[Joint House and Senate Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
S. Hrg. 110-663
THE EMPLOYMENT SITUATION: JULY 2008
=======================================================================
HEARING
before the
JOINT ECONOMIC COMMITTEE
CONGRESS OF THE UNITED STATES
ONE HUNDRED TENTH CONGRESS
SECOND SESSION
__________
AUGUST 1, 2008
__________
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
Charles E. Schumer, New York, Carolyn B. Maloney, New York, Vice
Chairman Chair
Edward M. Kennedy, Massachusetts Maurice D. Hinchey, New York
Jeff Bingaman, New Mexico Baron P. Hill, Indiana
Amy Klobuchar, Minnesota Loretta Sanchez, California
Robert P. Casey, Jr., Pennslyvania Elijah E. Cummings, Maryland
Jim Webb, Virginia Lloyd Doggett, Texas
Sam Brownback, Kansas Jim Saxton, New Jersey, Ranking
John E. Sununu, New Hampshire Minority
Jim DeMint, South Carolina Kevin Brady, Texas
Robert F. Bennett, Utah Phil English, Pennsylvania
Ron Paul, Texas
Michael Laskawy, Executive Director
Nan Gibson, Deputy Director
Christopher J. Frenze, Republican Staff Director
C O N T E N T S
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Opening Statement of Members
Page
Statement of Hon. Carolyn B. Maloney, Vice Chair, a U.S.
Representative from New York................................... 1
Witness
Statement of Dr. Keith Hall, Commissioner, Bureau of Labor
Statics; and Dr. John Greenlees, Research Economist, Office of
Prices and Living Conditions, Bureau of Labor, Statistics, U.S.
Department of Labor............................................ 3
Submissions for the Record
Prepared statement of Senator Charles E. Schumer................. 14
Prepared statement of Representative Carolyn B. Maloney.......... 16
Chart entitled, ``Monthly Change in Nonfarm Payrolls''........... 18
Chart entitled, ``Annual Change in Real Earnings''............... 19
Prepared statement of Dr. Keith Hall, Commissioner, Bureau of
Labor Statistics, together with Press Release No. 08-1049...... 20
Report entitled, ``Equality in Job Loss: Women Are Increasingly
Vulnerable to Layoffs During Recessions''...................... 22
Article from New York Times entitled, ``More Arrows Seen Pointing
to a Recession''............................................... 33
THE EMPLOYMENT SITUATION: JULY 2008
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FRIDAY, AUGUST 1, 2008
Congress of the United States,
Joint Economic Committee,
Washington, DC.
The committee met at 9:30 a.m. in Room 562 of the Dirksen
Senate Office Building, the Honorable Vice Chair Carolyn B.
Maloney, presiding.
Senators present: Brownback and Saxton.
Representatives present: Maloney.
Staff present: Christina Baumgardner, Ted Boll, Heather
Boushey, Tanya Doriss, Chris Frenze, Nan Gibson, Gretta
Goodwin, Colleen Healy, Bob Keleher, Tyler Kurtz, Annabelle
Tamerjan, and Jeff Wrase.
OPENING STATEMENT OF HON. CAROLYN B. MALONEY, VICE CHAIR, A
U.S. REPRESENTATIVE FROM NEW YORK
Vice Chair Maloney. I would like to call the meeting to
order and welcome all of the gentlemen who will be testifying
today. We will be having a vote, so I will have to adhere to a
very tight schedule.
Good morning, and I would like to thank Commissioner Hall
for testifying today on the July employment situation. In July
the economy shed jobs for the seventh straight month for a
total of 463,000 jobs lost so far in 2008, and there we see it.
The unemployment rate rose two-tenths of a percentage point
in July to 5.7 percent, a full percentage point higher than a
year ago. With these grim statistics, it would be hard not to
conclude that the labor market is in a downturn.
Congress is already at work on a second stimulus package
which Speaker Pelosi has announced we will take up next month.
We continue to see mounting evidence that a significant
downturn in the economy may be underway. Yesterday we learned
that the U.S. economy grew by a paltry 1.9 percent in the
second quarter of 2008--well below expectations--and that the
fourth quarter growth in 2007 was revised to show negative
growth of 0.2 percent.
American families are paring back their spending because
their real wages are as low now as they were in October 2001,
which was when we were in a recession. The chart shows this.
[Chart entitled, ``Monthly Change in Nonfarm Payrolls''
appears in the Submissions for the Record on page 18.]
[Chart entitled, ``Annual Change in Real Earnings'' appears
in the Submissions for the Record on page 19.]
Gasoline and food prices are skyrocketing. They have
severely weakened the buying power of the American consumer.
The weak recovery of 2000 has left families especially
vulnerable to an economic downturn.
Real family income is about $1000 lower now than it was in
2000, and families have accumulated little in the way of
savings. Declining home prices means that many families will be
unable to access home equity lines of credit to make ends meet
as they did in prior recessions.
For decades families could rely on women's earnings to
boost household income during a recession, but wives and
mothers may not be able to shelter their families from the
economic storm that is hitting now.
Up until the 2000s, during recessions women typically lost
very few jobs on net. However, all this changed with the
recession of 2001 when women lost jobs on par with men in the
industries that were hardest hit.
We for decades have worked for equal pay and equal wages
and equal jobs, but where we have achieved equality is in job
loss.
The 2000s recovery was also unique as it was the first
recovery in the post-World War II period during which women's
employment rates did not return to their pre-recession peak.
This is a trend to watch because the only families that are
getting ahead are those with a working wife. Families without a
working wife have real incomes today that are nearly identical
to what they were over 35 years ago.
Congress has already taken numerous steps to help buffer
families from the effects of this economic downturn. Most
families have received their recovery rebates, and the
President has just signed into law our Housing Package aimed at
stemming the tide of foreclosures.
But there is more to do to get the economy back on track.
Over half of the states are projecting budget shortfalls for
fiscal year 2009, and this will lead not only to cutbacks in
necessary services but likely higher unemployment for women who
disproportionately work in social service agencies, in
education, and in state government.
So far this year private employers have shed 651,000 jobs
while government has added 188,000 jobs, but government will
not likely be able to continue to act as an engine of job
growth once budgets are cut.
We need a second stimulus package that includes fiscal aid
to the states and funds for infrastructure investment to give
our sagging economy a much-needed boost and to promote job
creation.
I hope the President will work with us in Congress to get
Americans back to work as quickly as possible. Chairman Schumer
and I look forward to the continued focus on labor market
conditions by this Committee, along with our Ranking Members.
[The prepared statement of Senator Charles E. Schumer
appears in the Submissions for the Record on page 14.]
[The prepared statement of Representative Maloney appears
in the Submissions for the Record on page 16.]
Vice Chair Maloney. I now will recognize Commissioner Hall.
STATEMENT OF DR. KEITH HALL, COMMISSIONER, BUREAU OF LABOR
STATISTICS, U.S. DEPARTMENT OF LABOR, ACCOMPANIED BY: MR. PHIL
RONES, DEPUTY COMMISSIONER, BUREAU OF LABOR STATISTICS; AND DR.
JOHN GREENLEES, RESEARCH ECONOMIST, OFFICE OF PRICES AND LIVING
CONDITIONS, BUREAU OF LABOR. STATISTICS, U.S. DEPARTMENT OF
LABOR
Commissioner Hall. Thank you, Madam Chair, Members of the
Committee:
I appreciate the opportunity to comment on the employment
and unemployment data that we released this morning.
In July, non-farm payroll employment continued to trend
down, dropping 51,000. The unemployment rate rose from 5.5 to
5.7 percent. Thus far in 2008, payroll employment has fallen by
463,000, or an average of 66,000 per month.
In July job losses continued in several industries,
including construction, manufacturing, and employment services,
particularly in temporary help. Health care and mining
continued to add jobs.
Average hourly earnings for production and nonsupervisory
workers in the private sector rose by 6 cents, or 0.3 percent,
in July. Over the past 12 months, average hourly earnings rose
by 3.4 percent. From June 2007 to June 2008, the Consumer Price
Index for Urban Wage Earners and Clerical Workers rose by 5.4
percent.
Turning now to some of our measures from the Household
Survey, both the number of unemployed persons at 8.8 million
and the unemployment rate at 5.7 percent, increased in July.
Over the past 3 months there has been a notable increase in
unemployment of youth aged 16 to 24. Each summer, millions of
young people move into the labor market. This year the
summertime influx of youth into the labor market was about the
same as last year. However, fewer young people were able to
find jobs.
For the three-month period May through July, the
unemployment rate for 16 to 19 year olds averaged 19 percent,
compared with an average of 15.7 percent for those same three
months last year.
Similarly, the May through July average jobless rate for 20
to 24 year olds was 10.2 percent this year compared with 8.0
percent over the same period last year.
Not all of the increase in unemployment in the last 3
months was among youth since joblessness also rose also among
those 25 years and older.
The employment-to-population ratio for all persons 16 years
and older was unchanged in July at 62.4 percent, but has
declined from 63.0 percent a year earlier.
Among the employed, the number of part-time workers who
would prefer to work full time continued to rise in July. The
number of such workers has increased by 1.4 million over the
past 12 months to 5.7 million.
To summarize July's labor market developments, payroll
employment continued to trend down and the unemployment rate
rose to 5.7 percent.
My colleagues and I now would be glad to answer your
questions.
[The prepared statement of Commissioner Hall appears in the
Submissions for the Record on page 20.]
Vice Chair Maloney. Thank you.
Well first of all I would like to get your comment on an
article today in The New York Times. The headline says, ``More
Arrows Seen Pointing To A Recession.''
Would you agree with this headline?
Commissioner Hall. I would say that it is generally
accepted that a recession is a significant decline in economic
activity spread across the economy that lasts for more than a
few months.
There is no established rule with respect to say the number
of jobs lost, or the number of months of job lost, but it is
true that in the last two recessions the National Bureau of
Economic Research waited for 8 months of job loss before they
declared a recession.
I would like to add though that the severity of a labor
market downturn is also an important determination in a
recession, and in the last two recessions the job loss was
around 1.5 million jobs; and over this last 7 months we have
lost about a third of that. So it is not as severe.
Vice Chair Maloney. Yet we have shed jobs for the seventh
straight month.
Commissioner Hall. That is correct.
Vice Chair Maloney. And if we continue to shed jobs into
the next month, would you then claim it is a recession as this
headline says we are pointed towards?
Commissioner Hall. You know, I don't know what--obviously I
don't know what--the labor market is going to do in the future.
It is important that we have had job loss for so many months in
a row. It is important that it has not been as severe. It is
still job loss, however.
There is a good reason for sort of labeling something a
recession as opposed to a downturn. The last two recessions,
for example, lasted only about 8 months. The last recession in
particular lasted about 8 months, but it took the labor market
3.5 years to recover. It is a pretty significant thing when you
have a recession because it takes so long for the labor market
to recover.
Vice Chair Maloney. Can you tell us what the big picture is
in employment this month? Did the economy create jobs? And how
does this compare to trends in recent jobs?
We saw from today's report that since December 2007 private
employers have shed 651,000 jobs, but government has added
188,000 jobs. How many jobs were lost in the private sector
last month, and did the government do any hiring last month?
Commissioner Hall. Sure. The unemployment rate increased
from 5.5 percent to 5.7 percent in July. To put that in a
slightly broader perspective, over the last three months the
unemployment rate has averaged 5.6 percent. In the prior three
months it averaged 4.9 percent. So this is a significant trend.
The job loss at 51,000 jobs this month brings the total
decline this year so far to 463,000 jobs, or 66,000 jobs per
year.
The weakness remains in construction, manufacturing, and
temporary help services. Wholesale and retail trades have
posted steady losses. And after many months of declines, losses
in financial activities have slowed a little bit.
But we have had gains in education, health services,
government, and mining thus far in 2008.
Private payroll jobs this month declined by 76,000. That is
compared to an average so far this year of a loss of 93,000.
Vice Chair Maloney. Okay, did the government do any hiring
last month that you're aware of?
Commissioner Hall. Yes. The government added about 25,000
jobs, and that job gain was centered in local government and
state government hiring.
Vice Chair Maloney. Okay, given the growing constraints on
state and local governments where we are getting reports that
they will be facing deficits, what do you think will happen to
government employment in the months to come? And what will this
mean for the overall labor market?
Commissioner Hall. Obviously if state governments continue
to have financial troubles and they do start to shed jobs, this
is going to add to the labor market difficulties.
Vice Chair Maloney. I would like to go back to the
statement earlier that this is the seventh month of consecutive
job loss and ask you specifically: Do consecutive months of job
losses mean that the economy is in a recession?
Commissioner Hall. It certainly means that economic growth
is not strong enough to support job growth. I hesitate to say
just that alone means you are in a recession, because other
things are important in that and I think it is sort of
important--at least from my view--that sort of a declaration of
a recession remains with the private sector at the National
Bureau of Economic Research, since they are a private group.
Vice Chair Maloney. Well how many months of job losses do
we need to see before we can say that we are in a recession?
Commissioner Hall. The best I can say is that the last two
recessions we had eight months of job loss before the recession
was declared.
Vice Chair Maloney. And what are some of the other
indicators that are part of determining a recession on top of
eight consecutive months of job loss?
Commissioner Hall. The NBER cites a number of things. I
think the labor market performance is extremely important. It
would be the job loss and the magnitude of job loss. They also
cite things like industrial production as being important, real
income growth as being important.
Vice Chair Maloney. How much of a factor do you think is
the housing crisis playing into the economy that we are
confronting with seven months of consecutive job loss, and the
loss of values in homes so that resident constituents cannot
refinance equity lines now because of the loss of value of
their homes?
Commissioner Hall. Well it is true that a lot of the job
loss is centered in construction and construction-related
industries, but the weakness is fairly broad. So it may well
be----
Vice Chair Maloney. So it is not particularly the housing
market that is forcing this?
Commissioner Hall. No. No, it is not.
Vice Chair Maloney. So when we put all this together, it
appears that the employment situation looks rather grim. Would
you agree?
Commissioner Hall. I would certainly agree that this is not
a strong job market report.
Vice Chair Maloney. And typically in an economic downturn
or in a recession how long does it take for employment to
recover to its pre-recession peak?
Commissioner Hall. Over the last I think couple of decades
the average recovery has been about 20 months, and this last
recession it was 39 months.
Vice Chair Maloney. And how long do wages and other
compensation take to recover?
Commissioner Hall. Well in terms of the level, typically
compensation does not go down much more than a quarter or so
before it starts to grow again, but the growth in compensation
has gone down all the last few recessions and has never
recovered.
Vice Chair Maloney. So based on your analysis of today's
report, does it appear that we may be in for a difficult period
for the last market in the months to come?
Commissioner Hall. I do not want to speculate too much
since we do have the data that's coming out.
Vice Chair Maloney. Well talking about data, one item that
was very striking to me was the fact that American families are
paring back their spending because their real wages are as low
now as they were in October of 2001, which was our last
recession correct. So that to me is shocking, that their wages
are the same as 2001.
Could you elaborate, please?
Commissioner Hall. Sure. Although there has been some
nominal wage growth, the wage growth clearly has not kept up
with inflation. In particular, energy and food inflation.
Vice Chair Maloney. Okay.
Commissioner Hall. And to some degree it is the issue of
how much is the problem in the labor market, how much of the
problem is energy and food inflation, but in a sense it does
not matter because wages have not kept up with inflation.
Vice Chair Maloney. I would like to ask some questions on
women and the economy. I asked the Joint Economic Committee to
do a report on the impact of the economic downturn on women.
Women are usually the people who buffer families during a
recession or an economic downturn.
They also, regrettably, are usually very poor in older age.
One of the strongest indicators of poverty at an older age is
being a mother, particularly a single mother.
So I would like to turn to asking you about women's
employment trends. Is it true that women's employment rates are
typically below men's?
Commissioner Hall. Yes, it is.
Vice Chair Maloney. Are there any age groups in which
women's employment rates are above men's, or nearly equal to
men's?
Commissioner Hall. Among teenagers, the employment to
population ratios are sometimes higher for women to men, but
that's it.
Vice Chair Maloney. Since it is too soon to tell how the
current labor market downturn will turn out, or the impact it
will eventually have on women's employment, I would like to
turn to some question about women's experiences in the 2001
recession, which is the numbers that we looked at in our
report.
The report--and actually I congratulate the Committee staff
that are sitting right here for all of their hard work on this
report--but the report showed that women lost more jobs in the
2001 recession than they had in prior recessions.
So my question is: Why do you think that the 2001 recession
was so hard on women workers compared to prior recessions?
Commissioner Hall. Well during the labor market downturn
during this last recession--which takes you from maybe March
2001 to August 2003--women did lose about 670,000 jobs on net.
That is compared to a job loss with men of just over 2 million
jobs.
The job loss for women had sort of a similar industry
pattern as it did for men. Literally a million women lost jobs
in manufacturing over that period. Six hundred thousand lost
jobs in trade, transportation, utilities. And almost half a
million lost jobs in professional and business services.
So I do think women's participation by industry had a big
influence on the job loss.
Vice Chair Maloney. So that they are in more different
industries is why the job loss was there. So what is so
troubling to me is that we cannot achieve equality in wages,
but we are achieving equality in job loss. Why do you think
that is?
Why do you think women cannot achieve equality in wages? We
have passed one bill after another in this area--equal pay for
equal work. We just passed yesterday in the House of
Representatives the Pay Fairness Protection Act to protect and
encourage women to be able to find out what other employees are
making, and compare their wages and seek fair treatment. Why do
you think it has taken so long?
We did another report that looked at 20 years of income
between men and women and found a consistent 40 percent gap.
And after you factored in reasons why it might occur--because
of having a child, or taking care of a sick parent, or family
responsibilities--there still was a 20 percent unexplained wage
gap. This was a General Accounting Office, a nonpartisan
accounting office, test and report that they did.
I am wondering if you have any ideas of why this is so
consistent? The report looked at 20 years of work life of men
and women and found a persistent 40 percent gap after
explaining reasons for it, an unexplained gap of 20 percent.
Some would say that possibly that unexplained gap was
discrimination. So can you comment on why is changing that wage
gap so persistent, so strong, and does not seem to budge?
Commissioner Hall. That is getting a bit outside my
expertise. I can say that the basic data you described, I think
that is generally our data. That sounds correct, the 40 percent
wage gap.
Vice Chair Maloney. Well let's get back to the numbers. The
2000s recovery was also different from prior recoveries as it
was the first recovery in the post-World War II period during
which women's employment rates did not return to their pre-
recession peak.
Can you tell me, during the 2000s' recovery did women's
employment rates return to where they were at their peak in the
strong recovery of the 1990s?
Commissioner Hall. No. The rate peaked at about 58 percent
in April of 2000, and currently it is below that at the moment.
Vice Chair Maloney. And was the lack of recovery of
employment rates a sharp departure from prior trends?
Commissioner Hall. Yes. The long-run trend for decades and
up through the late 1990s was a steady growth in women's
employment rates, with the exception of recessions. And since
the 2001 recession, this long-run trend for whatever reason has
not returned, or is showing no signs of returning, and instead
the ratio for women has been relatively flat over the past two
years.
Vice Chair Maloney. And how have women fared as the economy
has shed this year in particular, and in what industries have
they lost the most jobs?
Commissioner Hall. Overall, women have actually gained
about 200,000 jobs so far this year, but that masks a
significant loss in a number of industries. In manufacturing
women lost about 97,000 jobs so far this year. Trade,
transportation, utilities, there was a drop of about 70,000
jobs. Retail trade, a drop of about 50,000 jobs. And
professional business services was a drop in 69,000 jobs.
The gains for women have been centered in the industries
that have been doing well still: education and health services.
They have still had some gains, as have men, and government as
well.
Vice Chair Maloney. As a New Yorker, I would like you to
get it back to me, if you could get me a picture, or a review
of how jobs are faring in the Great State of New York City and
New York State, which I have the honor of representing, but you
can get that to me later, as this is a meeting for the entire
country.
I feel that we need proper data in order to make good
policy decisions, so I want to be as supportive as I can for
you to continue your work, Commissioner, to give us the
information that we need.
So I would like to ask you a few questions about your
budget, if I could, please.
Commissioner Hall. Sure.
Vice Chair Maloney. Can you tell us what has been happening
to your budget over the past two years?
Commissioner Hall. Sure. In 2007 the BLS Appropriation was
about $15 million below the President's request. We took a
number of temporary measures to deal with that, and we dealt
with it well without cutting any programs.
This year we were funded at about $30 million below the
President's request, and I think we have done a really good job
of maintaining our programs up to now, but we have taken a
number of temporary measures to get by.
Vice Chair Maloney. So what are some of those temporary
measures that you have had to take?
Commissioner Hall. We have everything from a hiring freeze,
to restrictions in travel and training. We've trimmed a number
of programs. We have done some reduction in sample size. We've
reduced some of the detail in some of our data. Unfortunately
we had to trim some of the Metropolitan Area Employment Data,
some things like that. And we have delayed some improvements to
a couple of our core programs that are very important that are
getting due.
Vice Chair Maloney. What would happen to the Bureau of
Labor Statistics Programs and Surveys if you have to operate
under a Continuing Resolution in Fiscal Year '09? And can you
sustain another year of temporary reductions?
Commissioner Hall. First, I do not think we can continue
with a third year of temporary reductions. We run the risk of
reducing the quality of our data across the board if we do not
go ahead and restore some of the funding for a number of our
programs.
And we need to sort of protect two of our flagship
programs. The Consumer Price Index in particular has an
important part--the geographic and housing part of it is based
right now on the 1990 Census. That has gotten quite old.
We really need to spend some money to update that. And the
current Population Survey, which is a lot of what we have been
talking about right now, we have had a big jump in the cost of
that. So we are going to really have to increase our spending
on that.
So as a result, if we take care of our major programs then
it looks like we are going to have to trim as much as $50
million permanently from our programs, which means we are going
to have to go and try to pick some of our lower priority
programs and cut them out.
Vice Chair Maloney. Can you tell us the ways in which the
quality of our economic indicators might suffer if your budget
request is not met? And is it wise to allow our economic
statistics to deteriorate in the midst of an economic downturn?
Commissioner Hall. Well of course if we don't look to sort
of trimming, permanently trimming some programs, then we've got
a real problem, at least in my view, of continuing to maintain
the quality of all of our data.
Our data is extremely important not only for households and
businesses making decisions, but government programs rely quite
a bit on our data.
For example, I mentioned the Consumer Price Index. That is
used not only to adjust Income Tax rates, but it helps guide
half a trillion dollars of Social Security Benefits that are
based on the Consumer Price Index.
So if we go ahead and take care of these programs, then we
are going to have to look to some of these other smaller
programs that have been around for years that are very valuable
but we just--our priorities are just going to have to be to
take care of the big things.
Vice Chair Maloney. And how much of real wages have fallen
over the past year? And how do real wages compare to the past
few years for our workers?
Commissioner Hall. Real wages have fallen. Over say the
past 12 months, real wages have declined by about 1.8 percent.
Vice Chair Maloney. And how does that compare to the past
few years?
Commissioner Hall. Real wages have been either flat or
falling the last few years. This is a bigger decline in large
part because of food and energy prices.
Vice Chair Maloney. I would like to look at the shift that
we are seeing in many businesses as employers shift more of the
burden of rising health care costs to their workers. Doesn't
that reduce the purchasing power of the take-home pay even more
when their pay has been so stagnant?
Commissioner Hall. Yes, it does. In fact, with rising
health care costs two things can happen, and we have seen some
trends to this.
First, as employers may push more of the rising health care
insurance costs onto workers, and as you say reducing the
purchasing power of take-home pay; and the second, the rising
costs of employer-provided health insurance may crowd out wage
increases. There has been maybe some evidence of that, as well.
Vice Chair Maloney. Let's talk about the effects of food
and gas prices on wages. Last month this Committee held a
hearing on the rising costs of food and the effects on the
pocketbooks of American families.
Government forecasters predicted that for 2008 we will see
a 5 to 6 percent increase to the CPI for food consumed at home.
Additionally, consumers are expected to experience higher
gasoline prices.
Given that wages are falling, prices for food and energy
are rising, unemployment is high and lasting longer, and people
are exhausting their unemployment benefits, it appears getting
hard to make ends meet for a lot of Americans. Would you agree?
Commissioner Hall. Yes. As we just discussed, the average
wage growth has not kept up with inflation. I think it is
particularly concerning that a lot of the inflation comes from
food and energy, which means it is particularly hard for modest
income families.
Vice Chair Maloney. And what does this signal about the
health of our economy?
Commissioner Hall. Well besides the obvious direct effects
of lower wages, rising food, energy, and gasoline prices may
well be creating a drag on economic growth. It may have
contributed to the weakening of the U.S. labor market.
Vice Chair Maloney. We recently, as Congress, passed a
housing bill to stabilize the housing markets. Federal Reserve
Chairman Bernanke had testified that we needed to really
solidify or bring stability to that market in order to move
forward. But your testimony earlier indicated that the economic
downturn was not just in housing, but around all of the
different areas of our economy. Is that correct? Would you
elaborate some more?
Commissioner Hall. Sure. Yes, the weakness in the labor
market is broader than just housing-related things. Obviously
that can be for a lot of reasons. The real--certainly a concern
with the downturn in housing is not just the direct effect but
the indirect effect it has on people's ability to spend, and
their confidence in spending going forward. We have perhaps
seen evidence of that because the labor market weakness is
broad.
Vice Chair Maloney. Well I want to thank you for your
testimony. I have been called for votes, so I will have to rush
over and vote. But I want to assure you that I will work very
hard to make sure that your budget requests are in place, and
certainly will be a strong advocate that you have the necessary
resources in order to get the proper information so that we in
Congress on both sides of the aisle can make proper decisions
in ways that we can respond to the important information that
you are putting before us.
I just, before parting, would like to ask if you have any
other items that you would like to share with us that you think
are important. Many Members are on the Floor. This is closing
days. It is a very difficult time. The Chairman is in another
committee meeting voting, as are other Members on this
Committee, but I will certainly get a transcript of your
statements to them.
Again, I thank you for your testimony.
Commissioner Hall. Thank you.
Vice Chair Maloney. The meeting is adjourned.
(Whereupon, at 10 a.m., Friday, August 1, 2008, the hearing
was adjourned.)
Submissions for the Record
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Statement of Keith Hall, Commissioner, Bureau of Labor Statistics
Madam Chair and Members of the Committee:
I appreciate this opportunity to comment on the employment and
unemployment data that we released this morning.
Nonfarm payroll employment continued to trend down in July
(-51,000), and the unemployment rate rose from 5.5 to 5.7 percent. Thus
far in 2008, payroll employment has fallen by 463,000, or an average of
66,000 per month. In July, job losses continued in several industries,
including construction, manufacturing, and employment services. Health
care and mining continued to add jobs.
Employment in construction declined by 22,000 in July. Since its
September 2006 peak, construction employment has decreased by 557,000.
Nearly three-fourths of the decline (-402,000) has occurred since
October 2007.
Manufacturing employment fell by 35,000 in July. Job losses have
averaged 39,000 per month thus far in 2008 compared with an average
loss of 22,000 per month during 2007.
Employment services lost 34,000 jobs over the month, with nearly
all of the decline in temporary help. Temporary help employment has
declined by 268,000 since a peak in December 2006, with more than two-
thirds of the loss (-185,000) occurring since January.
In July, employment in health care rose by 33,000, in line with the
prior 12-month average. Mining added 10,000 jobs in July, the third
consecutive gain of this magnitude.
Average hourly earnings for production and nonsupervisory workers
in the private sector rose by 6 cents, or 0.3 percent, in July. Over
the past 12 months, average hourly earnings rose by 3.4 percent. From
June 2007 to June 2008, the Consumer Price Index for Urban Wage Earners
and Clerical Workers (CPI-W) rose by 5.4 percent.
Turning now to some of our measures from the household survey, both
the number of unemployed persons, at 8.8 million, and the unemployment
rate, at 5.7 percent, increased in July.
Over the last 3 months, there has been a notable increase in
unemployment of youth (16 to 24 years). Each summer, millions of young
people move into the labor market. This year, the summertime influx of
youth into the labor market was about the same as last year; however,
fewer young people were able to find jobs. For the 3-month period, May
through July, the unemployment rate for 16- to 19-year-olds averaged
19.0 percent, compared with an average of 15.7 percent for those same 3
months in 2007. Similarly, the May-through-July average jobless rate
for 20- to 24-year-olds was 10.2 percent this year, compared with 8.0
percent over the same period last year. Not all of the increase in
unemployment in the last 3 months was among youth; joblessness also
rose among those 25 years and older.
The employment-population ratio for all persons 16 years and older
was unchanged in July, at 62.4 percent, but has declined from 63.0
percent a year earlier. Among the employed, the number of part-time
workers who would prefer to work full time continued to rise in July.
The number of such workers has increased by 1.4 million over the past
12 months to 5.7 million.
To summarize July's labor market developments, payroll employment
continued to trend down, and the unemployment rate rose to 5.7 percent.
My colleagues and I now would be glad to answer your questions.
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