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


                                                        S. Hrg. 111-655
 
                  THE EMPLOYMENT SITUATION: JUNE 2010 

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

                                HEARING

                               before the

                        JOINT ECONOMIC COMMITTEE
                     CONGRESS OF THE UNITED STATES

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

                              JULY 2, 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 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. Kevin Brady, a U.S. Representative from Texas...............     3
Hon. Elijah E. Cummings, a U.S. Representative from Maryland.....     5

                                Witness

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

                       Submissions for the Record

Prepared statement of Representative Carolyn B. Maloney, Chair...    24
    Chart titled ``Monthly Change in Private Payrolls''..........    26
Prepared statement of Representative Kevin Brady.................    27
Prepared statement of Representative Elijah E. Cummings..........    28
Prepared statement of Dr. Keith Hall, Commissioner, Bureau of 
  Labor Statistics, together with Press Release No. USDL-10-0886.    29
Letter dated July 27, 2010, transmitting Commissioner Hall's 
  response to Representative Brady...............................    33
Letter dated July 16, 2010, transmitting Commissioner Hall's 
  response to Representative Maloney.............................    34


                  THE EMPLOYMENT SITUATION: JUNE 2010

                              ----------                              


                          FRIDAY, JULY 2, 2010

             Congress of the United States,
                          Joint Economic Committee,
                                                    Washington, DC.
    The committee met, pursuant to call, at 9:36 a.m. in Room 
106 of the Dirksen Senate Office Building, The Honorable 
Carolyn B. Maloney (Chair) presiding.
    Representatives present: Maloney, Cummings, and Brady.
    Staff present: Andrea Camp, Gail Cohen, Colleen Healy, 
Jessica Knowles, 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. I would 
first like to recognize myself for my opening statement.
    Today's employment report from the Bureau of Labor 
Statistics shows that in June, the economy added 83,000 private 
sector jobs, making June the sixth straight month with 
employment gains in the private sector.
    [The chart titled ``Monthly Change in Private Payrolls'' 
appears in the Submissions for the Record on page 26.]
    You can see that the light blue is the gains of jobs in the 
private sector. The red, on the so-called V-chart that we use 
in the Joint Economic Committee, is when President Bush was in 
office. As you see in the down part of the valley, at the low 
point we lost over 779,000 jobs, during the last month that 
President Bush was in office. When President Obama took office, 
it has been a zig-zag, but we are trending in the right 
direction and we are gaining private-sector jobs.
    Since the beginning of this year, in fact, the economy has 
added 593,000 jobs in the private sector. As expected, the June 
report also showed a sharp decline in temporary Census workers 
(government workers) causing total nonfarm payrolls to decline 
for the first time this year.
    Additionally, the June employment report showed that the 
unemployment rate ticked down to 9.5 percent, and the number of 
unemployed workers declined by 350,000.
    Although the overall unemployment rate has declined from 
its peak of 10.1 percent in October, not all demographic groups 
are seeing the same trends in unemployment rates. For example, 
the unemployment rate for African-American workers continued to 
rise after October, although the current unemployment rate of 
15.4 percent is lower than the peak of 16.5 percent. Although 
the unemployment rate for women showed little change in the 
first 5 months of 2010, the unemployment rate for women 
declined in June to 8.3 percent.
    We have made real progress in the past year. Last June, 
this country lost 452,000 private sector jobs. While these job 
gains are not as robust as earlier this year, the trend is 
definitely in the right direction. The policies that Democrats 
in Congress quickly put into place over the last year are 
working.
    In addition to overall private-sector job gains, there were 
gains across many sectors in our economy. Manufacturing 
employment has risen for six months in a row, after falling for 
three straight years. Consumer spending has risen every month 
since October of 2009. Surveys of both the service sector and 
the manufacturing sector show that the growth is expected to 
continue.
    But we have to be patient. The path to recovery is never in 
a straight line. For the millions of workers who lost their 
jobs, it will take time for them to become employed again. We 
also have to be vigilant. The recovery is still fragile and our 
economy is still vulnerable. In fact, Nobel Laureate Paul 
Krugman believes that we are in the early stages of another 
Great Depression.
    He recently wrote that this depression, and I quote, ``will 
be primarily a failure of policy . . . governments are 
obsessing about inflation when the real threat is deflation, 
preaching the need for belt-tightening when the real problem is 
inadequate spending.''
    I am disheartened that the Senate has failed to extend 
unemployment insurance benefits, despite the fact that there 
are still 14.6 million unemployed workers bearing the brunt of 
the worst economic crisis since the Great Depression. As a 
result, an estimated 1.7 million unemployed workers will lose 
benefits by the end of next week.
    Some Members of Congress do not want to extend unemployment 
benefits because they believe these benefits create a 
disincentive for people to seek work.
    As this JEC Majority Staff Report shows--this is a report 
that was developed and released recently by the JEC Majority 
Staff--the evidence is very clear: these benefits do not 
inhibit job seekers from vigorously looking for or accepting 
work. Instead, these benefits provide an enormous benefit to 
society by stimulating the economy as well as preventing 
workers from dropping out of the labor force.
    Every dollar that an unemployed worker gets, he or she 
plows right back into the economy--because they need to. That 
helps us reduce the deficit. That helps us keep our economy 
moving.
    Even former Chairman of the Federal Reserve Board Alan 
Greenspan expressed strong support for extensions of 
unemployment benefits after the first Bush recession.
    In a hearing before the Joint Economic Committee in May of 
2003, Chairman Greenspan stated, and I quote, ``when you're in 
a period of job weakness where it is not a choice on the part 
of people whether or not they're employed or unemployed, then, 
obviously, you want to be temporarily generous. And that's what 
we've done in the past, and I think it's worked well.''
    In May 2003, we had fewer than 3 unemployed workers for 
every opening, and the unemployment rate was 6.1 percent. The 
most recent data shows that there are 5 unemployed workers for 
every opening, and the unemployment rate is 9.5 percent.
    Extending these benefits provides stimulus to the economy 
and a social safety net for people who are out of work. It is 
also fiscally prudent, as well.
    Disabled workers who become discouraged and drop out of the 
labor force enter the Social Security Disability Insurance 
Program, which is much more expensive than unemployment 
insurance benefits.
    We all know that unemployment benefits stimulate the 
economy. Every dollar distributed in unemployment benefits 
multiplies to create over $1.60 in economic activity.
    At a hearing before this Committee in February, Douglas 
Elmendorf, director of the nonpartisan Congressional Budget 
Office, testified that extending these benefits is one of the 
most effective and efficient ways to stimulate the economy. And 
surely it is obvious that getting the economy to grow and 
getting people back to work are crucial to getting our deficit 
under control.
    Moreover, this will be the first time since 1959 that the 
government will allow unemployment benefits to expire when the 
national unemployment rate was over 7 percent.
    It is time for all Members of Congress to put the American 
people first.
    I yield back the balance of my time, and yield to my 
colleague and good friend, Mr. Brady.
    [The prepared statement of Representative Maloney appears 
in the Submissions for the Record on page 24.]

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

    Representative Brady. Thank you, Madam Chairman. And Happy 
4th of July. I hope you enjoy the holidays.
    I am pleased once again to join in welcoming Dr. Hall 
before the Committee this morning.
    Today's report is more disappointing news for American 
workers and their families. Total non-farm payroll employment 
decreased by 125,000. And even after excluding the layoffs of 
225,000 temporary Census workers, private sector payroll job 
growth remains anemic at 83,000. At this slow pace it will take 
much of the decade to return to normal employment levels.
    While the unemployment rate fell to 9.5 percent, it fell 
for the wrong reason: a precipitous drop of 652,000 workers in 
the labor force or, more importantly, out of the labor force.
    The number of discouraged and other marginally attached 
workers that have stopped actively seeking jobs rose to 2.6 
million, an all-time series high. And 6.8 million American 
workers have remained unemployed for six months or longer.
    In January of last year, President Obama promised that the 
Democrats' economic program would restore confidence and jump-
start the U.S. economy. Last month, the Conference Board's 
Consumer Confidence Index fell dramatically. Consumer 
confidence is flagging because families are frightened by 
dangerous deficits as far as the eye can see.
    And as for jump-starting the economy, two of the 
Administration's top economists, Christina Romer and Jared 
Bernstein, predicted that if Congress were to pass the 
President's stimulus bill the unemployment rate would remain 
below 8 percent and non-farm payroll employment would increase 
to 137.6 million jobs by the fourth quarter of this year. 
Democrats in Congress did enact the American Recovery and 
Reinvestment Act last year, but this stimulus has fallen far 
short of both of these important projections.
    The growth of real GDP slowed by more than one-half from 
5.6 percent in the last quarter of 2009 to 2.7 percent in the 
first quarter of this year.
    A number of economic indicators flashed yellow in the 
second quarter, suggesting that economic growth may be sluggish 
for the remainder of this year and next. Americans don't see an 
economy in recovery. They see a White House seemingly incapable 
of protecting our beaches or getting people back to work.
    This anemic economic performance after the recession that 
began in December of 2007 is in sharp contrast to the robust 
economic growth that benefitted American workers and their 
families after the 1981-1982 recession.
    The Obama recovery is one-third the recovery of the Reagan 
recovery, one-third the recovery from the 1981-1982 recession. 
President Reagan's economic policies were a tailwind 
accelerating real economic growth. President Reagan pursued 
pro-growth policies, including large reductions in marginal tax 
rates, deregulation, and trade opening.
    Combined with the disinflationary monetary policies under 
Federal Reserve Chairman Paul Volcker and Alan Greenspan, 
Reagan laid the foundation for two decades of prosperity.
    In contrast, President Obama and Congressional Democrats 
have pursued largely anti-growth policies that have hindered 
this recovery. Businesses are slow to hire because they fear 
higher taxes, job killing regulation, and a dysfunctional 
Washington that is ideologically driven and increasingly anti-
business. Instead of providing encouragement, President Obama 
and this Congress have given entrepreneurs reason to worry.
    Businesses are not reluctant to hire because they are 
waiting to see what Washington will do for them, they are 
reluctant to hire because they're afraid of what Washington 
will do to them.
    Ominously, President Obama and Congressional Democrats are 
insisting on reckless increases in federal spending both now 
and in the future. This puts the triple-A reputation of the 
U.S. Government into jeopardy for the first time since 
Secretary of the Treasury Alexander Hamilton miraculously 
resurrected the finances of the United States after the 
Revolutionary War and put us on the road to becoming the 
world's economic superpower.
    The Congressional Budget Office projects that under the 
President's budget federal spending will grow to 25.2 percent 
of GDP, far above its post-war average of 19.5 percent. A 
structural budget deficit in excess of 4 percent of GDP will 
persist through the next decade.
    Consequently, publicly held federal debt will rise to 90 
percent of GDP by the end of fiscal year 2020. In The Long-Term 
Budget Outlook released just two days ago, the Congressional 
Budget Office projects that under the alternative fiscal 
scenario which keeps current policies in place, uncontrolled 
spending growth will cause the publicly held federal debt to 
explode to nearly ten times America's GDP by the end of fiscal 
year 2084.
    President Obama and Congressional Democrats are pursuing 
reckless fiscal policies that are clearly unsustainable. Unless 
their excessive spending, deficits, and debt accumulation are 
quickly reversed, the United States may experience a debt 
crisis similar to Greece. We are putting the future of our 
children and grandchildren in grave jeopardy. Unlike Greece, 
however, no one will be around to bail us out.
    Dr. Hall, I look forward to hearing your testimony.
    [The prepared statement of Representative Brady appears in 
the Submissions for the Record on page 27.]
    Chair Maloney. The Chair recognizes Congressman Cummings.

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

    Representative Cummings. Thank you very much, Madam Chair.
    It is so easy to take a look at these reports every month, 
Commissioner Hall, and have a spirit of fear, as opposed to 
hope. I have chosen hope.
    When I think about from whence we come, and the chart here 
tells the story very clearly, back in January of 2009 we are in 
deep, deep trouble. President Obama came in with a patient--
that is, our economic system--that was in deep trouble, and was 
in intensive care. He took that situation and turned it around.
    I do not know how many people have ever been in intensive 
care, but it takes time to heal. I do believe that our country 
has come a long way. Is it where we want it to be? No. I wish 
that we could wave a magic wand. And the people who come to me 
on a daily basis in my District, the ones who are saying that 
they cannot find jobs, I wish they could find them. But the 
fact still remains that we have come a long way, and we do have 
a long way to go.
    I have often said that in these hearings when we hear our 
jobs reports on a monthly basis the question becomes so often 
when do we root for the home team? When do we acknowledge 
progress? When do we give this President, this Administration, 
this Congress credit for what we are accomplishing?
    We must keep in mind that 60 percent of the GDP is consumer 
spending. And my good friend, Mr. Brady, is absolutely right. 
It is about confidence. But the fact remains that one of the 
things to get that confidence going is going back to what the 
Chairwoman talked about in most of her speech this morning. We 
have got to get people employed, but we also have to make sure 
that those who are not employed and cannot find jobs through no 
fault of their own have some kind of way of making it from day 
to day.
    You know, sometimes I listen to my colleagues on the other 
side and I wonder. What do you say? And maybe they have never 
been in those situations where a person just could not find a 
job. So what do you say to the person who cannot find a job? 
Just go and die? Just get lost? No empathy? No nothing? Because 
through no fault of their own?
    So I am hoping too, Madam Chair, that the Senate will act. 
I think it is very sad that we leave for a 4th of July 
vacation, and when the fireworks are going off and people are 
having fun, there will be a lot of people throughout our 
country who will not be able to. They are not trying to get 
down, as I have often said, to Disney World; they are just 
trying to get to the nearest amusement park.
    They are not trying to eat steak; they are simply trying to 
get hamburger. Folks who are just trying to live their lives. 
People who were doing fine a few years ago, doing fine before 
the country was put into intensive care through no fault of 
their own; doing fine while others were getting, at AIG and 
other big firms, were getting major bonuses for millions of 
dollars for running our country into the gutter.
    And so again, one of the things that we did not talk about 
yet this morning is that a lot of people at the beginning of 
this week were saying, oh, the sky is going to fall and we will 
move from 9.7 to 9.9. I heard it all week. Not a mumbling word 
yet about the fact that the unemployment rate went down to 9.5. 
Hello? Rooting for the home team.
    We still have a lot to do, but the fact still remains that 
we have come a long way. And the Chairwoman is right. We are 
going in the right direction. And I think that there are things 
that this Congress can do in working with this President to 
speed that process up.
    And so I choose hope, as opposed to fear. With that, Madam 
Chair, I yield back.
    [The prepared statement of Representative Cummings appears 
in the Submissions for the Record on page 28.]
    Chair Maloney. Thank you very much.
    I would now like to introduce Dr. Keith Hall. He is the 
Commissioner of the Bureau of Labor Statistics for the United 
States Department of Labor. The BLS is an independent national 
statistical agency that collects, processes, analyzes, and 
disseminates essential statistical data to the American public, 
the United States Congress, other federal agencies, state and 
local governments, business, and labor.
    Dr. Hall has also served as Chief Economist for the White 
House Council of Economic Advisers. Prior to that, he was Chief 
Economist for the U.S. Department of Commerce. Dr. Hall also 
spent 10 years at the United States International Trade 
Commission.
    Thank you for your public service. We look forward to your 
testimony.

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

    Commissioner Hall. Thank you, Madam Chair.
    Thank you for the opportunity to discuss the employment and 
unemployment data we released this morning.
    Nonfarm payroll employment fell by 125,000 in June, and the 
unemployment rate edged down to 9.5 percent. The decline in 
employment reflects a large drop in the number of temporary 
workers for Census 2010.
    The number of jobs in the private sector edged up due to 
modest increases in several industries. Private sector 
employment has risen by 593,000 so far in 2010, but in June was 
7.9 million below its pre-recession level.
    Over the month, Federal Government employment declined 
sharply. The number of temporary Census workers were dropped by 
225,000, leaving 339,000 temporary workers on the Census 
payroll.
    In the private sector, temporary help services employment 
continued to grow over the month. The industry has added 
379,000 jobs since September of 2009. Employment also rose in 
management and technical consulting and in business support 
services in June. Amusements, gambling, and recreation gained 
28,000 jobs, while transportation and warehousing employment 
was up by 15,000.
    Mining employment continued to trend up, and the industry 
has gained 56,000 jobs since October of 2009. Employment in 
manufacturing also continued to trend up in June. The industry 
has added 136,000 jobs so far this year. The manufacturing 
workweek declined by half an hour in June, more than offsetting 
an increase in May. Nonetheless, factory hours remained 1.3 
hours above their recent trough. Employment in health care 
edged up in June.
    Construction employment fell by 22,000; specialty trade 
contractors accounted for most of the decline. On net, 
construction employment has shown little change over the last 4 
months.
    Turning to measures from the survey of households, the 
unemployment rate edged down by 0.2 percentage point to 9.5 
percent in June. Of the 14.6 million unemployed individuals, 
about 6.8 million have been jobless for 27 weeks or more. In 
comparison, 1.3 million persons were unemployed for 27 weeks or 
more when the Recession began.
    The labor force declined in June, following increases 
earlier in the year; the labor force participation rate has 
declined by half a percentage point over the last 2 months.
    The employment to population ratio edged down 58.5 percent 
in June. Among the employed, there were 8.6 million individuals 
working part-time who preferred full-time work. The number of 
such workers has fallen by 525,000 over the past 2 months.
    In summary, payroll employment fell by 125,000 in June, as 
modest growth in the private sector was more than offset by a 
large decline in temporary census workers. The unemployment 
rate edged down to 9.5 percent.
    My colleagues and I would now be glad to answer your 
questions.
    [The prepared statement of Commissioner Hall, together with 
Press Release No. USDL-10-0886, appears in the Submissions for 
the Record on page 29.]
    Chair Maloney. Commissioner Hall, what are the bright spots 
in this month's jobs report? And are there any particularly 
encouraging areas that you can report to us in this month's 
report?
    Commissioner Hall. Well the biggest bright spot is of 
course I think the drop in the unemployment rate from 9.7 to 
9.5 percent. And although the private sector job growth was not 
strong, it was job growth; and it has been growing now for 6 
straight months. So I think in context that is a positive sign.
    Manufacturing employment continues to grow--again, not 
strongly, but it has grown now for 6 straight months. So I 
think that also is a good sign.
    And temporary help continues to add jobs, and has added 
quite a few jobs. And that continues to be a good sign for 
generally future growth I think in employment.
    There was not really strong job growth--strong growth in 
any portion of the economy, but there was not strong job loss, 
either. And I think the several areas I mentioned were modest 
job growth.
    Chair Maloney. What sectors are experiencing more job 
creation than job losses now? You mentioned manufacturing. What 
other areas?
    Commissioner Hall. Manufacturing is. Retail trade declined 
a little bit this month, but over the prior six months it 
started to grow modestly in job growth. Of course temporary 
help services, I mentioned that as well.
    Education and health services continues to add jobs. And 
leisure and hospitality has grown jobs for the last six months, 
and in June as well.
    Chair Maloney. Are there any other sectors that are showing 
signs that they might have job growth, or giving an indication 
that they are getting stronger?
    Commissioner Hall. I would say there are no real industries 
that are losing jobs strongly. Everything is either hovering 
around little job growth or is growing a little bit. So I would 
say that the biggest indication is probably the temporary help 
services that has been strong, that suggests that at some point 
employers will start to bring back other workers.
    Chair Maloney. As you said, we are trending in the right 
direction. Are there any further indicators that overall job 
gains will continue in the coming months, besides the temporary 
help and the six months of job gains in manufacturing?
    Commissioner Hall. Yes. I think one of the more encouraging 
things, although this month the manufacturing work hours 
declined--that's not a good sign; but prior to that, there had 
been a pretty steady rise in manufacturing work hours. That is 
generally a leading indicator, as well.
    Chair Maloney. And I would like to ask you about the Gulf 
region. Have you done any analysis on the impact of the 
disaster on jobs in that region? Are you tracking that?
    Commissioner Hall. We are starting to do some tabulations 
on that. We are probably not going to be able to simply 
identify which--you know, what has been the effect of the oil 
spill, but we will probably have some nice tabulations that 
will show you the areas that could be affected.
    In terms of the overall job impact, this is probably going 
to be a tricky thing to estimate because you do get a job boost 
from cleanup and activities like that, but then of course you 
have tourism and such along the beaches that will be impacted. 
But we do have some pretty good data on that, and I think as 
more of our data becomes available people will sort of be able 
to tease out some of the effect.
    Chair Maloney. And when will it be available?
    Commissioner Hall. Some of it will be available over the 
next few months. The best data we've got actually will not be 
available for quite awhile. The payroll jobs that we sample 
right now, at some point we are going to do a census of all 
those. We do that once a year. That will give us really 
detailed information, but that will not be for another, 
probably another year.
    Chair Maloney. Thank you.
    Mr. Brady.
    Representative Brady. Commissioner, I can't believe you 
just said a bright spot is that the unemployment rate fell. Do 
you realize that is because 652,000 Americans gave up looking 
for work?
    Commissioner Hall. Absolutely. The labor force did decline 
by that much.
    Representative Brady. So if next month another 600,000 
people give up looking for work, should we organize some parade 
to cheer it? It seems to me that that is not good news going 
forward. And also, the second quarter I think all of us were 
kind of optimistic about it; it started out strong, and it has 
not moved forward.
    I do not see any payroll job growth by industry in this 
month's report that is statistically significant. Do you?
    Commissioner Hall. No, I don't. And I certainly would agree 
that we have not yet seen strong, sustained job growth. And 
that is clearly something we are going to need to see at some 
point to start lowering the unemployment rate further.
    Representative Brady. I think companies are hopeful, you 
know what I mean, that their customers or clients will start 
demanding, have that confidence, consumers will have 
confidence, companies will have confidence to make those 
investments and hiring decisions, but that is not happening.
    I do think it is the policies of Washington that is holding 
this recovery back. But I would like to point out, I agree that 
the unemployment benefits that have lapsed, that that is a 
tragedy, but I would point out that Democrats have no one to 
blame but themselves. This is not a surprise. We have known 
this deadline for months.
    They hold the super-majority in the House, the Senate, and 
they hold the White House. I guess, other than blaming George 
Bush, I think they have to look in the mirror for those who 
will not be getting help this month.
    But I think most people who are on unemployment are looking 
hard for work, you know, are struggling to find it, and what 
they really want are jobs. And this report today is not very 
encouraging news for them.
    One concern I have, and Chairwoman Maloney raised the 
issue, I think correctly, the impact of the Gulf oil spill. You 
know, clearly it is going to have an impact on tourism along 
those beaches. It is going to have a big impact on, you know, 
tourist season is pretty short. Shrimping, oyster season is 
very short. Every week counts, and matters. And I think we are 
going to see some real impacts from that going forward in the 
future months.
    Have you been able to estimate--another equally important 
blow to our economy is this drilling moratorium, six-month 
drilling moratorium on the 33 deep-water wells. The federal 
courts have stayed that moratorium, but Secretary Salazar has 
announced in the next few days that they will find a way to 
reinstate it.
    In our region we are already--I had breakfast last week 
with a woman who was laid off due to the drilling moratorium. 
There are almost 50,000 jobs directly related to those rigs in 
the Gulf Coast in the deep-water area, and thousands of 
businesses, many of them small and mid-sized businesses who, as 
they say, we can't survive six months without revenue.
    Have you had a chance to study the impact of shutting down 
our energy exploration in the Gulf for a six-month period, if 
that, including the rigs that will leave? It just was announced 
this week, rigs are leaving for West Africa and the Middle East 
and will not be returning for a year to three because of the 
schedule. Companies are already redeploying workers to other 
areas that are allowing energy exploration.
    Do you have any estimates yet on what the devastating 
economic impact of that moratorium would be?
    Commissioner Hall. We don't yet, but we--if you like, I can 
follow that----
    Representative Brady. Okay.
    Commissioner Hall [continuing]. And take a look and sort of 
see what sort of numbers----
    Representative Brady. When do you think the impact from the 
Gulf spill will start showing up in your reports? I noticed in 
this week, for example, it was small, you know, but there was 
some tiny job gain in amusement, recreation, you know, that 
area, tourism-related type areas. Do you think we will start 
seeing that impact in next month's report, or the following 
one?
    Commissioner Hall [continuing]. Yes, whatever impact there 
is I think we will. The difficulty for us is teasing out the 
impact of something like that. Because in context of 130 
million payroll jobs, teasing out that sort of impact is very 
difficult.
    I think we have got the right sort of data that someone can 
take a look at that and try to make some estimates, but to be 
honest it won't be easy. And it's not because it's not there; 
it's because it is very hard.
    Representative Brady. You have to isolate it to build it.
    Commissioner Hall. Yes.
    [Letter dated July 27, 2010 transmitting Commissioner 
Hall's response to Representative Brady appears in the 
Submissions for the Record on page 33.]
    Representative Brady. Great. Thank you, Madam Chairman.
    Chair Maloney. Thank you very much. But I need to respond 
to my good friend and colleague. There's a lot of revisionist 
history going on.
    Blaming the Democrats for the loss of jobs is absolutely 
factually incorrect. We see clearly in this chart in red, 
white, and blue for the 4th of July that's coming up, clearly 
President Bush not only inherited a surplus, but we see 
throughout his Administration, in a zig-zagged way, we 
continued to lose jobs in a downward trend until the last month 
he was in office. We lost, this country lost, over 779,000 
jobs. That is an undisputed fact.
    With President Obama and the Democratic policies, we have 
started to trend in the right direction. Now it is true that 
recoveries never move in a straight line. It has not been a 
straight line up that V-chart, and it certainly does not stand 
for victory, but it shows progress and that we are moving in 
the right direction.
    Now it shows that we have gained private sector jobs, the 
truest indicator of an economic recovery. The light blue is 
consistently zig-zagged in a way, but it shows that we are 
stabilizing our economy.
    The recovery will take time, but we need to stay vigilant. 
We need to continue working. We need to continue helping our 
people find jobs. And I can assure you, the Democrats will not 
stop until every American who wants a job can get one.
    I now recognize my good friend and colleague, Mr. Cummings, 
who has been a very creative leader in creating jobs and 
helping small businesses.
    Representative Cummings. Thank you very much, Madam Chair.
    Mr. Brady said when Democrats look in the mirror we should 
blame ourselves for the plight of our many constituents who are 
out of work. And I just want to be very clear that when I look 
in the mirror I feel good about the fact that just yesterday I 
voted to try to help constituents get unemployment benefits, 
while the other side of the aisle was voting against those in 
need.
    So I do not know what kind of mirror we want to be looking 
into, but that is the mirror I look into.
    And I do not want to get into the blame game, but I do want 
to make the picture clear. Mr. Brady also asked you about the 
Gulf Coast. We understand that there are 33 wells--and I have 
been down there twice, and I am getting ready to go again--but 
there are 33 wells we are talking about here, out of 3,600, 33 
wells that the moratorium affects.
    And when we see the damage that has been done to our 
environment, when we see the 11 gentlemen who were tragically 
killed, we had as a matter of fact one of them, his father was 
with us yesterday in the Transportation Committee. And then we 
see all the damage done to our environment, a six-month 
moratorium to try to get this thing straight so that it does 
not happen again seems to be a small price.
    So we do understand that it does affect people. And I have 
talked to folks on both sides of that issue. But the fact still 
remains that billions upon billions, tens of billions of 
dollars of damage has already been done. Lives have been lost. 
And we have got to figure out how to bring a balance to this, 
and I think the President is doing the right thing.
    But let me ask you this. Another thing Mr. Brady talked 
about--and I heard some people on CNBC talking about on my way 
here--they were saying that it was interesting that I think it 
was last month we had an increase in the number of jobs, but 
yet and still the rate--I'm not talking about this report, but 
the last one--but the rate stayed the same? Is that right?
    Commissioner Hall. Yes.
    Representative Cummings. It stayed the same. And they were 
saying that you have got a situation where if you are going to 
live and die by the rate--that is, either 9.5, 9.7, whatever--
that there are certain variables that come with that. And, 
that--but the overall picture is still that we are going in the 
right direction. I mean, in other words, that we are not moving 
backwards? Is that a fair statement? I am not trying to put 
words in your mouth.
    Commissioner Hall. No, that's a fair statement. We are 
making--the data is showing improvement over several months.
    Mr. Cummings. And this temporary job thing, you talk about 
that every month. And you say that that is something 
significant. But at what point would you expect temporary jobs 
to turn into permanent jobs? Do you follow me?
    Commissioner Hall. Sure, sure. You know, it is not clear. 
It predicts turning points very well. And it is continuing to 
show growth. But to be honest, the reaction sort of varies at 
times. Sometimes it comes faster, sometimes later.
    Representative Cummings. And so these private temporary 
jobs, there was a small growth in those?
    Commissioner Hall. Yes, there was.
    Representative Cummings. And what is the significance of 
that, as opposed to public?
    Commissioner Hall. As opposed to public? With the private 
sector it's a reflection of the fact, probably the fact that 
establishments are more likely to bring back the temporary help 
workers first before they start bringing back the permanent 
workers. That is why it winds up being sort of a leading 
indicator.
    And it is perhaps an indicator of some uncertainty, that 
they are bringing back temporary folks instead of permanent 
hires.
    Representative Cummings. But at least they are going in the 
direction of increasing something?
    Commissioner Hall. That's correct.
    Representative Cummings. You know there was an article in 
The New York Times just yesterday that said that employment in 
the manufacturing sector is on the rise. And in fact it said 
the data would show an increase--the report today shows a 
report of 9,000 jobs in manufacturing. Is that accurate?
    Commissioner Hall. That's accurate, yes.
    Representative Cummings. And what is the significance of 
this data?
    Commissioner Hall. Well first of all, manufacturing has not 
shown sustained job growth for a long time. In fact, the last 
recession, the recovery after the last recession, manufacturing 
didn't regain any of those jobs lost.
    So this is the first time manufacturing has shown some 
recovery from a recession in awhile, quite awhile.
    Representative Cummings. So I take it that is a good sign?
    Commissioner Hall. That is a good sign.
    Representative Cummings. I see my time has expired, Madam 
Chair.
    Chair Maloney. Thank you very much.
    Commissioner Hall, at our hearing in May we talked about 
Dr. Krueger's testimony. He is an economist at the Treasury 
Department, and he had testified at an earlier Joint Economic 
Committee hearing that the recovery, of course, was fragile, 
and it was moving in the right direction but very zig-zaggy, 
but he did testify and said something that I thought was 
tremendously interesting.
    He said that in most recoveries the driver of new job 
creation has always historically been small- and medium-sized 
businesses, but in this recovery it has been larger businesses. 
And I would like to ask you, do you have any numbers on small- 
and medium-sized companies and their hiring patterns?
    We in Congress have initiated a number of incentives to 
support small businesses to help them gain access to credit, to 
give them a tax relief for hiring new unemployed workers, and I 
would like to hear the status, since it is such an important 
part of our economy, of the employment movement in small- and 
medium-sized businesses.
    Commissioner Hall. First let me put it into context a 
little bit. In certainly the last recession, and in previous 
recessions, the job loss was somewhat centered in large firms. 
This particular recession it has been much more evenly 
balanced. There has been a much stronger job loss in small- and 
medium-sized firms than in past recessions.
    That has been notable. And now in this recovery, the early 
stage of the recovery hopefully, the large industries have 
shown--the large establishments have had job growth, since 
about September, but the medium and small have not. So they 
have been lagging in recovery.
    Our data isn't real up-to-date on that yet. We should be 
getting out some new data pretty soon on that, but that is the 
early indication.
    Chair Maloney. Since small businesses are such an important 
engine of our economy and of our employment in our country, 
would it be possible for you to supply us on a more regular 
basis the information on employment in small- and medium-sized 
businesses?
    Commissioner Hall. Sure. Yes. That is a tabulation that we 
haven't always done, but we can make an effort to try to update 
that for you. It is a little bit of a--it's a little bit of a 
difficult thing for us because our sample size on that is not 
very large. That's sort of why we don't do it all the time, but 
certainly it does--it will help inform things, so we will see 
what we can do.
    Chair Maloney. Could you help put this recovery in context 
in the first six months of 2010? We now have six months of 
employment data, and I would like to see if you could put it in 
context. Setting aside the temporary Census jobs that we lost 
(you noted that 225,000 were lost), how would you characterize 
overall the job growth in the first six months of 2010? Not 
this month, but the trend in the past six months?
    Commissioner Hall. Right. The past six months we have 
averaged about around 100,000 jobs a month. And while that is 
not strong, sustained job growth, that is job growth. And I 
have to say, that has actually been fairly typical.
    The last two recessions, one of the things I have been 
struck by is, comparing to the last two recessions, the labor 
market, once it hit its trough, the first six months 
afterwards--in this Recession so far the trough looks like it 
was somewhere in November or December of last year. We have 
averaged growth of about 100,000 jobs per month in the private 
sector.
    Last recession we hit the trough in Total Private was July 
of 2003. The first six months after that, we grew about 100,000 
jobs a month.
    Chair Maloney. So it's basically the same?
    Commissioner Hall. It's basically very much the same. And 
the----
    Chair Maloney. And to the six months before that?
    Commissioner Hall [continuing]. The six months before that, 
the last half of last year we were losing about 175,000 jobs a 
month for the second half of 2009.
    Chair Maloney. So is this a labor market in freefall? Or 
would you characterize it as one consistent with the early 
stages of prior economic recoveries?
    Commissioner Hall. I would say this is consistent with the 
recoveries in the last two recessions.
    Chair Maloney. Do you see anything in this information that 
is a potential pitfall or problem we could see in the future?
    Commissioner Hall. No, just that we are in a point, as in 
past recessions, where we have got job growth, there is some 
job growth, but it is not strong job growth, and it is not 
sustained yet.
    So I would say the biggest risk is just we will have 
probably a higher risk than--until we start to get strong, 
sustained job growth--higher risk of things not improving 
quickly.
    Chair Maloney. Thank you very much. Mr. Brady.
    Representative Brady. This recovery certainly is not 
consistent with the recovery of 1981 and 1982, where job growth 
and unemployment were again three times better than the Obama 
recovery.
    I will, though, take comfort in telling our workers and 
small businesses in the Gulf Coast who will lose their jobs, 
are losing their jobs and losing their businesses due to the 
drilling moratorium, that they are, quote, ``a small price to 
pay'' for this over-reactionary and politically advantageous 
policymaking here in Washington.
    What is frustrating I think is that this Congress, Democrat 
Congress, has had control over MMS that oversees the Gulf for 
three years and done nothing to reform it.
    The Obama Administration themselves approved British 
Petroleum's operational waivers on the wells. They approved the 
clean-up plans which have turned out to be awful. They have 
failed to support our Gulf Coast governors and local 
communities in protecting the marshes and beaches. That's why 
you see them on TV every day pleading for help.
    And now with the drilling, trying to reinstate a drilling 
moratorium, they are intent on turning an environmental 
catastrophe into an economic catastrophe. I'm not just talking 
about 50,000 direct jobs that will be lost by the moratorium, 
or the $2 billion in wages that will be taken from the economy, 
I'm talking about thousands of small businesses, medium-sized 
businesses, simply won't survive this.
    And what is frustrating is that 24 lawmakers on both sides 
of the aisle have sent a letter to Secretary Salazar 
recommending a path forward that would protect the safety and 
security of the Gulf but allow exploration to go forward on 
those development and appraisal wells in the Gulf, three-
fourths of them in the Gulf that pose almost no risk at all, a 
proposal that would save 75 percent of the jobs, avoid an 
energy supply problem in 2011-2012; we're just hopeful that 
maybe the small people, the small price to pay folks who are 
going to suffer can get some relief under this White House.
    Maybe Congress could delay their unemployment checks, as 
well.
    Commissioner, jobs' claims were up again last week. 
Construction has stalled out. No industry, as you just said a 
moment ago, none of the job growth here is statistically 
significant at all.
    Now there are worries from Europe. There are concerns about 
manufacturing slowdowns in China and throughout the world. The 
debt is keeping consumers at bay. The saving rate, if I 
understand, continues to go up. People are banking their money 
rather than buying from it.
    I too am looking for optimistic signs in these numbers, and 
the sooner we get this recovery going the better. But I just do 
not see what I think we are all hoping for. We need at least 
200,000-250,000 private sector, not government workers but 
private sector workers each month, that job gain just to start 
working off the unemployment rate in a sustainable rate? Is 
that the rough estimate?
    Commissioner Hall. Yes, I would say that would be strong 
sustained growth.
    Representative Brady. So lowering the unemployment rate not 
by workers giving up, which is what happened again this month, 
but by workers going back to work, we need at least twice the 
job growth rate in the private sector than we got this month? 
Is that correct?
    Commissioner Hall. To make a strong move downward in the 
unemployment rate, we do need something stronger.
    Representative Brady. I think that's what we ought to be 
shooting for in all our policies up here, is, you know, adding 
at least 200,000-250,000 private sector, not government jobs, 
to the payroll so that we can get this unemployment down and 
people can get some hope back again; consumer confidence can 
rise; and companies will again, you know, not be so fearful of 
Washington, energy prices, new taxes, new regulation, all this 
debt, that they'll make those critical business investment 
decisions.
    Thank you, Commissioner.
    Chair Maloney. Okay. Mr. Cummings.
    Representative Cummings. Yes, Thank you very much, Madam 
Chair.
    The Chairwoman was asking you, Commissioner Hall, a few 
minutes ago about I think medium-sized and small businesses. Do 
you remember that?
    Commissioner Hall. Yes, I do.
    Representative Cummings. In my District we just had the 
Federal Reserve to come and talk to some small business folks, 
about two or three weeks ago, because the Federal Reserve was 
trying to get a feel for what problems they were experiencing.
    And what we heard over and over again from these small 
business people was they had a problem with access to capital. 
They said that they had a lot of opportunities, a lot of 
opportunities to do certain jobs, but then the banks were not 
lending and they could not get access to capital.
    And I was just wondering. When you go through your--when 
you make these--the Chairwoman was asking about certain 
information is not in your reports and was asking you to look 
at some things. You don't go into depth as to why certain 
things happen like that, do you?
    In other words, you don't go that far?
    Commissioner Hall. No, we don't.
    Representative Cummings. And you do not even draw 
conclusions, do you?
    Commissioner Hall. No.
    Representative Cummings. I see. But that certainly is very, 
very significant--if you do not have the money, it is kind of 
hard to do what you have to do. And we have been pushing pretty 
hard on this side of the aisle trying to get these banks to do 
even more to open up the door so that people can get the 
capital.
    One of the things that is interesting, too, as I listen to 
you, I could not help but think about years ago when I was 
learning to ride a bike. Remember, the chain had to catch? But 
if the chain did not catch, you were not going anywhere fast.
    And basically what it sounds like here is things moving in 
the right direction, but there needs to be some kind of little 
catch, a push to get us moving, moving even faster. But once 
that happens, it seems, just listening to what you're saying 
and having read the information provided today, we might see 
that motion that sends us into another level of progress.
    In the past, has that been the case? In other words, in 
talking to the Chairwoman you were talking about how this 
compared to 2003, I think it was, and you said six months you 
see about 100,000 jobs each month. So what have you seen in the 
past with regard to when you get beyond that six months? And is 
there anything different about this Recessionary situation 
which would cause you to have less optimism or more pessimism?
    Commissioner Hall. It is true that in the past, through the 
past couple of recessions, after the six-month time period 
there was at some point fairly soon where the job growth did 
strengthen and become sustained. And we got well on our way to 
sort of recovering all of the jobs lost during the recession.
    The biggest concern that I would have going forward is that 
this has been a very severe Recession. And we do need--ideally, 
we would have even stronger job growth than in the last couple 
of recessions to recover those jobs. Otherwise, it is going to 
take awhile to recover those jobs. That would be my biggest 
concern, is that we really do need even stronger job growth 
than we have had during the early parts of the last couple of 
expansions to get back the jobs.
    Representative Cummings. And those other recessions, were 
they associated with anything like the problems that we have 
had with regard to Wall Street?
    Commissioner Hall. No. No, in fact both those other two 
recessions were mild recessions and relatively short 
recessions. This has been neither mild or short.
    Representative Cummings. So, I'm not putting words in your 
mouth, I am going to repeat what I said. President Obama came 
into this situation having to put a patient in intensive care, 
not just in critical--not just critical care, but intensive 
care, and now it has taken awhile to get out of that. It is a 
slow process.
    All of us would like the patient to get better quicker, but 
the fact still remains that--and for every person out there, 
and believe me, I feel their pain. Because I see them every 
day. When I got back to my District today, I guarantee you 
there will be people that will come up to me and say: Cummings, 
I'm looking for a job.
    But the fact is that we are going in the right direction. I 
just want to make it even faster.
    Thank you very much, Mr. Hall.
    Chair Maloney. Thank you very much.
    I agree with my good friend and colleague, Mr. Brady, that 
what we want in this country is robust private sector job 
creation. But I believe that trying to create 250,000 private 
sector jobs a month is a very daunting job, given the fact that 
the former President, President Bush, created roughly that much 
during his entire eight years in office.
    Again, for the 4th of July, our chart is in red, white, and 
blue. We were losing over 779,000 jobs a month. It takes a long 
time to recover, but we are trending in the right direction, 
employing Americans and digging ourselves out of this deep 
valley that President Obama inherited.
    I would like to ask you, Commissioner Hall, a few questions 
on some reports that the JEC produced on certain demographics 
and the impact of this Recession on them.
    In a report we did in March we found that African Americans 
had been disproportionately hurt by long-term unemployment. 
Have you seen any recent signs that the duration of 
unemployment is shortening for African Americans?
    Commissioner Hall. No, I haven't.
    Chair Maloney. You have not?
    Commissioner Hall. No.
    Chair Maloney. And also in a May report that we issued on 
working mothers, we noted that one out of three working mothers 
was the sole bread winner for her family. You noted in your 
last employment hearing that it is women with children who lost 
their jobs during this Recession. I am concerned how they are 
faring. Women and working mothers in particular--how did they 
fare during June?
    Commissioner Hall. Yes. You know, I don't have that data 
real handy. Yes, I think we don't have that data yet, but I 
would be happy to follow up with you for the June numbers. That 
data sort of lags.
    Chair Maloney. Okay. Thank you.
    [Letter dated July 16, 2010 transmitting Commissioner 
Hall's response to Representative Maloney appears in the 
Submissions for the Record on page 34.]
    Chair Maloney. And in a May report that the Joint Economic 
Committee issued on younger workers, we found that these 
workers were experiencing the highest unemployment in history 
for younger workers. Did things get any better in these June 
numbers for younger workers?
    Commissioner Hall. Not significantly, no.
    Chair Maloney. They did not. We also released a report on 
the impact of the Recession on Hispanic workers, and the report 
concluded that the drivers of unemployment in the Hispanic 
community are industry and geography. Latino workers were over-
represented among construction employment, and going into the 
downturn were more likely to live in regions that were hit hard 
by the housing burst--the housing bubble states such as Nevada, 
Arizona, Florida, and California. What has happened to 
construction employment in the first half of 2010? Is it 
experiencing job gains at the same rate as some of the other 
sectors?
    Commissioner Hall. No. In fact, we have been losing about 
19,000 jobs a month for the first half of this year in 
construction, still.
    Chair Maloney. Do you see any evidence that construction 
employment will expand in the near future and eventually reach 
the levels seen before the housing market collapse?
    Commissioner Hall. No. I think obviously the thing you 
would want to see first is the pickup in new-home construction, 
new housing starts. And we have not yet seen a big pick up in 
that.
    Historically it takes awhile, once the housing starts start 
to pick up, for the employment level to pick up. So there are 
not good signs on that yet.
    Chair Maloney. And with the Latino community, we felt that 
we need to look at focusing on policies on providing these 
workers not only with skills but the ability to be mobile, to 
move to areas where the economy is better, particularly in the 
construction trades. So we have been looking at trying to 
improve that, and working in that area.
    My time has expired. My colleague, Mr. Brady.
    Representative Brady. Man I hate being outnumbered on this 
Committee. It makes for a tough Friday morning. [Laughter.]
    Well I do think President Bush should apologize for the 
United States losing its soccer game the other day; Chicago not 
winning the Olympics bid; Avatar not winning the best motion 
picture of the year; and Democrats not passing unemployment 
benefits, for those who are out of work.
    Let's talk about debt, because it has a real impact on our 
economy. The debt of course is just skyrocketing. At one point, 
$5 trillion last year, $1.4 trillion this year. And the 
Congressional Budget Office tells a terrifying tale here in 
their report, in America's Debt.
    We have had economists before us telling us that when debt 
reaches a certain level, publicly held debt reaches a certain 
level, it creates a very strong drag on the economy, usually 
around the 90 percent level.
    We are at 83 percent of the GDP for all debt; 62 percent in 
the publicly held debt. It will skyrocket over the next decade 
in debt. And that puts us already right now, we are below 
Greece, Italy, and Portugal, but above other European countries 
that are Ireland, Spain, that are in trouble.
    In gross debt, in budget deficit we trail only Greece and 
Ireland. We are almost at 10 percent, the budget deficit, of 
percentage of our economy as well. This debt will increase as 
far as the eye can see. And the only thing being considered at 
this point are increasing taxes on families, small businesses, 
capital, dividends, and on companies that are trying to sell 
around the globe.
    Commissioner, debt creates higher interest payments for a 
budget, puts a strain on companies borrowing as well, and tends 
again to drag down the economy. At what point, or can you 
estimate how much our economy is hurting as a result of the 
debt that we are accumulating? And long term what that would do 
to our economy?
    Commissioner Hall. I wouldn't. That's just--I guess the 
main reason, that's not my garden to hoe. I am focused on the 
labor market.
    Representative Brady. You are a wise man. [Laughter.]
    Representative Brady. Can we talk a little about where you 
see trends going? Construction has stalled out for several 
months now. Manufacturing, as you said, has been stalled out as 
well. The few jobs we did see seem to be in services, temporary 
services, some services in consulting, a small amount in 
recreation and tourism.
    Are there any significant trends within the numbers this 
month that we can be looking to?
    Commissioner Hall. I don't want to speculate too much about 
going forward, but I think most of the trends that we have 
already seen have been the ones that I have mentioned, that we 
have had some job growth in manufacturing, and temporary help 
services continues to add jobs, and education and health 
services. Those have been the real trends pretty much all this 
year.
    Representative Brady. Great. Thank you, Madam Chairman.
    Chair Maloney. Thank you, my good friend and colleague. You 
mentioned the deficit, and that is a concern that we have. The 
Federal budget deficit was $941 billion through the first eight 
months of the fiscal year 2010, and $51 billion less than the 
record shortfall recorded over the same period last year. So 
both revenues and outlays are down.
    The debt is now--you know, we do have a strong debt. The 
total debt for the Federal Government was $13 trillion, and the 
Federal Government paid roughly $152 billion in interest 
through the first eight months of 2010, or 1 percent of GDP.
    We are certainly not in comparison with Greece. Certainly 
we need to focus on it, but to compare our economy at this 
point with others is really factually inaccurate.
    Now Mr. Cummings is recognized for five minutes.
    Representative Cummings. Mr. Hall, you spoke about the 
health care industry. You said they had increased jobs?
    Commissioner Hall. Yes.
    Representative Cummings. Has that been a steady situation? 
One of the things that I have been trying to encourage many of 
my constituents to do is to look towards those fields that seem 
to be on the upward trend, and seem to be providing jobs in a 
steady way. Because the reports are that a lot of companies now 
are doing more with less, and therefore will not be replacing 
people in the same jobs.
    So people have to be retrained. So I am just wondering if 
there are areas--for people that are looking at this right 
now--if there are areas that you see a trend in with regard to 
jobs either increasing or not losing, but seeming to have a 
steady, you know, some kind of stability or growth, what would 
those areas be?
    Commissioner Hall. Well the one that jumps out the most is 
in fact health care. Health care has steadily added jobs 
throughout the whole Recession. That is a fairly remarkable 
thing when you consider how many jobs we were losing while they 
were still growing some jobs.
    And certainly going forward, the demographics of the 
American population are going to encourage, probably going to 
encourage job growth in the health care industry as well.
    Representative Cummings. And when you look at the health 
care industry, is there a breakdown? Is it just general health 
care? Is it various types of health care? I'm just curious. Is 
it just health care in general?
    Commissioner Hall. We've got some breakdowns into some 
various categories.
    Representative Cummings. Okay, can you give me an idea of 
just generally what some of them might be?
    Commissioner Hall. Sure.
    Representative Cummings. In other words, I want people who 
are watching this to get an idea of what might be--I have got 
some people who have been out of a job for a long time, and 
they are trying to figure out where they go from here, and 
possibly going to a community college, or going back for some 
type of training, and I just want to give them some sense of 
hope. I have heard a lot of fear from Mr. Brady this morning, 
but I want to give some hope.
    Commissioner Hall. Sure. Within health care we have got 
ambulatory health care services, which includes: offices of 
physicians, outpatient care centers, home health care services. 
That sector added about 7,400 jobs this month. That was the 
major part of the job growth in health care this month.
    Hospitals actually have been losing jobs the last, this 
past month, the last 2 months. But there's also nursing and 
residential care facilities, which the biggest part is nursing 
care facilities. Those have been adding jobs throughout the 
Recession.
    And then--well social assistance is often worked into 
health care, as well, and that has continued to add jobs, child 
day care services and such.
    Representative Cummings. Now are there any other areas 
other than health care that might fall into that category of 
staying steady or increasing jobs?
    Commissioner Hall. Sure. You know, I think one of the 
things--I don't have the numbers in my mind very clearly, but 
we do produce some long-term forecasts on occupations and 
industry growth. And we have just released some last year that 
really give you an idea in great detail about the sort of 
industries where we expect job growth through either 
replacement or through just growing industries.
    There are a number of areas, mostly services' industries, 
service-providing industries, that have quite a bit of promise.
    Representative Cummings. The tourism industry and 
restaurants, or whatever, how are they doing?
    Commissioner Hall. They are doing okay. They have actually 
gone up and down. Those haven't shown a real clear pattern. We 
did have a loss this month in retail.
    Representative Cummings. The reason why I mentioned tourism 
and things of that nature is because it might show some 
confidence on the part of consumers if they are doing things 
that they might otherwise, if they were so concerned about 
finances, that they probably would not do. And I was just 
trying to figure out----
    Commissioner Hall. Sure. That makes logical sense, and I 
have sort of looked at that and I have not seen a real clear 
pattern, to be honest.
    Representative Cummings [continuing]. I see.
    Commissioner Hall. It does not seem to reflect so well 
consumer confidence like you think it might, like I thought it 
would.
    Representative Cummings. So last question. If the President 
called you as soon as we finished here and said: Hall, what is 
your summary of this month's report? What would you say?
    Commissioner Hall. I would say this is not a strong report, 
but the prior six months have been encouraging. This is not a 
strong report, but we did have a drop in the unemployment rate. 
We did have some job growth. And the past six months have had 
some job growth.
    Representative Cummings. Thank you very much.
    Chair Maloney. Thank you very much, Commissioner Hall, and 
your staff for being here today. And I thank my colleagues.
    The last six months, as Commissioner Hall has pointed out, 
the data clearly shows that the labor market has begun to turn 
around and is trending in the right direction.
    Without a doubt, job creation will be at the top of our to-
do list, and it will remain there until Americans across 
America are back to work. So I would like to wish everyone a 
safe and happy Independence Day, and thank you very much.
    [Whereupon, at 10:46 a.m., Friday, July 2, 2010, the 
meeting of the Joint Economic Committee was adjourned.]
                       SUBMISSIONS FOR THE RECORD

 Prepared Statement of Carolyn Maloney, Chair, Joint Economic Committee
    Today's Employment Report from the Bureau of Labor Statistics shows 
that in June, the economy added 83,000 private sector jobs, the sixth 
straight month of employment gains in the private sector.
    Since the beginning of the year, the economy has added 593,000 jobs 
in the private sector.
    As expected, the June report also showed a sharp decline in 
temporary Census workers causing total nonfarm payrolls to decline for 
the first time this year.
    Additionally, the June employment report showed that the 
unemployment rate ticked down to 9.5 percent and the number of 
unemployed workers declined by 350,000.
    Although the overall unemployment rate has declined from its peak 
of 10.1 percent in October, not all demographic groups are seeing the 
same trends in unemployment rates.
    For example, the unemployment rate for African American workers 
continued to rise after October, although the current unemployment rate 
of 15.4 percent is lower than the peak of 16.5 percent.
    Although the unemployment rate for women showed little change in 
the first 5 months of 2010, the unemployment rate for women declined in 
June to 8.3 percent.
    We have made real progress in the past year. Last June, we lost 
452,000 private sector jobs. While these job gains are not as robust as 
earlier this year, the trend is in the right direction.
    The policies that Democrats in Congress quickly put into place over 
the last year are working.
    In addition to overall private sector job gains,

      Manufacturing employment has risen for six months in a 
row, after falling 3 straight years.

      Consumer spending has risen every month since October 
2009.

      Surveys of both the service sector and the manufacturing 
sector show that growth expected to continue.

    But we have to be patient. The path to recovery is never a straight 
line. For the millions of workers who lost their jobs, it will take 
time for them to become employed again.
    We also have to be vigilant. The recovery is still fragile and our 
economy is still vulnerable.
    In fact, Nobel laureate Paul Krugman believes that we are in the 
early stages of another Great Depression.
    He recently wrote that this depression ``will be primarily a 
failure of policy . . . governments are obsessing about inflation when 
the real threat is deflation, preaching the need for belt-tightening 
when the real problem is inadequate spending.''
    I am disheartened that the Senate has failed to extend unemployment 
insurance benefits, despite the fact that there are still 14.6 million 
unemployed workers bearing the brunt of the worst economic crisis since 
the Great Depression.
    As a result, an estimated 1.7 million unemployed workers will lose 
benefits by the end of next week.
    Some Members of Congress do not want to extend unemployment 
benefits because they believe these benefits create a disincentive for 
people to seek work.
    As this JEC majority staff report shows, the evidence is clear--
these benefits do not inhibit job seekers from vigorously looking for 
or accepting work.
    Instead, these benefits provide an enormous benefit to society, by 
stimulating the economy as well as preventing workers from dropping out 
of the labor force.
    Even former Fed Chairman Alan Greenspan expressed strong support 
for extensions of unemployment benefits after the first Bush recession.
    In a hearing before the JEC in May 2003, Chairman Greenspan stated, 
``When you're in a period of job weakness where it is not a choice on 
the part of people whether or not they're employed or unemployed, then, 
obviously, you want to be temporarily generous. And that's what we've 
done in the past, and I think it's worked well.''
    In May 2003, we had fewer than 3 unemployed workers for every 
opening and the unemployment rate was 6.1 percent.
    The most recent data shows that there are 5 unemployed workers for 
every opening and the unemployment rate is 9.5 percent.
    Extending these benefits provides more than needed stimulus to the 
economy and a social safety net for people who are out of work.
    It is fiscally prudent as well.
    Disabled workers who become discouraged and drop out of the labor 
force enter the Social Security Disability Insurance program, which is 
much more expensive than unemployment insurance benefits.
    We also know that unemployment benefits stimulate the economy. 
Every dollar in unemployment benefits multiplies to create over $1.60 
in economic activity.
    At a hearing before this committee in February, Douglas Elmendorf, 
Director of the nonpartisan Congressional Budget Office, testified that 
extending these benefits is one of the most effective and efficient 
ways to stimulate the economy.
    And surely it is obvious that getting the economy to grow and 
getting people back to work are crucial to getting our deficit under 
control.
    Moreover, this will be the first time since 1959 that the 
government will allow unemployment benefits to expire when the national 
unemployment rate was above 7 percent.
    It is time for all Members of Congress to put the American people 
first.

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            Prepared Statement of Representative Kevin Brady
    I am pleased once again to join in welcoming Dr. Hall before the 
Committee this morning.
    Today's report is bad news for American workers and their families. 
Total non-farm payroll employment decreased by 125,000. Even after 
excluding the layoffs of 225,000 temporary Census workers, private 
sector payroll job growth remains anemic at 83,000. At this slow pace 
it will take much of the decade to return to normal employment levels.
    While the unemployment rate fell to 9.5 percent, it fell for the 
wrong reason, a precipitous drop of 652,000 in the labor force. The 
number of discouraged and other marginally attached workers that have 
stopped actively seeking jobs rose to 2.6 million, an all-time series 
high. And 6.8 million American workers have remained unemployed for six 
months or longer.
    In January 2009, President Obama promised that the Democrats' 
economic program would restore confidence and jump-start the U.S. 
economy. Last month, the Conference Board's Consumer Confidence Index 
fell dramatically by 9.8 percentage points to 52.9. Consumer confidence 
is flagging because families are frightened by dangerous deficits as 
far as the eye can see.
    As for jump-starting the economy, two of the Administration's top 
economists, Christina Romer and Jared Bernstein, predicted that if 
Congress were to pass the President's stimulus bill then (1) the 
unemployment rate would remain below 8.0 percent, and (2) non-farm 
payroll employment would increase to 137.6 million by the fourth 
quarter of 2010. Democrats in Congress enacted the American Recovery 
and Reinvestment Act on February 17, 2009, but this stimulus has fallen 
far short of these predictions.
    The growth of real GDP slowed by more than one-half from 5.6 
percent in the fourth quarter of 2009 to 2.7 percent in the first 
quarter of 2010. A number of economic indicators flashed yellow in the 
second quarter of 2010, suggesting that economic growth may be sluggish 
for the remainder of this year and 2011. Americans don't see an economy 
in recovery, they see a White House seemingly incapable of protecting 
our beaches or getting people back to work.
    This anemic economic performance after the recession that began in 
December 2007 is in sharp contrast to the robust economic growth that 
benefited American workers and their families after the 1981-1982 
recession. During the first three quarters of recovery, the real GDP 
growth rate averaged 7.5 percent under Reagan compared with 3.5 percent 
under Obama. Eleven months into the recovery under Reagan, payroll 
employment increased by 2.8 million, and the unemployment rate fell by 
2.3 percentage points. In contrast, twelve months into the Obama 
recovery, payroll employment has fallen by 195,000.
    President Reagan's economic policies were a tailwind accelerating 
real GDP growth. President Reagan pursued pro-growth policies including 
large reductions in marginal tax rates, deregulation, and trade 
liberalization. Combined with the disinflationary monetary policies 
under Federal Reserve Chairmen Paul Volcker and Alan Greenspan, Reagan 
laid the foundation for two decades of prosperity.
    In contrast, President Obama and Congressional Democrats have 
pursued largely anti-growth policies that have hindered this recovery. 
Businesses are slow to hire because they fear higher taxes, job killing 
regulation and a dysfunctional Washington that is ideologically driven 
and increasingly anti-business. Instead of providing encouragement, 
President Obama and this Congress have given entrepreneurs reason to 
worry.
    Ominously, President Obama and Congressional Democrats are 
insisting on reckless increases in federal spending both now and in the 
future. This puts the triple-A reputation of the U.S. government into 
jeopardy for the first time since Secretary of the Treasury Alexander 
Hamilton miraculously resurrected the finances of the United States 
after the Revolutionary War and put us on the road to becoming the 
world's economic superpower.
    The Congressional Budget Office projects that under the President's 
budget, federal spending will grow to 25.2 percent of GDP, well above 
its post-war average of 19.5 percent of GDP. A structural budget 
deficit in excess of 4 percent of GDP will persist through the next 
decade. Consequently, publicly held federal debt will rise to 90.0 
percent of GDP by the end of fiscal year 2020. In The Long-Term Budget 
Outlook released two days ago, the Congressional Budget Office projects 
that under the alternative fiscal scenario, which keeps current 
policies in place, uncontrolled spending growth will cause the publicly 
held federal debt to explode to 947 percent of GDP by the end of fiscal 
year 2084.
    President Obama and Congressional Democrats are pursuing reckless 
fiscal policies that are clearly unsustainable. Unless their excessive 
spending, deficits, and debt accumulation are quickly reversed, the 
United States may experience a debt crisis similar to Greece. We are 
putting the future of our children and grandchildren in grave jeopardy. 
Unlike Greece, however, no one will be around to bail us out.
    Dr. Hall, I look forward to hearing your testimony.
                               __________
        Prepared Statement of Representative Elijah E. Cummings
    Thank you, Madam Chair.
    Commissioner Hall, I appreciate you and your team from the Bureau 
of Labor Statistics for being here today.
    Last week, Chairwoman Maloney and I spent a great deal of time in 
this room as conferees to the Dodd-Frank Regulatory Bill.
    In addition to ensuring that Federal Regulators have the necessary 
tools for restructuring ``too big to fail'' financial organizations 
before irresponsible behavior could again threaten our entire economy, 
we looked out for the people on Main Street by providing support to 
those facing foreclosure through no fault of their own.
    During the last 15 months, I have sponsored four foreclosure 
prevention seminars, and thousands of distressed homeowners have 
attended. Black, White, and Hispanic Americans--they all were in tears.
    We can and must do better than this.
    This is why I am extremely gratified that the conference committee 
accepted my proposal for the creation of a $1 billion fund--that would 
provide low-interest ``bridge loans'' to homeowners facing foreclosure.
    Let me repeat myself. This is a loan, not free money.
    I am also pleased that the House passed legislation to extend 
unemployment benefits to over 1 million people yesterday.
    It is my hope that the Senate will take up this matter after the 
District Work Period.
    We took care of the people on Wall Street but it is our duty to 
assist those who have fallen victim to circumstances beyond their 
control.
* * *
    Now there are some who will argue that Congress should be focused 
more on job creation--well we have been and it is priority number one.
    Excluding the economic stimulus bill, Congress has enacted and 
President Obama signed into law, the Hiring Incentives to Restore 
Employment (HIRE) Act that provides a new payroll tax exemption that 
will lead to the creation of over 300,000 jobs.
    Additionally, the House has passed 6 major job creation bills that 
would create over 600,000 jobs when enacted.
    Chief among them is H.R. 5019, HOME Star Energy Retrofit Act that 
would provide immediate incentives for consumers to renovate their 
homes to become more energy-efficient, while saving families money.
    Of equal importance is the fact that HOME Star would create over 
160,000 jobs in construction, manufacturing and retail industries that 
have been devastated by the economic crisis.
    It is my hope that the Senate will move quickly in considering all 
of these bills.
* * *
    This morning, we learned that the private sector added 83,000 jobs 
during the month of June.
    Like many, I had hoped to see greater gains. However, these 
additional jobs are not to be taken for granted. I know that each of 
these families is incredibly appreciative.
    All of us should remember that prior to President Obama taking 
office, our constituents faced job losses of nearly 800,000 a month.
    Whereas, under Democratic leadership--jobs have been created in 6 
of the last 7 months--this is over 1 million jobs.
* * *
    However, while traveling through by hometown of Baltimore and other 
parts of my district, I am keenly aware that many more people need 
jobs.
    In fact, Wednesday's Washington Post discussed a survey conducted 
by the Pew Research Center in which nearly half of the survey's 
respondents say they are in worse financial shape as a result of the 
downturn, which destroyed 20 percent of Americans' wealth.
    So, I understand and agree that more needs to be done in order to 
get middle and working class families back to work.
    However, the need and importance of interim assistance like the 
short-term bridge loans and unemployment benefits should not be 
discounted.
    Madam Chair, I look forward to Dr. Hall's testimony and with that, 
I yield back.
                               __________
    Prepared Statement of Keith Hall, Commissioner, Bureau of Labor 
                               Statistics
    Madam Chair and Members of the Committee:
    Thank you for the opportunity to discuss the employment and 
unemployment data we released this morning.
    Nonfarm payroll employment fell by 125,000 in June, and the 
unemployment rate edged down to 9.5 percent. The decline in employment 
reflects a large drop in the number of temporary workers for Census 
2010. The number of jobs in the private sector edged up (+83,000), due 
to modest increases in several industries. Private sector employment 
has risen by 593,000 so far in 2010, but in June was 7.9 million below 
its prerecession level.
    Over the month, federal government employment declined sharply. The 
number of temporary Census 2010 workers dropped by 225,000, leaving 
339,000 temporary workers on the Census payroll.
    In the private sector, temporary help services employment continued 
to grow over the month (+21,000). The industry has added 379,000 jobs 
since September 2009. Employment also rose in management and technical 
consulting (+11,000) and in business support services (+7,000) in June. 
Amusements, gambling, and recreation gained 28,000 jobs, while 
transportation and warehousing employment was up by 15,000.
    Mining employment continued to trend up (+6,000), and the industry 
has gained 56,000 jobs since October 2009. Employment in manufacturing 
also continued to trend up in June (+9,000). The industry has added 
136,000 jobs so far this year. The manufacturing workweek declined by 
half an hour in June, more than offsetting an increase in May. 
Nonetheless, factory hours remained 1.3 hours above their recent 
trough. Employment in health care edged up in June (+9,000).
    Construction employment fell by 22,000; specialty trade contractors 
accounted for most of the decline. On net, construction employment has 
shown little change over the last 4 months.
    Average hourly earnings of all employees on private nonfarm 
payrolls decreased by 2 cents in June to $22.53. Over the past 12 
months, average hourly earnings have increased by 1.7 percent. From May 
2009 to May 2010, the Consumer Price Index for All Urban Consumers 
(CPI-U) rose by 2.0 percent.
    Turning to measures from the survey of households, the unemployment 
rate edged down by 0.2 percentage point to 9.5 percent in June. Of the 
14.6 million unemployed individuals, about 6.8 million had been jobless 
for 27 weeks or more. In comparison, 1.3 million persons were 
unemployed for 27 weeks or longer when the recession began.
    The labor force declined in June (-652,000). Following increases 
earlier in the year, the labor force participation rate has declined by 
half a percentage point over the last 2 months.
    The employment-population ratio edged down to 58.5 percent in June. 
Among the employed, there were 8.6 million individuals working part-
time who preferred full-time work. The number of such workers has 
fallen by 525,000 over the past 2 months.
    In summary, payroll employment fell by 125,000 in June, as modest 
growth in the private sector (+83,000) was more than offset by a large 
decline in temporary census workers (-225,000). The unemployment rate 
edged down to 9.5 percent.
    My colleagues and I now would be glad to answer your questions.

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