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



                                                        S. Hrg. 111-524
 
                 THE EMPLOYMENT SITUATION: JANUARY 2010

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

                                HEARING

                               before the

                        JOINT ECONOMIC COMMITTEE
                     CONGRESS OF THE UNITED STATES

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

                            FEBRUARY 5, 2010

                               __________

          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

                   Andrea P. Camp, Executive Director
               Jeff Schlagenhauf, Minority Staff Director


                            C O N T E N T S

                              ----------                              

                                Members

Hon. Carolyn B. Maloney, Chair, a U.S. Representative from New 
  York...........................................................     1
Hon. Robert P. Casey, Jr., a U.S. Senator from Pennsylvania......     3
Hon. Elijah E. Cummings, a U.S. Representative from Maryland.....     4

                               Witnesses

Statement of Dr. Keith Hall, Commissioner, Bureau of Labor 
  Statistics; Accompanied by: Mr. John Galvin, Associate 
  Commissioner for Employment and Unemployment Statistics; and 
  Mr. Phillip Rones, Deputy Commissioner, Bureau of Labor 
  Statistics.....................................................     5

                       Submissions for the Record

Prepared statement of Representative Carolyn B. Maloney..........    20
Prepared statement of Representative Kevin Brady.................    20
Prepared statement of Dr. Keith Hall, Commissioner, Bureau of 
  Labor Statistics, together with Press Release No. USDL-10-0141.    22


                 THE EMPLOYMENT SITUATION: JANUARY 2010

                              ----------                              


                        FRIDAY, FEBRUARY 5, 2010

             Congress of the United States,
                          Joint Economic Committee,
                                                    Washington, DC.
    The committee met, pursuant to call, at 9:30 a.m. in Room 
216 of the Hart Senate Office Building, The Honorable Carolyn 
B. Maloney (Chair) presiding.
    Representatives present: Maloney and Cummings.
    Senators present: Casey.
    Staff present: Brenda Arredondo, Andrea Camp, Gail Cohen, 
Colleen Healy, Annabelle Tamerjan, Andrew Wilson, Jane 
McCullogh, Jeff Schlagenhauf, Ted Boll, and Robert O'Quinn.

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

    Chair Maloney. The meeting will come to order. My 
colleagues on the other side of the aisle, because of the snow, 
I have asked unanimous consent to have their statements placed 
in the record.
    Chair Maloney. We may have some others coming on the 
Democratic side, but many people have left because of the snow 
warning.
    Well first of all, what a difference a year makes. Today's 
report from the Bureau of Labor Statistics provides further 
evidence that the labor market has stabilized and that we have 
turned a corner. The economy is no longer hemorrhaging jobs. In 
fact, the unemployment dropped to 9.7 percent, and employment 
was virtually unchanged, dropping by 20,000 jobs.
    Just over one year ago the current Administration took 
office, taking helm of a country suffering the worst crisis 
since the Great Depression. In fact, the Council of Economic 
Advisers Chair, Christina Romer, testified before this 
Committee that the shocks we endured during this recession were 
even greater than during the Great Depression.
    During the last three months of the Bush Administration we 
lost an average of 727,000 jobs per month. In contrast, during 
the most recent three months of the Obama Administration we 
lost an average of 35,000 jobs each month. We are definitely 
trending in the right direction.
    But there is no escaping the cruel math of recoveries. The 
recovery of the job market lags behind the recovery of the 
broader economy. Businesses must have more customers before 
they have more employees. However, thanks to the Recovery Act, 
which became law a year ago on February 17th, the economy is 
growing.
    The Bureau of Economic Analysis reported last week that in 
the final quarter of 2009 the economy expanded at a rate of 5.7 
percent. Average weekly hours are climbing, with indications 
that the manufacturing sector is driving that upward trend. 
Since June, the manufacturing workforce is up 1.2 hours, and 
job creation in the temporary help sector is a leading 
indicator of progress in the labor market. Since September, 
temporary help services have added 274,000 jobs, 52,000 in 
January alone.
    Although the labor market appears to be stabilizing, too 
many Americans remain out of work. More than 15 million workers 
are unemployed. The overall unemployment rate masks how hard 
some groups have been hit. While the overall unemployment rate 
is 9.7, the unemployment rate is 16.5 percent for African 
Americans, and 12.6 percent for Hispanics.
    Today's Jobs Report makes it clear: We are making progress. 
But the road to recovery will be long, and it will not be easy. 
While we have brought the economy back from the brink, we are 
not yet where we need to be in terms of job creation.
    The mission is to create high-quality private-sector jobs. 
In the last year, Congress has enacted policies that support 
struggling families and encourage job creation. The $700 
billion Recovery Act included a tax cut for 95 percent of 
American families and created jobs, while investing in clean 
energy technologies, infrastructure, and education.
    Last year we extended the $8,000 first-time home buyer's 
credit that will help spur construction jobs. We extended a 
host of safety net programs that will help struggling families 
weather this economic storm. We extended the Net Operating Loss 
Carryback Provision that will help small businesses hire new 
employees. And we are boosting funding for small business loans 
via the Small Business Administration.
    In order to bring creative ideas on job creation to 
Congress, I started the year reaching out to CEOs of Fortune 
100 companies and leaders of small businesses. I asked these 
employers to share new ideas on ways to create good private-
sector jobs.
    In order to jumpstart job growth, I am introducing an 
Employer Tax Credit co-sponsored in the Senate by the JEC 
colleague who is sitting next to me, Senator Casey, and my 
fellow New Yorker Kirsten Gillibrand. This idea was suggested 
by several of the respondents to the survey.
    On Tuesday, February 9th, the Joint Economic Committee will 
hold a hearing to discuss job creation ideas from some of 
America's best economists and business leaders. The hearing 
will include testimony from CBO Director Doug Elmendorf. A 
recent CBO study showed that an employer tax credit similar to 
the one in my bill is one of the most effective and efficient 
ways to spur job creation. I look forward to hearing from all 
of our witnesses today and at Tuesday's hearing, and to hear 
their different perspectives. I encourage all to attend and to 
be there for Tuesday's hearing.
    [The prepared statement of Representative Maloney appears 
in the Submissions for the Record on page 20.]
    Chair Maloney. I am pleased that my colleague, Congressman 
Cummings, is here. Senator Casey is recognized for five 
minutes.

OPENING STATEMENT OF THE HONORABLE ROBERT P. CASEY, JR., A U.S. 
                   SENATOR FROM PENNSYLVANIA

    Senator Casey. Thank you. I want to thank our Chair for 
gathering us today, and for her comments about the challenges 
that are ahead of us.
    We are all gratified that the unemployment rate has come 
down from month to month. We do not know what that means yet, 
and we will be interested to hear some of the analysis about 
what it means. I do believe, though, that in places around the 
country people are still very, very worried, and there is a 
high degree of anxiety about what lies ahead.
    In Pennsylvania I know that when we looked at December 
numbers, 560,000 people are out of work in Pennsylvania, which 
translates into an 8.9 percent unemployment rate. 
Unfortunately, that number went up in December by 0.4 percent.
    And then when you look at individual communities, we have 
14 labor markets in our state and we had one that just went to 
10 percent, Erie up in northwestern Pennsylvania. We do not 
know what this number that we are getting today means for the 
long term, but one thing I am sure of: We need a jobs bill 
passed as fast as possible.
    We need a bill that tackles a number of the problems that 
we are discussing today. One of the solutions to bringing this 
unemployment rate down over time I believe, as our Chair just 
stated and her good work on this is important, is to have a 
jobs creation tax credit. Economists from across the board have 
made it clear that it is the right thing to do. It is the 
fastest way to create jobs and to grow our Gross Domestic 
Product.
    This is not a theory. We have done it before. We passed a 
similar tax credit in the 1970s that created over 700,000 jobs, 
and a program which has widely been known to be under-
advertised. If we could do that all those years ago without a 
lot of dissemination of information, I think a lot of employers 
would take advantage of this opportunity to create jobs 
literally in the next several months, not the next several 
years.
    So we have a real challenge ahead of us. You need only go 
to places like a jobs center. I was in a jobs center in 
Gettysburg, Pennsylvania, about 10 days ago now and met 8 
unemployed Pennsylvanians out of the 560,000 who have yet to 
find work. You learn a lot by literally just listening to the 
struggles and the worries that people in our economy feel when 
they are out of work.
    Many of them in this group, and I think this is true across 
the board, tend to be over the age of 50, or over the age of 
60, and feel that they not only have an economic challenge but 
sometimes are facing discrimination because of their age, but 
they obviously cannot prove that sometimes. But they feel it. 
And they fill out application after application, and not just 5 
or 10, but 20, and 30, and 50, and 100, and are either rejected 
outright or never hear back.
    We are going to continue to push forward to get a jobs bill 
passed; to continue every possible strategy to create jobs in 
the near-term. And I want to thank our Chair for getting us 
together today.
    Chair Maloney. I want to thank the Senator for his 
comments, particularly on creating new jobs. We passed a jobs 
bill in the House earlier, so it is encouraging to hear the 
Senate is now taking up a focus on creating new jobs, the main 
focus of President Obama's speech last night and recently.
    Congressman Cummings.

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

    Representative Cummings. Thank you very much, Madam Chair.
    I would like to associate myself with the words you stated 
and the statements of Senator Casey.
    After staggering job losses in 2008 and 2009, the national 
unemployment rate has inched lower for four months now, 
reaching 9.7 percent today. I've got to tell you that I am glad 
that it did not go up, because if it had gone up we would have 
some naysayers on the other side talking about how bad things 
are. That is not to say that we do not have problems.
    As I have said many, many times: One job lost is one job 
too many. There are so many people who are suffering, and I 
just want to take the few moments that I have, Madam Chair, to 
urge our Republican colleagues to join in as we attempt to 
address this problem.
    You know people are unemployed in every district of our 435 
Congressional Districts. Last week the President was in 
Baltimore, and he did two things. One, he went to a company 
that manufactures all kinds of steel casings for things like 
water purification apparatus, and just did a lot of wonderful 
things.
    One of the things we found out there was that they have 
been getting some government contracts, and other contracts 
from the private sector, and they may very well be on the verge 
of hiring a few more people. It is not a tremendously large 
company, but when the President talked about a tax credit that 
you and Senator Casey talked about, Madam Chair, for employers 
to hire folks and to incentivize them to do that, you could 
tell that the owner of the company was simply delighted.
    There are so many businesses that are right on the verge of 
hiring people, it is just a hard decision. And I do not think 
it is the solution that is going to necessarily be the one 
silver bullet, but it is a part of a whole group of efforts 
that have been put forth on the part of the House, and I know 
will be put forth on the part of the Senate. But the thing that 
we have to do now is do what the President has said:
    Folks have got to put the partisanship aside, Madam Chair. 
As I say to my constituents, I tell them that we will get 
through the storm. This is the United States of America, and we 
have been through storms before. But the question is not 
whether we will get through the storm; the question is: After 
the storm is over, who will be living in your house? Who will 
have your job? Will you have your health? Will you have your 
health insurance? Will your children, when given the golden 
opportunity to go to school after they have worked hard and 
done everything they were supposed to do from kindergarten 
through the 12th grade and they bang on the door of college, 
will they have been able to go to college at that critical 
moment? Those are the questions.
    And so I do believe that the things that we have been doing 
have been working. But in the words of the President, we can do 
better. We can do better. And I just take this moment to urge 
all of those people that may be listening to this to urge their 
Senators--09 be they Republican or Democrat, their Congressman, 
Republican or Democrat--to stand up for them.
    It is time the American people had people standing up for 
them, putting partisanship aside, so that they can live the 
best lives that they can.
    Finally, Madam Chair, we have one life to live. This is no 
dress rehearsal; this is life. This is it. Some people act like 
they've got a life next door, or they've got a life over there; 
no, no, no. This is it, right here.
    So I think it is our duty, when people go to the polls and 
they pull that lever, they are not pulling it so that we can 
win the next election in a few years. They pull it so that we 
could win the election that they are voting in, and so that we 
can immediately act, and they expect that of us, and nothing 
less.
    And so, on behalf of my constituents, I urge all of our 
colleagues to join together to address this issue, and I look 
forward to hearing from the witnesses, and with that I yield 
back.
    Chair Maloney. Thank you very much.
    Before we begin, I would like to ask unanimous consent to 
accept into the record written statements from any Member of 
this Committee.
    [The prepared statement of Representative Kevin Brady 
appears in the Submissions for the Record on page 20.]
    And now I would like to introduce Commissioner Hall. Dr. 
Keith Hall is the Commissioner of Labor Statistics for the U.S. 
Department of Labor. Prior to that he served as Chief Economist 
for the White House Council of Economic Advisers. And prior to 
that he was Chief Economist for the U.S. Department of 
Commerce. Dr. Hall also spent ten years at the U.S. 
International Trade Commission.
    Welcome, and we hope to hear some good news.

  STATEMENT OF DR. KEITH HALL, COMMISSIONER, BUREAU OF LABOR 
    STATISTICS; ACCOMPANIED BY: MR. JOHN GALVIN, ASSOCIATE 
 COMMISSIONER FOR EMPLOYMENT AND UNEMPLOYMENT STATISTICS; AND 
    MR. PHILLIP RONES, DEPUTY COMMISSIONER, BUREAU OF LABOR 
                           STATISTICS

    Commissioner Hall. Madam Chair, Members of the Committee, 
thank you for the opportunity to discuss the employment and 
unemployment data we released this morning.
    The unemployment rate declined from 10.0 to 9.7 percent in 
January. Nonfarm Payroll Employment was essentially unchanged, 
and on net has shown little movement over the last three 
months.
    In January, job losses continued in construction and in 
transportation and warehousing, while employment increased in 
temporary help services and retail trade.
    With revisions released today, job losses since the start 
of the recession in December 2007 totaled 8.4 million, 
substantially more than previously reported.
    Construction employment fell by 75,000 in January, about in 
line with the average monthly job loss in 2009. Nonresidential 
specialty trade contracting accounted for much of the over-the-
month decline. The nonresidential components of construction 
have accounted for the majority of the industry's job losses 
since early 2009.
    Employment in transportation and warehousing decreased by 
19,000 in January. The entire decline occurred in courier and 
messenger services, which laid off more workers than usual over 
the month.
    Employment in temporary help services grew by 52,000 over 
the month. This industry which provides workers to other 
businesses has added nearly a quarter of a million jobs since 
its recent low point last September.
    Following two months of little change, retail trade 
employment increased by 42,000 in January, with gains in 
several components. Health care employment continued to rise in 
January. Overall manufacturing employment was little changed, 
although motor vehicles and parts added 23,000 jobs.
    Since June, the manufacturing work week for all employees 
has increased by 1.2 hours. Federal Government employment rose 
in January, partly due to hiring for the decennial census. 
Employment in State and Local Governments, excluding education, 
continued to trend down over the month.
    Turning now to some measures from our Household Survey, 
both the number of unemployed persons and the unemployment rate 
declined in January. However, the share of those jobless for 27 
weeks and over continued to rise.
    The employment-to-population ratio increased to 58.4 
percent over the month. The number of persons working part-time 
who would have preferred full-time employment dropped from 9.2 
to 8.3 million, the lowest level in a year.
    Before closing, I would note that several changes were 
introduced today to The Employment Situation News Release Text 
and Tables. Three new Household Survey Tables provide 
information on the employment status of Veterans, persons with 
a disability, and the foreign-born population. In January the 
unemployment rate of Veterans from Gulf War Era II was 12.6 
percent compared with 10.4 percent for non-Veterans.
    Persons with a disability had a higher jobless rate than 
persons with no disability: 15.2 percent versus 10.4 percent. 
In addition, 21.8 percent of persons with a disability were in 
the labor force, compared with 70 percent of persons without a 
disability.
    The unemployment rate for the foreign-born was 11.8 
percent, and the rate for the native-born was 10.3 percent. The 
Establishment Survey Tables have been redesigned to include the 
addition to data on hours and earnings for all private-sector 
employees, as well as employment information for women.
    Women currently make up 49.9 percent of total non-farm 
payroll employment, compared with 48.8 percent when the 
recession began in December of 2007. Additional information 
about the new and redesigned tables is available on the BLS 
website.
    I would also note that there were annual adjustments to 
data from our two surveys. The Establishment Survey data 
released today reflects the incorporation of annual benchmark 
revisions. Each year we re-anchor our sample-based survey 
estimates to a full universe count of employment primarily 
derived from administrative records of the Unemployment 
Insurance Tax System. Accounting for revisions during the 
benchmark and post-benchmark periods, the previously published 
level of nonfarm employment for December was revised downward 
by 1.4 million. Household Survey Data for January reflect 
updated population estimates from the U.S. Census Bureau. 
Further information about the impact of these adjustments is in 
our news release and on our website.
    Returning now to the Labor Market Data we released this 
morning, the jobless rate declined to 9.7 percent in January, 
and payroll employment was essentially unchanged.
    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 22.]
    Chair Maloney. Well thank you very much. What a difference 
a year makes. Can you point to any particularly encouraging 
bright spots in this month's labor report?
    Commissioner Hall. I would say there are several things 
worth mentioning.
    First of course is that the unemployment rate went from 
10.0 to 9.7 percent. Also in a related thing, people who are 
part-time for economic reasons declined this month. So what 
that means is our broadest measure of labor underutilization, 
those who are unemployed plus those who are marginally attached 
plus those who are part-time who want to be full-time, that 
declined from 17.3 to 16.5 percent. That is a drop of .8 
percentage points. That was a nice sign.
    Temporary help has added almost a quarter of a million jobs 
over the past four months. Quite often that is a leading 
indicator of strengthening in the labor market.
    Manufacturing work week now increased .3 hours this month, 
and 1.2 hours since June. That also is a leading indicator of 
it is an indicator of strengthening in the labor market.
    And then of course there are a number of other there is 
some other non-labor market data I think that indicates that 
there may be some signs of strengthening in the labor market.
    Chair Maloney. Could you comment on any further indicators 
that overall job losses will continue to slow and turn positive 
in the coming months?
    Commissioner Hall. Without speculating too much, obviously 
the temporary help and the manufacturing work week are both 
considered leading indicators of a strengthening labor market. 
I actually think some of the other data the GDP number that 
just came out, although most of that growth in GDP was from 
inventories, a good portion of it was actually equipment and 
software investment. Which if you look at that, that actually 
tracks very nicely with payroll jobs. In other words, when 
firms bring back invest in equipment and software, they also 
tend to bring back employees.
    I think the industrial production numbers are also 
signaling potentially a strengthening labor market.
    Chair Maloney. Some economists have estimated that we need 
to grow our jobs just to meet the new demand for jobs that they 
estimate is between 100- to 150,000 new payroll jobs. I would 
like you to comment on that. And what rate is needed to lower 
the unemployment rate to what it was in 2007 before the 
recession began, at 4.7 percent?
    Commissioner Hall. The number of 100- to 150,000, that 
seems about accurate for payroll job growth that would keep up 
with population growth.
    Going forward, if the labor market continues to improve we 
expect people to re-enter the labor force. So actually we might 
hope to get stronger payroll job growth than 100- to 150,000. 
We would probably need stronger than that to have the 
unemployment rate drop in the next few months.
    Chair Maloney. Well as you said, some workers are likely to 
re-enter the labor force because they see greater promise of 
finding a job now with these numbers. That is good and 
encouraging. But isn't it true that those workers' re-entry 
into the labor market will bump the unemployment rate upwards?
    Commissioner Hall. It often does, yes. If the labor market 
continues to strengthen, in the past certainly what's happened 
is an increase in the labor force has caused the unemployment 
rate to bump up temporarily.
    Chair Maloney. Well how big a factor is it in bumping up 
the unemployment?
    Commissioner Hall. It certainly has done that in the past. 
This particular time we have got a particularly high potential 
for that because so many people are unemployed and we've lost 
so many people out of the labor force. It is one of those 
things where I would say that as we go forward, if we start to 
see real improvement we should not get too concerned if the 
unemployment rate hits a bit of a speed bump and goes up for a 
couple of months.
    Chair Maloney. Great. My time has expired.
    Senator Casey.
    Senator Casey. Thank you very much.
    I wanted, just preliminarily, to make a comment about where 
we are and where we have been. I know, Commissioner, you are 
not allowed to make the kind of comments that I will make, but 
I think it is important to put it in the record.
    We have had a lot of folks in Washington denigrating the 
American Recovery and Reinvestment Act, the so-called Stimulus 
Bill, but I think the facts are pretty clear right now that 
prior to the Recovery Bill we were losing, between December and 
March, every single month for four months, at least 600,000 
jobs. And in January of 2009, 741,000 jobs.
    Here we are a little more than a year later from January, 
and we lost and, I want to make sure the number is right, this 
month, is it 20,000?
    Commissioner Hall. Yes.
    Senator Casey. 20,000 jobs lost. Last month was what?
    Commissioner Hall. 150,000.
    Senator Casey. 150,000. So at least we are moving in the 
right direction. I think a strong case can be made that the 
Recovery Bill is having and has had a positive impact, and is 
at least any fair-minded person would say, is beginning to 
work. So that is I think important to put on the record.
    But I did want to note in terms of the individual groups or 
demographic groups that we look at here, I wanted to highlight 
one segment, one part of our population where the number 
actually went up, African Americans. The unemployment rate went 
up to 16.5? Is that right?
    Commissioner Hall. That is correct.
    Senator Casey. And that was up .3 percent?
    Commissioner Hall. Yes.
    Senator Casey. The only group I guess among if you look at 
in terms of just groups, whether it is adult women, adult men, 
teenagers, White Americans the Hispanic unemployment rate was 
12.6?
    Commissioner Hall. Yes.
    Senator Casey. So one of the only groups, if not the only 
group, where the number went up was for African Americans? Is 
that correct?
    Commissioner Hall. I believe that's correct. I'm not sure 
that number was statistically significant, though.
    Senator Casey. Okay. In terms of it being not necessarily a 
trend?
    Commissioner Hall. Correct. I think the uncertainty in that 
number is relatively large.
    Senator Casey. Okay. And why is that? Because sometimes 
with a group it is harder to get an accurate read just from.
    Commissioner Hall. Yes. Our sample size is a little bit 
smaller. We over-sample the group relative to the population, 
but it is still not as large a sample as say the overall 
number.
    Senator Casey. We of course hope you are wrong about this. 
We hope the number is stabilized for African Americans, or 
going down.
    The other point that I wanted to highlight is the new data. 
I think it is pretty significant that you are now tracking 
Veterans and persons with disabilities. The Veteran number I 
wanted to make sure I had right. This would be Veterans for let 
me just have you say it Veterans since the Gulf War?
    Commissioner Hall. Yes, the Gulf War Era II, so that is 
since September 11.
    Senator Casey. Okay. And that number is what?
    Commissioner Hall. That number was 12.6 percent.
    Senator Casey. Do you know what that works out to be in a 
total number?
    Commissioner Hall. In terms of the number of unemployed?
    Senator Casey. Unemployed Veterans.
    Commissioner Hall. It is about 213,000.
    Senator Casey. That is a big number. And I guess--and I 
have only got a minute left, but if you are able to speak with 
great speed. Are there data points here that indicate that 
there are sectors that are growing that we should be encouraged 
by?
    Commissioner Hall. Yes. The short answer is yes. I think 
one notable one is that we actually gained 11,000 jobs in 
manufacturing.
    Senator Casey. A net gain in manufacturing?
    Commissioner Hall. A net gain in manufacturing. And this is 
the first net gain we have had in three years in manufacturing. 
So that actually was notable.
    Senator Casey. The first time in three years in a monthly 
number?
    Commissioner Hall. Yes. That's correct.
    Senator Casey. Okay.
    Commissioner Hall. So that is encouraging. Professional 
Business Services seems to be back, especially with Temporary 
Help. And of course the Health and Education are continuing to 
grow.
    Most of the job loss right now is centered in construction. 
We lost 75,000 jobs in construction, which is in fact more of 
the overall loss of 20,000. So we actually had net gains 
overall outside of construction.
    Senator Casey. Thank you.
    Chair Maloney. Congressman Cummings.
    Representative Cummings. Let's go to the African American 
numbers. You said that it is possible that the numbers might 
not be as bad as they appear? Is that right?
    Commissioner Hall. Just because it is a relatively it is a 
smaller sample, so there might be some fluctuation that is due 
to our measurement rather than actual changes in the 
unemployment rate.
    Representative Cummings. Well if I were to guess, I believe 
they would be higher. Because I think you have a lot of when I 
go to my District, if I went there right now, 40 miles away 
from here, you would see a lot of African American men just 
riding through my neighborhood who are unemployed, and I do not 
know whether their numbers are even registered here. I would 
venture to guess that there are parts of my District where the 
African American male unemployment rate is 45 to 50 percent.
    So I just do not know how we I know you look at stats. As 
you were talking I was thinking about the Census and how people 
get left out of the Census, not necessarily because of 
government, government's fault, but they just never get 
counted. And so I just do you want to comment on what I just 
said?
    Commissioner Hall. Well, sure. One thing I think we know 
for sure is the unemployment rate is very high. It is very high 
relative to other groups. When I talked about the .3 increase, 
I was just talking about the monthly change, but it is 
absolutely true that this is a high number and it has well more 
than doubled since before the Recession started.
    Perhaps a bit of what you are seeing as well is discouraged 
workers who have dropped out of the labor force, and that would 
not be reflected in this 16.5 percent number.
    Representative Cummings. Now if the President were to call 
you as soon as you got out of this hearing and ask you for a 
30-second explanation, bottom line, on what you have said, a 
summary of what we have got here today, and he said: Where does 
it look like we are going? And I know you are limited with your 
opinions even with the President, but would you share what you 
can with us?
    Commissioner Hall. I'll tell you where I see we have come 
to.
    Representative Cummings. All right, Mr. President, go 
ahead.
    Commissioner Hall. The past three months we have had 
essentially no change in the payroll jobs, which is a dramatic 
improvement over earlier in the year. And there are lots of 
indications in this data that, with Temporary Help and Hours 
Worked, that the labor market may be tightening up which, if 
that continued, would be encouraging for job growth going 
forward.
    Representative Cummings. Now has there been any discernable 
trend of jobs moving from unskilled labor to skilled labor, or 
vice versa, in past recessions? Did we experience any sort of 
shift like that? And how about this one?
    Commissioner Hall. Yes. This Recession was notable because 
the job loss was significant across all groups: Skilled, 
Unskilled. So it was a very, very broad job loss. Other 
recessions have been a little bit more centered in particular 
industries, particular occupations, than this particular 
Recession.
    Then of course this Recession has just been so deep. We 
have had so much job loss that one of the very interesting 
things will be when we come to recovery how quickly recovery 
comes and how broad it will be. But in terms of this Recession, 
there is no real pattern in the Skilled/Unskilled yet at this 
point.
    Representative Cummings. Now the Labor Department reported 
yesterday that worker productivity increased 6.4 percent in the 
fourth quarter as companies did more for less. Are these 
productivity gains centered in certain sectors? Or is that 
happening across the board? Or would you have an opinion on 
that?
    Commissioner Hall. It is pretty across the board. We don't 
have a lot of breakout on industries on that monthly data, but 
it is across the board. And that actually is a very good sign. 
Strong productivity growth in the past has been associated with 
early stages of an economic recovery. And I think one thing 
that was notable about that particular release, we have had 
about three months of very strong productivity growth, but this 
is the first month where we had strong productivity growth and 
an increase in hours worked.
    Representative Cummings. So what does that mean?
    Commissioner Hall. Well in the prior month we had strong 
productivity but it was because output dropped by less than 
hours dropped. So a sort of strong productivity in sort of a 
negative way. And this last release was strong productivity in 
sort of a positive way.
    Representative Cummings. So Americans are working hard?
    Commissioner Hall. Yes.
    Representative Cummings. If they can get a job.
    Commissioner Hall. Yes.
    Representative Cummings. Thank you.
    Chair Maloney. Yes. That is a strong statement, 
Congressman, and it is very true.
    Commissioner Hall, several months ago the BLS released its 
Employment Projects for the years 2008 to 2018. What does the 
BLS project as the largest growth sector in employment over the 
coming years? Where do you see the job growth? And is this 
different from past projections?
    Commissioner Hall. I will mention some of the broad 
numbers. Our projections are that the Service Providing Sector 
will have something like 96 percent of the job growth. When I 
say Service Providing Sector, I don't mean service occupations, 
but I mean service industries. And that is consistent with the 
past.
    We expect the largest employment growth in Professional 
Business Services, and in Health and Social Systems, in 
particular. And that is also fairly consistent I think with our 
past forecasts.
    Inside that, the more detailed industries, we're talking 
about industries like management, scientific and technical 
consulting, computer system design, employment services, some 
industries like that.
    Chair Maloney. And how do these projections differ from the 
private sector projections that you read about every now and 
then?
    Commissioner Hall. Well one of the things we are doing here 
is, and Jack can maybe talk about this a little bit as well, 
one of the things we are doing here is we are projecting from 
inside of a Recession right now.
    So one of the big reasons our numbers now change from the 
last projection is we are looking past the Recession. So a lot 
of these numbers are looking at recovery out of the Recession 
in addition to sort of normal economic growth afterwards.
    Do you want to add anything, Jack?
    Mr. Galvin. I would say our projections do not differ from 
private sector projections. In fact, they typically use the 
same methodology that we use for ours.
    Chair Maloney. Okay. Great. I am concerned about the 
duration of unemployment. The duration of unemployment has been 
longer in this recession. Is there a relationship between this 
long period of unemployment and compensation and degree of 
probability of being employed?
    Could you comment on this duration of unemployment that has 
increased in this recession?
    Commissioner Hall. Sure. Unfortunately there does seem to 
be pretty strong evidence that the longer the duration of 
unemployment, the lower the probability of being rehired.
    Chair Maloney. Is this different from prior recessions? In 
prior recessions have we had these long periods of 
unemployment?
    Commissioner Hall. No. This is by far the worst Recession 
with respect to duration of unemployment. The long-term 
unemployed, for six months or more, started at a higher level 
at the beginning of this Recession, and it has been at record 
levels now for several months. Unfortunately in past recessions 
the long-term unemployed typically grows well into the 
recovery.
    Chair Maloney. Well, could you tell us anything about the 
demographic characteristics of the long-term unemployed? Are 
there characteristics in terms of educational attainment, in 
terms of any category?
    Commissioner Hall. We may have to get back to you on the 
details oh, okay. We do have something. I'm sorry.
    The duration is particularly high in of the long-term 
unemployed, certain demographic groups are over-represented. 
For example, those without a high school diploma are over-
represented in long-term unemployed. African Americans are 
over-represented in long-term unemployed. Even those with a 
high school diploma but no college are over-represented in the 
long-term unemployed.
    Chair Maloney. My time is expired. Congressman Cummings.
    Representative Cummings. Thank you, Madam Chair.
    One of the features often cited about this Recession has 
been the fall in consumer spending, which is itself linked to 
consumer confidence. How does the fall in overall consumer 
demand show up in your data?
    Commissioner Hall. I would say consumer spending is really 
the driver behind GDP, and it is really the driver behind 
employment. During normal expansions, the growth in consumer 
spending is roughly in line with the growth of GDP. So without 
a strong recovery in consumer spending, and hopefully with 
consumer confidence and then consumer spending, we just are not 
going to see a strong recovery. So it is critical.
    Representative Cummings. Now when we got the information a 
few days ago that when we got the very good numbers on the 
GDP----
    Commissioner Hall. Yes.
    Representative Cummings [continuing]. I mean do you see a 
correlation between those numbers and what you found in your 
report?
    Commissioner Hall. Actually a lot of the GDP let me just 
say, a lot of the GDP growth was from inventory. So the 5.7, 
while it was a good number, a good portion of that was from 
inventory buildup which actually may be an indication of future 
growth, but it is not an indication of current demand. That 
current demand has not fully recovered yet.
    But outside of inventories, GDP did grow about 2.2 percent, 
which is reasonable growth. And that is consistent, if that 
continues to grow at 2.2 percent or more that is consistent 
with payroll job growth.
    Representative Cummings. Now we saw with Ford--I am going 
to go into cars now--we saw with Ford that they had a 
significant rise in cars sold. We also saw that with GM. And 
one of the things that we were concerned about was that after 
the Cash for Clunkers sales were over that there might be just 
a slight bump-up in manufacturing of automobiles, but a lot of 
us were concerned that that would not last very long.
    Can you tell from your research how we are. Do we see a 
trend there? In other words, are people, generally it seems 
like they are buying cars and decided that, you know what, 
although I may not have bought one during the Cash for Clunkers 
I am going to get a car I feel a little bit better about my 
situation. I mean, what are you finding there?
    Commissioner Hall. Well, actually, this month motor 
vehicles and parts, the jobs grew by about 23,000, which 
actually accounted for all, more than all of the manufacturing 
job growth.
    Representative Cummings. So that is very significant, isn't 
it?
    Commissioner Hall. It is only one month, but that was a 
nice bump-up in employment.
    Representative Cummings. Well let me ask you as just sort 
of a general question. The month of January from year to year 
has certain unique characteristics. For example, it is coming 
after the Christmas season. It is the first month of the year. 
And maybe people are getting off to new starts with certain 
types of things. Do you find, when you look at those numbers, 
now going back to cars, when you look at those numbers is that 
surprising to you at all, considering what we have seen in the 
past for January? And I know we are in a recession; I 
understand that.
    Commissioner Hall. That gain in 23,000 jobs is in fact 
taking into account the normal seasonal patterns in motor 
vehicles. So when we say 23,000, we mean relative to what we 
expect normally for January of this year. So I would say the 
answer is, yes.
    Representative Cummings. So in other words, if we were not 
in a Recession you would expect 23,000 new jobs? Is that what 
you are saying?
    Commissioner Hall. No. Well, I think to be honest the 
expectation I am not sure what the expectation was for motor 
vehicles particularly, but the way we calculate these numbers 
is we have 23,000 more jobs than we would have normally 
expected.
    Representative Cummings. I see. I see. So you are saying 
the opposite of what I just said.
    Commissioner Hall. Yes.
    Representative Cummings. So we should feel I take it, then, 
and I know you are limited to your opinions and everything but 
I am sure that makes you, if somebody were to ask you outside 
of your position, and said how do you feel about that, Hall? I 
guess you would say you felt pretty good, huh?
    Commissioner Hall. Yes. Although I would caution, as I did, 
that it is only one month.
    Representative Cummings. Right.
    Commissioner Hall. But it was growth in jobs in motor 
vehicles and parts.
    Representative Cummings. Thank you, Madam Chair.
    Chair Maloney. Thank you.
    Commissioner Hall, temporary help is often an indicator of 
an employer's willingness to hire more employees. Could you 
comment on the Temporary Help numbers and any trends you see 
over the past several months?
    Commissioner Hall. Sure. The Temporary Help industry has 
been and continues to be a leading indicator. For example, 
before we went into the Recession, Temporary Help Services job 
growth started to decline nine or ten months ahead of the 
Recession. So it actually did signal, early on, that we were 
coming into an economic slowdown.
    And in past recessions, a pickup in Temporary Help Services 
has preceded a pickup in payroll job growth. So the fact that 
Temporary Help Services added 52,000 jobs this month, and a 
quarter million over the past four months or so, I would 
consider to be an indicator of potential payroll job growth in 
the future.
    Chair Maloney. Could you comment on how women have fared in 
this recession? You testified earlier that women employees are 
up from 48.8 to 49.9 percent. Could you comment on this trend? 
Do you see that more women may be employed in this Recession 
than men? In what industries are they employed? In what 
industries are they losing or gaining jobs?
    Commissioner Hall. Yes. Men have lost jobs relative to 
women something like 2 to 3 to 1. And you are right, women now 
make up about 49.9 percent of the payroll jobs in the economy. 
And it is possible. We are within probably 350,000, give or 
take the number of women employed are within 350,000 of the 
number of men employed right now. So actually it still is 
potentially possible that the number of women in the payroll 
jobs could exceed the number of men in payroll jobs at some 
point.
    But women have also participated in the job loss, though, 
in this Recession. That is not to say that they have not lost 
jobs. Women have lost literally 2.6 million jobs out of the 8.4 
million during this Recession so far. They have lost 
particularly notable in say Professional and Business Services. 
Actually, Education and Health Services, and Financial 
Activities forget the Education and Health, I'm sorry Financial 
Activities. In fact, more women have lost jobs in the Financial 
Activities than men have, which is kind of interesting.
    Chair Maloney. Well thank you for tracking that 
information.
    I would like to ask a few questions about my home state of 
New York. In New York City, unemployment rose to 10.6 percent 
in December. This is a jump of 3.6 points from last December. 
Is this in tune with other states, and the overall national 
average? Are these changes similar to the changes taking place 
on national unemployment?
    Commissioner Hall. I know historically the State of New 
York has had a very similar pattern during a recession as the 
United States as a whole, I think because it's a very diverse 
economy. And I think that is roughly what we have seen during 
this Recession with New York. The numbers have been fairly 
similar to the overall numbers for the United States.
    Chair Maloney. What about Manhattan, which is very 
dependent on Financial Service jobs? Given the economy, has it 
had a particularly hard blow? Or is it in tune with the 
national average?
    Commissioner Hall. I don't have Manhattan with me. I can 
tell you about New York state. New York has lost about 50,000 
jobs in Financial Activities since the start of the Recession, 
so New York has been particularly hit by the Financial 
Activities downturn.
    Chair Maloney. My time has expired. Congressman Cummings.
    Representative Cummings. Yesterday a New York Times 
reporter had asked me, Mr. Hall, about the whole idea of 
African American unemployment being there being such a gap 
between overall unemployment and African American unemployment, 
and whether special things ought to be done.
    I am not going to ask you your opinion on that, I just want 
to know, it appears that there is an increase in the gap 
between overall unemployment and African American unemployment. 
Is that accurate?
    Commissioner Hall. That is. And it has grown during the 
Recession, and unfortunately it actually grows during every 
Recession.
    Representative Cummings. Is that right?
    Commissioner Hall. Yes.
    Representative Cummings. And do we have an explanation for 
that?
    Commissioner Hall. I don't. I don't. There's probably some 
research on that, but I'm not familiar with it.
    Representative Cummings. Now what changes in the makeup of 
the labor force can you identify in terms of gender, race, or 
age? And tell me who is entering the labor force, and who is 
leaving, and what is the significance of those changes? Can you 
answer those questions? Changes in the makeup of the labor 
force. In other words, we have people who are leaving the labor 
force, and there are people who are entering.
    For example, you have got, I assume, while all the reports 
are saying that more and more people are staying in school 
because many of them feel they can't find jobs, so I'm just 
wondering do we have any stats on who is entering, and at what 
rate, and who is leaving? Are you following me?
    Mr. Rones, how are you?
    Mr. Rones. Okay. Fine, thank you. The first thing I would 
say, the most important trend in terms of the labor force is 
that older workers are actually older workers' labor force 
participation has been going up, and actually started going up 
well before the Recession and has continued to go up. And that 
is at the same time that labor force participation has gone 
down for pretty much every other group.
    Now a lot of that is, again, part of a long-term trend. 
Part of it is also because of course a lot of people lost much 
of their assets through the stock market fall, as well as the 
housing market fall. So there are some structural things going 
on there, as well as some things related to the downturn.
    We have not seen, as you discussed before, we have not seen 
a lot of people coming back into the labor force, which you 
might see as people start getting more confident. At some point 
you would expect to see that, as it goes hand in hand with job 
creation. As the jobs show up, people hear that someone is 
hiring. They start looking for work, and the labor force grows. 
But we are not really there yet.
    Representative Cummings. Now based on what you have 
observed, Commissioner, in earlier iterations of the Decennial 
Census, do you anticipate any net job creation effect in 
government hiring attributable to the Census?
    Commissioner Hall. Absolutely we should. In fact, this 
month we added about 10,000 Federal Government jobs from the 
Census. And in coming months, I think their total hiring yes, 
we should get at least about a half a million added to the 
government jobs when the Census fully hires up.
    Representative Cummings. About a half a million?
    Commissioner Hall. Yes. And that actually might have a 
measurable effect on the unemployment rate. It might go down a 
little bit.
    Representative Cummings. So is that a usual trend, Mr. 
Hall? That is, that there is some slight impact on the 
unemployment rate because of the Census? That is not unusual, 
is what you're saying?
    Commissioner Hall. No, that is normal.
    Representative Cummings. Now do we see any geographic 
changes with regard to job losses? In other words, are there 
certain parts of the Nation that seem to be suffering more job 
losses disproportionately than others?
    Commissioner Hall. You know, the job losses have been very 
spread out, but it certainly is true that certain states had 
higher unemployment rates and they had higher increases in 
unemployment. It is a little hard to talk about because it is 
not so much regional as it is with specific states.
    Representative Cummings. I see. All right. Thank you very 
much.
    Chair Maloney. Many of my colleagues have left because 
Washington is getting ready for a huge snow storm. We are very 
grateful, Commissioner Hall, that you have weathered this storm 
to be here today and give us the Jobs Report.
    Weather aside, it appears that we are trending in the right 
direction. We no longer are facing an avalanche of job losses. 
We thank you for your hard work and for being here today.
    This meeting is adjourned.
    [Whereupon, at 10:26 a.m., Friday, January 5, 2010, the 
hearing was adjourned.]
                       SUBMISSIONS FOR THE RECORD

  Prepared Statement of Representative Carolyn Maloney, Chair, Joint 
                           Economic Committee
    Today's report from the Bureau of Labor Statistics provides further 
evidence that the labor market has stabilized and we have turned a 
corner. The economy is no longer hemorrhaging jobs. In fact, the 
unemployment rate dropped to 9.7 percent, and employment was virtually 
unchanged, dropping by 20,000 jobs.
    Just over one year ago, the current Administration took office, 
taking helm of a country suffering the worst crisis since the Great 
Depression. In fact, Council of Economic Advisers Chair Christina Romer 
testified to the Joint Economic Committee that the shocks we endured in 
this ``Great Recession'' were actually worse than those of the Great 
Depression.
    During the last three months of the Bush administration, we lost an 
average of 727,000 jobs per month. In contrast, during the most recent 
3 months of the Obama administration, we lost an average of 35,000 jobs 
each month. The trend is heading in the right direction.
    But, there is no escaping the cruel math of recoveries. The 
recovery of the job market lags behind the recovery of the broader 
economy. Businesses must have more customers before they add employees.
    However, thanks to the Recovery Act, which became law a year ago 
February 17, the economy is growing. The Bureau of Economic Analysis 
reported last week that in the final quarter of 2009, the economy 
expanded at a rate of 5.7 percent.
    Average weekly hours are climbing, with indications that the 
manufacturing sector is driving that upward trend. Since June, the 
manufacturing workweek is up 1.2 hours. And, job creation in the 
temporary help sector is a leading indicator of progress in the labor 
market. Since September, temporary help services has added 247,000 
jobs--52,000 in January alone.
    Although the labor market appears to be stabilizing, too many 
Americans remain out of work. More than 15 million workers are 
unemployed. The overall unemployment rate masks how hard some groups 
have been hit--while the overall unemployment rate is 9.7 percent, the 
unemployment rate is 16.5 percent and 12.6 percent, for African 
Americans and Hispanics, respectively.
    Today's jobs report makes it clear--we are making progress, but the 
road to recovery will be long, and it will not be easy. While we have 
brought the economy back from the brink, we are not yet where we need 
to be in terms of job creation. The mission is to create high-quality 
private-sector jobs.
    In the last year, Congress has enacted policies that support 
struggling families and encourage job creation. The $700 billion 
Recovery Act included a tax cut for 95 percent of American families and 
created jobs while investing in clean energy technologies, 
infrastructure, and education.
    Last year, we extended the $8,000 first-time homebuyers credit that 
will spur construction jobs. We extended a host of safety net programs 
that will help struggling families weather the economic storm. We 
extended the net operating loss carry-back provision that will help 
small businesses hire new employees. And we are boosting funding for 
small business loans via the Small Business Administration.
    In order to bring creative ideas on job creation to Congress, I 
started the year reaching out to CEOs of Fortune 100 companies and 
leaders of small businesses. I asked these employers to share new ideas 
on ways to create jobs.
    In order to jump-start job growth, I am introducing an employer tax 
credit (co-sponsored in the Senate by my JEC colleague Senator Casey 
and my fellow New Yorker, Senator Gillibrand). This idea was suggested 
by several of the respondents to our survey.
    On Tuesday, February 9, the Joint Economic Committee will hold a 
hearing to discuss job creation ideas from some of America's best 
economists and business leaders.
    The hearing will include testimony from CBO Director Doug 
Elmendorf. A recent CBO study showed that an employer tax credit 
similar to the one in my bill is one of the most effective and 
efficient ways of spurring hiring. I look forward to hearing from all 
our witnesses at the Tuesday's hearing and look forward to the 
different perspectives they will bring--especially their views on 
lessons learned about creating jobs in previous recessions and economic 
expansions.
    I encourage you all to attend next Tuesday's hearing.

                               __________

    Prepared Statement of Representative Kevin Brady, Senior House 
                               Republican

    I am pleased once again to join in welcoming Dr. Hall before the 
Committee this morning.
    Today's employment report is still bad news for American workers. 
Payroll employment fell by 20,000. Although the unemployment rate fell 
to 9.7 percent, largely due to more workers reporting part-time jobs, 
the number of long-term unemployed workers reached an all-time high of 
6.3 million. And today we learned that job losses were 902,000 higher 
during 2009 than previously estimated.
    Last week, the Bureau of Economic Analysis reported that real GDP 
grew at an annualized rate of 5.7 percent in the fourth quarter of 
2009. While this is an improvement over the 2.2 percent rate in the 
third quarter, more than 57 percent of real GDP growth in the fourth 
quarter was due to a one-off restocking of inventory. The fourth 
quarter spike reveals how deeply businesses emptied their shelves last 
year but gives no indication they are confident in bringing workers 
back or hiring new ones. Real final sales, which are a better measure 
of the underlying trend in real GDP than the headline number, rose by 
only 2.2 percent in the fourth quarter of 2009.
    The Blue Chip consensus forecast of private economists is that real 
GDP will grow by 2.8 percent in 2010. Unfortunately, such modest growth 
cannot support vigorous job creation and a rapid reduction of the 
unemployment rate. Indeed, the most recent Blue Chip consensus forecast 
is that the unemployment rate will average 9.8 percent in the fourth 
quarter of 2010.
    Normally, economists would expect two years of rapid economic 
growth following a severe recession. Unfortunately for American workers 
and their families, the current economic recovery is fighting the 
headwinds of excessive government spending and debt, the prospect of 
higher income taxes in the near future, and uncertainty over the future 
of health care and ``cap and trade'' legislation.
    Let's compare the recovery after the recession that began in 
December 2007 with the recovery after the August 1981 to November 1982 
recession, which is similar in depth and length to the recent 
recession. The National Bureau of Economic Research has not yet 
determined the official bottom for the recent recession. However, 
industrial production hit its bottom in June 2009, and real GDP began 
to grow in July 2009. So, until the National Bureau of Economic 
Research makes its official determination, let's assume that the bottom 
of the recent recession occurred in June 2009.
        Comparing the Reagan and Obama recoveries so far, we find:

      The average annualized rate of real GDP growth was 7.2 
percent in the first two full quarters of the Reagan recovery compared 
with 4.0 percent in the first two full quarters of the Obama recovery.
      During the first seven months of the Reagan recovery, 
payroll employment had increased by 1.2 million jobs, while during the 
first seven months of the Obama recovery payroll employment fell by 1.1 
million jobs.

    Looking ahead, the contrast between the Reagan and Obama recoveries 
becomes increasingly stark. Fifteen months into the Reagan recovery, 
payroll employment had increased by 4.4 million jobs, and the 
unemployment rate had fallen by a full 3.0 percentage points to 7.8 
percent. By October 2010, at the same point in the Obama recovery, the 
unemployment rate is forecast to be 9.8 percent, a full 2 percentage 
points higher.
    If we want American workers and their families to enjoy robust job 
growth, Washington needs to put aside partisan blinders and re-examine 
what economic policies have worked in the past to increase confidence 
and foster job-creating investment and what policies have not. I 
encourage President Obama to study the successful economic policies of 
John F. Kennedy and Ronald Reagan, and, for the sake of our country, to 
make a mid-course correction in this Administration's economic 
policies. Despite significant tax increases, President Obama's FY 2011 
budget will entrench federal spending at a new plateau of more than 23 
percent of GDP and more than double the publicly held federal debt over 
the next ten years. This budget is a job-killer.
    Finally, I would like to observe that the Census Bureau will hire 
between 700,000 and 800,000 temporary, mainly part-time, workers during 
the first five months of 2010 to take the decennial census. The hiring 
of these temporary Census workers will inflate the monthly change in 
payroll jobs above its underlying trend through May. Then, the 
dismissal of these temporary Census workers during the following five 
months will pull the monthly change in payroll jobs below its 
underlying trend from June through October. Because this is a Census 
year, we will need to examine the payroll jobs data, without this 
distortion to understand the employment situation during 2010.
    Dr. Hall, I look forward to hearing your testimony.

                               __________

  Prepared Statement of Dr. Keith Hall, Commissioner, Bureau of Labor 
                               Statistics

    Madam Chair and Members of the Committee:
    Thank you for the opportunity to discuss the employment and 
unemployment data we released this morning.
    The unemployment rate declined from 10.0 to 9.7 percent in January. 
Nonfarm payroll employment was essentially unchanged (-20,000) and on 
net has shown little movement over the last 3 months. In January, job 
losses continued in construction and in transportation and warehousing, 
while employment increased in temporary help services and retail trade. 
With revisions released today, job losses since the start of the 
recession in December 2007 totaled 8.4 million, substantially more than 
previously reported.
    Construction employment fell by 75,000 in January, about in line 
with the average monthly job loss in 2009. Nonresidential specialty 
trade contracting accounted for much of the over-the-month decline. The 
nonresidential components of construction have accounted for the 
majority of the industry's job loss since early 2009. Employment in 
transportation and warehousing decreased by 19,000 in January; the 
entire decline occurred in courier and messenger services, which laid 
off more workers than usual over the month.
    Employment in temporary help services grew by 52,000 over the 
month. This industry, which provides workers to other businesses, has 
added nearly a quarter of a million jobs since its recent low point 
last September. Following 2 months of little change, retail trade 
employment increased by 42,000 in January, with gains in several 
components. Health care employment continued to rise in January. 
Overall, manufacturing employment was little changed, although motor 
vehicles and parts added 23,000 jobs. Since June, the manufacturing 
workweek for all employees has increased by 1.2 hours.
    Federal government employment rose in January, partly due to hiring 
for the decennial census. Employment in state and local governments, 
excluding education, continued to trend down over the month.
    Average hourly earnings of all employees in the private sector rose 
by 4 cents in January to $22.45. Over the past 12 months, average 
hourly earnings have risen by 2.0 percent. From December 2008 to 
December 2009, the Consumer Price Index for All Urban Consumers (CPI-U) 
increased by 2.8 percent.
    Turning now to some measures from our household survey, both the 
number of unemployed persons (14.8 million) and the unemployment rate 
(9.7 percent) declined in January. However, the share of those jobless 
for 27 weeks and over continued to rise.
    The employment-population ratio increased to 58.4 percent over the 
month. The number of persons working part time who would have preferred 
full-time employment dropped from 9.2 to 8.3 million, the lowest level 
in a year.
    Before closing, I would note that several changes were introduced 
today to the Employment Situation news release text and tables. Three 
new household survey tables provide information on the employment 
status of veterans, persons with a disability, and the foreign-born 
population. In January, the unemployment rate of veterans from Gulf War 
era II (September 2001 to the present) was 12.6 percent, compared with 
10.4 percent for nonveterans. Persons with a disability had a higher 
jobless rate than persons with no disability--15.2 versus 10.4 percent. 
In addition, 21.8 percent of persons with a disability were in the 
labor force, compared with 70.1 percent of persons without a 
disability. The unemployment rate for the foreign born was 11.8 
percent, and the rate for the native born was 10.3 percent. (The data 
in these new tables are not seasonally adjusted.)
    The establishment survey tables have been redesigned to include the 
addition of data on hours and earnings for all private-sector employees 
as well as employment information for women. Women currently make up 
49.9 percent of total nonfarm payroll employment, compared with 48.8 
percent when the recession began in December 2007. Additional 
information about the new and redesigned tables is available on the BLS 
Web site.
    I would also note that there were annual adjustments to data from 
our two surveys. The establishment survey data released today reflect 
the incorporation of annual benchmark revisions. Each year, we re-
anchor our sample-based survey estimates to full universe counts of 
employment, primarily derived from administrative records of the 
unemployment insurance tax system. Accounting for revisions during the 
benchmark and post-benchmark periods, the previously published level of 
total nonfarm employment for December 2009 was revised downward by 
1,363,000. Household survey data for January reflect updated population 
estimates from the U.S. Census Bureau. Further information about the 
impact of these adjustments is contained in our news release and on our 
Web site.
    Returning now to the labor market data we released this morning, 
the jobless rate declined to 9.7 percent in January, and payroll 
employment was essentially unchanged.
    My colleagues and I now would be glad to answer your questions.

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