[Joint House and Senate Hearing, 111 Congress]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 111-113
 
                 THE EMPLOYMENT SITUATION: JANUARY 2009

=======================================================================



                                HEARING

                               before the

                        JOINT ECONOMIC COMMITTEE
                     CONGRESS OF THE UNITED STATES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                            FEBRUARY 6, 2009

                               __________

          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]

HOUSE OF REPRESENTATIVES             SENATE
Carolyn B. Maloney, New York, Chair  Charles E. Schumer, New York, Vice 
Maurice D. Hinchey, New York             Chairman
Baron P. Hill, Indiana               Edward M. Kennedy, Massachusetts
Loretta Sanchez, California          Jeff Bingaman, New Mexico
Elijah E. Cummings, Maryland         Amy Klobuchar, Minnesota
Vic Snyder, Arkansas                 Robert P. Casey, Jr., Pennsylvania
Kevin Brady, Texas                   Jim Webb, Virginia
Ron Paul, Texas                      Sam Brownback, Kansas, Ranking 
Michael Burgess, M.D. Texas              Minority
John Campbell, California            Jim DeMint, South Carolina
                                     James E. Risch, Idaho
                                     Robert F. Bennett, Utah

                     Nan Gibson, Executive Director
               Jeff Schlagenhauf, Minority Staff Director
          Christopher Frenze, House Republican Staff Director


                            C O N T E N T S

                              ----------                              

                      Opening Statement of Members

Hon. Carolyn B. Maloney, Chair, a U.S. Representative from New 
  York...........................................................     1
Hon. Sam Brownback, Ranking Minority Member, a U.S. Senator from 
  Kansas.........................................................     2
Hon. Amy Klobuchar, a U.S. Senator from Minnesota................     4
Hon. Kevin Brady, a U.S. Representative from Texas...............     6
Hon. Robert P. Casey, Jr., a U.S. Senator from Pennsylvania......     8

                               Witnesses

Dr. Keith Hall, Commissioner, Bureau of Labor Statistics; Dr. 
  Michael Horrigan, Associate Commissioner for Prices and Living 
  Conditions, Bureau of Labor Statistics; and Mr. Philip Rones, 
  Deputy Commissioner, Bureau of Labor Statistics, U.S. 
  Department of Labor............................................    10

                       Submissions for the Record

Prepared statement of Representative Carolyn B. Maloney..........    26
Prepared statement of Senator Sam Brownback......................    27
Prepared statement of Representative Kevin Brady.................    29
Prepared Statement of Dr. Keith Hall, Commissioner, Bureau of 
  Labor Statistics, together with Press Release No. 09-0117......    30
Chart entitled ``Job Losses Are Mounting at an Accelerated Rate''    63


                 THE EMPLOYMENT SITUATION: JANUARY 2009

                              ----------                              


                        FRIDAY, FEBRUARY 6, 2009

             Congress of the United States,
                          Joint Economic Committee,
                                                    Washington, DC.
    The committee met at 9:30 a.m. in Room 106 of the Dirksen 
Senate Office Building, the Honorable Carolyn B. Maloney 
(Chair), presiding.
    Senators present: Klobuchar, Casey, Brownback, and Risch.
    Representatives present: Maloney, Brady, and Burgess.
    Staff present: Gail Cohen, Eleni Constantine, Nan Gibson, 
Colleen Healy, Aaron Kabaker, Nolan Berry, Doug Branch, James 
Gilroy, Rachel Greszler, Jeff Schlagenhauf, Colm Willis, Jeff 
Wrase, Ted Boll, Gordon Brady, Chris Frenze, Bob Keleher, and 
Robert O'Quinn.
    Chairman Maloney. The Committee will come to order.
    Commissioner Hall, we thank you for testifying today and we 
also thank your colleagues for joining you, and we will go 
forward.
    I would like to first give an opening statement and see if 
other members would like to be recognized for an opening 
statement.

  OPENING STATEMENT OF HON. CAROLYN B. MALONEY, CHAIR, A U.S. 
                  REPRESENTATIVE FROM NEW YORK

    The newest job numbers today told Americans something they 
already knew: things are bad. They are bad all over. In almost 
every sector of the economy and in almost every section of the 
country things are bad and Americans are hurting.
    These numbers add to the overwhelming evidence for getting 
a recovery package to the President's desk fast. In today's 
report we see that even the bright spots are dim. According to 
the figures just released by the Bureau of Labor Statistics, 
nearly 3.6 million jobs have been lost since the recession 
began in December, including the nearly 600,000 jobs shed in 
January.
    Given the steady stream of mass layoffs, a credit freeze, 
and a decline in consumer spending, the writing was already on 
the wall for a devastating 13th month of job losses. The job 
losses were widespread throughout our economy and employers cut 
jobs at a faster pace last month.
    My home State of New York, even though the unemployment 
rate is lower than the national record, has been especially 
hard hit with the highest number of announced layoffs in the 
country last month, almost 48,000 jobs were lost.
    The Labor Department announced yesterday that initial 
jobless claims surged to a 17-year high of 626,000 last week, 
and that the number of people on the unemployment rolls ticked 
up to nearly 4.8 million, the most since records began in 1967.
    We now hear that the growing rolls of the unemployed are 
colliding head-on with states who cannot afford to efficiently 
process their claims. More than 2 million homes have gone into 
foreclosure, and millions of other homeowners find themselves 
owing more to the bank than their homes are worth.
    Because of these job losses, millions have also lost their 
health insurance; and an estimated $6 trillion in personal 
wealth has simply evaporated since the economic crisis began.
    Alarm bells are sounding and our economic recovery package 
must make its way to the President as soon as possible. The 
current economic crisis requires bold solutions that address 
the magnitude of our economic woes and the American recovery 
and reinvestment plan will do just that.
    These jobless numbers today underscore once again that 
there is no issue that is more important for this government to 
address than saving and creating jobs. Our recovery package 
will create or save an estimated 4 million jobs and will make 
key investments in our future.
    We will create jobs across a variety of sectors over the 
next several years which will soften the downturn and foster a 
solid economic recovery that benefits all Americans.
    First and foremost we will help families in need by 
increasing Food Stamp benefits for some 30 million Americans, 
expanding Unemployment Benefits for 18 million Americans, and 
preserving health care benefits for 20 million Americans.
    We have an historic opportunity to make the investments 
necessary to modernize our public infrastructure, transition to 
a clean energy economy, and make us more competitive in the 
future. America's schools, roads, bridges, and water systems 
are in disrepair and this is creating a drag on economic 
growth.
    Our plan also supports working families by providing a 
$1000 Making Work Pay tax cut for 95 percent of workers and 
their families. These families will go out and spend the money, 
not save it, and help jumpstart local economic recovery.
    Now is the time to put aside the differences we might have 
in economic theories and put the needs of our country first. 
Now is the time to save our economy, not defend the failed 
policies of the past. We need to stand together for the good of 
our Nation.
    President Obama and the Democrats are ready to embark on a 
bold, common sense plan to turn this economy around, to address 
the fierce urgency of now, and to get this country back on its 
feet. Today's numbers underline the need to act and the need to 
act now. Thank you.
    [The prepared statement of Representative Maloney appears 
in the Submissions for the Record on page 26.]
    Chairman Maloney. I will now recognize my colleague, 
Senator Brownback, for five minutes.

   OPENING STATEMENT OF HON. SAM BROWNBACK, RANKING MINORITY 
               MEMBER, A U.S. SENATOR FROM KANSAS

    Senator Brownback. Thank you very much, Chairwoman Maloney. 
I appreciate that. I appreciate the hearing and, Commissioner 
Hall, I appreciate being able to hear from you--although I do 
not like the information that we are getting. This is a very 
difficult and another very bad month. The Unemployment numbers 
are up another 598,000 with an unemployment rate of 7.6 percent 
during the month of January. This is all very unwelcome news. I 
think most would say it is probably expected, but certainly not 
welcome.
    There is no question that our economy and the people of the 
Nation are hurting, and hurting badly. I wish I could say that 
I am looking forward to your testimony, but this is news we 
could do without.
    I know that Commissioner Hall is here to testify on the 
data in today's report and is not here to offer us projections 
about future results or policy prescriptions for what ails us. 
That isn't the job of the BLS Commissioner, so I hope we can 
all avoid the temptation to rewrite your job description today.
    There is no question that our economy needs help. Passage 
of a stimulus package is essential. It is necessary for this 
economy. Passage of a massive spending bill that permanently 
adds to the size of government is not. We need to put gas in 
the tank, not sugar. Unfortunately, the stimulus bill passed by 
the House and the one under consideration by the Senate fail 
both tests.
    I think the thing that actually makes me the saddest about 
this is this is totally avoidable. We easily could have had a 
normal process on a truncated schedule and come up with a bill. 
In the Senate I know that we could have gotten 75 votes for it 
if we could have had a normal appropriations process. I'm on 
the Appropriations Committee, Ranking Member.
    I got the bill 24 hours ahead of the vote. No input. I 
got--we had an hour-and-forty-minute markup hearing in the 
Appropriations Committee. No amendments. And that is the bill. 
It is a spending bill, not a stimulus bill.
    I think really what we should do at this point in time is 
to send it back to the committees for a set period of time, for 
two weeks, and say that everything in the bill must be 
stimulative, at least on a 2-to-1 ratio of $2 of economic yield 
per $1 of activity, and then bring it back.
    We are going to be in this stew for a period of time that 
we are in right now in the economy, and we need to work on this 
together. This is a $1 trillion bill, and we do not have many 
bullets that size.
    We need to hit the target with it. There is a good deal of 
economic research that analyzes data as opposed to building 
models on Keynesian assumptions that government can spend our 
way into prosperity.
    Research by President Obama's Chair of the Council of 
Economic Advisors--this is his chair--Christina Romer and her 
husband find a tax multiplier of about three to one, a dollar 
of tax cuts raises the gross domestic product by about $3. This 
is his Council of Economic Advisors' chief.
    Andrew Mountford of the University of London and Harald 
Uhlig of the University of Chicago analyzed U.S. quarterly data 
from 1955 to 2000. They considered three policy scenarios:
    A deficit-financed government spending increase;
    A deficit-financed tax cut; and
    A balanced-budget increase in government spending.
    And all this spending we are looking at on both the tax and 
the spending side is all deficit. Their findings:
    ``We find that deficit-financed tax cuts work best among 
these three scenarios to improve GDP, with a maximal . . . 
multiplier of five dollars of total additional GDP per each 
dollar of the total cut in government revenue fine years after 
the shock.''
    Another economist at the IMF, Olivier Blanchard, and 
Roberto Perotti find that, quote:
    ``In most cases [of tax and spending changes in the U.S.] 
the multipliers are small, often close to one,'' on spending, 
and that ``. . . both increases in taxes and increases in 
government spending have a strong negative effect on private 
investment spending.''
    Now I am not opposed to all government spending in this. I 
think we can--I think we clearly need to do things on Food 
Stamps, and health care. People are out of jobs and they are 
hurting and we need to help in that category.
    I think we need to do some things on infrastructure. I just 
think the economic models clearly point out that the 
stimulative effect is not in those categories. I think we need 
to help people where they are hurting, and we need to do that.
    I think we can do some of the infrastructure things that 
have multiplier effects to them, but at the end of the day what 
our experience has shown is that if you want to stimulate the 
economy you get money back into people's pockets.
    The thing that you were talking about, the $1000 per 
person, I think those are the sort of ideas that are good that 
we can use, but not $450 billion of grab-bag government 
spending.
    We really need to get this right. I am ready to work to get 
it right. I think the process to get it right is to send it 
back to committees for a short period of time to actually get a 
product we can agree on.
    I look forward to hearing what your numbers say that we can 
look at into the future, and a particular category so that we 
can target these. Senator Mikulski and I got an amendment 
through to make tax exempt interest on buying a new car in 
2009. My guess is that the auto industry numbers are big and 
that this is one that we can actually get automobiles sold 
with. I have had three people say they will buy one this next 
year, or look to buying one with this provision.
    I think those are the sort of tax provisions that we can do 
to try to stimulate targeted categories where employment has 
been falling.
    Thank you, Madam Chairman.
    Chairman Maloney. Thank you so much.
    [The prepared statement of Senator Brownback appears in the 
Submissions for the Record on page 27.]
    Chairman Maloney. Senator Klobuchar.

 OPENING STATEMENT OF HON. AMY KLOBUCHAR, A U.S. SENATOR FROM 
                           MINNESOTA

    Senator Klobuchar. Thank you very much, Madam Chair, and I 
want to congratulate you on leading this committee in the 111th 
Congress.
    Chairman Maloney. Thank you.
    Senator Klobuchar. I look forward to working with you as we 
tackle some of these enormous problems that we face.
    I want to also thank you for holding this hearing, and 
thank Dr. Horrigan, Commissioner Hall, and Mr. Rones for 
joining us today to discuss the most recent evidence that our 
Nation is in the midst of a financial and economic crisis of 
historic proportions with Americans facing record job losses 
and the largest loss of wealth since the Great Depression.
    Today's report further reveals that America is trapped in a 
vicious cycle where consumers are afraid to spend, businesses 
are unable to invest, leading to more workers losing their jobs 
and income, which further reduces consumer spending. And 
working families are bearing the brunt of this vicious cycle.
    Since 2000--and these figures actually predate the severe 
economic downturn--the average American family has lost 
something like $1200 in their average salaries when adjusted 
for inflation. At the same time, their expenses have increased 
by more than $4500.
    So the bottom line is that the average middle class family 
has suffered a net annual income loss of something like $6500 
over the last eight years.
    In my State of Minnesota, the unemployment rate rose to 6.9 
percent last month, the highest it has been in over 20 years. 
Over the past months I traveled across my State on a Main 
Street Jobs Tour to hear directly from Minnesotans about how 
they have been effected by this crisis.
    While I know we are going to hear the numbers from all of 
you, the stories are just as important. I heard from a father 
with three young daughters under the age of 10. After they go 
to bed, he and his wife sit at the kitchen table and put their 
heads in their hands and just wonder how they are going to make 
it.
    I heard from a special education teacher who lost her job 
due to the economy who has been watching her Mutual Funds and 
other investments shrink. She is now forced to rent out her 
house.
    I heard from a Minnesotan who inherited just a little bit 
of money from her father that she was going to spend on her 
daughter's wedding, and then to see it all get lost in the 
Stock Market.
    And I have heard from Veterans who are being hit 
particularly hard by the current unemployment situation, 
members who bravely served overseas and are now standing in 
unemployment lines back at home.
    In 2007, unemployment among Veterans aged 18 to 24 was 11.2 
percent, more than twice the national rate that year. A 
separate report by the Department of Veterans Affairs found 
that nearly one in five Veterans who sought work within one to 
three years after their discharge from the Armed Forces 
remained jobless.
    It is unbelievable that we couldn't do more to help the men 
and women who protect this country to find a way to provide for 
themselves or their families upon returning home.
    As layoff rates are expected to continue to increase for 
U.S. companies and prices for everything from college tuition 
to health care to food continue to rise, it looks like we will 
likely have to brace ourselves for continued increases in 
unemployment.
    Despite all this, after travelling my State for the last 
few months I believe that the American People still have faith 
in our Nation. They know that our economy has great potential, 
and many, many of them have faith in our new President.
    Our immediate challenge is to implement a comprehensive 
recovery package that will not only provide a short-term boost 
to our economy but also make the investments necessary to build 
long-term foundations for prosperity.
    Right now, as you know, we are in the midst of long 
negotiations over the Senate Economic Recovery Plan. I believe 
this Plan should achieve three critical objectives:
    Deliver immediate relief to the middle class, and also 
provide the safety net with unemployment and some of the 
changes that need to be made;
    Invest in jobs, infrastructure, bridges, roads, building 
schools, broadband, doing things that create jobs but also give 
us something to show for it in the long term so that when our 
economy gets moving again we have the roads in place and the 
rail in place to bring our goods to market;
    Investing in an energy economy that reduces our dependence 
on foreign oil and instead emphasizes home-grown, renewable 
energy sources.
    That is what the President's Plan is all about, and I do 
not believe that we can bury our heads in the sand and pretend 
that these numbers that we are going to hear about today are 
just going to go away by doing more of the same.
    We have to act. I look forward to working with the 
President, members of the Committee, and my colleagues in the 
Senate to deliver this recovery package swiftly and responsibly 
to the American People who are desperate for the assistance 
that it will provide.
    Thank you, Madam Chair, and I look forward to hearing from 
our witnesses.
    Chairman Maloney. Thank you so much.
    Congressman Brady.

 OPENING STATEMENT OF HON. KEVIN BRADY, A U.S. REPRESENTATIVE 
                           FROM TEXAS

    Representative Brady. Chairman Maloney, let me congratulate 
you, too, on your leadership of the Committee----
    The Chairman. Thank you.
    Representative Brady [continuing]. And Ranking Member 
Brownback as well, and we look forward to working with you on 
obviously an issue that is the number one priority in America, 
to get the economy going again. So thank you.
    I would like to join you in welcoming Commissioner Hall, 
too, before the Committee as well.
    The data show that payroll employment fell by 598,000 jobs 
January and the job losses were widespread, reflecting the 
deepening recession and economic hardship facing many families.
    The unemployment rate climbed to 7.6 percent, the highest 
since September of 1992. Clearly there is little to be 
encouraged about in this report. The question is: Will the 
controversial stimulus bill going through Congress bring these 
jobs back?
    Unfortunately, the answer is; No. We all want the stimulus 
to work, but it is slow and costly and too filled with pork to 
do the job, just as, unfortunately, were many of the eight 
stimulus packages that Congress has enacted since 1948.
    Between 2009 and 2019 the House bill would add $1.2 
trillion of Federal debt to the already large and growing 
burden of public debt on the economy. It would add a bill of 
$7000 to every household in America over the next 10 years. 
Clearly we, our children, our grandchildren will be paying for 
this spending spree for a very long time to come.
    And even before the stimulus bill was considered, the 
Congressional Budget Office warned that the budget deficit 
would balloon to a record $1.2 trillion again in this year 
alone. To put it in perspective what is alarming is the 
publicly held debt as a percent of our economy was projected to 
increase from 40.8 percent in 2008 to nearly 60 percent by 
2011. It is a dangerous and alarming increase in our debt 
position.
    The real budget outlook is actually considerably worse 
because the CBO baseline does not include a number of items 
that will further enlarge the deficit. Trillions of dollars of 
federal bailouts also expose taxpayers. Furthermore, the 
looming retirement of the Baby Boom generation will cause 
entitlement spending to accelerate faster and faster in the 
next few years.
    The U.S. fiscal outlook is already undermining financial 
markets. As The Financial Times reported Thursday, the U.S. 
Treasury opened the floodgates of government bond issuance 
yesterday. The announcement came amid fears about growing U.S. 
Government deficits and send the yield on the Benchmark 10-year 
Treasury Note rising to 2.95 percent. The rise in yields has 
been pushing 30-year mortgage rates higher, complicating 
efforts by U.S. authorities to revive the economy.
    The key question, as Senator Brownback asked, is whether 
huge federal spending increases will actually work to stimulate 
the economy. As economist John Taylor noted in a recent paper 
presented at the annual American Economic Association meetings, 
quote, ``There is little empirical evidence that government 
spending is the way to end a recession or accelerate 
recovery.''
    It didn't work in Japan, and there is no reason to think it 
will work now in the United States. Part of the reason to doubt 
the effectiveness of stimulus spending is that taxpayers know 
that they will end up paying for the stimulus in higher future 
taxes and inflation, and will adjust accordingly now, 
undermining any stimulative effect. One study even found that 
it is thus possible for responses to expected future policies 
to exacerbate and prolong recessions.
    The prospect of borrowing over a trillion dollars for 
questionable programs thrown together with little procedural 
deliberation has rightly given the American People pause. Even 
if job creation is assumed--and many do not--the cost per job 
has been estimated at nearly $275,000 a job, far above average 
taxpayer income.
    We do know one thing: There is an absolute certainty that 
at least the House-passed stimulus will increase deficits and 
debts by over $1 trillion, the equivalent of all the personal 
income taxes we gather in America each year. And there is 
little indication that it will do much to help the economy.
    President Obama has been impressive in his call for GOP 
ideas, and I have admired his choice to ask for that input. We 
have given him ideas that would double the amount of jobs we 
create at half the price, by lowering marginal rates, by 
putting in pro-growth tax provisions, and moving toward a far 
smarter and targeted stimulus than we have today.
    I will close with this. To date I think there has been a 
good, healthy debate on Capitol Hill, and again I admire 
President Obama's call for good ideas from both parties. I am 
alarmed in recent days that the President's rhetoric is getting 
too partisan. We have had that for many years. I would gently 
remind everyone present that no party and no one person has a 
monopoly on good ideas on Capitol Hill. Let's work together and 
find a bill that can actually move this economy back in the 
direction we want.
    With that, I yield, Madam Chairman.
    Chairman Maloney. Thank you.
    [The prepared statement of Representative Brady appears in 
the Submissions for the Record on page 29.]
    Chairman Maloney. Senator Casey.

OPENING STATEMENT OF HON. ROBERT P. CASEY, Jr., A U.S. SENATOR 
                       FROM PENNSYLVANIA

    Senator Casey. Madam Chair, I congratulate you on the 
assumption of your duties as Chair of this Committee. We are 
grateful for your service, and the same goes for Senator 
Brownback, as Ranking Member.
    Chairman Maloney. Thank you.
    Senator Casey. I have been saying over the last couple of 
months that if our economy was analogized to a car, that we're 
in a ditch and that we have to push ourselves out of that 
ditch. And I still believe that.
    But when you see numbers like this, that we have lost 
basically 600,000 jobs in a month, I have to ask the question 
whether or not what we thought was an economy in the ditch 
might be an economy that has gone over the cliff.
    I hope that is not the case, but I believe that if we do 
not take strong action now--not a month from now, not two 
months from now--but right now, this week, if not early next 
week, that that analogy of going over a cliff will in fact be 
the case.
    We cannot allow that to happen. In Pennsylvania we have 
seen evidence of it. Just in November and December, for 
example, in our--and the State numbers sometimes lag a month 
behind the national numbers--but in Pennsylvania it was more 
than 27,000, plus another 27,000 in December. So in two months, 
well more than 50,000 jobs lost.
    We saw the number yesterday, the national number on 
unemployment claims, I guess it was 636,000. The three-month 
number--this is one of the numbers that really struck me--the 
three-month job loss number is almost 1.8 million jobs. It is 
hard to comprehend when you think about even the early or mid-
point of 2008.
    So as Senator Klobuchar said before, this is more than just 
the numbers, and I know that our panel today is going to add 
more detail on the numbers, but this is now about the trauma 
that families are being hit with in the midst of this terrible 
recession. They are the ones that are paying the price.
    Family after family are either losing their job or their 
home, and in a larger sense losing their hope and optimism. One 
thing we have to do, in addition to passing something this week 
to jumpstart this economy, to get this economy at least out of 
the ditch if not out of something, a larger hole than just 
being in a ditch, is that we have to do our best to begin to 
rebuild the trust and the confidence that the American People I 
think have lost in Congress.
    Forget whether they are hopeful or not about their own 
prospects, they have lost confidence in Congress's ability to 
do the right thing and to get this right. And part of that is 
what underlies this debate.
    I think the American People, no matter what their opinion 
of Congress--the House and the Senate--they have great 
confidence in our new President. And they have a right to 
expect that we are going to help him get this economy moving, 
and they want us to help him, and they should want us to help 
the new President.
    He has given us an opportunity to do just that, to 
jumpstart the economy and also to make investments that will 
create jobs now, and many years from now, by making investments 
in healthcare and energy and education, as well as doing the 
short-term things that we need to jumpstart our economy right 
now.
    So we look forward to the testimony, not because we want to 
hear these numbers but because we have to understand them if in 
fact this economy has gone over a cliff. I hope that is not the 
case, but in my judgment, if we are not there yet, we are very 
close to that point and that is why we have to act now and get 
a bill passed this week.
    Thank you.
    Chairman Maloney. Thank you so much.
    Congressman Burgess, and welcome to the Committee.
    Representative Burgess. Thank you, Madam Chairman. I will 
just say congratulations on being appointed Chairman of the 
Committee and I look forward to serving with the other Members.
    Chairman Maloney. Thank you very much.
    Dr. Keith Hall is the Commissioner of the Bureau of Labor 
Statistics at the U.S. Department of Labor. Before becoming BLS 
Commissioner, Dr. Hall served as Chief Economist for the White 
House Council of Economic Advisors. Prior to that he was Chief 
Economist for the U.S. Department of Commerce. Dr. Hall 
received his B.A. Degree from the University of Virginia, and 
his M.S. and Ph.D. Degrees in Economics from Purdue University.
    Thank you so much for coming. Please introduce your 
colleagues and proceed with your testimony.

  STATEMENT OF DR. KEITH HALL, COMMISSIONER, BUREAU OF LABOR 
   STATISTICS, U.S. DEPARTMENT OF LABOR; ACCOMPANIED BY: DR. 
MICHAEL HORRIGAN, ASSOCIATE COMMISSIONER FOR PRICES AND LIVING 
 CONDITIONS, BUREAU OF LABOR STATISTICS; AND MR. PHILIP RONES, 
        DEPUTY COMMISSIONER, BUREAU OF LABOR STATISTICS

    Commissioner Hall. Thank you, Madam Chairman. I would like 
to first introduce the Deputy Commissioner, Phil Rones, on my 
left, and Associate Commissioner Michael Horrigan on my right.
    Madam Chairman and Members of the Committee:
    Thank you for the opportunity to discuss the employment and 
unemployment data we released this morning.
    The labor market continued to weaken dramatically in 
January. Total nonfarm payroll employment fell by 598,000, and 
the unemployment rate rose from 7.2 to 7.6 percent.
    January's sharp drop in employment brings job losses to 3.6 
million since the start of the recession in December 2007. 
About half of the decline occurred in the past three months 
alone. Job losses in January were large and widespread across 
the major industry sectors.
    Manufacturing employment fell by 207,000 over the month, 
bringing the job loss in this industry to 1.1 million since the 
start of the recession. Nearly half of the job loss occurred in 
the past three months.
    In January, employment declines were spread throughout the 
sector but were especially large in fabricated metal products, 
motor vehicles and parts, and machinery.
    Construction shed 111,000 jobs over the month. The pace of 
job loss in this sector has accelerated in recent months. 
Employment has declined by 781,000 since the beginning of the 
recession, with about 40 percent of the decrease occurring in 
the past three months.
    In January, job losses continued throughout most of the 
service-providing sector. Since the start of the recession this 
sector has lost 1.8 million jobs, with over half of the decline 
occurring in the past three months.
    Employment in temporary help agencies fell by 76,000 in 
January and has declined by 605,000 since December 2007. Other 
large over-the-month job losses occurred in retail trade, 
transportation and warehousing, financial activities, wholesale 
trade, and professional and technical services.
    Private education and health care added jobs in January. 
Employment in health care was up by 19,000 over the month 
compared with an average of 30,000 a month in 2008.
    Average hourly earnings for production and nonsupervisory 
workers in the private sector rose by 5 cents, or 0.3 percent, 
in January. Over the past 12 months, average hourly earnings 
have increased by 3.9 percent.
    From December 2007 to December 2008, the seasonally 
adjusted Consumer Price Index For Urban Wage Earners and 
Clerical Workers fell by 0.7 percent.
    Measures from our household survey also reflected the weak 
labor market conditions in January. The unemployment rate rose 
from 7.2 to 7.6 percent, bringing the total number of 
unemployed persons to 11.6 million.
    Since December 2007, the rate has risen by 2.7 percentage 
points with the increase widespread across demographic groups.
    In January, the employment-population ratio dropped to 60.5 
percent, 2.2 percentage points lower than at the beginning of 
the recession. This is the lowest level since May 1986. The 
labor force participation rate at 65.5 percent in January has 
edged down in recent months.
    Also, this morning on our web site the Bureau of Labor 
Statistics began publishing monthly estimates of the employment 
status of persons with a disability. In January, the 
unemployment rate for these persons was 13.2 percent compared 
with a rate of 8.3 percent for persons with no disability.
    The employment-population ratio for persons with a 
disability was 20 percent, compared with 65 percent for those 
with no disability. The collection of these important data is 
sponsored by the Department of Labor's Office of Disability 
Employment Policy.
    Summarizing labor market developments for January, nonfarm 
payroll employment fell by 598,000, and the unemployment rate 
rose to 7.6 percent. Since the start of the recession in 
December 2007, job losses have totaled 3.6 million, with about 
half of the decrease occurring in the past three months.
    My colleagues and I would now be glad to answer your 
questions.
    [The prepared statement of Commissioner Hall appears in the 
Submissions for the Record on page 30.]
    Chairman Maloney. Thank you very much.
    This is bad news across the board: 13 months of growing 
numbers of unemployment. Have you ever seen this many bad 
employment reports in a row, 13 months of unemployment? Has it 
ever been this bad before?
    Commissioner Hall. That's a good question, whether we have 
had 13 months. Thirteen months is a fairly long time. It would 
be a reasonably long recession at 13 months, if it stopped 
right now. I think the most remarkable thing is the past three 
months, and maybe five months, how very bad the numbers have 
been.
    Chairman Maloney. How accelerated it is.
    Commissioner Hall. Yes, exactly.
    Chairman Maloney. And why do you think it is accelerating 
at such a point?
    Commissioner Hall. You know, I cannot say why it is 
accelerating. I think it is notable that it is accelerating so 
dramatically. That has not happened very often. But it is also 
very, very widespread. And as I mentioned, it is across all 
industries; it is across demographic groups. As our December 
data showed, it is across all 50 States, and unemployment rates 
rose in 363 of 369 metropolitan areas. So it is very wide by 
any dimension.
    A third thing I think is notable is there really are not 
signs of improvement in this report.
    Chairman Maloney. In fact, some economists are predicting a 
decline in the GDP of 2 to 3 percent. Are you concerned that 
job losses may reach historic rates?
    Commissioner Hall. You know obviously I cannot predict 
where we are going, but the job loss is very big now. It is as 
big as we have had in recent years. And the fact that there are 
not signs of improvement at this point are certainly 
concerning.
    Chairman Maloney. Building on what you said, the 
unemployment rate has now risen to 7.6 percent. Is there any 
way that you can predict when we might see the peak of 
unemployment?
    Commissioner Hall. No, there really is not. In fact, we 
might see the unemployment rate continue to rise even once the 
recession is over and we start to get job growth. There may be 
a period where the unemployment rate continues to rise a bit.
    Chairman Maloney. Well the current downturn that began in 
December of 2007 and is already longer than the last two 
recessions, based on historical data, how long can we predict 
that it might take for employment to return to its pre-
recession peak?
    Commissioner Hall. It is hard to predict. I can tell you, 
for example, the last recession took an extraordinarily long 
time. After the last recession it took about four years for the 
payroll employment level to fully recover.
    Chairman Maloney. And the severe slump in housing prices 
that is cited oftentimes for part of the recession is making it 
much harder for workers to sell a home, and move, and take 
another job. Do you see any indication that long-term 
unemployment rates are being affected by this loss of mobility 
due to the housing market?
    Commissioner Hall. It is hard for us to make a connection 
with the housing market. I can say that the levels of, and the 
percentage of, unemployed that are long- term unemployed is 
very high right now. In fact, typically in expansions that 
number goes down to somewhere about say 10 percent of the 
unemployed are long-term unemployed. This past expansion that 
number never went down like it has in the past, so now when we 
are seeing this increase in job loss it is taking the long-term 
unemployed number to actually a rather high level at this 
point.
    Chairman Maloney. Well even the good news was very bad and 
dim in this report in the two areas that are gaining jobs: 
education, private education; and health care. Those areas also 
have slowed.
    Was there any good news anywhere in this report? Was there 
any glimmer of hope, or turnaround? Was there any good news?
    Commissioner Hall. No good news comes to mind from this 
report.
    Chairman Maloney. Senator Brownback.
    Senator Brownback. I do note what you were saying in 
education and health care sectors. What was the employment in 
those sectors?
    Commissioner Hall. In education I think we gained about 
33,000 jobs. And in health care I think we gained about 19,000 
jobs.
    Senator Brownback. The reason for me asking that and 
pointing that out is, in my looking at the stimulus package--
this is not about your job--but in my looking at it, those are 
sectors that have maintained relative stability during this 
recession thus far in the numbers I have looked at. Is that 
accurate?
    Commissioner Hall. Yes. Both those sectors have continued 
to see some job growth.
    Senator Brownback. So that the stimulus, to me you want to 
target in on sectors that have shown huge weaknesses, not ones 
that have had relative stability. And along that line, in the 
auto and auto parts sector what have we seen for job loss over 
the 13-month time period? Do you recall that?
    Commissioner Hall. Sure. I think I have a good data chart 
for that.
    Senator Brownback. Or even if you have within the last 
three months.
    Commissioner Hall. Yes. The last three months--sorry I have 
to do a little math here--the last three months motor vehicle 
and parts have lost about 75,000 jobs.
    Senator Brownback. And those would be concentrated in the 
major auto-producing states?
    Commissioner Hall. It should be, yes.
    Senator Brownback. That's one--to me, as we look at this 
you need to target in on the zones where we have the most 
problems and try to get the most bang for your buck there. That 
is why it was talked about making tax-deductible interest on 
new cars purchased in 2009 as a way to try to stimulate that 
employment.
    It looks like to me in some of these sectors, particularly 
manufacturing ones, that people were looking at the inventory 
buildup over the last couple of months, and probably said we 
are going to start shedding employment because our inventories 
are starting to build up. Do you--I do not know that you track 
inventory. Do you?
    Commissioner Hall. No, we do not.
    Senator Brownback. Okay. I know in the auto industry we 
have got a major plant in my State in Kansas City, and they 
were starting to back up on sales, and so they were just 
slowing the production lines down. Then eventually they took a 
two- to three-week holiday time period where people were off, 
not voluntarily, but forced because they did not want to get 
the inventories of autos built up, and that that goes in this 
zone.
    What happened three months ago? Are there things that you 
were tracking, or saw? Because you are pointing out that we 
have had a soft employment picture for 13 months, and then just 
really--to quote my colleague from Pennsylvania--went over a 
cliff three months ago. What happened then? I think that is 
what the Chairwoman was asking, but I wanted--
    Commissioner Hall. Sure. I would say up until about five 
months ago the job loss was really centered in a few 
industries. It was centered in housing-related industries, 
construction and such, and in manufacturing somewhat. And what 
has happened lately is it has just spread to all parts of the 
economy.
    It has sort of mirrored that decline in consumer spending. 
When consumer spending stops, you have this very, very broad 
impact on the economy. I think that is what we are seeing.
    Senator Brownback. The other figure that comes to my mind 
is that exports stopped the last quarter of last year. We were 
having nice growth in exports the first three quarters of last 
year, and then when the recession went global that that had a 
broadening impact also on unemployment. Would that be accurate?
    Commissioner Hall. Yes, it would.
    Senator Brownback. Which again to me augurs for us 
targeting in on key sectors of whatever we can do to get those 
moving again.
    What has happened to construction employment since 2003? I 
want to look at that period of time in particular because we 
have had this big bubble of credit in the construction 
industry. Do you recall? Or is that easily available for you to 
come up with?
    Commissioner Hall. Yes, my colleagues will look up the 
exact numbers, but my recollection is that there was a very 
large buildup in construction employment since 2003 and we have 
now fallen back down to a level actually about where we were in 
2003.
    Senator Brownback. Okay. So while your numbers are showing 
a precipitous falloff, it was enormous growth that had taken 
place?
    Commissioner Hall. Yes. Yes, in fact the last--we are back 
down to a level around where we were around in the middle of 
2003. The level of employment in construction is back down to 
that level.
    Senator Brownback. Thank you.
    Chairman Maloney. Senator Klobuchar.
    Senator Klobuchar. Thank you very much, Madam Chair.
    Commissioner Hall, if current economic conditions continue 
or worsen--and I know you talked about how this is very bleak, 
this report, that there is no good news, that this is such a 
long period of time--but if current economic conditions 
continue or worsen, do you believe it is possible for the 
Nation to experience double-digit unemployment for an extended 
period?
    Commissioner Hall. I would not want to speculate on how--on 
the future of something like the unemployment rates since 
certainly we produce that data. I will say, though, that the 
unemployment rate has been going up, and in the past we have 
seen at least some moderation of the decline in job loss before 
the unemployment rate stops going up, and we have not seen that 
yet.
    Senator Klobuchar. So you think it is possible we would go 
into the double digits?
    Commissioner Hall. I think it is possible the unemployment 
rate will rise. I do not want to speculate too much on exactly 
how far.
    Senator Klobuchar. And I remember at the last hearing, the 
lengthy one when Senator Casey and I were there a few months 
ago, where we talked about not just the people who have lost 
their jobs but the people who have reduced hours. Do you have 
statistics on that, as well?
    Commissioner Hall. Yes.
    Senator Klobuchar. And that is not included in the 7.6 
percent rate? Is that right?
    Commissioner Hall. Correct.
    Senator Klobuchar. Or the 598,000 job loss in January.
    Commissioner Hall. Or you think of something like people 
who are--
    Senator Klobuchar. Reduced hours.
    Commissioner Hall [continuing]. Or just reduced hours.
    Senator Klobuchar. I just remember that that is something 
that people, as they are struggling to get by, talked about how 
difficult it is to keep up; that it was somewhat stunning to 
know those numbers, as well; that that is very difficult for 
people who maybe lose some hours and then they cannot afford 
their health care, or they lose some hours and they cannot 
afford to get a car. [Pause.]
    Commissioner Hall. I am sorry to be so----
    Senator Klobuchar. No, that is fine. In fact, you could 
look and tell me later, too, if that is easier. Do you want to 
do that?
    Commissioner Hall. Yes.
    Senator Klobuchar. And then when we come back around I will 
ask?
    Commissioner Hall. Yes.
    Senator Klobuchar. I can just tell you in general I am sure 
the hours have been declining. When we have a generally 
declining labor market, hours decline typically along with 
employment.
    Senator Klobuchar. Maybe your friends there can look and we 
will continue on.
    Commissioner Hall. Yes.
    Senator Klobuchar. The Congressional Budget Office has 
projected that the economic recovery package the Senate is 
considering would raise employment by .9 million to 2.5 million 
at the end of 2009; 1.3 million to 3.9 million at the end of 
2010. I know you cannot comment on your thoughts on the 
economic recovery package that is pending legislation, but do 
you generally believe that this level of job creation is 
possible in the next few years with a stimulus recovery 
package?
    Commissioner Hall. Certainly at the end of a recession we 
obviously get job growth at that sort of numbers. I cannot 
speak to how it might be related to any legislation, but that 
level of job growth is certainly possible.
    Senator Klobuchar. Okay. As I discussed in my opening 
statement, American Veterans are facing particularly high 
unemployment. In 2007 unemployment, as I said, among Veterans 
ages 18 to 24 was 11.2 percent, more than twice the national 
rate during that year.
    A separate report found that nearly 1 in 5 Veterans who 
sought work within 1 to 3 years after their discharge from the 
Armed Services remained jobless.
    Could you talk about some of the unique challenges Veterans 
face when they return home from overseas, and if we see an 
increase in the number of Veterans returning home in the next 
few years do you see an increase in Veterans' unemployment?
    Commissioner Hall. Sure. I think the pattern of 
unemployment for Veterans appears to be--as my memory is--it 
appears to be similar to anybody else who has lost a job, that 
there can be an extended period of job search before they get 
jobs back.
    And certainly during a recession like this it is 
particularly difficult for people entering or re-entering the 
civilian labor market to find work.
    Senator Klobuchar. So when you say ``job loss,'' you mean 
because they went to serve our country they lost their job, and 
so when they are trying to re-enter at a time when there is 
suddenly such a drop in jobs it is understandable that this 
would happen?
    Commissioner Hall. Absolutely.
    Senator Klobuchar. But it is incredibly--it is double the 
amount and a cause of great concern.
    As you know, state and local governments across the Nation 
are facing record budget deficits. Can you talk about the 
impact further cuts in public spending at the state and local 
level might have on employment?
    Commissioner Hall. Sure. Typically state and local 
employment does not start to decline oftentimes until after a 
recession, once I suppose state and local budgets start to 
tighten up.
    In state employment, for example, I think we have had 
declines in state employment for the last couple of months. It 
is still too early to tell if that is a trend now, but if that 
is true that would be a bit quicker than in past recessions.
    Local government employment has actually flattened out the 
last four or five months. So that is already showing signs of 
difficulty. In past recessions, local government employment 
often has not even slowed growth and now we are seeing it 
flatten out.
    Senator Klobuchar. Thank you. And you maybe could get me 
those numbers later.
    Commissioner Hall. Okay, we will do that.
    Senator Klobuchar. Do you have them?
    Mr. Rones. The hours--the average workweek from our Payroll 
Survey was at 33.3 hours in January. I think that is the lowest 
on record, although the hours' data have not been falling 
dramatically the way the employment numbers have, but it's been 
edging----
    Senator Klobuchar. The lowest on record from history?
    Mr. Rones. I believe that's----
    Senator Klobuchar. Wow.
    Mr. Rones [continuing]. The case. Although for most of the 
last five or six years it has been in the 33 to 34 range. So 
that is why I said it has been edging down.
    Senator Klobuchar. So it has not gone up.
    Mr. Rones. It has been edging down. But certainly from our 
Household Survey we have measures of the number of people who 
are working part-time even though they would prefer full-time 
work, and that has gone up just the way the number of 
unemployed has gone up.
    Senator Klobuchar. And just to point out--and I am going 
beyond my time here--so people understand this, that is not 
even reflected in that 7.6 percent unemployment rate. So you 
have these people in astronomical increase, like the seven--up 
to that levels for people that would like to work full-time but 
are working part-time. And then you also have people who are 
having reduced hours at a time when their expenses are going 
up.
    Mr. Rones. Right.
    Senator Klobuchar. And none of that is reflected in the 
unemployment numbers.
    Mr. Rones. Right. We have a set of alternative unemployment 
measures in our news release each month that takes that into 
account.
    Senator Klobuchar. Thank you. Thank you, Mr. Rones.
    Chairman Maloney. Thank you so much.
    Congressman Brady.
    Representative Brady. Thank you, Madam Chairman.
    Clearly when someone loses their job in a family it is a 
remarkably traumatic event. And so there is among the Democrats 
and Republicans alike a strong desire to bring these jobs back 
as quickly as possible.
    Let me ask you, because the key for the day is how can we 
bring these jobs back? That is the key question. You have a 
unique background as former chief economist of the Economic 
Advisors for the President and your role here at BLS. One of 
the centerpieces of the stimulus bill is the making work pay 
credit, a rebate by another name.
    For the average worker, it would give them an extra $1.35 a 
day in their paycheck. We have lost 45,000 retail jobs this 
last month. How many retail jobs will be created by that extra 
$1.35 a day?
    Commissioner Hall. In my current role I think I want to 
avoid speculating on things like that, or doing that sort of 
forecasting.
    Representative Brady. But do you look at jobs numbers? 
Obviously, because you track them and your role in advising the 
President in the past, do you have a feel for what types of job 
creation we will have?
    Commissioner Hall. You mean from that particular----
    Representative Brady. Um-hmm.
    Commissioner Hall. No, I do not, really. This is something 
I actually have not taken a hard look at.
    Representative Brady. Let me ask. You know, consensus by 
economists is that the second and third quarters will continue 
to decline with some uptick in the fourth quarter of this year, 
so everyone agrees 2009 is the key year if you are going to 
recover these jobs.
    In the infrastructure area, another major part of this 
stimulus but only just a little over one-tenth of this whole 
stimulus goes to infrastructure, we lost 111,000 construction 
jobs this last month, yet very little of the infrastructure 
spending will occur this year. How many jobs this year will be 
brought back in the construction industry as a result of the 
stimulus as you view it?
    Commissioner Hall. Yeah. Again I--I am in a position where 
we rely on our objectivity and putting out the data and not 
forecasting things like that, so I would like to beg off trying 
to answer that just because of our unique role at the Bureau of 
Labor Statistics.
    Representative Brady. Small businesses are just such a big 
job creation machine, yet in the stimulus bill that passed the 
House there was actually more money allocated to buy new art in 
America than to help small businesses' expense, new computers, 
equipment, and machines. Along the same lines do you have at 
least a general feel for how many small business jobs can be 
recreated as a result of the stimulus as you see it going 
forward?
    Commissioner Hall. Yeah, again I do not want to speculate 
on that and I certainly have not sat down and done any sort of 
analysis on the effect of the stimulus.
    I can tell you that small businesses are clearly a major 
source of job growth, especially coming out of a recession.
    Representative Brady. Is new art a major source of job 
growth in America? I love it, but I am just wondering.
    Commissioner Hall. That seems unlikely.
    Representative Brady. Okay. The final--close to final 
question is on consumer confidence. The latest poll yesterday 
shows that only 37 percent of Americans, barely a third, have 
confidence and support the stimulus package. In all of our 
statistics do you see--have you seen any increase in consumer 
confidence as a result of this stimulus package being discussed 
and debated in Congress?
    Commissioner Hall. I do not watch the consumer confidence 
numbers. We do not produce those. But I guess I will revert 
back to what I have said before, there is very little sign of 
improvement in this report.
    Representative Brady. Sure. And I think every Member here 
has talked about the unemployment number because it is high. 
Help me put it in perspective.
    Today it is 7.6 percent in this report?
    Commissioner Hall. Yes.
    Representative Brady. What is the next highest unemployment 
figure that we have reached in modern times? In 1982 it was at 
10.8 percent.
    Commissioner Hall. Yes, we have the historical data here. 
We will take a quick peek.
    Representative Brady. Because one of the questions was: 
Will we reach double-digit unemployment? That is a fair 
question. Which would take us back to the 1982 era.
    Commissioner Hall. Yes. The last time we had double-digit 
unemployment was in the 1980s recession.
    Representative Brady. So we are not to that magnitude yet, 
but----
    Commissioner Hall. No.
    Representative Brady. But as it moves, those are sort of 
the benchmarks. Just curious, a final question: What level did 
Depression-era unemployment reach?
    Commissioner Hall. Do we have data going back that far? It 
was very high. It was about 25 percent, right? It was 24.9 
percent.
    Representative Brady. Around 24 percent or so.
    Commissioner Hall. Right. It was really high.
    Representative Brady. Thank you. Thank you, Madam Chairman.
    Chairman Maloney. Senator Casey.
    Senator Casey. Thank you.
    I wanted the panel first to direct your attention to the 
data on Minority Unemployment. It seems to me from looking at 
the numbers that, as bad as this recession has been overall for 
all Americans, that it has had a particularly disproportionate 
adverse effect on African Americans and Latinos.
    I want to make sure I am stating the numbers accurately. 
The unemployment rate for African Americans and Latinos has 
jumped about 3.5 percentage points since the recession began, 
and that would be--and I would ask you just to tell me if I am 
accurate on this--for African Americans it has gone from 8.4 to 
11.9? Is that correct?
    Commissioner Hall. Yes. Actually the numbers I have are it 
went from 8.9 to 12.6, but that is the same ballpark, 3.7 
percentage points.
    Senator Casey. 8.9 to 12.6?
    Commissioner Hall. Yes.
    Senator Casey. Okay, and that is over what time period?
    Commissioner Hall. That is since the start of the 
recession.
    Senator Casey. So since December of '07?
    Commissioner Hall. Yes.
    Senator Casey. Okay. So it is actually higher.
    And also for Latinos, 5.7 to 9.2?
    Commissioner Hall. Right. The most recent numbers, it has 
gone from 6.2 to 9.7, about 3.5 percentage points.
    Senator Casey. And that is starting from the beginning of 
the recession?
    Commissioner Hall. Yes.
    Senator Casey. Give me that number again? Six point?
    Commissioner Hall. 6.2 to 9.7.
    Senator Casey. 9.7. And then when you look at it in terms 
of white unemployment rates only rose about 2.5 percent? Do you 
know those numbers?
    Commissioner Hall. Yes, that's correct. It went from 4.4 to 
6.9 percent.
    Senator Casey. 4.4 to 6.9?
    Commissioner Hall. Yes.
    Senator Casey. Okay. That is an obvious differential 
between minority versus white unemployment. Are those numbers--
can you put them in any kind of broad historical context? I do 
not need an exact number, but is that consistent with recent 
history when we have had a recession, that the minority 
unemployment rate would outstrip or outrun the white 
unemployment rate at that rate?
    Commissioner Hall. The unemployment rates for all these 
groups have risen more than the last couple of recessions, but 
you are exactly right. Typically the African American and the 
Latino unemployment rates rise by more during recessions just 
generally. In every past recession that has happened.
    Senator Casey. And so just to recap on where we are now, 
the African American unemployment rate right now is 12.6? That 
is the latest number?
    Commissioner Hall. Yes.
    Senator Casey. And the Latino unemployment rate right now 
is 9.7?
    Commissioner Hall. Yes.
    Senator Casey. And for whites it would be 6.9?
    Commissioner Hall. Yes.
    Senator Casey. Okay. I wanted to take a look at one of our 
charts. Our staff here does a great job of preparing them, so I 
want to use at least one. It is obviously not good news. Could 
you just talk about what that depicts? I mean, it is obvious it 
is a decline, but can you just kind of provide a summary of 
what that means?
    Commissioner Hall. Sure. You will see for the first half of 
this time period, maybe a little bit more than half, you have 
significant job loss but it is not a huge job loss. And it is 
sort of centered in a few industries. And then you have about 
two months of a significant uptick where you have job loss at 
over 300,000 jobs, and that got much broader. Now the past 
three months we have had job loss of over 500,000, nearly 
600,000 job loss.
    So you have a pretty significant deepening and broadening 
of the deterioration in the labor market.
    Senator Casey. And there may not be one month, but I guess 
where it started to really break away is August-September? What 
is the best way to describe where it began to really--
    Commissioner Hall. I would say it was in two stages. For 
August and September it jumped up to over 300,000 jobs lost. 
And then since then it has been well over 500,000 a month job 
loss.
    Senator Casey. The last thing--and I have about 30 
seconds--is on Unemployment Insurance. I guess for the third 
quarter of 2008 you have got about 15 states that have--15 
states as well as Puerto Rico, Virgin Islands, and D.C.--who 
have Unemployment Insurance Benefit exhaustion rates of more 
than 40 percent. Is that correct?
    Commissioner Hall. I believe that is correct. We do not 
collect that data, but I believe that is correct.
    Senator Casey. The concern that I have--and I guess I will 
not make it a question because we are out of time--but the 
concern that I and a lot of people would have is not just that 
you are getting numbers very high and benefit exhaustion rates, 
is can our current system of Unemployment Insurance Benefits 
handle the tsunami or the flood of these Unemployment claims? I 
will end with that question. It is rhetorical because I think 
we know. We can only speculate about the answer, but that is 
pretty frightening.
    Thank you very much.
    Chairman Maloney. Thank you, Senator. You raised a very 
important point. I am hearing it at offices in my District in 
Massachusetts. A friend called and told me that they line up 
early in the morning, and by the time that they can get in all 
the people in line cannot even take the slots that are 
available that day. So that is a huge concern that is 
confronting men and women in our country.
    Congressman Burgess.
    Representative Burgess. Thank you, Madam Chair.
    Dr. Hall, Representative Brady in his opening statement 
talked a little bit about the overall cost of this bill. I am 
going to make my comments in reference to the House-passed bill 
because the Senate bill is still a moving target and we do not 
know where that is going to end up, but we were talking about a 
package that I think was $819- or $820 billion, and people have 
written that if you include the cost of capital into that 
figure that it is in excess of $1.2 trillion. I am concerned 
because the small part of the bill that my committee of 
jurisdiction got to mark up on Energy and Commerce dealt with 
increases in Medicaid funding, increases in COBRA funding.
    It seems as if you look at those types of funding, and 
there are big funding cliffs that occur--12 months for the 
COBRA, payments 18 or 24 months for the Medicaid payments--and 
if you looked at extending those costs out beyond those cliffs, 
we are probably talking about a total package with the 
extension of those costs and the cost of capital, we are 
probably talking about a bill that may in fact be in excess of 
$3 trillion, which I think would fit anyone's definition of 
truly explosive spending.
    What I am concerned about is that we do not seem to be 
acknowledging with just say concentrating on the increase in 
the Federal match for Medicaid for states with that funding 
cliff, that is equivalent to a balloon payment on a note. In 
fact, it starts to look a lot like some of the subprime loans 
that were made that got us into this difficulty in the first 
place.
    I realize that is a little bit out of your area of 
jurisdiction, but would you care to comment on that?
    Commissioner Hall. I think that is pretty far into the 
policy woods for me to comment on.
    Representative Burgess. But again going back to 
Representative Brady's earlier remarks, the total cost of this 
bill is undoubtedly going to have an effect upon the economy, 
and I do not know if we--well I will just say this to the 
people on the Dias--I do not know if we have been honest with 
ourselves and with the American People about how much money we 
are actually spending, borrowing, printing, however we propose 
to get that, and it does almost resemble the types of predatory 
lending that was going on that sparked the housing crisis that 
began this problem in the first place.
    I do not think we have been honest about the total cost of 
ownership to the government for expanding these programs, and 
in fact is this a good deal or a bad deal for the taxpayer? I 
do not know that we have made that case.
    Let me just shift gears for a moment with the time I have 
left. On your section provided by the Department of Labor under 
the Frequently Asked Questions about Employment Unemployment 
estimates, there is a paragraph that starts out: Are 
undocumented immigrants counted in the surveys?
    There is a reasonable answer given there that it is 
difficult to assess that number, but it looks like the data 
from the Household Surveys show that foreign-born workers 
accounted for 15.7 percent of the labor force.
    Is it possible to use statistics from the Department of 
Labor or Homeland Security to know how many people are in the 
country with a work permit, with a work visa, and extrapolate 
from that then what percentage, or what part of that 15.7 
percent are people are in the country without a work visa?
    Commissioner Hall. That is something that we would never 
do. We just collect the data. We actually never ask the 
question when we count the employed in the payroll jobs. So I 
would not know how to make an estimate.
    Representative Burgess. But those numbers, in fact to 
calculate that number, are available if someone were to want to 
tease them out and run that formula? Is that correct?
    Commissioner Hall. Sure. I suspect people have done that.
    Representative Burgess. And I do not want this to sound too 
harsh, but I come from a part of the country where--and I think 
the comments from Senator Casey, about the minority populations 
where the unemployment rate is so much higher, clearly we as 
Members of Congress have a duty to protect those jobs of 
American citizens first. It was referenced about the low 
credibility that Congress has, and this is one of those issues 
that has seriously eroded Congressional credibility over the 
past several years. And just for the record it seems like 
something that we might devote some attention to and see if we 
cannot be better stewards of the Nation's workforce, at least 
as it revolves around people who are actually legally in this 
country to work and those who are not. And I yield back. Or I 
would yield to the Commissioner if he has a comment to make.
    Commissioner Hall. I do not.
    Chairman Maloney. Thank you. And Senator Risch.
    Senator Risch. Pass.
    Chairman Maloney. Pass?
    Senator Risch. Yes.
    Chairman Maloney. We are going to submit some more 
questions to the record, but we really need to go forward with 
some of our meetings that we are having on my side of the aisle 
in support of moving the economic recovery package forward.
    [Committee Insert]\*\
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    \*\Information not available at time of printing.
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    Chairman Maloney. I would just like to state for the record 
that we now have job numbers for the entire eight years of the 
former Administration, the Bush Administration. In the last 
eight years, payroll jobs are up only 1.6 percent. That is far 
and away the lowest eight-year gain on record.
    In the eight years of Clinton, jobs grew by 20.7 percent.
    In the 70 years of available data, jobs have grown at an 
annual rate of 2.2 percent. For the 62 years before President 
Bush, the average was 2.4 percent.
    I just would like to thank you very much for your service. 
There may be additional questions that other members would like 
to get to you, and again these are not good numbers but we 
appreciate very much your testimony.
    Senator Brownback. Madam Chairwoman, could I ask a question 
that I am going to get to you in writing, but I would like to 
put you on notice for it?
    There is a lot of discussion obviously in our stimulus 
about spending, and I understand you have some economists that 
focus on international areas. I am going to have two questions 
I am going to submit to you and I hope you can answer them.
    One is the effect of the Japanese stimulus package that 
they did on spending. If you have economists that have 
researched that, I would like to get that number in 
perspective.
    And the second is: Because we have had such a falloff of 
exports, what you would project, or your economists, if they do 
project, if we have a declining value of the dollar taking 
place, or a rising value of the dollar taking place, its impact 
on projected employment areas.
    I think those are two key current issues that we need to 
look at.
    [The chart entitled ``Job Losses are Mounting at an 
Accelerated Rate'' appears in the Submissions for the Record on 
page 63.]
    Senator Brownback. And I appreciate your notice, too, about 
the housing bubble that we floated on for quite a period of 
time in the Clinton and Bush Administrations on those expanded 
credit numbers, and it seems like that is a big part of what we 
are dealing with, the bursting of that that has now expanded 
not just housing but it has gone broad-based all sectors, and 
it has gone global as well.
    So I think we do not want to reinflate another bubble, but 
we want to target into places where we can create some jobs and 
opportunities.
    Chairman Maloney. Thank you, Senator. I join you in 
requesting this information.
    I just would like to close with one question about your 
funding. Do you have enough funding to get the important 
statistics that we need in order to make the proper policy 
decisions?
    And are there any other labor statistics that you think 
would be helpful for you to collect to help to make the best 
possible policies going forward?
    Commissioner Hall. Sure. Well, as you know we are under a 
Continuing Resolution holding our funding to 2008 levels. That 
is not nearly enough for us to continue to produce all our 
products. So our most important thing is we need to go ahead 
and get an '09 budget, or if the Continuing Resolution gets 
extended, we are going to need some help to continue our 
programs at their current levels.
    Chairman Maloney. Are there other statistics and items that 
you feel you should be focusing on that would help us in making 
better policy decisions?
    Commissioner Hall. Yes, I can think of two areas.
    One is I would like to see us improve the accuracy of our 
detailed job and wage trends by occupation. We have some of 
that data, but we do not have that data over time. I think that 
would be really important to sort of follow, especially when 
you get back to job growth, following the impact of job growth 
where you have good job growth, what kind of job growth you 
have.
    And the other thing is I think we would like to see some 
better data on new business formation.
    Chairman Maloney. Well I hope the Minority will join me in 
a letter requesting a budget request for them to be able to 
include this important information in their analysis.
    Thank you very, very much for your important report today. 
The meeting is adjourned. Thank you.
    Commissioner Hall. Thank you.
    [Whereupon, at 10:41 a.m., Friday, February 6, 2009, the 
meeting of the Committee was adjourned.]
                       SUBMISSIONS FOR THE RECORD

                Prepared Statement of Carolyn B. Maloney

    The newest job numbers--with the fourth straight month of 
job losses over half a million--highlight the misery and 
disruption that American families have been enduring. As the 
chart shows, well over 4 million Americans have lost their jobs 
since the start of this recession--almost half of them in the 
last 4 months.
    This recession looks to be the worst since the Great 
Depression--and this chart was prepared before the latest bad 
news. I can't even begin to imagine how deep this recession 
would have been in the next few months had Congress not passed 
the recent stimulus bill.
    These numbers add further support to the bankruptcy bill 
pending in the House of Representatives that would allow a 
homeowners' primary residence to be included in bankruptcy. As 
millions of Americans have lost their jobs, they have become 
unable to pay their mortgages. And in many states, the bursting 
of the housing bubble means that these homeowners owe more than 
their houses are worth, eliminating the possibility of 
refinancing a mortgage or selling a house at a high enough 
price to pay off the existing mortgage, and therefore 
increasing foreclosures in that state. The housing problem is 
making a vicious cycle even worse--as more people lose their 
homes to foreclosure, the stock of unsold houses increases 
putting more downward pressure on house prices, which leads to 
more homeowners owing more than their house is worth, which is 
leading to more foreclosures. And homeowners who have lost 
their jobs are less mobile when they owe more than their house 
is worth--taking a job in another area of the country would 
entail coming up with money to pay off their mortgage or taking 
a serious hit to their credit rating.
    The latest numbers show that almost 1 in 10 mortgage 
holders in Florida were in foreclosure during the fourth 
quarter of 2008, and in Nevada, Arizona, California and Ohio 
more than 1 in 25 mortgage holders are in foreclosure. Not 
surprisingly, most of those states have unemployment rates much 
higher than the national average. California recently reported 
that the unemployment rate in January was 10.1 percent.
    Although the housing prevention plan outlined by Secretary 
Geithner helps some homeowners--interest rates are lowered to 
homeowners who have limited or no equity in their houses, 
homeowners who have lost their jobs and will need to sell their 
houses have been offered no help. If homeowners can lower their 
payments through bankruptcy proceedings, they may be able to.
    According to the figures just released by the Bureau of 
Labor Statistics, more than 3.6 million jobs have been lost 
since the recession began in December 2007, including the 
nearly 600,000 jobs shed in January. Given the steady stream of 
mass layoffs, a credit freeze and a decline in consumer 
spending, the writing was already on the wall for a devastating 
13th month of job losses. The job losses were widespread 
throughout the economy and employers cut jobs at a faster pace 
last month.
    The Labor Department announced yesterday that initial 
jobless claims surged to a 17-year high of 626,000 last week 
and that the number of people on the unemployment rolls ticked 
up to nearly 4.8 million, the most since records began in 1967. 
We now hear that the growing rolls of the unemployed are 
colliding head-on with states who cannot afford to efficiently 
process their claims.
    More than 2 million homes have gone into foreclosure, and 
millions of other homeowners find themselves owing more to the 
bank than their homes are worth. Because of these job losses, 
millions have also lost their health insurance. And an 
estimated $6 trillion in personal wealth has simply evaporated 
since the economic crisis began.
    Alarm bells are sounding and our economic recovery package 
must make its way to the President as soon as possible. The 
current economic crisis requires bold solutions that address 
the magnitude of our economic woes, and the American Recovery 
and Reinvestment Plan will do just that.
    These jobless numbers today underscore once again that 
there is no issue that is more important for this government to 
address than saving and creating jobs. Our recovery package 
will create or save an estimated 4 million jobs and will make 
key investments in our future. We will create jobs across a 
variety of sectors over the next several years, which will 
soften the downturn and foster a solid economic recovery that 
benefits all Americans.
    First and foremost, we will help families in need by 
increasing food stamps benefits for some 30 million Americans, 
expanding unemployment benefits for 18 million Americans, and 
preserving health care benefits for 20 million Americans.
    We have an historic opportunity to make the investments 
necessary to modernize our public infrastructure, transition to 
a clean energy economy, and make us more competitive in the 
future. America's schools, roads, bridges, and water systems 
are in disrepair and this is creating a drag on economic 
growth.
    Our plan also supports working families by providing a 
$1,000 ``Making Work Pay'' tax cut for 95 percent of workers 
and their families. These families will go out and spend the 
money, not save it, and help jumpstart local economies right 
away.
    Now is the time to put aside the differences we might have 
in economic theories and put the needs of our country first. 
Now is the time to save our economy, not defend the failed 
policies of the past. We need to stand together for the good of 
our nation.
    President Obama and the Democrats are ready to embark on a 
bold, common sense plan to turn this economy around, to address 
the fierce urgency of now, and to get this country back on its 
feet. Today's numbers underline the need to act, and to act 
now.
                              ----------                              


              Prepared Statement of Senator Sam Brownback

    The Bureau of Labor Statistics' report that payroll 
employment declined by another 598,000 jobs and that the 
unemployment rate rose to 7.6 during the month of January is 
unwelcome, but not unexpected, news. There is no question that 
our economy and the people of this nation are hurting, and 
hurting badly. I wish I could say that I am looking forward to 
Commissioner Hall's testimony this morning, but candidly this 
is news that we could all do without.
    I know that Commissioner Hall is here to testify on the 
data in today's report and is not here to offer us projections 
about future results or policy prescriptions for what ails us. 
That isn't the job of the BLS Commissioner, so I hope we can 
all avoid the temptation to attempt to re-write his job 
description this morning.
    There is no question that our economy needs help. Passage 
of a stimulus package is essential. Passage of a massive 
spending bill that permanently adds to the size of government 
is not. We need to put gas in the tank, not sugar. 
Unfortunately, the stimulus bill passed by the House and the 
one under consideration by the Senate both fail the test--and 
fail it miserably.
    We will hear a great deal of discussion about how spending 
is more effective than tax reduction in stimulating economic 
activity. Yes, there are a significant number of economists 
that use their macroeconomic models to generate results to 
support that notion. However, the results those models generate 
say more about how the models were constructed than about the 
economy. These models are more parable than fact. Recent 
economic research does not support the notion that government 
spending is the most effective way to stimulate the economy.
    In fact, there is a good deal of recent economic research 
that analyzes data as opposed to building models on Keynesian 
assumptions.
    Research by President Obama's Chair of the Council of 
Economic Advisors, Christina Romer and her husband find a tax 
multiplier of about three: a dollar of tax cuts raises the 
gross domestic product (GDP) by about three dollars.
    Andrew Mountford of the University of London and Harald 
Uhlig of the University of Chicago analyzed U.S. quarterly data 
from 1955-2000. They considered three policy scenarios: a 
deficit-financed government spending increase, a deficit-
financed tax cut, and a balanced-budget increase in government 
spending.
    Their findings: ``We find that deficit-financed tax cuts 
work best among these three scenarios to improve GDP, with a 
maximal . . . multiplier of five dollars of total additional 
GDP per each dollar of the total cut in government revenue five 
years after the shock.'' They found that a deficit financed tax 
cut has a maximal multiplier of 5.33 after 14 quarters, while a 
deficit financed increase in government spending has a maximal 
multiplier of only 0.65 after one quarter.
    Olivier Blanchard, Chief Economist at the IMF and Roberto 
Perotti find that ``In most cases [of tax and spending changes 
in the U.S.] the multipliers are small, often close to one,'' 
and that ``. . . both increases in taxes and increases in 
government spending have a strong negative effect on private 
investment spending.''
    While consumers will save some portion of a tax cut and, 
equivalently, pay down household debt, it is not sound policy 
to suggest that individuals taking steps to improve household 
balance sheets is a negative for the economy. Improved credit 
quality is an important part of freeing up bank lending. The 
reduced debt service requirement also increases a household's 
long term income that is available for consumption. Many of the 
current so-called stimulus measures involve long-term 
government spending programs that are advocated as long-term 
investments in our Nation's infrastructure and future growth. 
Why is it not prudent to allow families to shore up their 
balance sheets to provide for their own private financial 
infrastructures and their families' future growth prospects?
    While there has been a great deal of focus placed on 
financial institutions' balance sheets, household balance 
sheets have suffered significantly. From the third quarter of 
2007 to the 3rd quarter of 2008, the net worth of households 
and nonprofit organizations has declined by $7.1 trillion or 
8.9%.
    Household debt declined in the third quarter of 2008 for 
the first time since the Federal Reserve began tracking this 
data in 1952.
    It should not be surprising that households are moving to 
shore up their balance sheets. Neither should it be considered 
a bad thing from an economic perspective, if one takes a long 
view.
    It is also important to note that evidence suggests that 
consumers are more likely to spend tax reduction that comes in 
the form of permanent reductions than they are one time 
stimulus checks.
    While it may be timely in the current deep economic 
downturn to consider stimulus measures, the current proposals 
are neither targeted toward measures that will provide actual 
stimulus nor temporary. In fact, the proposals are a giant step 
toward permanently increasing the size of the federal 
government. Once spending is in place, it will remain in place.
    We owe the American people better. Congress and the 
Administration need to step back and take the time--not a long 
time--but the time to craft a true stimulus package.
                              ----------                              


            Prepared Statement of Representative Kevin Brady

    I would like to join in welcoming Commissioner Hall before 
the Joint Economic Committee this morning. The data released 
today underscore the need for effective steps to get the 
economy back on track.
    The data show that payroll employment fell by 598,000 in 
January. The job losses were widespread, reflecting the 
deepening recession and economic hardship facing many families. 
The unemployment rate climbed to 7.6 percent last month.
    Unfortunately, the policy response to the downturn was a 
partisan stimulus bill passed by the House to increase federal 
spending, deficits, and debt by astronomical amounts. Between 
2009 and 2019, the House bill would add $1.2 trillion of 
federal debt to the already large and growing burden of public 
debt on the economy. The stimulus bill would add more than 
$3,000 to the share of public debt of every man, woman, and 
child in the U.S. by 2019. We, our children, and grandchildren 
will be paying for this spending spree for a long time to come.
    Even before the stimulus bill was considered, the 
Congressional Budget Office (CBO) projected that the budget 
deficit would balloon to a record $1.2 trillion in 2009 alone. 
The publicly held debt as a percent of GDP was projected to 
increase from 40.8 percent in 2008 to 50.5 percent in 2009, a 
whopping 10 percentage point increase in only one year. The 
stimulus bill could push this debt-to-GDP ratio to nearly 60 
percent by 2011.
    The real budget outlook is actually considerably worse 
because the CBO baseline does not include a number of items 
that will further enlarge the deficits. Trillions of dollars of 
federal bailouts also expose taxpayers. Furthermore, the 
looming retirement of the baby boom generation will cause 
entitlement spending to accelerate faster and faster in the 
next few years.
    The U.S. fiscal outlook is already undermining financial 
markets. As the Financial Times reported Thursday, ``. . . The 
U.S. Treasury opened the floodgates of government bond issuance 
yesterday . . . the announcement came amid fears about growing 
U.S. government deficits and sent the yield on the benchmark 
10-year Treasury note rising to 2.95 percent . . . The rise in 
yields has been pushing 30-year mortgage rates higher, 
complicating efforts by U.S. authorities to revive the economy 
. . .''
    The key question is whether huge federal spending increases 
will actually work to stimulate the economy. As economist John 
Taylor noted in a recent paper presented at the annual American 
Economic Association meetings, ``there is little empirical 
evidence that government spending is a way to end a recession 
or accelerate a recovery.'' It didn't work in Japan, and there 
is no reason to think it will work now in the U.S. Part of the 
reason to doubt the effectiveness of stimulus spending is that 
taxpayers know that they will end up paying for the stimulus in 
higher future taxes and inflation, and will adjust accordingly 
now, undermining any stimulative effect. One study even found 
that ``. . . It is thus possible for responses to expected 
future policies to exacerbate and prolong recessions . . .''
    The prospect of borrowing over a trillion dollars for 
questionable programs thrown together with little procedural 
deliberation has rightly given the American people pause. Even 
if job creation is assumed, the cost per job has been estimated 
at well over $200,000, far above average taxpayer income. We do 
know one thing: there is an absolute certainty that the House-
passed stimulus will increase deficits and debt by over $1 
trillion. However, there is very little indication that it will 
do much to help the economy.
    A much better approach would be long-term marginal tax rate 
reductions to improve incentives to work, save, and invest. As 
Christina Romer, President Obama's chair of the Council of 
Economic Advisers has written, ``tax cuts have very large and 
persistent positive output effects.'' The Republican tax 
package offered in the Ways and Means Committee included a 
number of pro-growth tax provisions. We proposed cutting the 
marginal income tax rates in the bottom two brackets by five 
percentage points, tax deduction for small business, income tax 
relief for taxpayers receiving unemployment benefits, and a tax 
incentive for qualifying home buyers. This approach offers a 
much better prospect for economic growth than a tidal wave of 
new wasteful federal spending.
    This bloated spending stimulus bill is in trouble and there 
is still time to consider a better course of action. Instead of 
burdening the economy with more deficit spending and debt, 
let's reduce the burden of government and improve the prospects 
for economic growth.
                              ----------                              


                    Prepared Statement of Keith Hall

    Madam Chair and Members of the Committee:
    Thank you for the opportunity to discuss the employment and 
unemployment data we released this morning.
    The labor market continued to weaken dramatically in 
January. Total nonfarm payroll employment fell by 598,000, and 
the unemployment rate rose from 7.2 to 7.6 percent. January's 
sharp drop in employment brings job losses to 3.6 million since 
the start of the recession in December 2007 (as determined by 
the National Bureau of Economic Research). About half of the 
decline occurred in the past 3 months. Job losses in January 
were large and widespread across the major industry sectors.
    Manufacturing employment fell by 207,000 over the month, 
bringing the job loss in this industry to 1.1 million since the 
start of the recession. Nearly half of the loss occurred in the 
past 3 months. In January, employment declines were spread 
throughout the sector but were especially large in fabricated 
metal products (-37,000), motor vehicles and parts (-31,000), 
and machinery (-22,000).
    Construction shed 111,000 jobs over the month. The pace of 
job loss in this sector has accelerated in recent months. 
Employment has declined by 781,000 since the beginning of the 
recession, with about 40 percent of the decrease occurring in 
the past 3 months.
    In January, job losses continued throughout most of the 
service-providing sector. Since the start of the recession, 
this sector has lost 1.8 million jobs, with over half of the 
decline occurring in the past 3 months. Employment in temporary 
help agencies fell by 76,000 in January and has declined by 
605,000 since December 2007. Other large over-the-month job 
losses occurred in retail trade (-45,000), transportation and 
warehousing (-44,000), financial activities (-42,000), 
wholesale trade (-31,000), and professional and technical 
services (-29,000).
    Private education and health care added jobs in January. 
Employment in health care was up by 19,000 over the month 
compared with an average of 30,000 a month in 2008.
    Average hourly earnings for production and nonsupervisory 
workers in the private sector rose by 5 cents, or 0.3 percent, 
in January. Over the past 12 months, average hourly earnings 
have increased by 3.9 percent. From December 2007 to December 
2008, the seasonally adjusted Consumer Price Index for Urban 
Wage Earners and Clerical Workers (CPI-W) fell by 0.7 percent.
    Measures from our household survey also reflected the weak 
labor market conditions in January. The unemployment rate rose 
from 7.2 to 7.6 percent, bringing the total number of 
unemployed persons to 11.6 million. Since December 2007, the 
rate has risen by 2.7 percentage points, with the increase 
widespread across demographic groups.
    In January, the employment-population ratio dropped to 60.5 
percent, 2.2 percentage points lower than at the beginning of 
the recession. This is the lowest level since May 1986. The 
labor force participation rate, at 65.5 percent in January, has 
edged down in recent months.
    This morning, on our Web site, the Bureau of Labor 
Statistics began publishing monthly estimates of the employment 
status of persons with a disability. In January, the 
unemployment rate for these persons was 13.2 percent, compared 
with a rate of 8.3 percent for persons with no disability (not 
seasonally adjusted). The employment-population ratio for 
persons with a disability was 20.0 percent, compared with 65.0 
percent for those with no disability. The collection of these 
important data is sponsored by the Department of Labor's Office 
of Disability Employment Policy.
    Before closing, I would note there were routine annual 
adjustments to the data from our two surveys. The establishment 
survey data released today reflect the incorporation of annual 
benchmark revisions. Each year, we re-anchor our sample-based 
survey estimates to full universe counts of employment, 
primarily derived from administrative records of the 
unemployment insurance tax system. Household survey data for 
January reflect updated population estimates from the U.S. 
Census Bureau. Further information about the impact of these 
adjustments is contained in our news release and on our 
website.
    Summarizing labor market developments for January, nonfarm 
payroll employment fell by 598,000, and the unemployment rate 
rose to 7.6 percent. Since the start of the recession in 
December 2007, job losses have totaled 3.6 million, with about 
half of the decrease occurring in the last 3 months.
    My colleagues and I now would be glad to answer your 
questions.
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