rose by 20,000, with notable job gains in both
fabricated metals (10,000) and machinery (4,000).
A number of service-providing industries added jobs over the month.
Employment in professional and business services increased by 123,000
and has risen by about a half million since March 2003. Roughly half of
the over-the-month gain in this diverse sector occurred in employment
services, where the temporary help industry added 35,000 jobs.
Employment in temporary help has grown by 261,000 over the past year.
In April, employment increased by 7,000 in architectural and
engineering services and by 8,000 in management consulting. In
addition, employment in businesses that supply services to buildings
and dwellings rose sharply (30,000), with most of the gain occurring in
landscaping services.
Within education and health services, employment increased by
30,000 in health care and social assistance. Job gains occurred in
hospitals and in outpatient care centers. In leisure and hospitality,
the food services industry continued to add jobs in April (34,000). So
far this year, employment increases in food services have averaged
28,000 a month, twice the average monthly increase for 2003.
Elsewhere in the service-providing industries, employment in retail
trade edged up over the month, following a sizable increase in March.
In April, building material and garden supply stores added 10,000 jobs,
and employment in motor vehicle and parts dealerships rose by 6,000.
Wholesale trade employment was little changed in April, but the
industry has added 49,000 jobs since October. Within the financial
sector, employment in credit intermediation and in real estate
continued to edge up, reflecting strength in the housing market.
In April, average hourly earnings for production or nonsupervisory
workers rose by 5 cents to $15.59. Over the year, average hourly
earnings grew by 2.2 percent.
Looking at some of our measures obtained from the survey of
households, the April unemployment rate was 5.6 percent. The jobless
rate has shown essentially no movement since last December.
In April, the labor force participation rate was 65.9 percent for
the third consecutive month. Nearly 8.2 million persons were unemployed
in April. The number of persons who had been jobless for 27 weeks or
longer declined by 188,000, to 1.8 million.
In summary, nonfarm payroll employment increased by 288,000 in
April and is up by 1.1 million since last August. The unemployment rate
was little changed over the month, at 5.6 percent.
My colleagues and I now would be glad to address your questions.
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