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


                                                        S. Hrg. 111-438
 
                THE EMPLOYMENT SITUATION: SEPTEMBER 2009 

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

                                HEARING

                               before the

                        JOINT ECONOMIC COMMITTEE
                     CONGRESS OF THE UNITED STATES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 2, 2009

                               __________

          Printed for the use of the Joint Economic Committee

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                        JOINT ECONOMIC COMMITTEE

    [Created pursuant to Sec. 5(a) of Public Law 304, 79th Congress]

HOUSE OF REPRESENTATIVES             SENATE
Carolyn B. Maloney, New York, Chair  Charles E. Schumer, New York, Vice 
Maurice D. Hinchey, New York             Chairman
Baron P. Hill, Indiana               Jeff Bingaman, New Mexico
Loretta Sanchez, California          Amy Klobuchar, Minnesota
Elijah E. Cummings, Maryland         Robert P. Casey, Jr., Pennsylvania
Vic Snyder, Arkansas                 Jim Webb, Virginia
Kevin Brady, Texas                   Mark R. Warner, 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

                              ----------                              

                                Members

Hon. Elijah E. Cummings, a U.S. Representative from Maryland, 
  presiding......................................................     1
Hon. Kevin Brady, a U.S. Representative from Texas...............     2
Hon. Amy Klobuchar, a U.S. Senator from Minnesota................     5

                               Witnesses

Dr. Keith Hall, Commissioner, Bureau of Labor Statistics; 
  Accompanied by: Dr. Michael Horrigan, Associate Commissioner 
  for Prices and Living Conditions, Bureau of Labor Statistics; 
  and Mr. Philip Rones, Deputy Commissioner, Bureau of Labor 
  Statistics, U.S. Department of Labor...........................     6

                       Submissions for the Record

Prepared statement of Representative Elijah E. Cummings..........    28
Prepared statement of Representative Kevin Brady.................    28
Prepared statement of Dr. Keith Hall, Commissioner, Bureau of 
  Labor Statistics, together with Press Release No. 09-1180......    30
Table titled ``Employment statues of the civilian 
  noninstitutional population by educational attainment, age, 
  sex, race, and Hispanic or Latino and Non-Hispanic ethnicity, 
  September 2009''...............................................    62


                THE EMPLOYMENT SITUATION: SEPTEMBER 2009

                              ----------                              


                        FRIDAY, OCTOBER 2, 2009

             Congress of the United States,
                          Joint Economic Committee,
                                                    Washington, DC.
    The committee met, pursuant to call, at 9:30 a.m. in Room 
106 of the Dirksen Senate Office Building, the Honorable Elijah 
E. Cummings, presiding.
    Representatives present: Cummings and Brady.
    Senators present: Klobuchar.
    Staff present: Gail Cohen, Nan Gibson, Colleen Healy, 
Michael Neal, Annabelle Tamerjan, Andrew Wilson, Chris Frenze, 
and Robert O'Quinn.

 OPENING STATEMENT OF THE HONORABLE ELIJAH E. CUMMINGS, A U.S. 
                  REPRESENTATIVE FROM MARYLAND

    Representative Cummings. The Committee will come to order. 
Good morning.
    I'm pleased to welcome back, Commissioner Hall, this 
morning, though I wish that my presiding over this hearing had 
come under different circumstances.
    As many of you already know, Chair Maloney could not be 
here today, due to her husband's tragic passing over the 
weekend. I'm sure the Committee members will join me and my 
staff in expressing our deepest sympathies. Our thoughts and 
our prayers are with the Congresswoman and her family during 
these very, very difficult days.
    I ask unanimous consent to keep the hearing record open, so 
that Chairman Maloney may include remarks for the record, when 
she resumes her duties. Without objection, so ordered.
    Representative Cummings. Despite 7.2 million jobs lost in 
the current recession, 9.8 percent unemployment, job losses 
have moderated since January. As today's numbers show, it will 
be a long road to recovery, but we are finally seeing selected 
signs of recovery.
    After the first quarter of 2009, when the real Gross 
Domestic Product fell by 6.4 percent; the second quarter 
numbers reveal that GDP fell by only 0.7 percent. Additionally, 
the Institute for Supply Management's monthly index shows an 
expansion in the manufacturing sector for the second 
consecutive month, after contracting from February of 2008 to 
July of 2009.
    Finally, yesterday, I participated in an extraordinary 
hearing of the House Transportation and Infrastructure 
Committee, looking at the Administration's progress in getting 
our projects funded with the American Recovery and Reinvestment 
Act.
    At that hearing, Secretary Ray LaHood, our former House 
colleague, presented tremendous evidence of the benefits 
created by the stimulus, both in terms of improved 
infrastructure and true economic recovery.
    The transportation portion of the stimulus alone has 
created an estimated 122,000 jobs already.
    I want to highlight a few things presented by Secretary 
LaHood, as well as to congratulate the Secretary, President 
Obama, and all the local transportation agencies that have made 
the progress possible.
    Secretary LaHood spoke of nearly $20 billion in stimulus 
funds obligated for projects through the Federal Highway 
Administration. Specifically, he briefed us on the $128-
million, third phase of the Interstate 215 widening project in 
San Bernardino, California, which is on its way to creating 
2,000 jobs in its first year.
    He also noted that Atlanta's Mass Transit Administration 
received $10.9 million as a part of the transit investment for 
greenhouse gas and energy reduction program. The Atlanta 
program will renovate a bus maintenance facility with 
photovoltaic solar power cells, creating energy savings, better 
working conditions for employees, and many new jobs.
    Another success story is the Federal Maritime 
Administration, an agency that falls under our jurisdiction at 
the Coast Guard Subcommittee, upon which I sit and chair. As 
part of the stimulus Small Shipyard Grant Program, the Maritime 
Administration has already issued for grants for $98 million of 
its total $100 million allocated for dry docks, steelworking 
machinery, and other infrastructure improvements.
    Finally, though not part of the stimulus, the Car Allowance 
Rebate System, better known as ``Cash for Clunkers,'' is 
estimated to have created or saved between 40,000 and 120,000 
jobs in the second half of 2009, and not just the auto 
dealership jobs, but the whole United States economy was given 
a boost by nearly 700,000 cars being sold at 21,000 dealerships 
across our nation.
    So as we await Commissioner Hall's testimony on the 
September employment statistics, I'd like to close with the 
acknowledgement that, despite the progress we've made through 
the transportation portion of the stimulus, we know how far we 
still have to go.
    When we faced the most dire of circumstances, we took 
immediate action to provide for those most at risk. However, 
now we must build off of that success and work toward a real 
long-term recovery.
    [The prepared statement of Representative Cummings appears 
in the Submissions for the Record on page 28.]
    With that, I yield to Mr. Brady.

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

    Representative Brady. Thank you, Mr. Cummings. Like you, on 
behalf of the Republican members and the staff of the Joint 
Economic Committee, we would like to express our profound 
sympathy to our Chairman, Carolyn Maloney, and her family, for 
the loss of her husband, Cliff. We will all keep her and her 
family in our thoughts and in our prayers.
    I'm pleased to join in welcoming Commissioner Hall to the 
Committee this morning. The loss of 263,000 payroll jobs and an 
increasing unemployment rate to 9.8 percent is bad news for 
American workers and their families.
    Unemployment is a severe hardship. Even if the recession is 
near its trough, the high unemployment rate is likely to 
persist for many months, if not years. A jobless recovery is no 
recovery for American workers and their families.
    Last January, top Obama Administration economists predicted 
that if Congress were to pass the stimulus bill, the 
unemployment rate would not exceed eight percent. Congress did 
enact the Obama bill, but, unfortunately, as we see once again, 
the stimulus plan did not perform as the Administration had 
predicted.
    Nevertheless, we are all looking for encouraging signs that 
the economy, while contracting, is decelerating that 
contraction. Financial market conditions seem to be improving, 
stock prices are up, and job losses at least are slowing.
    However, personal consumption remains anemic, and business 
and residential investment continue to fall. These factors 
contribute to a very weak and stressed labor market.
    Like others, I'm hopeful that the current recession may 
have run its course. Given the normal lag time between monetary 
actions and the appearance of their effects in the rest of the 
economy, the Federal Reserve's injection of $1.3 trillion into 
the financial markets between September and December of last 
year should boost real economic growth during the second half 
of this year.
    However, liquidity injections or fiscal stimulus, for that 
matter, cannot turn a recovery into a long and strong 
expansion. As the Chief Executive and Co-Chief Investment 
Officer of Pimco, Mr. El-Erian noted that temporary government 
interventions are unsustainable sugar highs. For the U.S. 
economy to enjoy a sustained expansion, instead of slipping 
back into W-shaped recession, the private sector, the private 
sector must once again become the driver of economic growth.
    However, the balance sheets of U.S. families remain damaged 
from the collapse of housing prices and excessive debts 
accumulated during the bubble years. The growth of personal 
consumption is likely to remain tepid, as families increase 
their savings rates to repair their balance sheets.
    Although housing prices may be stabilizing, the large 
inventory of foreclosed homes is likely to restrain housing 
investment for some time. Therefore, a vigorous and sustained 
expansion will depend on a major turnaround in both business 
investment and net exports.
    With regard to business investments and net exports, the 
economic policies of the Obama Administration and the 
priorities of the Congressional Democrats are quite troubling.
    Business people make investment decisions based on their 
expectations of risk and return. In turn, government policies 
affect these perceptions.
    Unfortunately for the American people, the White House and 
Congressional Democrats have simultaneously decreased the 
expected return and increased risk associated with new business 
investment, through their actions and inactions.
    As a result, many firms are delaying investment decisions. 
Since new business investment propels job creation, first in 
manufacturing equipment, designing the software, building the 
structures, and then in hiring new employees to operate the 
equipment, the business investment created, these delays add to 
unemployment and they delay the recovery.
    Higher income tax rates and higher taxes on capital gains 
and dividends will begin in 2011. Congress has not yet moved, 
though it is the end of the year, to extend the Research and 
Development Tax Credit and the Homeowners Tax Credit, as well 
as increase the net operating loss carryback time from two to 
five years.
    These tax policies slash expected returns, causing firms to 
forgo job-creating investments. For example, one major 
corporation, which spends close to $10 billion per year on R&D 
to pursue cutting-edge technology, may lay off some of its 
researchers if Congress does not act to renew the R&D Tax 
Credit soon.
    Confusion about Cap-and-Tax and healthcare legislation adds 
to uncertainty, further depressing business investment. 
Business people fear the additional energy costs associated 
with the Cap-and-Tax bill that passed the House, and aren't 
sure of what the Senate may do.
    The multiple healthcare bills of the Democrats leave 
business people confused about what additional taxes firms, 
especially small businesses, may pay, or what regulatory 
burdens they may now bear.
    The prospect for a sustained boost from net exports is also 
dim. The Doha Round of trade liberalization negotiations at the 
WTO remains stalled. Three pending free-trade agreements with 
Colombia, Panama, and South Korea have not been acted upon, 
although recent studies show that they could cumulatively 
create 500,000 new jobs within the country--our country.
    Moreover, the President has proposed a number of very 
counterproductive tax increases on U.S. multinational 
corporations that create American jobs through foreign sales of 
our American-made goods and services. In one corporation, for 
example, American sales generate only 25 percent of their 
revenues, but nearly one-half of its jobs are located in the 
United States.
    The President's international tax proposals are, in my 
view, naive. They would reduce U.S. exports and jobs in export-
related industries.
    The U.S. economy must move from the sugar high of 
unsustainable government intervention, to sound, private-
sector-led growth. Given the ongoing weaknesses in personal 
consumption and the housing sector, business investment in net 
exports must lead the way if the unemployment rate is to fall 
substantially.
    Ironically, many of the policies in Washington today are 
undermining these two private-sector drivers of job creation, 
perhaps condemning American workers and their families to a 
very weak, jobless recovery.
    I yield back.
    [The prepared statement of Representative Brady appears in 
the Submissions for the Record on page 28.]
    Representative Cummings. Thank you very much. The Chair 
recognizes Senator Klobuchar.

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

    Senator Klobuchar. Thank you very much, Mr. Chairman, and 
on behalf of the Senate, I would also like to offer my deepest 
condolences to Chairwoman Maloney and her family. To lose her 
husband that suddenly, in a faraway place, I can only imagine 
how difficult this is for her, and our thoughts and prayers are 
with her family.
    As I was listening to Congressman Brady, I was thinking 
back to January, when we were losing 700,000 jobs a month, and 
I was thinking back to the policies that got us there. We had 
eight years where, basically--there's plenty of blame to go 
around, but deals that no one understood, Wall Street did 
things that everyone agrees now were wrong, and we got to the 
point in this country, where, what was it someone said, Wall 
Street sneezed and Main Street got a pneumonia.
    That's what's been happening in this country, so when I 
look at what got us there, again, I think that both sides of 
the aisle--I wasn't here--should have been doing much more 
about subprimes and regulating those mortgage rates.
    But I am much more interested in looking forward, and, from 
what I've heard from economists, this idea--and we've seen it 
in countries all over the world--of stimulating the economy is 
part of the solution, but, also, getting the credit markets 
going again and then fiscal responsibility on behalf of this 
country, and having middle-class families facing doubling of 
their insurance premiums for healthcare, cannot be the answer 
here, and that's why we're tackling this difficult problem.
    What I want to look at here today, is just where this rate 
is going. We have seen again, some tapering off of the 
unemployment in this country. We know there are certain 
sectors--I know the area in Minnesota, in northern Minnesota, 
mining and home construction, logging, has particularly 
suffered, but I will be interested in asking more about the 
trends we seek across this country.
    We also are struggling in Congress right now, Commissioner 
Hall, with the extension of unemployment benefits. The House 
passed a bill that limited the extension to states that have 
8.5 percent unemployment.
    Coming from an area where we have some regions that are 
significantly below that and some areas of our state that are 
significantly above that, I don't believe that that is the 
answer. So, in the Senate, we're looking at how we can extend 
unemployment benefits to all states, to get at some of the 
people from my state that I've heard from in recent months.
    Someone who wrote in recently from Woodbury: ``I've applied 
to over 500 jobs since last July and have personally walked 
into over 60 companies with resumes in hand. Companies don't 
even get back to me regarding my letter and resume 
submissions.''
    We are discouraged and we are isolated, so we have to 
remember that, while we are starting to see some recovery and 
there have been some dramatic changes and signs of hope all 
over this country, which are good for our economy, and the 
stock market is doing a little better right now, there are 
still many people out there out of work and I am looking 
forward to hearing about the recent data, the trends that it 
shows, so we can look at the facts and not just the political 
rhetoric. Thank you very much.
    Representative Cummings. Thank you, Ms. Klobuchar.
    Dr. Keith Hall is the Commissioner of Labor Statistics for 
the United States Department of Labor. The Bureau of Labor 
Statistics is an independent national statistical agency that 
collects and processes, analyzes, and disseminates essential 
data to the American public, United States Congress and other 
federal agencies, state and local governments, business, and 
labor.
    Dr. Hall also served as Chief Economist for the White House 
Council of Economic Advisers for two years under President 
George W. Bush, and, prior to that, he was Chief Economist for 
the United States Department of Commerce.
    Dr. Hall also spent ten years at the U.S. International 
Trade Commission. He received his B.A. Degree from the 
University of Virginia and his M.S. and Ph.D. Degrees in 
Economics from Purdue University.
    It's good to be with you again, Dr. Hall. We will hear from 
you now.

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

    Commissioner Hall. Let me start by saying that on behalf of 
all of us at the Bureau of Labor Statistics, I join with the 
members of the Committee in offering our condolences to 
Congresswoman Maloney and her family. They have our deepest 
sympathy, and our thoughts and prayers are with them.
    Mr. Chairman and members of the Committee, thank you for 
the opportunity to discuss the employment and unemployment data 
we released this morning.
    Job losses continued in September, and the unemployment 
rate continued to trend up, reaching 9.8 percent. Non-farm 
payroll employment fell by 263,000 over the month, and losses 
have now averaged 307,000 per month since May.
    Payroll employment has fallen for 21 consecutive months, 
with declines totalling 7.2 million. In September, notable job 
losses occurred in construction, manufacturing, government, and 
retail trade.
    Construction employment decreased by 64,000 in September. 
Job losses averaged 66,000 per month from May through 
September, compared with an average of 117,000 lost per month 
from November 2008 through April.
    Employment in manufacturing declined by 51,000 in 
September. Job losses in factories averaged 53,000 per month 
over the past three months, about one-third of the average 
monthly decline from October through June.
    In September, retail trade employment fell by 39,000. The 
industry has lost an average of 29,000 jobs per month since 
April, down from an average loss of 68,000 for the prior six-
month period. Employment in government decreased by 53,000 in 
September. Much of the decline was in local government.
    Employment continued to increase in healthcare, by 19,000 
in September. The average monthly job gain thus far in 2009 is 
22,000 compared with an average monthly gain of 30,000 during 
2008.
    Turning now to some of the measures from our household 
survey, the unemployment rate continued to trend up in 
September. The jobless rate has doubled since the start of the 
recession, to 9.8 percent.
    A total of 15.1 million persons were unemployed in 
September, twice the number as at the start of the recession. 
The number of long-term unemployed rose to 5.4 million in 
September. This group has grown more than fourfold since the 
start of the recession.
    In September, the employment-to-population ratio continued 
to decline. At 58.8 percent, the ratio has fallen by 3.9 
percentage points since the recession began, and is at its 
lowest level since January of 1984.
    Among the employed, there were 9.2 million persons working 
part-time in September who would have preferred full-time work. 
While the number of such workers has been little changed since 
March, it has nearly doubled since the start of the recession.
    In keeping with standard practice, we are announcing the 
preliminary estimate for the next benchmark revision to payroll 
employment. The benchmark process annually revises the payroll 
survey's sample-based employment estimates to incorporate 
universe employment counts derived primarily from unemployment 
insurance tax reports.
    Preliminary tabulations indicate that the estimate of total 
non-farm payroll employment for March of this year will require 
a downward revision of approximately 824,000 jobs or 6/10ths of 
one percent.
    The historical average for the benchmark revision over the 
prior ten years has been plus or minus 2/10ths of one percent. 
Most of the additional job loss occurred in the first quarter 
of 2009, when payroll employment was declining most steeply, 
and it appears to be due, in part, to an increase in the number 
of business closings.
    The final benchmark revision will be incorporated into the 
payroll survey, with the publication of January data on 
February 5, 2010. The historical data series will be revised at 
that time.
    In summary, the labor market remained weak in September. 
Payroll employment fell and the unemployment rate continued to 
trend up.
    My colleagues and I would now be glad to answer your 
questions.
    [The prepared statement of Commissioner Hall appears in the 
Submissions for the Record on page 30.]
    Representative Cummings. Dr. Hall, thank you very much. The 
falling of wages, what is the significance of that, Dr. Hall?
    Commissioner Hall. The falling of wages, surely, of real 
wages, would be an indication of a weak labor market, and, 
certainly, that has implications beyond that, because, of 
course, consumers' buying power doesn't grow so quickly that 
way, and so that can have further implications.
    Typically, in recessions, nominal wages continue to rise, 
and they have continued to rise, but the rise in nominal wages 
has slowed a bit; it's only about 2.5 percent right now.
    Representative Cummings. Now, the national unemployment 
rate is 9.8 percent; is that correct?
    Commissioner Hall. Yes.
    Representative Cummings. And for whites, it's--for white 
people, it's 9 percent; is that correct?
    Commissioner Hall. Yes.
    Representative Cummings. And, for African Americans, it's 
15.4 percent; is that correct?
    Commissioner Hall. That's correct.
    Representative Cummings. And Hispanic is 12.7 percent; is 
that correct?
    Commissioner Hall. Yes.
    Representative Cummings. For men, it's 10.3 percent?
    Commissioner Hall. For men, total, it's 11 percent.
    Representative Cummings. Eleven percent?
    Commissioner Hall. Yes.
    Representative Cummings. And how about for women?
    Commissioner Hall. That's 8.4 percent.
    Representative Cummings. Last month, the Council of 
Economic Advisers released their first report on the effects of 
the Recovery Act. According to them, government stimulus 
created between 300,000 and 500,000 jobs in the second quarter 
of this year, and just as many jobs in the first two months of 
the third quarter.
    As I mentioned in my opening statement, I was in a hearing 
with Secretary of Transportation LaHood yesterday, who said 
that many transportation projects had started because of the 
stimulus, and these projects were creating jobs. If I heard you 
correctly, you said that there was a decline in construction 
jobs. Is that right?
    Commissioner Hall. Yes, that's correct.
    Representative Cummings. Well, let me ask you this: Do you 
see any evidence of increasing employment in construction and 
other sectors affected by the transportation in September's 
numbers?
    Commissioner Hall. Yeah, it's hard for us to tease that out 
because we're so based on getting this current level.
    Representative Cummings. Right.
    Commissioner Hall. And our surveys really aren't designed 
to capture the impact of particular policy issues. We're 
actually mostly surveying establishments and just asking what 
their payroll levels are. We don't, at any time, try to ask 
establishments what their levels would have been.
    Representative Cummings. I got you. So the CEA also said 
that the stimulus created jobs in the temporary employment 
services, retail trade, and manufacturing. Is there any 
evidence of this in the September numbers, or would that fall 
into the same category you just said?
    Commissioner Hall. It does fall into the same category, but 
I will say that temporary help services, the job loss there, 
has moderated a fair amount.
    Representative Cummings. And what is the significance of 
that?
    Commissioner Hall. Well, one of the significances of that 
is that's a leading indicator, and often, when changes in 
temporary help services, whether the job loss increases or 
decreases, like it has been lately, that's generally a sign of 
improvement or possible future improvement.
    Representative Cummings. Recently, the Bureau of Economic 
Analysis reported its advance estimate for second-quarter GDP, 
reporting that the GDP declined by 0.7 percent in the second 
quarter of 2009. In addition to this glimmer of hope, they 
reported that personal consumption expenditures rose each month 
from May through August.
    Are 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? Essentially, what is the 
good news, if any, to take from this report?
    Commissioner Hall. Sure. The job loss this month was 
actually fairly reasonably concentrated in four sectors: 
construction, manufacturing, retail trade, and government. 
Outside those four sectors, the other major sectors either had 
very small job loss or approximately zero job loss, so that 
actually is a good sign that the job loss is not so broad as it 
was, say, six months ago.
    Representative Cummings. And those four categories that you 
stated now, what did you say about those?
    Commissioner Hall. That's where most of the job loss this 
month was concentrated. Almost 80 percent of the job loss was 
in either construction, manufacturing, or retail trade or 
government.
    Representative Cummings. And what's the significance of the 
losses in government?
    Commissioner Hall. Well, for government, the notable thing 
about government was the job loss was focused in local 
government. In fact, the job loss is kind of accelerating in 
recent months, and it has been local government. Of the 53,000 
jobs lost in government, 37,000 were in local government.
    Representative Cummings. So that means that our local 
folks, in cities and local towns, are suffering, is that right?
    Commissioner Hall. Yes.
    Representative Cummings. Were there any surprises? I mean, 
what about state government?
    Commissioner Hall. State governments, they are losing jobs, 
as well, but not quite at the pace of local governments. We 
lost about 10,000 jobs in state government this month.
    Representative Cummings. I see. My time is up. I now yield 
to Mr. Brady.
    Representative Brady. Thank you, Mr. Chairman. If I may, 
I'd like to say one thing at the outset: A long-time public 
servant of this Committee has recently decided to retire and 
deserves to be recognized. That's House Republican Staff 
Director, Chris Frenze.
    Chris has been a tremendous asset to both my office and to 
this Congressional body. He joined the Joint Economic Committee 
staff in 1981, and served under 12 different JEC Chairmen in 
his 28-plus years of service.
    He actually first began staffing the employment situation 
hearings in 1982, beginning with BLS Commissioner Janet 
Norwood, appointed by President Carter. Today marks his final 
employment hearing.
    Chris represents the very best in public service, and, 
needless to say, his expertise, vast institutional knowledge, 
and constant professionalism, will be sorely missed. I and 
others wish him the very best. Thank you, Chris.
    If we could have that chart, we were told again and urged 
to pass the federal stimulus, and told, assured that it would 
control unemployment in America.
    [The chart was not available at the time of publication.]
    This chart shows, the blue line shows what was projected by 
the White House and the Economic Advisers, if only we passed 
the stimulus. The red line shows what's actually happened in 
real life.
    We've seen a tremendous increase in unemployment, job 
losses continue, and, ironically, Christina Romer, Chairman of 
the Economic Advisers, sat where you sat and testified that job 
gains would be highest in manufacturing and construction.
    And, in your testimony, as it has been for several months, 
actually, the greater job losses have occurred in manufacturing 
and construction, the very two areas the stimulus was 
proclaimed would have a jolt to America's economy.
    What I think is happening in real life is that you have one 
stimulus that's so small compared to the rest of the economy. 
If the U.S. economy is the size of a football field, the 
stimulus spending so far is about that of the one-yard line, so 
it's hard to claim that that's stimulating the economy.
    The second problem we've got, is that--I meet each Monday 
with a number of our businesses in the Houston region to try to 
determine what they're experiencing and what they're 
forecasting. And, week-in/week-out, even though they are 
different groups, they come to the same conclusion, which is 
that their customers and clients are delaying business and 
investment decisions, waiting to see what Washington will do.
    They're afraid of making key investments in areas where 
they might later see increased energy taxes, increased utility 
taxes, increased taxes on capital gains and dividends, 
increased income and healthcare taxes. They are being--a lot of 
companies think we sell American products around the world, but 
the White House and this Congress has proposed to make them 
absolutely uncompetitive with tax increases that would 
devastate their jobs.
    In my region, the Houston region, we have 340 companies 
that employ 150,000 people, who depend upon some type of level 
playing field to sell our U.S. products around this world, and 
they're not going to make investments if they will be punished 
for actually selling American throughout the world.
    I think that the invisible hand of government, rather than 
the visible hand of the market, is now dramatically slowing our 
recovery and delaying those investment decisions. You see that, 
I think, in unemployment numbers today.
    According to the household survey, employment declined by 
785,000 in September, and, Commissioner, I'd like to ask you to 
put that in perspective. Is that an average or an unusually 
large monthly decline?
    Commissioner Hall. Well, we tend to focus at looking at 
month-to-month employment changes, and we tend to focus on the 
Payroll Survey, since it's a bit more accurate on the monthly 
case.
    But I'd say that, certainly, the payroll job loss at 
263,000, is a little bit better, but roughly in line with the 
past five months.
    Representative Brady. What have the household surveys been 
in the past month?
    Commissioner Hall. Let me see. The household survey--we 
have to look the numbers up for one second here.
    Representative Brady. Is one of the reasons the 
unemployment rate did not increase more in September is that 
those who were no longer in the labor force increased by 
807,000?
    Commissioner Hall. Yes, there was a decline in the labor 
force.
    Representative Brady. So if those people were staying in 
there looking for jobs, unemployment would like be somewhat 
higher?
    Commissioner Hall. Yes.
    Representative Brady. The Administration's model 
simulations claim job growth, even as actual data continued to 
show job losses. Do you know what was the number of unemployed 
in September, and how much has it increased from January? What 
is that number?
    Commissioner Hall. Sure. The total unemployed in September, 
was 15.1 million, and that's an increase of about 200,000.
    Representative Cummings. The gentleman's time has expired.
    Representative Brady. Thank you, Mr. Chairman. Ms. 
Klobuchar?
    Senator Klobuchar. Thank you very much, Mr. Chairman. Thank 
you for being here, Commissioner Hall.
    I appreciate you going through the four areas in which 
we've seen job loss. I think some people, with the recovery 
package, think that all that money went into government 
workers, and I think it will be interesting for them to know 
there's actually been a decrease in government workers. Is that 
correct?
    Commissioner Hall. Yes, that's correct.
    Senator Klobuchar. And I think that's because most of the 
money was used in the private sector. A third of it was tax 
cuts, a third of it was helping with state budget issues, and 
then a third of it was the spending on roads and bridges and 
broadband, which still hasn't gone out yet, and other things 
which essentially went to the private sector, the vast majority 
of it; is that correct?
    Commissioner Hall. I believe so.
    Senator Klobuchar. Okay. The retail trade number, where 
you've seen a decrease in that, is that--you're talking just 
about people buying things?
    Commissioner Hall. Basically, yes.
    Senator Klobuchar. Okay. And I was just reading an article 
about this, that individual spending has gone down as the 
savings rate has gone up. Is that right?
    Commissioner Hall. I believe that's true.
    Senator Klobuchar. Do you see this with other recessions 
that we've had in the past?
    Commissioner Hall. That's a good question. I'm not sure I 
know the answer really well. I believe that's correct. The data 
doesn't come to mind, but that does sound right; people do tend 
to sort of repair their balance sheets, so they might, in fact, 
increase their savings for awhile.
    Senator Klobuchar. And then manufacturing, I think we're 
aware of that issue, and construction, as you've pointed out. 
Is there a trend in parts of the country?
    Say, is the unemployment rate higher in the West or the 
South, or do you see any trend. I know that when you and I have 
discussed this before, it has been sort of a patchwork of 
states; it didn't really have one part of the country that was 
faring worse.
    Commissioner Hall. Sure. I can tell you generally about the 
regions. Of the regions that have been hardest hit in this 
recession, the hardest-hit region has been the West and then 
maybe the Midwest. The Northeast has been maybe the least hard-
hit.
    The West, for example, lost about almost six percent of 
their jobs, while the Northeast lost about three percent.
    Senator Klobuchar. You know, one of the things we're 
debating right now is an extension of the unemployment 
benefits, and there's a proposal out there--well, actually, the 
House-passed proposal says only those unemployed in states that 
have 8.5 percent or over unemployment, will get an extension.
    I got an interesting letter from one of my constituents 
that said that, well, maybe Minnesota's rate is eight percent, 
but at her household, it's a hundred percent. And one of things 
I'm grappling with is that regions, say Wisconsin, next door to 
us, has an 8.8 percent unemployment rate, we're at eight 
percent, yet a region that stretches across both states has a 
similar unemployment rate, and I'm very concerned about this 
cutoff, that we look at it that way.
    It doesn't quite make sense to me. I will say, compared 
with Wisconsin, we did get one more increase in employment in 
Minnesota when we hired Brett Favre from over Wisconsin into 
Minnesota, so that maybe can account for some of the 
difference.
    But I'm just wondering if you've seen this before, and what 
kind of economic--don't make some joke about ``Cash for 
Clunkers,'' because he has turned out to be very good. 
[Laughter.]
    All right, so, what I'm wondering about, what I'd like to 
know, is, in the past, have there been these arbitrary cutoffs, 
and is this the way we should go when states--what kind of 
incentive would we be creating in these states?
    Commissioner Hall. Well, yeah, I don't want to comment on 
the policy aspect, about what----
    Senator Klobuchar. Oh, please do, Commissioner. [Laughter.]
    Commissioner Hall [continuing]. I will say, though, that 
the change in unemployment rates during recessions in states 
clearly depends on the industry mixes in those states, but 
there really does seem to be a state level, you know, where 
some states started with a higher unemployment rate, even 
before the recession.
    So, I don't see a simple story as to which states are going 
to jump up above the level that you talk about, and which 
aren't. I don't see a good way of sort of predicting that 
during a recession.
    Senator Klobuchar. Do you know much about the history of 
these extensions of unemployment benefits, and if they were set 
at a certain rate, which unemployed get them and which don't?
    Commissioner Hall. I don't know very much.
    Senator Klobuchar. Okay. The changes in temporary services, 
I think I read somewhere this morning that your numbers are 
going to show that, actually, they've seen job loss in 
temporary services. Is that right?
    Commissioner Hall. Yes, temporary help services lost 2,000 
jobs.
    Senator Klobuchar. Didn't you tell me before that actually 
an increase in temporary help can be a sign; that that's what 
companies do first, they hire these temporary workers, so it 
can be a good sign that it's going to lead later. So what do 
you think this means?
    Commissioner Hall. Well, this is a moderation, actually, in 
loss in temporary help. In the last five months, temporary help 
has lost something around 9,000 jobs a month, and so 2,000 is a 
little bit of a moderation.
    I would say even a moderation in the job loss in temporary 
help is probably not a bad sign.
    Senator Klobuchar. Okay, so, in other words, it actually 
has moderated?
    Commissioner Hall. Yes.
    Senator Klobuchar. And gotten better, so this argument that 
companies start hiring temporary workers and then eventually 
hire permanent workers could still stand true?
    Commissioner Hall. Yes.
    Senator Klobuchar. Thank you.
    Representative Cummings. Thank you very much. Dr. Hall, I 
just want to talk a little bit about how this economy has 
affected women and people of color.
    In particular, in what industries have women and people of 
color lost the most jobs?
    Commissioner Hall. It varies a bit. African Americans have 
lost a lot of jobs in manufacturing and wholesale trade, in 
terms of percentage--information services, professional and 
business services--it's actually been pretty broad.
    For Hispanics, it's also been pretty broad, as well, 
although their notable job loss probably was in construction, 
more so than other groups.
    Representative Cummings. And we--go ahead. Were you 
finished?
    Commissioner Hall. And, you know, there are some areas 
where there actually hasn't been job loss for certain groups, 
you know, for example, education and health and leisure and 
hospitality, for Hispanics. They actually have had some job 
increase over the past year.
    Representative Cummings. One of the most alarming 
statistics is with regard to African American teen 
unemployment. I think it was up to 40.8 percent in September, 
and that was up from 34.7 percent. Is that correct?
    And, while you're looking, what is the--if that's accurate, 
what is the significance of that?
    Commissioner Hall. Well, that is accurate.
    Representative Cummings. And, normally, I mean, is the teen 
employment rate significant in regard to--I mean, from what you 
can tell--to contributing towards a family's stability, 
financial stability and having the funds to do what they need 
to do to survive and thrive?
    Commissioner Hall. Well, certainly, if African American 
teens are being hit harder by the recession, and they almost 
always are, and the unemployment rate starts probably way too 
high for that group and it's gone up quite a bit, then, 
absolutely, it probably should have implications for family 
finances.
    Representative Cummings. And do you--can you--do you have 
any reasonable explanation for that, in other words, why that 
number--I mean, we're approaching now 50 percent of African 
American teens, and I assume these are people who are ready, 
willing, and able to work, don't have jobs.
    Commissioner Hall. I don't have a good explanation. I'm not 
that familiar with economic research literature that might help 
explain that.
    Representative Cummings. I understand. Has the unemployment 
rate for people of color leveled off, or is it still rising at 
a fast clip?
    Commissioner Hall. Yeah, it's slowed down, pretty much like 
the overall unemployment rate. It's still probably roughly 
going up, but it's moderated a little bit.
    Representative Cummings. And women, in recent decades, an 
increasing proportion of women who are 55 and older are 
working. This trend has continued during this recession, while 
a decreasing proportion of men who are 55 and over are working 
during this recession. Could there be reasons for the 
difference, other than simply the recession has hit male-
dominated industries harder?
    Commissioner Hall. Yeah, there might well be something more 
going on because the differences are fairly surprising.
    Representative Cummings. And why do you say that?
    Commissioner Hall. Well, the big difference for women who 
are 55 and older, their unemployment has doubled during this 
recession, but the employment-to-population ratio, which gives 
you some idea of the labor force participation, that hasn't 
gone down for women who are 55 and older.
    So, really, what we've seen is an increase in labor force 
participation by women of that age.
    Representative Cummings. Could some of that trend have to 
do with the fact that many 55-64-year old women, are married to 
older men who have retired or taken buyouts or are now 
Medicare-eligible; the younger spouses of women ages 55 to 64 
aren't yet eligible for Medicare, though, and because their 
husbands are no longer working, they no longer have health 
insurance through a spouse, perhaps these older women are 
returning to the labor force or postponing retirement, in order 
to obtain health insurance?
    Commissioner Hall. That's quite possible. Our data is not 
going to tease that out and tell you that for sure, but, 
certainly, the data is consistent with that.
    Representative Cummings. My time has expired. Ms. 
Klobuchar?
    Senator Klobuchar. Thank you very much, Mr. Chairman. 
Commissioner Hall, we've talked before about this dramatic 
difference between unemployment with varying degrees of 
education.
    And I was looking to see what the trend is here, and I 
think you've remarked before, that, compared to other 
recessions--and, correct me if I'm wrong--those without a high 
school degree were really socked hard with this recession.
    What is the employment rate now for--let's start with 
college graduates--the unemployment rate?
    Commissioner Hall. Sure. The unemployment rate for college 
graduates is 4.9 percent.
    Senator Klobuchar. That's 4.9 percent, and then what is the 
unemployment rate for high school graduates?
    Commissioner Hall. That's 10.8 percent, which is more than 
double.
    Senator Klobuchar. And then what is the unemployment rate 
for those without a high school degree?
    Commissioner Hall. Fifteen percent.
    Senator Klobuchar. Fifteen percent, and is that relatively 
the same margin we saw last month, or has there been any change 
there?
    Commissioner Hall. It's pretty similar. The unemployment 
rate for less than a high school diploma dropped a little bit, 
but that may not be statistically significant, and there may be 
some issue of folks dropping out of the labor force, as well.
    Senator Klobuchar. Do you have post-college degree 
unemployment rates for people who have an additional degree?
    Commissioner Hall. Yeah, we do, but----
    Senator Klobuchar. I tricked you this time.
    Commissioner Hall [continuing]. We don't have the data with 
us. We can find that.
    Senator Klobuchar. I would like to see that. It would be 
interesting.
    Commissioner Hall. Okay.
    [The table titled ``Employment statues of the civilian 
noninstitutional population by educational attainment, age, 
sex, race, and Hispanic or Latino and Non-Hispanic ethnicity, 
September 2009'' appears in the Submissions for the Record on 
page 62.]
    Senator Klobuchar. I mean, there's just that literally you 
have, you know, not quite double the unemployment rate, if you 
don't have a high school degree, but almost, and then it's 
really above the national unemployment rate, even with a high 
school degree, and then significantly below, if you have a 
college degree. Is that a correct characterization?
    Commissioner Hall. Yes, it is.
    Senator Klobuchar. And you can see why we are so focused 
right now and the President is, on trying to make sure that 
high school students get some college education, and so we're 
going to continue to pursue that. I think it's very important.
    The second thing I always like to ask you about, because I 
think people are stunned when they learn that our soldiers that 
have come back from serving in Iraq and Afghanistan, the group 
that we categorize in the age group who have served in the 
Armed Services since September 11th, 2001, that their 
unemployment rate has been traditionally higher than the 
unemployment rate of your average citizen in the United States.
    So where is that this month?
    Commissioner Hall. Well, for Gulf War Era II Veterans, the 
unemployment rate is 10.6 percent, as opposed to non-Veterans, 
where it's 9.3 percent.
    Senator Klobuchar. And you and I have talked before about 
how--and this was worse, earlier in the year; is that right, or 
is it always just slightly above the national unemployment 
rate?
    Commissioner Hall. It's generally above it. I think----
    Senator Klobuchar. It's always above it, I think. I just 
wonder if it's been more above it.
    Commissioner Hall [continuing]. I'm not sure if it was 
more. In 2009, it's been about the same gap. I'm not sure about 
whether in 2008, the gap----
    Senator Klobuchar. I think there was somewhere it was--
well, it was up further than this percent rate.
    Commissioner Hall [continuing]. Okay.
    Senator Klobuchar. But I think people would be surprised by 
that because we want to make--when those that serve us, come 
home, we want to make sure they have a job, and it's difficult 
because those that left in the middle or the beginning of this 
recession come back and maybe the company they worked for isn't 
there anymore, or they have significantly reduced their 
employment, so that's a change.
    Another thing I wondered about was the discouraged workers. 
These are people who work full-time, who would like to work 
full-time, right, but they can only find a part-time job, or 
people who--is that the characterization of ``discouraged 
worker,'' or does it include those that can't find a job at 
all?
    Commissioner Hall. Yeah, well, there's a broader category 
called ``marginally attached.''
    Senator Klobuchar. Okay, so what's--and you always--what's 
``marginally attached'', again?
    Commissioner Hall. These are people who want to work, but 
they haven't looked within the past four weeks, so they aren't 
counted as in the labor force because they haven't looked 
lately, but they've looked within the past year.
    Senator Klobuchar. So they're not included in this 
unemployment rate?
    Commissioner Hall. No, they're not.
    Senator Klobuchar. So this person I mentioned in my opening 
statement, who had sent out 60 resumes to 60 places and gone to 
all these interviews, if, at some point, she just says, I can't 
do this anymore, and takes a month off from looking, she 
wouldn't even be included in the unemployment rate?
    Commissioner Hall. That's right. The 9.8 unemployment rate, 
doesn't include people who were discouraged or were part-time 
for economic reasons.
    Senator Klobuchar. So, how many--when you include, 
forgetting the marginally attached ones, if you include these 
people that want to work full-time, but are only working part-
time, who have significantly reduced hours and significantly 
reduced money as a result, how--what's the unemployment rate, 
when you include them?
    Commissioner Hall. It goes up to 17 percent. This measure 
includes the marginally attached as well as involuntary part 
time workers.
    Senator Klobuchar. And where is that, compared to the trend 
of the last year?
    Commissioner Hall. That's up significantly. As a change 
over the year, it's up by almost six percentage points over the 
past year.
    Senator Klobuchar. So, do you think it's possible that some 
of these people are unemployed, then found part-time jobs, but 
it's not where they want to be?
    Commissioner Hall. Yes, that's quite possible, yes.
    Senator Klobuchar. All right, very good, thank you.
    Representative Cummings. Thank you very much. Dr. Hall, let 
me ask you, the last month when you were here or the last time 
you were here, you sounded relatively and cautiously 
optimistic. Is that a fair statement?
    Commissioner Hall. Yes.
    Representative Cummings. How would you describe your 
position today?
    Commissioner Hall. I think this report is very similar to a 
couple of months ago.
    Representative Cummings. That's what I thought.
    Commissioner Hall. Yes.
    Representative Cummings. Yes.
    Commissioner Hall. You know, I was a little more 
enthusiastic because it was a clear moderation from prior. Now, 
we're not in an uncommon position where we're at a plateau 
right now, where the job loss is still significant, but it 
isn't as high as it was before.
    Representative Cummings. Now, this ``Cash for Clunkers'' 
program, when you consider that, did you expect to see more or 
less impact as a result of that, or no impact? I mean, did you 
have any idea?
    I know you don't have a magic ball, but, certainly, when 
you see all the commercials and hear all the news, you must, 
considering what you do, I'm sure you had some thoughts.
    Commissioner Hall. Well, in August, we did see pickup in 
employment in automobile dealerships, in particular. We didn't 
see a lot in the manufacturing of cars, but that wasn't 
surprising because a lot of those sales were coming out of 
inventories.
    If there winds up being an impact on production of cars, 
that's likely to come later than when the actual program was 
going on.
    Representative Cummings. So, it would not surprise you if 
there was at least a slight pickup in the future report or two, 
with regard to manufacturing, since, I think they said they 
sold over 700,000 cars?
    Commissioner Hall. That's right, although, again, it would 
be really hard for us to measure that, but that's where I would 
expect to see some sort of impact.
    Representative Cummings. Consumer balance sheets have been 
severely depleted due to the fall in the stock market and 
declining home values. State budgets have been hit hard by the 
decline in income taxes, property taxes, and sales tax 
revenues.
    However, we saw a small increase in personal consumption 
expenditures in May, June, and July. Will personal consumption 
spending help expand employment in the retail sector?
    Commissioner Hall. Yes, it will. It may not happen 
immediately, because, sometimes there's a bit of a delay in 
bringing on employment, so even if consumption picks up, this 
is part of the lagging effect of the labor markets sometimes, 
where businesses will take a little time before they bring on 
employment, even if sales pick up.
    Representative Cummings. And in answering one of Ms. 
Klobuchar's questions, you were talking briefly about saving, 
and what is the significance of people saving? That means, I 
guess, that they're not spending, and that doesn't help too 
much, or does it?
    Commissioner Hall. No, in the long run, it can be, 
obviously, good, because people have to replenish their 
savings, but, in the short run, it can delay a recovery a 
little bit because people are being cautious and increasing 
their savings, rather than spending.
    Representative Cummings. In August alone, all retailers saw 
their sales increase by 2.7 percent, due in large part to a 
10.6 percent boost in sales of the auto dealers. Most 
economists agree that this bump in auto sales was spurred by 
the ``Cash for Clunkers,'' and we saw retail job losses slow 
sharply in August.
    Do you think that there is going to be a continuing slowing 
in the retail job area?
    Commissioner Hall. Yeah, it's hard to say. You know, we 
lost 39,000 this month. We averaged about 28,000 in loss over 
the last five months.
    I would guess that if consumption and retail sales continue 
to stay up, that at some point, we'll see an employment impact.
    Representative Cummings. So, if President Obama called you 
right after you got out of this hearing, and said, Dr. Hall, 
just give me your assessment of where we are, what would you 
say?
    Commissioner Hall. I would say, right now, we're at a bit 
of a plateau, where job loss is significant, but it's nowhere 
near what it was early in the year. In fact, I think the job 
loss now is maybe in the range of something like a normal 
recession, whereas that six-month period where we had 650,000 
jobs lost a month, that was beyond any normal recession; that 
was--in fact, that was unprecedented.
    Representative Cummings. That was like a tsunami-like, I 
take it?
    Commissioner Hall. Yes.
    Representative Cummings. Ms. Klobuchar.
    Senator Klobuchar. Thank you very much. To follow up more 
on this savings issue and this lag, does there come some point 
where consumers, who, I think, smartly, have been saving more 
money and realizing that they have to protect themselves from 
economic downturns, but does there come some point where people 
realize they just have these repairs mounting to their homes, 
or, in my case, the Saturn, where last winter, you couldn't 
even get the window up when it was ten degrees below zero, but 
I still kept it eight years old--is there some point where 
people realize that they have to replace some of these vehicles 
or make the repairs on their house, and they start dipping into 
those savings?
    Commissioner Hall. Yes. You know, this is one of the 
characteristics, I think, of recessions. It's part of why it 
takes awhile for recessions to work out, as people are 
repairing their balance sheets and getting comfortable getting 
back to normal spending levels, but that does always happen.
    Senator Klobuchar. You know, Ben Bernanke, the Chair of the 
Federal Reserve, has been suggesting that our economy may be 
out of recession. He's predicting some growth, although he 
still says that we would see, I think he predicted, above nine 
percent unemployment through the end of 2010. Do you agree with 
those predictions?
    Commissioner Hall. Well, without predicting----
    Senator Klobuchar. I forgot, you do not do that; you 
report.
    Commissioner Hall [continuing]. I will say that is the way 
that has worked in the past recessions; that once GDP picks up 
and income starts to be generated, it does take a little while 
for the labor market to catch up.
    Senator Klobuchar. But I think it is hard for people to 
understand that, while Wall Street is doing better, the Stock 
Market is doing better, to explain how the economy may be 
recovering while job losses really do continue to mount. I 
mean, there are predictions that we are going to see an 
increase in the unemployment, so could you explain this?
    Commissioner Hall. I think a lot of it has to do with what 
we have been talking about with consumers. Consumers have to 
get--I think we need to get consumer confidence back up. 
Consumers have to get comfortable increasing their spending 
levels, getting back to spending.
    And then businesses have to work through their typical 
patterns. One of the things that does really happen in the 
early stages of expansions after recessions is businesses 
sometimes are slow to bring workers back onboard because they 
take productivity gains for awhile. That's part of why we get 
this lagging labor market recovery sometimes.
    Senator Klobuchar. You know one of the areas, when we look 
at government policies that we've undertaken, one of the ones I 
keep hearing about at home is the First-Time Homebuyers' Tax 
Credit; that that has been our realtors who are practically 
cheering that they are able to have, I think in the month of 
June in Minnesota in the metro area we had a 20 percent 
increase over the same month a year before in new-home sales--
or homes sales, period.
    What are you seeing in the housing market? Maybe you do not 
collect that data, but I know there have been some increases 
there. But it does not appear to have yet gone into the new-
home construction.
    Commissioner Hall. Well let me first say that employment in 
real estate actually increased this month by about 6,000, and I 
believe that is the first time in awhile----
    Senator Klobuchar. Oh, that is interesting.
    Commissioner Hall [continuing]. An increase in employment.
    And it does look like the new-home sales, I have looked at 
that data, that it is flat and it may be picking up a little 
bit. There is an issue of inventories, and once sales pick up 
then there are existing-home sales of course that start to go 
on the market.
    In terms of the labor market/construction, I can tell you 
in the past when new-home sales pick up, employment in 
construction takes a while for that to pick up. In fact, it 
takes probably between a year and a year-and-a-half for 
construction employment to start to pick up once home sales, 
new-home sales start to accelerate.
    Senator Klobuchar. All right. Very good. Thank you, very 
much.
    Representative Cummings. Let me ask you this. In talking 
about new-home sales, I assume there would also at some point 
be a relationship between new-home sales and certain 
manufacturing areas such as refrigerators, and stoves, and air 
conditioners, and things of that nature. When do you expect to 
see that with regard to what is happening now with the home 
sales's situation?
    Commissioner Hall. I think the story is probably going to 
be similar. It is a little hard to track all those things with 
new-home sales because, you know, obviously people just replace 
refrigerators; they are not always buying a refrigerator for a 
new home.
    I have not looked at the data. I would suppose it tracks 
reasonably well with new-home construction. Once new-home 
construction starts to pick up, there will be a broader pick up 
in some of these related areas.
    Representative Cummings. If someone watching this right now 
has a BS degree and is out of work and they were watching this 
right now, if you were to tell them where they would have the 
best chance possibly to get a job--because I am sure there are 
a lot of people in that position--based upon what you see and 
what your research shows, what would you say to them? What 
areas would you tell them that they might want to look in? That 
is, geographically. And what kind of jobs might they want to 
look for to have their best chance of getting a job?
    Commissioner Hall. That is a good question because it is 
very hard for me to--it is very hard for me to offer advice on 
that, in part because I have not looked at that really 
carefully.
    Also----
    Representative Cummings. But we do know that there are 
certain parts of the country where the unemployment rate is 
low? Is that right?
    Commissioner Hall [continuing]. Sure. It is lower in some 
places than others.
    Representative Cummings. And wouldn't that have a bearing 
on any kind of information you might put out to them?
    Commissioner Hall. Sure.
    Representative Cummings. All right, well why don't you 
start there.
    Commissioner Hall. Okay, I will do that.
    I can tell you the states that have the lowest unemployment 
rate. In general, the Northeast Region has a lower unemployment 
rate than the rest of the Nation, although it is not a lot 
lower. It is about 9 percent.
    But there are a number of states. There is not a real rhyme 
or reason to it. I will just mention some of the states. And we 
have this up on our web site so people can take a look, but: 
North Dakota, South Dakota, Nebraska, Utah, Virginia, Montana, 
Wyoming, are all the states with the lowest unemployment rates 
right now. And it is a fairly long list of states that have 
below-average unemployment rates.
    Representative Cummings. This whole idea of consumer 
confidence I think is so easy, Dr. Hall, for us to say that the 
sky is falling, and if we say the sky is falling it has a 
tendency to make people believe that the sky is falling, and I 
think it has a tendency to add to the problem sometimes.
    That is, I do not think we should be overly optimistic but 
I think we need to call it like it is. If we are moving in the 
right direction, we need to say that so the American People 
will be clear on that. But we also need to keep in mind, as Ms. 
Klobuchar has so eloquently stated, where we have come from.
    I think it is fair to say that we have come a pretty long 
way, haven't we?
    Commissioner Hall. Yes, we have.
    Representative Cummings. And why do you say that?
    Commissioner Hall. Well, we really have moved into a, at 
least for right now, we have moved into a period where the job 
loss is, again as I said, somewhat like a normal recession. But 
we really did have a six-month period of job loss that was 
absolutely unprecedented. In fact, our benchmark revision come 
January is going to add to that job loss over that period.
    We had a lot of businesses closing down, and that is not 
happening anymore.
    Representative Cummings. And based on the data, what are 
the main differences between the current recession and the two 
prior recessions? For example, do the characteristics of the 
workers who are losing jobs in this recession versus those who 
lost jobs in previous recessions differ?
    Commissioner Hall. Yes. Recessions do wind up affecting 
everybody, but this particular recession was so broad and so 
deep that it probably--it probably impacted all groups more 
seriously than the past couple of recessions did.
    I thought the last recession was rather notable because it 
was a mild recession, but it was actually a recession where the 
consumer spending never really turned negative. So consumers 
actually kept spending through the last recession. In this 
recession, that has not been the case at all. It is one of the 
big reasons why this is so much more severe than the past 
recession.
    Representative Cummings. Mr. Brady.
    Representative Brady. Thank you, Mr. Chairman. I know we 
have a lot of national views from up here on employment, again 
going back to these companies, small, medium, large, that I 
meet with almost on a weekly basis.
    Consistently they say, as I ask them what's happening, 
what's their experience right now in the economy and what do 
they see going forward, you know separately they arrive at the 
exact same conclusions, two of them.
    One is, you in Congress are the problem. Our clients and 
customers are delaying decisions because they see proposals to 
raise energy costs dramatically, to increase utility costs, to 
raise health care costs on every size business. They see 
proposals to raise income taxes on small businesses, and new 
proposals to really punish our U.S. companies that are trying 
to market their products around the world.
    And again, their clients and customers are frozen because 
they are waiting to see what this hand of government is going 
to do. Again, they are convinced we are actually slowing this 
economic recovery.
    Last week I had a manufacturer, a small manufacturer, a 
pretty good-sized construction company, one was an employment 
firm that was telling me they're not seeing the orders for 
part-time employment and rehiring back, not in retail, not in 
manufacturing. I think your numbers today sort of bear that 
out. The index of total private aggregate weekly hours declined 
sharply last month. The total private hours declined overall, 
including in manufacturing.
    They do not see some of those indicators that show that 
people are making those rehiring decisions. Can you sort of 
tell us your observations from the numbers today? Private hours 
are going down, correct?
    Commissioner Hall. Yes, they are.
    I would just say that these numbers still do not show a 
healthy labor market. We are still having significant job loss. 
And although we have most of the job loss in four sectors, the 
weakness is still very broad.
    So we still have some work to do. We still have some 
improvement to go before we see the end of the decline in the 
labor market.
    I would just say one thing, as well, because I think of the 
recession maybe as an illness. There are phases that the 
economy goes through during a recession. And we have been in a 
phase where the job loss has been around 300,000--this month it 
was a little bit less than that--in past recessions there 
almost always has been a phase where the job loss is around 
zero, where it stops for awhile and there is a pause, and then 
the next phase is where you have significant job growth.
    If I were trying to be encouraging to folks, I would sort 
of say that there are normal phases for a recession. I don't 
want to predict, but in past recessions we have gone through 
these phases almost every time.
    Representative Brady. Tell me, in the economy you testified 
here recently that our ability to sell our products around the 
world have been a growing part of the economy up until 
recently. I think last year it was about 60 percent of all of 
our new growth. It is sort of the understanding that it is not 
enough simply to Buy American anymore, we have to sell American 
products and services throughout the world.
    Yet, we have seen a major decline in that. We do not have a 
Trade agenda right now. Other countries, as our businesses tell 
us, are passing America by, signing agreements that give 
advantages to their companies over our American companies. And 
we have a rash of new proposals, one of which is included in 
the House health care bill, that actually punishes companies 
for selling their products around the world.
    We had an example at this meeting where one of our 
companies has a project in Algeria. It employs 28 workers 
there, but there's almost 400 workers back in Houston that 
support that project--designed it, proposed it, operate in a 
sense, monitor it--and they were saying that other countries 
are aggressively courting our investment. You know, they're 
opening up their areas to energy, lowering taxes; yet America 
is doing just the opposite, shutting off our energy resources, 
increasing potentially energy costs, and actually increasing 
taxes on our U.S. companies.
    Do your numbers track jobs created by selling American 
products throughout the world?
    Commissioner Hall. Well in a sense they do. We can't tell 
you where the products are sold from these jobs, but the 
products could go anywhere. They could go in the United States. 
They could go abroad. They could even go abroad and come back.
    Representative Brady. But you don't break out the export 
jobs, do you? We talked about this before. Is there a way--is 
there a model where you can in the future, you know, create, or 
try to make those estimates as you look at--you look at a 
number of different criteria. Is there a way to start tracking 
those things?
    Commissioner Hall. It is very, very difficult. Because if 
you think about it, what we are doing is we are sending surveys 
to establishments. And the people in the establishments may not 
know where their product is winding up. And that gets to be 
very difficult to actually track that information.
    There are some research studies that could--can and could 
be done, but with our particular surveys there is really no way 
for us to separate out the exports.
    Representative Brady. Okay. Thanks, Commissioner; Mr. 
Chairman.
    Representative Cummings. Thank you. Ms. Klobuchar.
    Senator Klobuchar. Thank you very much, Mr. Chairman.
    I was listening to Congressman Brady's questions, and I 
think he and I share a belief that we do need to do everything 
we can to promote more American product exports. I actually 
chair a subcommittee focused on export promotion in the 
Commerce Committee, and we are having a hearing next week.
    But I was thinking about this argument that somehow the 
problems we are having right now and this unemployment rate is 
somehow caused by uncertainty about government policy.
    So the two major areas we have been discussing right now in 
Congress are first of all health care. How is the health care 
sector doing with unemployment?
    Commissioner Hall. The health care sector gained about 
19,000 jobs this month. The last five months it averaged 24,000 
jobs. And even during the worst of the recession, it still 
gained about 25,000 jobs per month. So it has actually looked 
relatively recession proof.
    Senator Klobuchar. So the major sector that we're having 
the major debate about and would be arguably facing the 
greatest uncertainty has actually, in its response to 
government policies, has actually seen increases in employment?
    Commissioner Hall. The health care industry has not shown 
obvious signs of the recession.
    Senator Klobuchar. Okay, how about the energy jobs? How are 
they doing? Because you have not mentioned those before.
    Commissioner Hall. Sure. Let me see here.
    Representative Brady. I'm from Houston. I can tell you how 
our energy jobs are doing----
    Senator Klobuchar. No, I'm just curious.
    Representative Brady [continuing]. But we will let the 
Commissioner answer that.
    Senator Klobuchar. Let's look at the entire country. I know 
in our State we have actually seen increases in some jobs from 
wind, and solar. We actually have gone up in the energy area.
    Commissioner Hall. Yes. I am going to have to get some of 
that information for you, but we do have data on mining 
employment and employment related to things like oil 
exploration, and things like that.
    Senator Klobuchar. Because North Dakota, next to us, has 
one of the lowest unemployment rates? North Dakota? Because I 
know that they are really an energy bastion right now with the 
renewables and also the oil.
    Commissioner Hall. Yes. And we have had significant job 
growth related to energy even during the worst of this 
recession when gasoline prices were high. I think the 
employment--for example, the employment in mining and logging 
this month declined by 1,000, but there have been months where 
for periods it actually grew a bit.
    Senator Klobuchar. And when you look at past recessions 
where we have had--you said to me before that, as Congressman 
Cummings described it, the tsunami, the effect of this 
recession, near depression, at the beginning was just somewhat 
catastrophic compared to other recessions. But as you have 
described this lengthy recovery which is still going on, it 
mirrors some other ones--maybe not in the length; it is going 
to be longer, but you see similar signs? Is that right?
    Commissioner Hall. Yes.
    Senator Klobuchar. And did those other recessions have 
major economic debates hanging over the heads of the citizens? 
You know, health care, and energy, and those things?
    Commissioner Hall. I'm sure they did.
    Senator Klobuchar. Well, maybe, but this argument that 
somehow our problems are caused by the fact that we are 
debating major issues that are affecting the middle class to me 
does not quite make sense. But of course you do not have to 
answer that policy question, Commissioner Hall.
    Commissioner Hall. Thank you.
    Senator Klobuchar. I just wanted to end by saying, first of 
all once again I appreciate the detail that you bring to this 
Committee. It has given me, and I hope the people who are 
watching this on C-SPAN or wherever else, some understanding of 
this issue and the long-term complexities of it.
    From my perspective, what you have told us is that we have 
seen a leveling off of this job loss. However, we are still 
facing significant issues here. And while we are seeing 
recovery in certain sectors and in certain parts of the 
country, we are continuing to see significant unemployed 
people.
    I just, as I always do, want to end with just some of these 
real-people stories as we look at this extension of 
Unemployment Benefits' issue. This is in my State that has 8 
percent unemployment.
    Someone wrote in from Sioux, from Red Wing:
    I am worried, as the winter is around the corner now. I 
have worked all my life, and I am 54 years old. I have now been 
unemployed for 12 months. Where are we to go? We cannot wait 
for years.
    Then a woman named Barbara from Mahtomedi, Minnesota:
    My husband was laid off in March of this year from his 
union construction job and is currently using his Unemployment 
Benefits. Two of our adult children are living with us and are 
looking for work after being laid off. What are we supposed to 
do? My husband has been looking for a job since March.
    So I think we all need to remember that, while some people 
on Wall Street might be recovering, there are plenty of people 
on Main Street that are still going to need help.
    So thank you very much, Commissioner Hall, and thank you, 
Dr. Horrigan, and Mr. Rones.
    Representative Cummings. Thank you very much, Ms. 
Klobuchar.
    I want to first of all thank you, Commissioner Hall, for 
the excellent work that you and your staff do consistently. 
Before I get to my concluding remarks, I too want to thank 
Chris Frenze for all of your service. So often, staff folks are 
unseen, unnoticed, unappreciated, and unapplauded, but they are 
the ones who make the difference on Capitol Hill and in so many 
other places, and they bring the balance, and the information, 
and the things that we need to get our jobs done. And so we 
wish you well, and we thank you very much for your service. 
[Applause.]
    Also, finally let me say this. Yesterday in our 
Transportation Committee hearing with Secretary LaHood, one of 
the things he talked about in the stimulus package, he was 
getting a lot of complaints from his own Party, his Republican 
Party.
    What he said was: Look, I am going out there and I now see 
people who have jobs as a result of the Stimulus. A month ago 
they were drawing Unemployment.
    As I listened to Ms. Klobuchar, I am just reminded that 
there are so many people who are fortunate to have jobs, and 
there are so many people who have lost their jobs, people that 
never thought they would be in this position but they are. But 
the fact still remains that I believe that this President 
constantly reminds us that he inherited a set of circumstances 
that were very unfortunate.
    As one great philosopher once said, it's not the hand that 
you're dealt, it's whether you properly rearrange them to work 
for you. And I believe that that is what we are doing. Will 
that hand yield the results that we want tomorrow, or the next 
day, or next month? Probably not. But we do know that we, based 
upon what I have heard here today and last month, we are on the 
road there.
    One of the things you said, Dr. Hall, and I will finish on 
this, is that these recessions apparently go up and down, just 
like an illness. Sometimes you have some good days, sometimes 
you have some bad days. My father, a former sharecropper, used 
to say: Life is like a caterpillar. Two steps forward. Three 
steps back. Five steps forward. Two steps back. But eventually 
it gets to where it has to go.
    I do believe that if I listened to you very carefully in 
the memory of my father, I think that is how we are proceeding. 
But at least we are going forward, which is good. So again we 
thank you, and with that this hearing is adjourned.
    [Whereupon, at 10:46 a.m., Friday, October 2, 2009, the 
hearing was adjourned.]
                       SUBMISSIONS FOR THE RECORD

        Prepared Statement of Representative Elijah E. Cummings
    Good morning. While I'm pleased to welcome back Commissioner Hall 
this morning, I wish my presiding over this hearing had come under 
different circumstances.
    As many of you already know, Chair Maloney could not be here today 
due to her husband's tragic passing over the weekend.
    I'm sure the Committee members will join me and my staff in 
expressing our deepest sympathies. Our thoughts and prayers are with 
the Congresswoman and her family during these difficult days.
    I ask unanimous consent to keep the hearing record open so that 
Chair Maloney may include remarks for the record when she resumes her 
duties.
    * * *
    Despite 7.2 million jobs lost in the current recession, and 9.8% 
national unemployment, job losses have moderated since January. As 
today's numbers show, it will be a long raod to recovery, but we are 
finally seeing selected signs of recovery.
    After the first quarter of 2009 when the real gross domestic 
product fell by 6.4%, second quarter numbers reveal that GDP fell by 
only 0.7 percent.
    Additionally, the Institute for Supply Management's monthly index 
shows an expansion in the manufacturing sector for the second 
consecutive month, after contracting from January 2008 to August 2009.
    Finally, yesterday, I participated in an extraordinary hearing of 
the Transportation and Infrastructure Committee, looking at the 
administration's progress in getting out projects funded with the 
American Recovery and Reinvestment Act.
    Secretary Ray LaHood, our former House colleague, presented 
tremendous evidence of the benefits created by the stimulus--both in 
terms of improved infrastructure and true economic recovery. The 
transportation portion of the stimulus alone has created an estimated 
122,000 jobs already.
    I want to highlight a few things presented by Secretary LaHood, as 
well as congratulate Secretary LaHood, President Obama, and all the 
local transportation agencies that have made the progress possible.
    Secretary LaHood spoke of the nearly $20 billion in stimulus funds 
obligated for projects through the Federal Highway Administration.
    Specifically, he briefed us on the $128 million third phase of the 
Interstate 215 widening project in San Bernardino, California, which is 
on its way to creating 2,000 jobs in its first year.
    He also noted that Atlanta's mass transit administration received 
$10.9 million as part of the Transit Investments for Greenhouse Gas and 
Energy Reduction program.
    The Atlanta program will renovate a bus maintenance facility with 
photovoltaic solar power cells, creating energy savings, better working 
conditions for employees, and many new jobs.
    Another success story is the Federal Maritime Administration, an 
agency that falls under our jurisdiction at the Coast Guard 
subcommittee.
    As part of the Stimulus' Small Shipyards Grant Program, the 
Maritime Administration has already issued grants for $98 million of 
its total $100 million allocated for dry docks, steel working machinery 
and other infrastructure improvements.
    Finally, though not part of the stimulus, the Car Allowance Rebate 
System (better known as ``Cash for Clunkers'') raised August retail 
sales by 2.7 percent.
    Not just auto sales--all retail sales--were boosted by the nearly 
700,000 cars sold at 21,000 dealerships across America.
    So, as we await Commissioner Hall's testimony on the September 
employment statistics, I'd like to close with something Chairman 
Oberstar said at yesterday's hearing:
    We are taking people off of unemployment rolls and onto payrolls, 
and replacing unemployment checks with paychecks.
    We know how far we have to go--there are 263,000 new reasons this 
month to redouble our efforts toward getting folks back to work.
    But it's equally as important to acknowledge where we have had 
success--like the transportation piece of the stimulus--and identify 
what we can do to build off that success for a long-term recovery.
                                 ______
                                 
    Prepared Statement of Representative Kevin Brady, Senior House 
                               Republican
    I am pleased to join in welcoming Commissioner Hall before the 
Committee this morning.
    The loss of 263,000 payroll jobs and the increase in the 
unemployment rate to 9.8 percent is bad news for American workers and 
their families. Unemployment is a severe hardship. Even if the 
recession is near its trough, the high unemployment rate is likely to 
persist for many months, if not years. A jobless recovery is not a real 
recovery for American workers and their families.
    Last January top Obama Administration economists predicted that if 
the Congress were to pass the stimulus bill, the unemployment rate 
would not exceed 8.0 percent. Congress did enact the Obama bill, but 
unfortunately as we see once again the stimulus plan did not perform as 
the Administration had predicted.
    Nevertheless, there are some encouraging signs that the economic 
contraction is decelerating. Financial market conditions are improving, 
stock prices are up, and job losses are slowing. However, personal 
consumption remains anemic, and business and residential investment 
continue to fall. These factors contribute to a very weak labor market.
    I am hopeful that the current recession may have run its course. 
Given the normal lag time between monetary actions and the appearance 
of their effects in the rest of the economy, the Federal Reserve's 
injection of $1.3 trillion into financial markets between September and 
December of last year should boost real GDP growth during the second 
half of this year.
    However, liquidity injections, or fiscal stimulus for that matter, 
cannot turn a recovery into a long and strong expansion. As the Chief 
Executive and Co-Chief Investment Officer of Pimco Mohamed El-Erian 
noted, temporary government interventions are unsustainable ``sugar 
highs.'' For the U.S. economy to enjoy a sustained expansion instead of 
slipping back into a ``W-shaped'' recession, the private sector must 
once again become the driver of economic growth.
    However, the balance sheets of U.S. families remain damaged from 
the collapse of housing prices and the excessive debts accumulated 
during the bubble years. The growth of personal consumption is likely 
to remain tepid as families increase their savings rate to repair their 
balance sheets. Although housing prices may be stabilizing, the large 
inventory of foreclosed homes is likely to restrain housing investment 
for some time. Therefore, a vigorous and sustained expansion will 
depend upon a major turnaround in both business investment and net 
exports.
    With regard to business investment and net exports, the economic 
policies of the Obama Administration and the priorities of 
Congressional Democrats are quite troubling. Business people make 
investment decisions based on their expectations of risk and return. In 
turn, government policies affect these perceptions.
    Unfortunately for the American people, the Obama Administration and 
Congressional Democrats have simultaneously decreased the expected 
return and increased risk associated with new business investment 
through their actions and inactions. As a result, many firms are 
delaying investment decisions. Since new business investment propels 
job creation, first in manufacturing the equipment, designing the 
software, and building the structures and then in hiring new employees 
to operate the equipment and facilities that business investment 
created, these delays add to unemployment.
    Higher income tax rates and higher taxes on capital gains and 
dividends will begin in 2011. Congress is blocking extensions of the 
research and development tax credit and the homebuyer's tax credit, as 
well as an increase in the net operating loss carry-back time from two 
to five years. These tax policies slash expected returns, causing firms 
to forgo job-creating investments. For example, one major corporation, 
which spends close to $10 billion dollars per year on R&D to pursue the 
cutting edge technology, may lay off some of its researchers if 
Congress does not renew the R&D tax credit.
    Confusion about ``cap and tax'' and healthcare legislation adds to 
uncertainty, further depressing business investment. Business people 
fear the additional energy costs associated with the ``cap and tax'' 
bill that passed the House and are unsure what the Senate may do. The 
multiple healthcare bills of the Democrats leave business people 
confused about what additional taxes firms, especially small 
businesses, may pay or what regulatory burdens they may bear.
    The prospects for a sustained boost from net exports are also dim. 
The Doha Round of trade liberalization negotiations at the World Trade 
Organization remains stalled. Three completed free-trade agreements 
with Colombia, Panama, and South Korea have not been acted upon.
    Moreover, President Obama has proposed a number of 
counterproductive tax increases on U.S. multinational corporations that 
create American jobs through foreign sales of American-made goods and 
services. In one U.S. multinational corporation, for example, American 
sales generate only 25 percent of its revenues, but nearly one-half of 
its jobs are located in the United States. Obama's international tax 
proposals are extremely naive. They would reduce U.S. exports and jobs 
in export-related industries.
    The U.S. economy must move from the ``sugar high'' of unsustainable 
government intervention to sound private sector-led growth. Given the 
ongoing weakness in personal consumption and the housing sector, 
business investment and net exports must lead the way if the 
unemployment rate is to fall substantially. Ironically, most of the 
policies of the Obama Administration and Congressional Democrats are 
undermining these two private-sector drivers of job creation, perhaps 
condemning American workers and their families to a very weak, jobless 
recovery.
    Dr. Hall, I look forward to your testimony.
                                 ______
                                 
    Prepared Statement of Keith Hall, Commissioner, Bureau of Labor 
                               Statistics
    Mr. Chairman and Members of the Committee:
    Thank you for the opportunity to discuss the employment and 
unemployment data we released this morning.
    Job losses continued in September, and the unemployment rate 
continued to trend up, reaching 9.8 percent. Nonfarm payroll employment 
fell by 263,000 over the month, and losses have averaged 307,000 per 
month since May. Payroll employment has fallen for 21 consecutive 
months, with declines totaling 7.2 million. In September, notable job 
losses occurred in construction, manufacturing, government, and retail 
trade.
    Construction employment decreased by 64,000 in September. Job 
losses averaged 66,000 per month from May through September, compared 
with an average of 117,000 per month from November 2008 through April.
    Employment in manufacturing declined by 51,000 in September. Job 
losses in factories averaged 53,000 per month over the past 3 months, 
about one-third the average monthly decline from October through June.
    In September, retail trade employment fell by 39,000. The industry 
has lost an average of 29,000 jobs per month since April, down from an 
average loss of 68,000 for the prior 6-month period. Employment in 
government decreased by 53,000 in September. Much of the decline was in 
local government.
    Employment continued to increase in health care (19,000). The 
average monthly job gain thus far in 2009 is 22,000, compared with an 
average monthly gain of 30,000 during 2008.
    Average hourly earnings of production and nonsupervisory workers in 
the private sector were up by one cent in September to $18.67. This 
followed a gain of 7 cents in August. Over the past 12 months, average 
hourly earnings have risen by 2.5 percent. From August 2008 to August 
2009, the Consumer Price Index for Urban Wage Earners and Clerical 
Workers (CPI-W) declined by 1.9 percent.
    Turning now to some measures from our household survey, the 
unemployment rate continued to trend up in September. The jobless rate 
has doubled since the start of the recession to 9.8 percent. A total of 
15.1 million persons were unemployed in September, twice the number at 
the start of the recession.
    The number of long-term unemployed rose to 5.4 million in 
September. This group has grown more than four-fold since the start of 
the recession.
    In September, the employment-population ratio continued to decline. 
At 58.8 percent, the ratio has fallen by 3.9 percentage points since 
the recession began and is at its lowest level since January 1984.
    Among the employed, there were 9.2 million persons working part 
time in September who would have preferred full-time work. While the 
number of such workers has been little changed since March, it has 
nearly doubled since the start of the recession.
    In keeping with standard practice, we are announcing the 
preliminary estimate for the next benchmark revision to payroll 
employment. The benchmark process annually revises the payroll survey's 
sample-based employment estimates to incorporate universe employment 
counts derived primarily from unemployment insurance tax reports.
    Preliminary tabulations indicate that the estimate of total nonfarm 
payroll employment for March 2009 will require a downward revision of 
approximately 824,000, or six-tenths of one percent. The historical 
average for the benchmark revision over the prior 10 years has been 
plus or minus two-tenths of one percent. Most of the additional job 
loss occurred in the first quarter of 2009, when payroll employment was 
declining most steeply, and appears to be due in part to an increase in 
the number of business closings.
    The final benchmark revision will be incorporated into the payroll 
survey with the publication of January data on February 5, 2010. 
Historical data series will be revised at that time.
    In summary, the labor market remained weak in September. Payroll 
employment fell, and the unemployment rate continued to trend up.
    My colleagues and I now would be glad to answer your questions.

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