[Joint House and Senate Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
S. Hrg. 111-338
THE EMPLOYMENT SITUATION: JULY 2009
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HEARING
before the
JOINT ECONOMIC COMMITTEE
CONGRESS OF THE UNITED STATES
ONE HUNDRED ELEVENTH CONGRESS
FIRST SESSION
__________
AUGUST 7, 2009
__________
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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 C. 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
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Members
Hon. Carolyn B. Maloney, Chair, a U.S. Representative from New
York........................................................... 1
Hon. Elijah E. Cummings, a U.S. Representative from Maryland..... 2
Hon. Amy Klobuchar, a U.S. Senator from Minnesota................ 4
Witnesses
Dr. Keith Hall, Commissioner, Bureau of Labor Statistics, U.S.
Department of Labor, Washington, DC; Accompanied by: Mr. Philip
L. Rones, Deputy Commissioner, Bureau of Labor Statistics, and
Dr. Michael W. Horrigan, Associate Commissioner for Prices and
Living Conditions.............................................. 5
Submissions for the Record
Prepared statement of Representative Carolyn B. Maloney.......... 30
Prepared statement of Senator Sam Brownback...................... 30
Prepared statement of Representative Kevin Brady................. 32
Prepared statement of Dr. Keith Hall, Commissioner, Bureau of
Labor Statistics, together with Press Release USDL-09-0908..... 32
THE EMPLOYMENT SITUATION: JULY 2009
----------
FRIDAY, AUGUST 7, 2009
Congress of the United States,
Joint Economic Committee,
Washington, DC.
The committee met, pursuant to call, at 9:32 a.m. in Room
562 of the Dirksen Senate Office Building, The Honorable
Carolyn B. Maloney (Chair) presiding.
Representatives present: Maloney and Cummings.
Senators present: Klobuchar.
Staff present: Nan Gibson, Colleen Healy, Aaron
Rottenstein, Annabelle Tamerjan, Justin Ungson, and Jeff
Schlagenhauf.
OPENING STATEMENT OF THE HONORABLE CAROLYN B. MALONEY, CHAIR, A
U.S. REPRESENTATIVE FROM NEW YORK
Chair Maloney. The hearing will come to order. I know other
members are expected, but hearings should start on time.
Welcome, Commissioner Hall.
Evidence that the Stimulus Bill is taking hold, is starting
to emerge. The economy dramatically improved in the second
quarter of this year, and the pace of job loss has moderated
significantly in recent months.
Clearly, the trend is towards recovery. I am optimistic
that more Americans will be heading back to work as more
stimulus projects get underway. While we welcome these signs of
improvement, this morning's BLS report reminds us of the high
toll that the recession has had on millions of working
Americans.
This recession, which began in December of 2007, is now the
longest and deepest in the post-World War II period. Although
the economy is predicted to expand later this year, the
duration of this recession has led to long spells of
unemployment for some workers.
With six unemployed workers for each job opening, those out
of work are finding it increasingly difficult to find a job.
More than one-third of the unemployed, a staggering five
million Americans, have been without a job for at least six
months. This is the highest on record, in both percent and the
sheer numbers. Over 2.3 million workers have been unemployed
for a year or longer.
The National Employment Law Project estimates that by the
end of September, more than 500,000 workers who lost their jobs
through no fault of their own, will exhaust their federally-
funded unemployment benefits before finding a job.
By the end of this year, the number could grow to 1.5
million. For many, those weekly benefit checks are the ever-so-
thin cushion that allows them to keep up with their utility
bills, stay current on their credit card bills, and meet basic
needs.
Congress and the President worked swiftly to expand and
extend the Unemployment Insurance Program for the thousands of
workers losing their jobs each month. We funded up to 20
additional weeks of benefits at the state level, through the
Extended Benefits Program.
The Emergency Unemployment Compensation Program also
provided up to an additional 20 weeks of federally-funded
benefits for workers in all states, and an additional 15 weeks
for laid-off workers in states with exceptionally high rates of
unemployment.
Many jobless Americans are receiving an additional hundred
dollars a month, due to provisions in the Recovery Act, but for
many of these unemployed workers, it is not just the income
that they have lost; for millions of jobless Americans and
their families, health insurance benefits have evaporated or
may stop.
The Joint Economic Committee released a report yesterday,
estimating that 1.4 million women and 2.7 million men, have
lost their employment-based health insurance, because of job
losses during this recession.
Today's job report makes it clear, we are making progress,
but it will be a long road to recovery. By extending
unemployment benefits, we will give out-of-work Americans
across the country, some peace of mind, as they continue to
search for work.
By passing healthcare reform, millions of uninsured
Americans will have access to affordable healthcare insurance,
regardless of their employment status.
I look forward to working with my colleagues in the House
and the Senate, to act swiftly on behalf of the millions of
unemployed Americans across this country.
[The prepared statement of Representative Maloney appears
in the Submissions for the Record on page 30.]
[The prepared statement of Senator Sam Brownback appears in
the Submissions for the Record on page 30.]
[The prepared statement of Representative Kevin Brady
appears in the Submissions for the Record on page 32.]
Chair Maloney. I now call on my colleague, Mr. Cummings,
for five minutes.
OPENING STATEMENT OF THE HONORABLE ELIJAH E. CUMMINGS, A U.S.
REPRESENTATIVE FROM MARYLAND
Representative Cummings. Thank you very much, Madam Chair.
As we continue to emerge from the worst recession since the
Great Depression, it is sobering when the loss of 247,000 jobs,
qualifies as good news.
However, Treasury Secretary Geithner and former Federal
Reserve Chairman Alan Greenspan, did suggest on Sunday, that
the United States economy may have turned a corner. Both men
point to forecasts that portend possible economic growth in the
second half of 2009.
Further, the New York Times yesterday reported comments by
economist Christina Romer and Allen Sinai, that the stimulus
has driven the recovery, adding some two percentage points to
the economic activity.
However, as we know, unemployment is a lagging indicator,
and, as White House advisor, Dr. Larry Summers, noted, it will
be some time before economic growth produces consistent job
growth, so I will resist any impulse to put on rose-colored
glasses.
One of the reasons why I wanted to be here this morning, is
because I have consistently heard that before this
Administration did the things that it did, people were
constantly saying that it would do no good, and I expected to
hear, as I heard from former Senator Fred Thompson of
Tennessee, this morning, there are some folks giving no credit
to this Administration for their efforts, and I wanted to make
sure that the record is clear, that while we may not see the
very end to this long tunnel, the fact is, is that the things
that we are doing, are making a difference.
After the loss of 6.7 million jobs since the recession
began, the effect on families and communities, is now being
felt more severely than ever. More and more Americans remain
unemployed for longer and longer stretches.
Today's data tell us that the number of long-term
unemployed, continues to climb. Five million Americans have
been unemployed for over six months, 2.3 million for over 12
months, so these individuals and families struggle to put food
on the table and pay rent each month.
The states' coffers, on which the unemployed depend,
continue to be empty. Long-term unemployed residents affect
state and local government in the form of reduced tax revenue.
When this occurs, crucial government services are put at
risk. Now, not only are hardworking Americans unable to find
employment, but the unemployment safety net has stretched
dangerously thin in some states and torn altogether in others.
This Congress has previously taken dramatic action in this
recession, to reduce the burden of unemployment on families.
The Stimulus Bill included funds to extend and increase state
unemployment benefits. This relief was and continues to be so
essential for those who are struggling.
Now we find that the weight of the cumulative job losses,
forced 18 states to borrow $12.1 billion from the Federal
Unemployment Trust Fund, just to keep benefits available to
unemployed residents.
Facing the potential exhaustion of this critical fund in
August, I was proud to join so many of my colleagues last week
in supporting emergency funding for the Federal Unemployment
Trust Fund.
This 11th hour action will ensure that 4.6 million workers
will have vital unemployment benefits in August and September,
however, I also hope that upon our return from recess, that we
are able to move another extension of unemployment benefits
through the House.
While the recession has provided its share of bad actors,
the unemployed, our constituents, remain our responsibility.
I'm proud of what we have accomplished as a Congress, but I
know we can and will do more and that we will do better.
I look forward to the testimony of the Commissioner, Mr.
Hall, and, with that, Madam Chair, I yield back.
Chair Maloney. Senator Klobuchar, for five minutes.
OPENING STATEMENT OF THE HONORABLE AMY KLOBUCHAR, A U.S.
SENATOR FROM MINNESOTA
Senator Klobuchar. Thank you very much, Madam Chair, and
thank you for being here today. It does seem like we have just
a little stability going here, and I'm looking forward to
asking questions of all of you to see what this means, as I
heard Representative Cummings so well say that, in fact, we
know we're not out of this, that this isn't going to turn
around overnight, that we still have incredible challenges for
the people of this country.
But the fact is that I will say, being in Minnesota for the
last--off and on for the last few weeks, there are some signs
I've seen. We have a 20-percent increase in home sales in our
state, from June of last year to June of this year.
I met with the realtors in Minnesota, and they attribute a
lot of that to the $8,000 first-time homebuyers tax credit.
Nearly half of these home sales were first-time homebuyers.
And then there's the anecdotes. When I was going to get
coffee and this guy was standing next to me in line and told me
that he's overwhelmed by work. I said, what do you do? He said,
I move people, I move their things out of apartment buildings,
because they're buying their first-time home.
So I think that we have seen, at least in our state, some
of the effects of this. The Cash for Clunkers program, our
state, the State of Minnesota, was fourth in the country for
the number of people that used that program over that weekend,
up there with California and Michigan.
So I think you see people starting to believe that there is
hope in this economy, with the numbers for consumer confidence
and other things that we've seen.
But that isn't quite enough, because I can tell you that
we're still not where we should be. I have talked to so many
people in our state, letters that I've received of people that
say that they put their kids to bed and then they go sit at the
kitchen table with their heads in their hands, wondering how
they're going to make ends meet, while they're telling their
kids everything is okay.
We just heard from someone the other day, a woman who's
unemployed and uses her savings to pay $250 a month for
healthcare that requires a $10,000 deductible.
The iron ore miners up in the northern part of my state,
which was really actually a part of our state that until the
recession hit, was really going better than it had been in
decades, and then suddenly the rug was pulled out from under
them when the worldwide demand for steel and other minerals
declined, and, suddenly, they were unemployed.
And this wasn't the traditional set of unemployed. In the
past, it tended to be older workers who were laid off. These
were younger workers who had hoped and moved up there and
bought houses.
As Representative Cummings has pointed out, the
unemployment extension is very meaningful to those people, but
there are parts of the iron range in Minnesota that are seeing
a 20-percent unemployment rate, and that is obviously
unacceptable.
I'm very much looking forward to seeing Commissioner Hall
and other witnesses, just your view of these somewhat hopeful
figures that we've seen, stability for one month, and what that
means as we go forward. Thank you very much.
Chair Maloney. Thank you, Senator. Now I'd like to
introduce Commissioner Hall. Dr. Keith Hall is the Commissioner
of Labor Statistics for the United States Department of Labor.
The BLS is an independent national statistical agency that
collects, processes, and analyzes essential data and
disseminates it to the American public, the U.S. Congress and
other federal agencies.
Dr. Hall also served as Chief Economist for the White House
Council of Economic Advisors for two years under President
George W. Bush. Prior to that, he was Chief Economist for the
U.S. Department of Commerce.
Dr. Hall also spent ten years at the U.S. International
Trade Commission. Dr. Hall received his B.A. degree from the
University of Virginia, his M.S. and Ph.D. degrees in economics
from Purdue University.
Welcome.
STATEMENT OF DR. KEITH HALL, COMMISSIONER, BUREAU OF LABOR
STATISTICS, U.S. DEPARTMENT OF LABOR, WASHINGTON, DC;
ACCOMPANIED BY: MR. PHILIP L. RONES, DEPUTY COMMISSIONER,
BUREAU OF LABOR STATISTICS, AND DR. MICHAEL W. HORRIGAN,
ASSOCIATE COMMISSIONER FOR PRICES AND LIVING CONDITIONS
Commissioner Hall. Thank you, Madam Chair and Members of
the Committee.
Nonfarm payroll employment decreased by 247,000 in July and
the unemployment rate was little changed at 9.4 percent.
Payroll job losses over the past three months have now averaged
331,000, compared with an average of 645,000 over the prior six
months.
Employment has fallen by 6.7 million since the start of the
recession in December of 2007. In July, employment declines
continued in many of the major industry sectors.
Construction employment fell by 76,000 over the month, with
losses throughout component industries.
Over the past three months, job losses have averaged
73,000, compared with 117,000 over the prior six months.
Employment in construction has fallen by 1.4 million since
December of 2007.
Manufacturing employment also continued to decline, with
the loss of 52,000 in July. Factory employment has fallen by
two million since the start of the recession.
The seasonally-adjusted employment estimate for motor
vehicles and parts rose over the month by 28,000. Because
layoffs in auto manufacturing already had been so large, fewer
workers than usual were laid off for seasonal shutdowns in
July; thus, the seasonally-adjusted gain does not necessarily
indicate improvement in the industry.
Employment in motor vehicles and parts manufacturing has
been on a long-term decline. The number of jobs in the
industry, 661,000, is now half of what it was in early 2000.
In July, job losses continued in wholesale trade,
transportation and warehousing, and financial activities;
however, these industries have lost fewer jobs, on average,
since May, than during the prior six months. Similarly, job
losses have lessened substantially in temporary help services.
Employment in leisure and hospitality has been little
changed over the past three months, and healthcare employment
grew about in line with the trend thus far in 2009.
Average hourly earnings for production and non-supervisory
workers in the private sector were up by 3 cents in July, to
$18.56. Over the past 12 months, average hourly earnings have
risen by 0.7 percent.
From June 2008 to June 2009, the Consumer Price Index for
Urban Wage Earners and Clerical Workers, declined by 1.7
percent.
Turning now to measures from our household survey, the
unemployment rate in July was 9.4 percent, little change for
the second consecutive month. The rate had been 4.9 percent
when the recession began. There were 14.5 million unemployed
persons in July.
The number of long-term unemployed continued to rise. In
July, five million people had been unemployed for more than six
months, accounting for one in three unemployed persons.
The employment-to-population ratio was 59.4 percent in
July. The ratio has fallen by 3.3 percentage points since the
recession began.
Among the employed, there were 8.8 million persons working
part-time in July, who would have preferred full-time work.
After rising sharply last fall and winter, the number of such
workers has been little changed for four consecutive months.
In summary, nonfarm payroll employment fell by 247,000 in
July and the unemployment rate was little changed at 9.4
percent. My colleagues and I would now be happy to answer your
questions.
[The prepared statement of Commissioner Hall appears in the
Submissions for the Record on page 32.]
Chair Maloney. Thank you very much, Commissioner Hall. I
usually ask you, are there any bright spots in the labor
report? Are there any green shoots or glimmers of hope? But,
today, I can ask you, what are the bright spots and the
glimmers of hope?
Commissioner Hall. In this report, there's still
substantial job loss, but the last three months, there's been
clear moderation in the job loss, and the moderation has been
pretty broad, which I think is a good sign.
While I would say that we're not in recovery yet, this is
the path that we have to go to get to recovery. We expect to
see moderation first, before we start actually getting
improvement in the labor market.
There are a couple things I'll mention, which are
indicators of maybe future conditions in the job market:
Temporary help services, the job loss there has slowed
substantially, and that oftentimes is a leading indicator of a
recovery.
We had a tick up in hours worked. While one month, I
wouldn't read too much into this, but sometimes a pickup in the
hours worked, is an indication of a labor market that's
strengthening, and it may sometimes lead to job gains somewhere
down the line.
Chair Maloney. Do you believe we've seen the worst, or is
there more pain ahead?
Commissioner Hall. You know, it's--we're still getting
substantial job loss, but it is quite a bit--has moderated
quite a bit, going forward.
It's hard to say, like I say, going forward, to estimate or
project what's going to happen, but I think, on the whole, this
is a good sign.
Chair Maloney. Great. Are there any sectors experiencing
more job creations than job losses, currently, or, are there
any signs that any sector will start expanding in the near
future?
Commissioner Hall. Across the board, the job losses have
moderated, which is positive. A few sectors, like healthcare,
has continued--they've continued to increase employment all
along.
A few sectors, like the financial activities, the job loss
there has moderated quite a bit, and it's getting fairly--if
that trend were to continue, it's getting fairly close to
actually getting some job gains in some of the service areas.
And in a few of these industries, I would say that the job
loss was not significant; in other words, it's around zero.
Chair Maloney. Are there any indicators that overall job
losses will continue to slow in coming months?
Commissioner Hall. I don't want to speculate too much. You
know, 247,000 jobs, that's a lot of jobs and that's a big loss,
but, given the context of the sort of job loss that we'd been
having, again, this is a good trend at the moment.
Chair Maloney. And what is the typical amount of time after
a contraction ends, before labor markets start showing signs of
recovery?
Commissioner Hall. Well, in one sense, the signs come right
away. When recoveries come, job loss moderates.
In the past two recessions, there's been a significant
period between consistent job loss and consistent job gain;
there's been a bit of a lag. For example, in the last
recession, consistent job loss ended and we were in this sort
of middle ground where there wasn't consistent job creation for
almost two years.
This is one of the reasons why people talk about the labor
market being a lagging indicator. In the 1990 recession, the
lag was about a year, but, prior to that, the lag was not so
much; it was only a month or two before job increases started,
so I'd say it's hard to say.
Recent recessions have been slow to see--we've been slow to
see job growth.
Chair Maloney. Thank you. Any other comments?
[No response.]
Chair Maloney. Mr. Cummings for five minutes.
Representative Cummings. Thank you very much, Madam Chair.
I was just looking at page 2 of this report, and I was looking
at the African American figures, Mr. Hall, and, from what I can
see here, in July, the unemployment rate for African Americans
is 14.5 percent; is that correct? July, 2009? I'm on page 4.
Commissioner Hall. Yes, 14.5, thank you.
Representative Cummings. And that compares to when we go
back to May when it was 14.9, and then in June, it was 14.7,
and then coming down to 14.5.
That, as usual, is substantially higher than the average
rate for the country; is that right?
Commissioner Hall. That's correct.
Representative Cummings. And while there is an improvement
there, does that improvement, does that surprise you, or is
that pretty much the way you expected it to be?
Commissioner Hall. It's actually kind of the way I expected
it to be. The unemployment rate for minorities such as African
Americans, runs higher than the average unemployment rate, and
it goes up more during a recession, but the actual changes, the
pattern of changes, do sort of match the overall unemployment
rate.
So we've had a pretty flat unemployment rate the last
couple of months and it's been fairly flat for African
Americans.
Representative Cummings. Now, moving on to another subject,
you mentioned that we're going through, with regard to the job
situation, moderation. What does ``moderation'' mean?
I think you said the moderation has been broad. Would you
give me the significance of the broadness that you talked
about?
Commissioner Hall. Sure. I think that in this recession, in
particular, the job loss has been very broad in a lot of
different industries, where that doesn't always happen that
way, and it's been very deep.
And we're backing out sort of the same way so far, that the
job loss has moderated in a very broad sense, so we're not
seeing just particular sectors of the economy that are starting
to improve a little bit; we're seeing sort of broad improvement
in terms of job loss moderation.
Representative Cummings. So, I take it, is that a good
thing?
Commissioner Hall. Yes.
Representative Cummings. And why is that a good thing?
Commissioner Hall. Hopefully, because it's a matter of, at
least in mind, a matter of consumer confidence coming back and
consumer spending coming back, because, more than anything
else, that's at the heart of a recession, is that when
consumers don't spend, things don't go well for the economy.
Representative Cummings. On another subject, yesterday the
Committee released a report, thanks to the Chair, that
discussed comprehensive health insurance and its impact on
women. The report said there are specific economic and health
risks for women regarding their ability to obtain and keep
health insurance.
For example, women are more likely to rely on their
spouses' employers to provide them with health insurance. More
often, this is due to the fact that women are more likely than
men to work part time, and thus be ineligible for employer
health benefits.
What is the unemployment rate for women?
Commissioner Hall. The unemployment rate for women is 8.1
percent.
Representative Cummings. How much?
Commissioner Hall. Eight point one.
Representative Cummings. And what is the under-employment
rate for women?
Commissioner Hall. Let me see. Do we have a broader--we
don't break out the broader underutilization numbers by gender.
Representative Cummings. Okay, well, our report yesterday
on women and healthcare, reported that young women are facing
high unemployment, 15.7 percent, and thus are less likely to
have employer-based health insurance.
By what industry is the segment of the population typically
employed, that is, that younger female worker? You wouldn't
have that information, either?
Commissioner Hall. No, I don't. We don't have a lot of
demographic information.
Representative Cummings. So you wouldn't know the current
unemployment rate; you wouldn't have that information, okay.
The average length of unemployment is increasing as
unemployed workers are having problems finding employment
during a time when the economy is shedding jobs. How is this
impacting women; do you know? Would you have that information?
Commissioner Hall. Yes. I think--let me see, do we have it
broken down by gender?
I don't think we have the long-term unemployed broken out
by demographic information. You know, women have fully
participated, generally, in the job loss during this recession,
so I would say they are probably unfortunately well represented
in the long-term unemployed.
Representative Cummings. All right, I see my time is
running out, but I want to ask you something about this Cash
for Clunkers, but hopefully we'll have another round.
Chair Maloney. Sure, absolutely. Senator Klobuchar.
Senator Klobuchar. Thank you very much, Madam Chair. Thank
you very much, Commissioner Hall. Here we are again.
I wanted to focus first just on some broad figures, and
just go back to what you were talking about at the beginning
about the hardest-hit sectors.
I know you mentioned construction and manufacturing, and,
on the other hand, sectors that seem to be getting better more
quickly. Healthcare, I know you've always mentioned healthcare
has been doing fine.
Since my state's a healthcare mecca, maybe that's part of
the reason we're beneath the national unemployment rate, but
what is the--what do you see as the hardest-hit sectors and
what are the ones you see improvement in?
Commissioner Hall. I think, through this recession, some of
the hardest-hit sectors are the sectors like construction and
manufacturing.
And I think, broadly, services have been hit harder than
normal, but services typically aren't hit as hard during
recessions.
Senator Klobuchar. And with construction and manufacturing,
have there been any--has that slowed, the unemployment rate
there, or is there any improvement in that?
Commissioner Hall. There has been improvement in both
construction and in manufacturing.
Senator Klobuchar. But by ``improvement,'' that means a
slowing of the unemployment rate?
Commissioner Hall. A moderation of job loss. It's clear
moderation of job loss in construction. In manufacturing, the
picture is a little less clear.
There may be some moderation, but it's coming--if it's
there, it's coming a little later than the other sectors.
Senator Klobuchar. Okay, and how about the areas of
improvement?
Commissioner Hall. The big areas of improvement are things
like the financial activities. That's been hit much harder this
recession, I think, than almost any past recession. That's
coming back.
Temporary help services, I think, is one of the more
encouraging.
Senator Klobuchar. Didn't you once tell me that temporary
help services--or maybe someone else did--is always a sign that
there could be some improvement, or not?
Commissioner Hall. It tends to be a leading indicator.
Temporary help services started shedding jobs before the
recession started, and it typically starts to moderate and
maybe even gain jobs before the rest of the economy does.
Senator Klobuchar. And is that because people sort of take
one step at a time and they think, well, our business is doing
a little better, so, we'll get temporary services first?
Commissioner Hall. I think that's exactly right. I think,
to a large degree, that's the advantage of temporary help, is
that they're there for the flexibility. Sometimes they're the
first ones to be let go and the first ones to bring back.
Senator Klobuchar. Okay, all right. Then I was going to ask
you about geographic areas, if there's been a change there.
What are the hardest-hit states and what are the states that
have seen--that are doing better, and is there any--I remember
when we were at the worst of this, at one of these hearings,
you were saying how, really, you couldn't really even point out
a geographic area, because it was bad all across the country.
I wonder if that has changed at all, if there's some
dramatic improvements or dramatic declines?
Commissioner Hall. I'm not seeing a really big change in
the pattern among states. The unemployment rate has moderated;
it hasn't grown much, and I think that's been roughly the same
pattern, I think, throughout the states.
I'm not seeing a big change patterns. There might be
individual states that are still having troubles, but----
Senator Klobuchar. What are the states that are hardest
hit?
Commissioner Hall [continuing]. Largest losses----
Senator Klobuchar. Or just the largest unemployment rate.
Commissioner Hall [continuing]. Well, the biggest losses
are states like Michigan, Arizona, Nevada, Florida. In terms of
overall numbers, California has been the hardest hit, but
that's also a very large state, so, in percentage terms, it's
not quite so bad.
Senator Klobuchar. Okay, and which ones are doing the best?
You could come back on the second round and tell me.
Commissioner Hall. Okay. I do have those numbers. I just
have to dig for them.
Senator Klobuchar. I thought I'd just ask one or two
questions that I actually got, verbatim, from some of our
citizens recently.
This one is from someone, a woman in Lakeshore, Minnesota,
and she says, ``Dear Amy, I'm sitting here watching the
President's news conference and realizing that my husband and I
do not fit into any of the categories''--this is like a
question for you, Commissioner Hall--``do not fit into any of
the categories of families unemployed that he is speaking
about. My husband and I own a small construction company. We
don't have the option of filing for unemployment, because we
are self-employed. Many of our friends are in the same
position. My comment is that all of the figures and stats that
are out there regarding housing and unemployment, aren't even
counting those of us who can't file for unemployment and are on
the verge of losing our home, because no one else is building.
I just need to get that off my chest.'' That's her talking, not
me.
``There are people that are unemployed that at least can
get unemployment, yet there are a lot of us that don't have any
income at all. Are there statistics--'' this is from a woman in
Lakeshore, Minnesota--``on how many are not getting
unemployment and are unemployed?''
She means people who don't qualify to get unemployment, but
have lost their businesses or lost their incomes.
Commissioner Hall. Well, actually, we do collect
information on people who are self-employed. In particular, in
the household survey, the unemployment rate includes basically
everybody, because that's a phone survey to households.
Senator Klobuchar. And what do you see from these small
business owners who, you know, have been hit by this? Or self-
employed?
Commissioner Hall. Sure. The self-employed have certainly
struggled the same way that the others, the non-self-employed
have with this.
That's been one of the remarkable things about this
recession, is that it has been very, very broad, and I think
it's been broad with respect to the type of employment and type
of firm, small businesses.
Senator Klobuchar. All right, so when we look at this, when
we look at these numbers, when we look at the 9.4 percent
unemployment, that does not include--we've already talked about
these discouraged workers in the past, and it doesn't include
people whose hours have been reduced, but it also doesn't
include some of the small business owners who may be self-
employed, that have lost their businesses, right?
Commissioner Hall. Well, actually, it does include these
self-employed.
Senator Klobuchar. It does include them?
Commissioner Hall. Yes.
Senator Klobuchar. Right, so it just doesn't include the
people who have lost hours and are discouraged workers?
Commissioner Hall. Exactly, the class of people, for
example, that are part time, for economic reasons. We collect
those, but that data is not part of the unemployment rate, and
then we have a whole category of discouraged workers, the
people who have stopped looking for work but want to work.
Senator Klobuchar. So the answer to this woman, is, while
she can't collect unemployment, you do look at including her
kinds of numbers in your statistics?
Commissioner Hall. Yes, we do.
Senator Klobuchar. All right, thank you very much.
Chair Maloney. Thank you. Commissioner, we hear a great
deal from the media and others, that this is the greatest
recession since the Great Depression. I'm interested in how
this recession compares to past slumps, and how does it compare
to past downturns, in terms of its impact on the labor market?
Commissioner Hall. All right, well, this recession has been
a long recession; it's been the longest recession since we've
been collecting data on the labor market--19 months.
We've now lost 4.8 percent of our payroll jobs, which is a
lot. That's the biggest loss since the 1948 recession, in
percentage terms, so we're talking about 60 years in terms of
percentage loss.
Particularly hard hit this time has been the service-
providing sector. In fact, the service-providing sector has
lost more jobs, as a percent, than in any other recession.
Manufacturing has been the hardest hit since 1945.
We have lost almost 14 percent of the manufacturing jobs,
and in financial activities and professional and business
services those have been hit harder than in any other
recession.
Chair Maloney. So this is the longest jobless period the
United States has ever had?
Commissioner Hall. Yes, since we have been collecting data
from around 1940.
Chair Maloney. In the last four recessions, how long did it
take for employment to recover to the pre-recession plan or
peak?
Commissioner Hall. Yes. The last recession it took a really
long time. It took 39 months for it to return to the peak. The
prior recession to that it was 23 months. It has been getting
longer and longer, actually, each of the last four recessions.
The average has been about 17, about a year-and-a-half. Like I
say, the average has been going up. The last two recessions it
was a particularly long time period for recovery.
Chair Maloney. Well one of the green shoots that has been
reported is that new home sales rose last month. But there are
still almost nine months' supply of new houses in the market.
Do you have any sense of what level of inventory of new homes
will lead to an increase in construction employment?
Commissioner Hall. First of all I would have to say that
the months' supply of houses is not--it turns out it is not a
very good predictor of construction employment, in large part
because right now we have nine months' supply when sales are
very low, so nine months' supply during low sales is not very
many houses compared to nine months say when sales are much,
much higher.
What is a good predictor is simply the number of sales.
When sales pick up, the construction employment does pick up
fairly much at the same time.
I can tell you a little bit about housing starts. Once
housing starts bottom out--and right now housing starts have
been level now for several months--it can take anywhere from a
year to a year-and-a-half for construction employment to pick
up after housing has hit bottom. So it could be a little while.
Chair Maloney. How much of the economy do you think is real
estate and housing construction? And are you tracking how many
of these new housing sales are tied to the program of a subsidy
for new housing purchases?
Commissioner Hall. We actually do not collect the housing
sales data; Census does. Our data on construction employment
and maybe on real estate employment might give some indication
of how those industries are doing. There is really no way for
us to just sort of connect that, at least not the way we
measure data, to connect to any sort of policy in particular.
Chair Maloney. Thank you, very much.
Representative Cummings.
Representative Cummings. Thank you very much, Madam Chair.
Mr. Hall, what is the trend for hours worked? And what does
that mean for families that rely on overtime in addition to say
base salary?
Commissioner Hall. Well one of the things that happens when
labor markets weaken is the hours worked goes down as well as
the employment rate goes down. And it is sort of yet another
burden on families, to be honest with you.
It is the same thing as people moving full-time to
temporary, or people just having their hours decline. That is a
cost. And lately it has been fairly flat. And that is a good
sign, like I say. And when you start to see some substantial
movement upwards, that can sometimes signal an actual
improvement in the labor market.
Representative Cummings. Yesterday I had the occasion to
visit two auto dealers in my district, and both of them had a
lot of people trying to take advantage of this Cash for
Clunkers--and I want to thank the Senate for acting on that--
but they said that it was really making a difference.
And is there--I mean, do you expect to see the impact of a
program like that when we pump $3 billion into a program, and
you've had some comments with regard to the auto industry, but
do you expect to see anything say in the future with regard to
that?
Commissioner Hall. Let me say, I do not want to forecast
the policy stuff, but----
Representative Cummings. Yes, I know that, but I am not
trying to get you to do that, really. I am just trying to----
Commissioner Hall [continuing]. I can say something----
Representative Cummings [continuing]. Oh? Wonderful!
[Laughter.]
I am always careful about what I ask you.
Commissioner Hall [continuing]. I appreciate that. Let me
put it this way: If automobile sales are stimulated, I think
probably what has happened right now is a lot of the sales have
come out of inventory. And because they are coming out of
inventory, that is not going to show up in employment at the
factories, et cetera.
But if that is going to have an effect, it is going to have
an effect going forward because it means factories are going to
come back on line with the new models. Hopefully they will come
back on line quicker, and so we will see some employment impact
in automobile manufacturing later on down the line, like I say,
if it has a big impact.
Representative Cummings. As you probably know, the Obama
Administration with regard to the Stimulus is going to be--a
lot of money, a huge percentage of the Stimulus money will be
going into the economy in the next six months. Do you expect to
see anything resulting from that? And a lot of it is going into
infrastructure, and so I guess what, if any areas--what areas
might be affected by that? Are you following me?
Commissioner Hall. Yes, I do. That is actually a really
difficult question in a period with the labor markets
declining. When we do our surveys, we are asking
establishments: How many people do you have on board right now?
We are not asking them to more or less speculate on what the
impact has been of any sort of policy.
But if--I do not know where the Stimulus money is going to
be spent, what industries, but I would suspect going forward if
you look at those particular industries and look at how those
industries are performing going forward, that might give you
some insight on the effect of the Stimulus.
Representative Cummings. You know, you talked a little
earlier, and you talked briefly about it, about consumer
confidence and how significant that is.
From all that you are seeing, from what you can glean from
your report, are you--do you get--I take it that you get a hint
at least that people are feeling a little bit better about
things? Is that a reasonable statement? I do not want to put
words in your mouth.
Commissioner Hall. Yes, I think it is.
Representative Cummings. Okay. And so if that were to
continue, do you think that you would see this broad moderation
that you talked about continue? Or do you think that you would
see it say in certain areas like manufacturing, or auto sales,
or whatever? Do you follow me?
Commissioner Hall. Yes. That is a little bit tough. Because
the loss has been very broad, I think probably the impact would
be broad. So I would hope to see that the moderation continues
until we get actual job growth.
Representative Cummings. And so when you got this report
today, how did you feel? I am just curious. You always--it is
hard to get anything out of you sometimes, but I am just
curious.
Commissioner Hall. Well right now it is a strange feeling
because 250,000 jobs is--that is really hard on people. But
given the context of things, this is good news.
Representative Cummings. Thank you, very much.
Chair Maloney. Senator Klobuchar.
Senator Klobuchar. All right. Thank you. I was just looking
back here at this chart and thinking about how it was quite a
bit worse in January of '09. Is that right, Commissioner Hall?
Commissioner Hall. Yes.
Senator Klobuchar. I am looking at this and seeing these
changes till now and thinking about when people get frustrated,
as I do, with our economic situation and remembering the hole
that we had to dig ourselves out of, and understanding that it
is not going to happen overnight. Is that your history with the
labor market? That these things cannot turn around quickly?
Commissioner Hall. That is correct; yes.
Senator Klobuchar. Okay, at the past hearings I have asked
you about something to keep apprised of what is going on here
with our men and women in uniform. Because one of the things
that I have found most distressing is that those who have gone
over to serve our country, especially in Iraq and Afghanistan,
and have really gone over since 9/11, or we call them our Gulf
War Era Veterans, that their unemployment rate is usually
significantly higher because they have left jobs behind. I
think in Minnesota of our Guard and Reserve. They left jobs
behind, and then they come back and those jobs are no longer
there.
What is the unemployment rate now for Gulf War Era
Veterans, those Veterans who have served in the Armed Services
since September 2001?
Commissioner Hall. Right now it is 9.8 percent.
Senator Klobuchar. 9.8 percent. So that seems closer than
it was in the past. What was it last month?
Commissioner Hall. Actually I do not have that one in front
of--oh, thank you. It was 9.3 percent last month, but in May it
was 11.4 percent.
Senator Klobuchar. That was when I last talked to you about
this. So in May it was eleven point?
Commissioner Hall. 11.4.
Senator Klobuchar. 11.4. So that is a significant change--
--
Commissioner Hall. Yes.
Senator Klobuchar [continuing]. To go from 11.4 to 9.8. Do
you have any reason to know why that happened?
Commissioner Hall. I do not. I do not. We might be able to
look at it a little bit and see if we can see a pattern there.
Senator Klobuchar. Maybe it is because of my questions
about this every month and all the CSPAN viewers seeing that,
and then hiring Gulf War Veterans and people who are serving.
I mean, I have just found it so disturbing that people have
done that. And then they serve and they come back and they do
not have a job. So we are going to continue pushing on that
issue. But we have seen some improvement.
So it is still above the national unemployment rate of 9.4
percent in that it is at 9.8 percent, but that gap has been
decreased? Is that right?
Commissioner Hall. Yes. Although I just will caution that
it is a fairly small sample of Veterans. So the variability in
that number can be fairly high.
Senator Klobuchar. All right.
Commissioner Hall. So it can go up and down for no real
reason other than statistical.
Senator Klobuchar. Thank you. We have also discussed the
importance of education and its impact on unemployment. What is
the unemployment rate, Commissioner Hall, for college
graduates, and the high school graduates, and those that have
not completed high school?
Commissioner Hall. For college graduates the unemployment
rate is 4.7 percent. For people with high school degree but no
college, the unemployment rate is 9.4 percent.
Senator Klobuchar. So they are exactly at the national
average, then?
Commissioner Hall. Yes. And they are double. The
unemployment rate is double that of people with college
degrees.
Senator Klobuchar. Okay, so what is the unemployment rate
for people who have not finished high school?
Commissioner Hall. 15.4 percent.
Senator Klobuchar. So you can see why the President has
made it a priority to try to get people to not just finish high
school but to finish some, at least a year of college. So we go
from 4.7 percent for college degrees to 9.4 percent for high
school graduates to 15.4 percent for those who have not
finished high school.
How has that changed the trends? What are the trends in
this area?
Commissioner Hall. Well, the recent trend--the recent
months' trend has been pretty much like the overall rate. They
have been fairly flat. All these unemployment rates have been
fairly flat over the last month or two.
But the growth since the start of the recession--for
example, those without a high school degree, their unemployment
rate has gone from 7.5 to 15.4. So they have had a fairly
dramatic increase in the unemployment rate.
Senator Klobuchar. And that is from what time?
Commissioner Hall. From the start of the recession.
Senator Klobuchar. So they have seen a bigger hit,
percentagewise, the people who have not finished high school,
than say the other groups. Even though the other groups started
lower, they have not seen as big of a spike in unemployment?
Commissioner Hall. Yes, on a percentage point basis.
Senator Klobuchar. Okay. Just to conclude here with my
round here, some of my colleagues were asking about the
Stimulus Package. I think Representative Cummings was. And the
effects of this and where you can see it.
Now we know about 25 percent of the Stimulus Package money
is out, the investment piece of it, and so obviously you will
see more effects of that as we go forward. But I think the
other piece that people do not always think about is that the
Stimulus--the Recovery Act was one-third of these investments,
but the other one-third was shoring up state budgets and
unemployment and things we have talked about today--but the
other third were these tax cuts. That a third of the Stimulus
Package was actually tax cuts, many of them going to the middle
class in tax credits.
So what I think is interesting is that you can see the
effects of that more immediately in the home buying rates I
talked about in Minnesota. And again I am basing this on our
Minnesota stats, but also what the realtors have told me in
terms of what they are seeing, and the tax credits with the
Cash for Clunkers program.
So do you see those things more immediately ripple through
the unemployment rates than you do with some of the spending,
just because it takes longer to get that money out there?
Commissioner Hall. Well, yes, that would be my
anticipation. My notion is that the payout rate is an important
thing on these things. So when they occur is important.
Senator Klobuchar. Okay. All right. Thank you very much,
Commissioner Hall.
Chair Maloney. Thank you.
Commissioner Hall, how have women fared in this economic
downturn? And in what industries have women lost the most jobs
during this recession?
Commissioner Hall. Well women have lost about 25 percent of
the jobs during this recession. So that means men are losing
jobs 3-to-1 compared with women. But that is not--in a sense
that is not normal. In the last recession women lost a lot of
jobs, but prior to the last recession women often would not
lose jobs at all during recessions.
So one of the things that has happened is, while men are
bearing the bigger brunt of the job loss, women are
participating more in the job loss than in the past. So women
have lost--at this point women have lost about 1.7 million jobs
so far.
Senator Klobuchar. Well certainly the equality in job loss
is not something I have been working for, but are women moving
towards equality in job loss? Are they gaining in job loss
during the recession? Could you elaborate a little more?
Commissioner Hall. Yes. My guess is that the women's
participation rates in a number of industries has gone up. For
example, in construction and manufacturing they are under-
represented. So when those industries are hit by a recession,
women do not participate so much in the job loss.
But women's representation in other industries can be
fairly high, so they participate in the job loss like men.
Chair Maloney. Could you comment on the trends of
unemployment for minorities--specifically, African Americans
and Latinos? Have they leveled off? Or is it still rising at a
fast clip? What is happening there? And in what industry are
Latinos and African Americans losing the most jobs?
Commissioner Hall. Lately the unemployment rate rise has
flattened out the last couple of months, pretty much like the
national numbers for minorities.
I think for the most part the changes in the unemployment
rate, while they have mirrored the overall unemployment rate,
they have just mirrored it to a bigger degree. So when the
overall unemployment rate goes up, it goes up by more for
minorities.
So the trend is pretty much I think the same.
Chair Maloney. Could you comment on the difference between
men and women--African American women and African American men;
and Latino women and Latino men; and differences between
African Americans and Latinos in terms of unemployment?
Commissioner Hall. All right, I can talk generally.
The women's unemployment rate is 8.1 percent----
Chair Maloney. For what?
Commissioner Hall [continuing]. I'm sorry?
Chair Maloney. Women?
Commissioner Hall. Just total women.
Chair Maloney. Total women? Um-hmm.
Commissioner Hall. 8.1 percent. For men it is 10.5 percent,
to put that in perspective. For African Americans the
unemployment rate is 14.5 percent. For Female Head of
Household, African American women, the unemployment rate is
17.8 percent.
Chair Maloney. So there are more unemployed?
Commissioner Hall. Yes.
Chair Maloney. What about Latino women?
Commissioner Hall. Female Head of Households, Hispanic, the
unemployment rate is 12.8 percent. And that is actually fairly
much in line with the overall unemployment rate, Latino
unemployment rate of 12.3 percent.
Chair Maloney. So Latino women are 12.8 percent, and men
are what?
Commissioner Hall. Well overall it is 12.3 percent. So men
are probably around 12 percent.
Chair Maloney. Okay. And do you see this leveling off, or
rising? Or what is the trend with minority unemployment?
Commissioner Hall. Well the recession trend I think lately
it has been leveling off. And I think typically what happens is
when things rise, they rise by more for the minorities. And
when things decrease, they decrease by more for minorities.
Chair Maloney. And again, what industries are Latinos and
African Americans losing the most jobs in? Do you have a sense
of where that job loss is?
Commissioner Hall. The one pattern that jumps out I guess
is Hispanic representation in construction is fairly high.
There is over-representation there. Construction has been hard
hit by this recession. So the Hispanic unemployment rate has
been--has gone up quite a bit.
There is a less simple pattern for African Americans,
especially in terms of industry representation.
Chair Maloney. And why are the numbers telling us that
women in the African American and Hispanic communities are more
likely to lose their jobs or be unemployed than men?
Commissioner Hall. I don't know. I mean, that is kind of a
big question and it is a kind of a research sort of question. I
would say certainly industry representation has an impact. That
probably explains some of it, but I do not know what else
explains it.
Chair Maloney. Thank you, very much.
Mr. Cummings for five minutes.
Representative Cummings. Thank you very much, Madam Chair.
I want to go back to Ms. Klobuchar when she was asking the
questions about the military and this whole issue of how much
education a person has.
I had a town hall meeting the other night, Mr. Hall--this
is like a commercial, by the way--and I was meeting with some
Veterans. And they did not know about the new G.I. Bill which
will allow them to get their tuition paid, in some instances
their housing, and fees at colleges.
And so I just wanted to let folks know that it appears from
what you've said, from the stats, that the more education one
has the better their chances of being unemployed, even during
these times. Is that right?
Commissioner Hall. Yes.
Representative Cummings. So I am just letting the Veterans
know who might be watching this that they ought to find out
about this new G.I. Bill because it is something that went into
effect on August 1st. And I want to thank Ms. Klobuchar for
even bringing up that issue of education and the military,
because I think it is one thing to have these opportunities; it
is another thing to know about them; and it is another thing to
take advantage of them.
Let's talk about health care for a moment. It seems like
health care stays pretty steady, doesn't it? In other words, it
does not seem to--it seems to always--it does not seem to go
down very much, so it does not seem to suffer as much as far as
unemployment. Is that right?
Commissioner Hall. That is right.
Representative Cummings. Why do you think that is? Do you
have any idea why you think that might be?
Commissioner Hall. I don't. I mean, there is some evidence
that early in a recession there are shortages in certain
occupations within health care, that early in a recession
employment goes up because the shortages go away because more
people are looking for work and they are willing to move over
into health care.
Beyond that, I don't know.
Representative Cummings. You know, on another note,
yesterday during our press conference with regard to women and
health care--and I think Ms. Maloney may have spoken about it a
little bit earlier--we learned something that was very
interesting. That is, that you have got a situation where a lot
of women during the Baby Boomer age were older than--I mean,
the men were older than the women they married.
And what is happening now is that, as they go into
Medicare, with their wives being younger and if the wife was
dependent on the husband for their insurance, when he goes into
Medicare she does not have any insurance.
And so I was just wondering, do you know the unemployment
rate for women--for older women? Let's say--and I didn't say
``old''; I said ``older''---- [Laughter.]
You may even have a definition for ``older.'' I want to be
very careful.
Commissioner Hall. I will pick out our oldest group.
Representative Cummings. Okay.
Commissioner Hall. For 55 and older the unemployment rate
for women is 7.1 percent.
Representative Cummings. Okay, and is that--had we seen any
kind of trend with regard to that? I mean, just like we have
seen different trends that have gone up, down, staying pretty
much the same over the last few years, or what? I mean, what do
you see? I meant several months.
Commissioner Hall. Actually that has grown a bit lately.
Last month it was at 6.4 percent, and then prior to that it was
5.8 percent. So that one does not seem to have, have not seemed
to have leveled off the last few months.
One of the things that is a little tricky, though, when you
get anybody in the 55-and-over range is whether they are in the
labor force or not. Because they can--someone can lose a job
and just stop looking if they are 55-and-over and go ahead and
take retirement. So it may under-estimate the issue.
Representative Cummings. So there is no way that you would
have that breakdown? In other words, a person who says, you
know what, I retire. You would not have that kind of
information in these stats?
Commissioner Hall. No, we do not collect that.
Representative Cummings. So there is one other thing that I
am concerned about, and that is the states, these states that
are running out of money.
Do we see any impact with regard to those unemployment
rates? Because almost every state is going through a lot of
problems right now, and I am just wondering what do we see
there?
Commissioner Hall. The recent trend in state government
employment the last few months has actually--they are starting
to lose jobs. For a while there state governments were hovering
at around no-job-growth/no-job-loss. But for example the last
three months we have averaged, state governments have averaged
declining 6000 jobs a month.
So it seems like the employment at the state government
level has worsened a bit.
Representative Cummings. I see my time has run out. Thank
you.
Chair Maloney. Senator Klobuchar.
Senator Klobuchar. Thank you, Chairman Maloney.
Commissioner Hall, I was just reading the report here. We
have a--the stocks gained--this is as of two minutes ago.
Stocks gained early Friday after the government--that is you,
Commissioner Hall--reported a surprise drop in the unemployment
rate, and a smaller number of job cuts than expected, raising
hopes that the economy is stabilizing. The Dow Jones Industrial
Average gained now 75 points. The S&P 500 rose now 7.3. And the
Nasdaq Composite added 14 points.
So my question of you is: Is this a little bit too
exuberant over this news? What do you see in the long haul as
we go forward?
Commissioner Hall. Well first of all, let me say I have
been a very bad predictor of the Stock Market just generally.
Senator Klobuchar. Now that may affect these numbers that
you said that, Commissioner Hall. [Laughter.]
Commissioner Hall. And I am even a bad predictor of how the
Stock Market is going to react to our data. It is hard for me
to see that because so much of it I think winds up being what
were people expecting. And that is hard to know.
As to whether, you know, I--I don't know. I have no way of
knowing.
Senator Klobuchar. Can you compare this to other
recessions? You and I have talked before about this one is so
much longer than some of these temporary recessions we have
seen before, and what you think of these signs of recovery
compared to other historical recessions?
Commissioner Hall. Yeah, I mean we are still having
significant job loss, but we are not having job loss at sort of
historic levels. You know, for a few months there we were
having job loss at nearly historic levels; you know, over a
half a million jobs lost per month.
So, you know, we have sort of settled in to maybe what is
a--I don't want to say ``more normal''--every recession is
different--but maybe a more normal recession level of job loss.
So we have still got improvement to go. But like I say, the
trend is encouraging.
Senator Klobuchar. I want to follow up a little on the
Chairwoman's questions about health care, and women, and
unemployment. And clearly they have done some ground--and she
has done some ground-breaking work here on health care with
women and children and how a lack of health care has an
inordinate impact on them. But I was getting back to these
unemployment rates.
The First Lady of California was out here a week or so ago
talking about at some point here more women are going to be
employed than men in the workforce. And maybe you do not have
those numbers are your fingertips because it is not
unemployment numbers, it is employment numbers. Is that
possible? And maybe it was just in certain quintals.
Commissioner Hall. Actually I do have that data.
Senator Klobuchar. Okay.
Commissioner Hall. Right now, men have been losing jobs 3
to 1 versus women, and there was been a large job loss. So part
of what that means is the women's share of payroll jobs has
been growing pretty steadily.
It is now up to 49.8 percent of jobs are now held by women.
Senator Klobuchar. Right.
Commissioner Hall. Which means that 435,000 more men are
currently employed than women in payroll jobs.
Senator Klobuchar. Is that why one of my letters, that I
will not read to you, referred to this as the ``man-session''
instead of recession? This letter we do not want to read here.
But--So you have, you have, while women have taken an
inordinate amount--I think I agree with these statistics they
found because they tend to be there's more women with kids and
with the lack of health care suffer more because of it--we
still are seeing growing employment rates of women. And you see
more men losing their jobs out of this? Is that what you are
saying?
Commissioner Hall. Yes. Yes.
Senator Klobuchar. All right, and why is that, do you
think?
Commissioner Hall. You know, it probably has got to start
with representation in particular industries that are hardest
hit. You know, because construction and manufacturing are
particularly hard hit this recession, and men are over-
represented there.
Senator Klobuchar. And so that is where we have a lot of
the Stimulus money going, of which only a quarter of that money
has hit yet. So presumably that could help with that particular
sector? Is that right?
Commissioner Hall. Potentially.
Senator Klobuchar. I could have it come from a question
from one of my constituents and it would be easier.
The last thing I wanted to ask about was the importance of
discouraged workers. You talked about that in your opening a
little bit. These are people who want to work full time but can
only find part-time work, or people who want to work but have
not been looking lately, for whatever reason. Are both of those
categories in the Discouraged Workers group? Or is it just
people that have not been--have sort of given up looking for
employment?
Commissioner Hall. Well we have something called marginally
attached, which are people who want to work and have looked
within the past year but have not looked lately.
Senator Klobuchar. And how are their numbers going?
Commissioner Hall. That number has gone up quite a bit. We
are now something like 2.3 million people who are marginally
attached. So these people are not counted in the unemployment
rate.
Senator Klobuchar. Right. And have their numbers gone up
each month? Like what was their number last month? What was
their percentage increase from the month before?
Commissioner Hall. That is tough for us because this number
is not seasonally adjusted.
Senator Klobuchar. Oh, I see.
Commissioner Hall. So there are seasonal things that change
it.
Senator Klobuchar. Because I am just wondering if maybe a
number of these people have become marginally attached. It
seems like it is sort of a cold description of them, but they
have tried to work--they have tried to look for employment;
they have given up, and they are out of your unemployment
numbers? Is that right?
Commissioner Hall. That's right. Although we do catch them.
We do have a very broad measure of labor utilization that
includes--underutilization--that includes them.
Senator Klobuchar. Okay. Very good. Well I want to thank
you. I am going to have to head out to do some other things,
but I again just wanted to remind people of what people are
still--despite this some good news here this month--people
still continue to suffer.
I just want to end with a letter we just got this week from
a guy in Minnesota. He says:
My wife lost her job last August as her company shut her
building down and moved all the jobs to Boston. She was the
major breadwinner in our house and has not been able to find a
job since. She has applied numerous places but can't find
anyone to hire her. We got a statement in the mail today saying
that our house value has dropped from $194,700 to $174,000, yet
we still owe over $190,000 on the house. We have a 14-month-old
daughter and soon unemployment will end and we are really
scared about what's going to happen.
So I continued to be reminded that, while we have seen some
stabilization, and there clearly are glimmers of hope in this,
and people have been incredibly determined in my State to start
businesses and keep going, we still have a lot of people in our
country that are hurting.
Thank you very much, Commissioner Hall.
Chair Maloney. Thank you, Senator.
Some of my colleagues have talked about the report that the
Joint Economic Committee released yesterday showing that 1.4
million women have lost their health insurance during this
economic downturn due to losing their job, or their spouse
losing his job.
We know that employers are looking at ways to cut costs,
and many of them are eliminating health insurance coverage. I
would like to know, Commissioner, do you have any idea on the
loss of employer-based health coverage due to budget-cutting
during this recession?
Commissioner Hall. We don't collect direct data on that
very often. There is an Annual Benefits' Data release once a
year that does talk about that. Right now the most recent data
is I think for 2007. We are not going to get 2008 until this
fall.
Chair Maloney. When will you have this?
Commissioner Hall. It is actually a report that Census puts
out in the fall. I think it is September or October, where they
talk about health care coverage.
Chair Maloney. Okay.
Commissioner Hall. We do have data on benefit availability
by industry. That does not really tell you how many people have
lost their health insurance, et cetera.
Chair Maloney. But can it tell you if certain types of
employees are more vulnerable than others because they are
employed in certain businesses that are losing jobs. Or, for
example, are part-time workers and lower wage workers at higher
risk due to the cost-saving measures that some of their
employers may be taking to cut health insurance coverage at
this time.
Commissioner Hall. Yes. Our detailed benefits data is going
to come out fairly shortly for March, but in general I can tell
you that right now 85 percent of full-time employees have
access to health care, and only 24 percent of part-time
employees have access.
So one of the things that you obviously see during a
recession is a shift from full-time to part-time work, so you
have health care issues there. And full-time employment, so far
this recession has fallen by nearly 9 million people. So this
is pretty significant, when people obviously go to either no
coverage or part-time work which only has 24 percent coverage.
Chair Maloney. And many employers have told us that the
rising cost of health insurance is simply unsustainable. Do you
believe that the high health insurance costs are contributing
to the slack labor market?
Commissioner Hall. I would imagine they are. You know, for
me the most obvious impact is on wage growth.
Chair Maloney. Do you have any data on how that might
impact on wage growth?
Commissioner Hall. Sure. There are some studies--rather
than data, there are some studies that have looked at the
likely impact on wage growth, and are pretty consistent I think
in sort of showing that when health care costs go up wage
growth slows. It sort of takes away from wage growth.
We do collect lots of data on benefits, but we don't do
that much on what's causing benefit growth to decline.
Chair Maloney. Well could you give to the Committee the
reports that have come out on that particular area so we could
study the impact on wage growth and the high cost of employer-
based insurance?
Commissioner Hall. Sure.
Chair Maloney. I would like to get back to one of the
questions from my colleague, Mr. Cummings. Is there a positive
feedback effect in labor markets? Is there a positive feedback
in labor markets because of the moderation in decline in
unemployment? And does that increase consumer confidence, and
therefore lead to more sales, and spur businesses to hire more
workers?
What is the positive feedback? Do you monitor any of this
in the labor market?
Commissioner Hall. It is sort of what you always see. You
know, when the economy turns bad, consumers start to lose
confidence and stop spending. Then the lack of spending means
people lose jobs. And people who lose jobs stop spending.
So what we are talking about now hopefully is the reverse:
if spending starts to increase, job loss will decline. Job-loss
declines will increase confidence and you will have this
feedback.
Chair Maloney. My time has expired. Mr. Cummings.
Representative Cummings. Thank you, Madam Chairwoman.
Mr. Hall, first of all I want to thank you for your
testimony. Just one question, and then a comment. We know that
during a recession more people will turn to higher education to
get graduate degrees and what have you.
Does this show up in any of your data in any way? For
example, young college graduates who could not find work so
they decide to stay in school? Would you have that data, any
kind of data like that?
Mr. Rones. Right now, the share of high school graduates
who go on to college in the fall is I think at 69 percent,
which is about at the highest ever. So that is partly--the
trend has been rising, that as more and more people have been
going to college, partly as a reaction to the statistics we've
talked about, about how much more successful people who go to
college are in terms of higher earnings, lower unemployment--
but also it is probably the case when the job market is this
bad there are people who otherwise might have worked who go on
to college, or some other type of formal training because they
are not really doing anything. But the participation in
college, both two and four-year colleges, is at record highs
now.
Representative Cummings. I see. And that is all the more
reason why the GI Bill that I talked about a little bit earlier
is so important, because that is another thing that--another
thing that people do not seem to realize, that we have a lot of
colleges--I sit on the board of Morgan State University, HBCU
in Baltimore, and what we have found is there are a lot of
students, because of the economic situation in the country
today that do not have the money to go to school. They do not
have the money.
So when you have a GI Bill which is going to pay tuition
fees and board, then those schools can then appeal to those GIs
to come back to school; then those are people that come walking
in the door with the tuition check and board check right in
their hand.
And of course that keeps your--in Maryland what we have
found is that we had our, just about all of our schools now
have had to cut back with regard to employment of our
professors and workers because of the fact that the money is
beginning to simply dry up. And then of course with Endowment
problems because of the recession, that does not help matters.
Did you have a comment, Mr. Hall? You look like you need to
say something?
Commissioner Hall. I am just agreeing with you.
Representative Cummings. Oh, thank you. Thank you, very
much.
You know, just in summary, because I have got to go myself,
but I think that there is a glimmer of hope here. And I think
that what we are seeing is a lot of things beginning to, slowly
but surely, work together. And this is a trend, this downward
trend I think they said, was--we have not seen that since 2008?
Is that right? This downward trend, Mr. Hall, with regard to
the unemployment?
Commissioner Hall. Oh, right. Right.
Representative Cummings. Is that right?
Commissioner Hall. Yes. Although I would say it is
flattening, but we have not seen a flat unemployment rate since
early 2008.
Representative Cummings. Early 2008. So it has been awhile.
And I guess what I'm trying to say, you know it is so easy for
us to look at the glass half empty as opposed to half full. And
I think that when it comes to these kinds of issues, we have to
be careful that we are not overly optimistic. But at the same
time, when we are talking about consumer confidence, when we
are talking about giving people hope, and we are praying that
they will go out there and, you know, spend--if they can, we
want them to save--but also spend because that keeps the
economy going, I think it is very important that we look at
these things and say: You know what? We are going in the right
direction. We are definitely not seeming like we're falling
backwards; we are going forward.
And although we may be going forward very slowly, we may be
inching along, it reminds me of an insect I saw in my house the
other day. It's a little, tiny insect and when I looked one
time it was on one wall, and the next time it was over there on
the other wall. In some kind of way those little--in some kind
of way it got all the way around to the other wall.
My point is that we may take small steps but, as they say,
a journey of a thousand miles begins with the first step. And I
want to make sure that, you know, that we don't just poo-poo
what we have been able to accomplish thus far. Because I think
we in leadership, if we are not careful, can help people not
feel the confidence, not feel the optimism that perhaps they
might want to at least begin thinking about.
So with that, Mr. Hall, I want to thank you, and I want to
thank both of you gentlemen, Mr. Rones and Mr. Horrigan, for
your--and your department. We rarely thank--we thank all the
people that back you all up, but we thank you also. Have a good
month.
Commissioner Hall. Thank you.
Chair Maloney. Thank you very much, Mr. Cummings, for your
participation today and your insightful comments.
Commissioner Hall, in my home State of New York the
unemployment rate was 8.7 percent in June, a jump of 3.4
percent points from last June. And in New York City it jumped
to 9.5 percent in June. And are these changes similar to the
changes in the national unemployment rate?
Commissioner Hall. Yes, they are.
Chair Maloney. On the national level we have seen a
deceleration in the pace of job losses in recent months. How
does that compare to the payrolls of New York State and the
payrolls of New York City?
Commissioner Hall. I think, especially the State, for a
number of years now it has followed very closely with the
national numbers. I think New York State has a very diverse
economy like the U.S. economy. So the pattern has been very
similar.
Chair Maloney. And what have been the largest declines in
New York State?
Commissioner Hall. In terms of what industries?
Chair Maloney. Job loss.
Commissioner Hall. I should have that, but I don't have it
in front of me; I'm sorry.
Chair Maloney. Would you get it to me later?
Commissioner Hall. Yeah, I can. [The information was not
availabe at the time of publication.]
Chair Maloney. And how has New York State fared, compared
to the nation as a whole, during recessions?
Commissioner Hall. Again, lately, it's been fairly close to
the national numbers. The last couple of recessions have sort
of jobless recoveries, where the delay in the labor market
took--created a problem, where the labor market took a while to
recover.
I think that's been pretty much the same for New York, so,
you know----
Chair Maloney. And do recessions typically last longer at
the state level? You could use the example of New York or any
state. Are recessions longer at the state level, would you say?
Commissioner Hall [continuing]. You know, it depends upon
the state. Some states, especially smaller states, can look
rather different than the national numbers, over time. In fact,
I would say that during much of the 2000s, there's a state or
two that probably has been in a recession for quite awhile in
this country.
Chair Maloney. What about New York?
Commissioner Hall. But New York has not; New York has
followed pretty closely with the national numbers.
Chair Maloney. Could you give us some insight on the effect
of trade on jobs? There's tremendous concern about the
outsourcing of jobs to other countries, and other reports that
say trade builds jobs in our country.
Are you tracking the connection between trade and the job
loss or job gain in certain industries? Do you have any reports
on that?
Commissioner Hall. We don't, and it turns out that that's a
rather difficult thing to do, because at the factory level,
once something's produced, quite often that establishment
doesn't really know where it goes.
And in respect to imports, for example, as well, when a
product hits the U.S. shores at Customs, we actually lose track
of where it goes, so we don't actually know how it impacts or
how it's used inside the United States. So it's very difficult
to connect job growth and loss with trade, specifically.
There are some studies that will do that. I know the
Department of Commerce has done a couple of studies on that.
Chair Maloney. Well, we would like to see those studies,
and I would like for you and your staff to look into how we can
track that and how we can see whether jobs grow or are lost. I
am told that one financial company just built a financial
services item in another country, and yet they were saying it
is creating over 500 jobs in the U.S., due to the support
services and the data collection.
The fact is the world is flat and we are in a global
economy. I believe we have to move to the 21st Century and
start tracking how trade affects job growth or loss, and,
specifically, you can track if a plant closes; you lose those
jobs, that's very clear. I would think that with the changing
world economy, you would look into this. Do you think you'll be
able to do that?
Commissioner Hall. I'll think about it and see what we can
do. I really do think that this is an issue. The statistical
system doesn't do enough to collect data related to trade, to
get the issues like offshoreing, I mean, and that sort of
thing.
I'll take a look and see what we've got. It's going to be--
it would be difficult.
Chair Maloney. Often temporary help is a leading indicator
of an employer's willingness to hire. How many jobs have been
lost in the temporary help industry since the recession began?
Do you see any indications that job losses in the temporary
help industry are slowing and when was the last time that the
temporary help industry saw this level of job losses?
Commissioner Hall. So, this recession so far, temporary
help services has lost 844,000 jobs, so it's pretty
significant. There has been substantial improvement in the job
loss. This last month, temporary help services lost just 10,000
jobs, compared to 844,000 since the recession began.
We've never seen job loss like this before, but the
temporary help industry has changed quite a bit. It is now
something on the order of nearly 1.7 million people who are in
temporary help now. In 2006 it was at the peak. We've dropped
from that, but just as recently as 1990, it was a one-million
person industry, so it's really grown quite a lot and it's
changed a lot.
That's a long way to say it's never--we've never seen a
drop like this before, but, then again, temporary help has
never been as big as it is right now.
Chair Maloney. With the financial indicators indicating
we're heading in the right direction, do you think we have seen
the worst in this whatever you want to call it? Recession?
Depression? Or compression?
I think I'd call it the Great Compression, with the job
losses and the shrinking of leverage.
Commissioner Hall. Certainly the trend is encouraging. I
don't want to sort of predict, because it's like anything else,
things can change going forward, but the trend right now is
encouraging.
Chair Maloney. Well, let's end with some positive news: The
trend is encouraging. Thank you for your testimony and your
hard work. This hearing is adjourned.
[Whereupon, at 10:55 a.m., the hearing was adjourned.]
SUBMISSIONS FOR THE RECORD
Prepared Statement of Representative Carolyn B. Maloney
Evidence that the stimulus bill is taking hold is starting to
emerge.
The economy dramatically improved in the 2nd quarter of this year,
and the pace of job loss has moderated significantly in recent months.
After averaging close to 700,000 jobs lost each month for the first
quarter of 2009, job losses have been half as large over the past three
months and the unemployment rate has been stable for the last two
months.
Clearly, the trend is toward recovery.
I am optimistic that more Americans will be heading back to work as
more stimulus projects get underway.
While we welcome these signs of improvement, this morning's
employment report reminds us of the high toll that the recession has
had on millions of working Americans.
This recession, which began in December 2007, is now the longest
and deepest in the post-world War II period. Although the economy is
predicted to expand later this year, the duration of this recession has
led to long spells of unemployment for some workers.
With six unemployed workers for each job opening, those out of work
are finding it increasingly difficult to secure a job.
More than one-third of the unemployed, a staggering 5 million
Americans, have been without a job for at least 6 months.
It is the highest on record, in both percent and the sheer number.
Over 2.3 million workers have been unemployed for a year or longer.
The National Employment Law Project estimates that, by the end of
September, more than 500,000 workers who lost their jobs through no
fault of their own, will exhaust their federally funded unemployment
benefits before finding a job.
By the end of the year, the number could grow to 1.5 million.
For many, those weekly benefit checks are the ever-so-thin cushion
that allows them to keep up with their utility bills, stay current on
their credit card bills, and meet basic necessities.
Congress and the President worked swiftly to expand and extend the
unemployment insurance program for the thousands of workers losing
their jobs each month.
We funded up to 20 additional weeks of benefits at the state level
through the Extended Benefits program.
The Emergency Unemployment Compensation program also provided up to
an additional 20 weeks of federally-funded benefits for workers in all
states, and an additional 13 weeks for laid off workers in states with
exceptionally high rates of unemployment.
Many jobless Americans are receiving an additional $100 each month
due to provisions in the Recovery Act.
But, for many of these unemployed workers, it is not just the
income that they have lost. For millions of jobless Americans and their
families, health insurance benefits have evaporated or may stop.
The Joint Economic Committee released a report yesterday estimating
that 1.4 million women and 2.7 million men have lost their employment-
based health insurance because of job losses during the recession.
Today's jobs report makes it clear--we are making progress, but it
will be a long road to recovery.
By extending unemployment benefits, we will give out-of-work
Americans across the country some peace of mind as they continue to
search for work.
By passing health care reform, millions of uninsured Americans will
have access to affordable health insurance benefits, regardless of
their employment status.
I look forward to working with my colleagues in the House and
Senate to act swiftly on behalf of the millions of unemployed Americans
across the country.
__________
Prepared Statement of Senator Sam Brownback, Ranking Republican
Thank you Chairwoman Maloney for arranging today's hearing and
thank you Commissioner Hall for testifying today.
Unfortunately, today's employment report on labor market conditions
in July brings more bad news: employers shed 247,000 payroll jobs and
the unemployment rate stands at 9.4%. While the pace of job loss has
receded, and the unemployment rate has edged down, labor market
conditions remain weak and American families are hurting. In total, we
have lost 6.7 million payroll jobs since the beginning of the
recession. Behind these numbers is a great deal of dislocation, pain,
and suffering in American families.
I am concerned about the way that the Federal government is
addressing the economic downturn and, in particular, the lack the lack
of focus on jobs and the growing ranks of unemployed workers and
families losing their homes to foreclosure. Earlier this year, Congress
and the President set up a $787 billion so-called ``stimulus'' plan,
filled with hundreds of billions of government spending that was to be
distributed in a timely, targeted, and temporary manner. Yet, the money
has not gone out the door in the timely manner necessary to help our
economy now. Rather, only a little over 10% of the $787 billion in
stimulus has been spent, and the remainder will be slowly spent over
the coming months and years, when our economy will presumably already
be expanding.
Additionally, the stimulus was not adequately targeted towards job
creation and foreclosure prevention which are weighing heavily on the
economy. Instead of preventing job losses and foreclosures, the bulk of
stimulus money is being used to fund long-term investment projects,
some of which will not be ``shovel ready'' for years. This is not
temporary stimulus, this is long-term government spending. Thus far,
the stimulus has failed on all three fronts: funds have not been spent
in a timely manner; spending has not been targeted to employment and
foreclosure prevention; and the vast array of long-term infrastructure
projects are in no way temporary.
During the depths of the recession, Congress has been debating a
health care overhaul that does nothing to reduce health care price and
cost inflation, but seems only to promise massive increases in
government deficits and debt and increases in taxes on businesses and
American families. Congress has also been debating ``cap and trade''
schemes to reduce carbon emissions, which will surely increase energy
costs for businesses and American families. While health care and
carbon emissions are serious issues to consider, what we have done to
date seems mostly to have generated increased uncertainty, in the midst
of a deep recession, for businesses and families about their future
health care costs, energy costs, and taxes. Raising the specter of
trillions of dollars of increased government spending on health care
and an increase in energy costs and higher future taxes in the midst of
our deep recession seems to be anything but stimulative.
If you believe in providing debt-financed stimulus to the economy,
I believe it should at least come on line and produce effects when it
is needed, which is now. To the many Americans who are ``paycheck
ready'' today, what good, in terms of stimulus, is a road that will not
be ``shovel ready'' and built for years to come? There are unemployed
workers who need relief now. There are unemployed workers who are
losing their homes to foreclosure now. There are employers, struggling
in the face of reduced demand for their products, who find now that
they simply cannot make it economically with their existing workforce,
and they are forced to lay more people off. And as the ranks of the
unemployed grow, more and more families are finding it difficult or
impossible to hang on to their homes and they are suffering through
foreclosure actions now. These Americans do not need to have a road
built in 2013, they need help now.
I voted against the stimulus because it simply contained too many
deficit-financed, long-term spending projects that are difficult to
think of as economic stimulus. The stimulus provides only minor tax
relief. Yet cutting taxes takes very little time, and time is of the
essence in trying to stimulate the economy. Lack of tax relief in the
stimulus was and is disappointing. Some of the long-term infrastructure
spending in the massive stimulus could very likely be sound investments
for the American economy. However, such investments should be made
according to careful cost-benefit analysis on a project-by-project
basis. That is not what was done in formulating the stimulus. Rather,
there was a rush to spend and a rush to run up deficits and debts even
further. For the sake of American workers and their families facing job
loss today, or who are unemployed, or who are losing their houses to
foreclosure, we should redirect stimulus efforts today.
My concern today is with continued job losses, growth in the number
of American workers who are unemployed, and growth in the number of
American families who are losing their homes to foreclosure. We seem to
be moving in the wrong direction by adding uncertainty to decisions
that American families and businesses need to make as they plan for the
future. The direction we are taking threatens to lengthen the recession
and work against a recovery in the labor market. The direction we are
taking has been one of adding to uncertainty--uncertainty about future
health care costs by pushing for bigger and more expensive government
intervention in the name of reform; uncertainty about future carbon
costs inherent in a cap and trade emission scheme that threatens
American jobs; and uncertainty about future taxes and national debt.
I look forward to the testimony of Commissioner Hall.
__________
Prepared Statement of Representative Kevin Brady, Senior House
Republican
I am pleased to join in welcoming Commissioner Hall before the
Committee this morning.
It is welcome news that the unemployment rate in July did not rise
further. However, as job losses appear to be slowing, the loss of an
additional 247,000 nonfarm payroll jobs in July is somber news. The
unemployment rate remains far above projections by top Administration
economists that the rate would peak at 8 percent if the stimulus were
adopted. The current rate of 9.4 percent reflects the serious facts
that 14.5 million Americans are unemployed and the number of long term
unemployed rose by 584,000 to a total of 5 million people.
There are signs that the recession is bottoming out and that
production may increase to replenish inventories, but the economy
remains in dire condition. Mortgage delinquencies and home foreclosures
are rising fueled by high unemployment. The prospects for sustained
economic growth are far from clear. The ``stimulus'' adds to the
deficit while employment and GDP will be lower and the debt-to-GDP
ratio higher than the Administration projected, and the far-off claim
that stimulus policies are creating a significant amount of jobs is
greatly out of touch.
Under Administration policies, excessive budget deficits, a
spiraling federal debt, tax increases, and the prospect of inflation
are putting the long-term economic recovery at risk. The increased
weight of government on a weak economy only raises the challenges of
restoring vigorous, sustained economic and job growth in the years
ahead.
__________
Prepared Statement of Keith Hall, Commissioner, Bureau of Labor
Statistics
Madam Chair and Members of the Committee:
Thank you for the opportunity to discuss the employment and
unemployment data we released this morning.
Nonfarm payroll employment decreased by 247,000 in July, and the
unemployment rate was little changed at 9.4 percent. Payroll job losses
over the past 3 months have now averaged 331,000, compared with an
average of 645,000 over the prior 6 months. Employment has fallen by
6.7 million since the start of the recession in December 2007. In July,
employment declines continued in many of the major industry sectors.
Construction employment fell by 76,000 over the month, with losses
throughout the component industries. Over the past 3 months, job losses
have averaged 73,000 compared with 117,000 over the prior 6 months.
Employment in construction has fallen by 1.4 million since December
2007.
Manufacturing employment also continued to decline, with a loss of
52,000 in July. Factory employment has fallen by 2.0 million since the
start of the recession.
The seasonally-adjusted employment estimate for motor vehicles and
parts rose over the month (28,000). Because layoffs in auto
manufacturing already had been so large, fewer workers than usual were
laid off for seasonal shutdowns in July. Thus, the seasonally-adjusted
gain does not necessarily indicate improvement in the industry.
Employment in motor vehicles and parts manufacturing has been on a
long-term decline. The number of jobs in the industry, 661,000, is now
half what it was early in 2000.
In July, job losses continued in wholesale trade, transportation
and warehousing, and financial activities. However, these industries
have lost fewer jobs on average since May than during the prior 6
months. Similarly, job losses have lessened substantially in temporary
help services. Employment in leisure and hospitality has been little
changed over the past 3 months. Health care employment grew about in
line with the trend thus far in 2009.
Average hourly earnings for production and nonsupervisory workers
in the private sector were up by 3 cents in July to $18.56. Over the
past 12 months, average hourly earnings have risen by 2.5 percent. From
June 2008 to June 2009, the Consumer Price Index for Urban Wage Earners
and Clerical Workers declined by 1.7 percent.
Turning now to some measures from our household survey, the
unemployment rate in July was 9.4 percent, little changed for the
second consecutive month. The rate had been 4.9 percent when the
recession began. There were 14.5 million unemployed persons in July.
The number of long-term unemployed continued to rise. In July, 5.0
million people had been unemployed for more than 6 months, accounting
for 1 in 3 unemployed persons.
The employment-population ratio was 59.4 percent in July. The ratio
has fallen by 3.3 percentage points since the recession began.
Among the employed, there were 8.8 million persons working part
time in July who would have preferred full-time work. After rising
sharply last fall and winter, the number of such workers has been
little changed for 4 consecutive months.
In summary, nonfarm payroll employment fell by 247,000 in July, and
the unemployment rate was little changed at 9.4 percent.
My colleagues and I now would be glad to answer your questions.
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