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






                                                        S. Hrg. 111-670

                  THE EMPLOYMENT SITUATION: JULY 2010

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

                                HEARING

                               before the

                        JOINT ECONOMIC COMMITTEE
                     CONGRESS OF THE UNITED STATES

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

                             AUGUST 6, 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

                                Witness

Statement of Dr. Keith Hall, Commissioner, Bureau of Labor 
  Statistics, U.S. Department of Labor; Accompanied by: Dr. 
  Michael Horrigan, Associate Commissioner for Prices and Living 
  Conditions, Bureau of Labor Statistics; and Mr. Philip Rones, 
  Deputy Commissioner, Bureau of Labor Statistics................     5

                       Submissions for the Record

Prepared statement of Representative Carolyn B. Maloney, Chair...    18
    Chart titled ``Monthly Change in Private Payrolls''..........    20
Prepared statement of Representative Kevin Brady.................    21
Prepared statement of Dr. Keith Hall, Commissioner, Bureau of 
  Labor Statistics, together with Press Release No. USDL-10-1076.    22

 
                  THE EMPLOYMENT SITUATION: JULY 2010

                              ----------                              


                         FRIDAY, AUGUST 6, 2010

             Congress of the United States,
                          Joint Economic Committee,
                                                    Washington, DC.
    The committee met, pursuant to call, at 9:34 a.m. in Room 
106 of the Dirksen Senate Office Building, The Honorable 
Carolyn B. Maloney (Chair) presiding.
    Representatives present: Maloney and Brady.
    Staff present: Andrea Camp, Gail Cohen, Colleen Healy, 
Jessica Knowles, Lydia Mashburn, Jeff Schlagenhauf, Ted Boll, 
Dan Miller, 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.
    Today's employment report from the Bureau of Labor 
Statistics shows that in July the economy added 71,000 private-
sector jobs, the seventh straight month of employment gains in 
the private sector. And we see that in our famous chart. We are 
continuing to gain jobs.
    [Chart titled ``Monthly Change in Private Payrolls'' 
appears in the Submissions for the Record on page 20.]
    Since the beginning of the year, the economy has added 
630,000 jobs in the private sector. As expected, the June 
report also showed a sharp decline in temporary Census workers, 
causing nonfarm payrolls to decline for the second month this 
year.
    Additionally, the June employment report shows that the 
unemployment rate remained unchanged at 9.5 percent. Although 
the overall unemployment rate has declined from its peak of 
10.1 percent in October 2009, 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 2009, although the 
current unemployment rate of 15.6 percent is lower than the 
peak of 16.5 percent.
    In addition to overall private-sector job gains, 
manufacturing employment has risen for seven months in a row, 
after falling three straight years. The last time this sector 
gained jobs for seven months in a row or longer was in 1998.
    GDP grew for the fourth consecutive quarter in the second 
quarter of 2010 with businesses' purchases of equipment and 
software growing by 20 percent for the second quarter in a row.
    Surveys of both the service sector and the manufacturing 
sector show that growth is 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.
    The recent GDP report from the Bureau of Economic Analysis 
also told us that this Recession was even more severe than 
previously reported. We now know that GDP fell by 6.8 percent 
in the fourth quarter of 2008, and fell by 4.9 percent in the 
first quarter of 2009.
    A recent study by the noted economists Alan Blinder and 
Mark Zandi shows that without the actions taken by the 
Administration, Congress, and the Federal Reserve, this 
Recession would have been another Great Depression. Without 
these actions, we would have lost an additional 8.5 million 
jobs by the end of 2010.
    We have made real progress in the past year. While today's 
job gains are not as robust as earlier this year, the trend is 
in the right direction. But we cannot let down our guard. The 
recovery is still fragile, and our economy is still vulnerable.
    The policies that Democrats in Congress quickly put into 
place over the last year are working. Policies do matter. That 
is one reason I am glad to see that yesterday the Senate passed 
legislation to extend funding to states to pay for their 
increased Medicaid costs, and to provide additional funding for 
teachers.
    The Department of Education estimates that 140,000 teacher 
jobs will be saved because of this increase in funding. The 
House will be reconvening on Tuesday of next week to pass this 
needed legislation so that it will be in place before the 
school year begins.
    This legislation will also help the economy grow. According 
to the Council of Economic Advisers' fourth quarterly report, 
aid given to the states in the Recovery Act was quickly 
implemented and provided a large boost to the growing economy.
    Recently the JEC Majority staff took a deeper look into the 
employment increases in the manufacturing sector in 2010, and 
we did this report on the manufacturing growth and the 
promising signs of recovery from it.
    Most of the job creation in the manufacturing sector is in 
the durable goods sector, and may be due to inventory 
restocking or temporary export surges due to fiscal stimulus in 
other countries. Manufacturing is a key source of good jobs 
that can play an important role in spurring growth in other 
sectors in our economy.
    This JEC report shows that Congress and the Administration 
need to take further actions to create a robust rebound in 
manufacturing employment.
    Some actions have been taken by the House of 
Representatives already, but we need to do more. In particular, 
more actions are needed to help small businesses. The House has 
already passed legislation to help small businesses get credit 
and provide tax credits for these engines of job growth.
    It is time for all Members of Congress to work together to 
pass legislation that will create jobs and put the American 
people first.
    I yield back, and I would now like to introduce 
Commissioner Hall, and recognize the other members of the 
Committee. There are not many here, but Mr. Brady flew all the 
way in from Texas for this meeting, even when we were not in 
session, and I am deeply grateful that he is here. And he is 
recognized for as much time as he may consume.
    [The prepared statement of Representative Maloney appears 
in the Submissions for the Record on page 18.]

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

    Representative Brady. Great. Thank you, Madam Chairman. 
Thank you for your leadership of the Committee.
    I am pleased to join with you in welcoming Dr. Hall before 
the Committee this morning.
    Unfortunately, today we received more bad news for American 
workers and their families. The unemployment rate shows no sign 
of improving and remains elevated at 9.5 percent. Total job 
losses were 131,000. And after excluding the layoffs of 
temporary Census workers, private sector payroll job growth 
remains anemic at 71,000. At this slow pace, it will take much 
of the decade to return to normal employment levels.
    Despite the promises, the economic plan of President Obama 
and Congressional Democrats has failed to restore consumer 
confidence--a key element to economic recovery.
    The University of Michigan's July Index of Consumer 
Sentiment fell dramatically by 10.8 percent to 67.8, the lowest 
level in a year. The Index of Consumer Expectations fell even 
further to the lowest level since March of last year, the month 
after Congress enacted the Stimulus.
    According to Richard Curtin, the economist in charge of 
producing these indices:

        Rather than the economy gaining strength, consumers now 
        anticipate a slowing pace of growth, and rather than 
        economic policies acting to improve prospects, the 
        policies of the Obama Administration have increased 
        economic uncertainty among consumers. Overall, the data 
        suggest that the current slowdown in spending is likely 
        to persist well into 2011 as it reflects a widespread 
        and general realignment of job and wage expectations. 
        While a double dip is still unlikely, it now has a 
        nonignorable 25% probability. End of quote.

    It is discouraging to American workers and small businesses 
that this unusually sluggish, sub-par recovery will persist 
well into next year. But it is not surprising.
    Along with the failure of the massive Democratic stimulus 
to put people back to work--except in Federal Government jobs--
families and businesses fear the dangerous levels of debt 
incurred by this Congress and a host of job-killing, anti-
growth policies coming out of Washington, including higher 
taxes, higher energy prices, burdensome regulations, and 
constant bailouts of special interests.
    While tens of thousands of American energy workers risk 
losing their jobs right now due to the White House moratorium 
on drilling in the Gulf of Mexico, Congress next week will 
consider another $26 billion bailout of state and local 
government workers. The signal this Democratic Congress is 
sending is clear: We'll spend whatever taxpayer money it takes 
to save a government job; the rest of you American workers can 
take a hike.
    And three weeks after we extended the invitation to 
President Obama to travel to Houston to meet face-to-face with 
energy workers and small businesses whose livelihoods are 
threatened by the President's moratorium, we have heard nothing 
but silence.
    To add insult to injury, this President is coming to Texas 
next week to raise campaign cash but apparently does not have 
an hour--not even 15 minutes--to spare for our American workers 
whose jobs he is killing.
    Maybe if our energy workers worked for the government they 
could get a bailout, too. But that is not what they are asking. 
They just want to go back to work on the rigs the President has 
idled and some that now are forced to leave America for foreign 
countries.
    The prospects for other workers who have lost their jobs 
isn't much better. Real economic growth slowed by more than 
one-half from 5 percent in the fourth quarter of last year to 
2.4 percent in the second quarter of this year.
    One-off inventory restocking accounted for 59 percent of 
real GDP growth during the last three quarters. Restocking your 
shelves isn't a sustainable basis for job creation, but 
consumers confident in the recovery are.
    Unfortunately real final sales growth--which is a better 
indicator of the underlying trend than real GDP--averaged an 
anemic 1.5 percent during the last three quarters. 
Consequently, economists are downgrading their forecasts for 
the remainder of this year and next.
    Earlier this week, Committee Democrats released a report 
stating that manufacturing payroll jobs increased by 136,000 
during the first half of 2010. I rejoice that some American 
workers have found new manufacturing jobs.
    However, this report tells only one-half of the story. 
Actually, manufacturing payroll jobs have decreased by 660,000 
since the Obama stimulus was enacted. Moreover, manufacturing 
payroll jobs fell by 2.3 million since the Democrats took 
control of Congress in 2007.
    With so many families struggling and having lost their jobs 
in manufacturing, how can Congressional Democrats possibly be 
proud of these devastating economic failures?
    Ironically, the slight improvement in the manufacturing 
sector is not due to sales here in America, but rather foreign 
demand, especially in Canada, Mexico, and rapidly growing 
countries in Asia.
    Monthly U.S. manufacturing exports are up 31 percent from 
February to May of this year--February of last year to May of 
this year. To satisfy higher foreign demand, U.S. manufacturers 
boosted their output by 6 percent during the same period.
    Since the beginning of the year, this export-driven 
recovery is beginning to reverse the decline in manufacturing 
employment under the failed White House economic plan.
    In contrast, demand here in America, which the Obama 
stimulus was supposed to boost, remains lackluster. So unless 
Speaker Pelosi and Majority Leader Reid want to pat themselves 
on the back for increasing demand in foreign countries, which 
is preposterous, Democrats can claim little credit for the 
improving outlook in manufacturing.
    Indeed, many Congressional Democrats oppose selling more 
American goods and services overseas by failing to pass the 
pending free trade agreements with Columbia, Panama, and South 
Korea that would accelerate export-driven job creation.
    Dr. Hall, amid this grim economic data I look forward to 
hearing your testimony. I yield back.
    [The prepared statement of Representative Brady appears in 
the Submissions for the Record on page 21.]
    Chair Maloney. Thank you. I would now like to welcome the 
panelists and introduce Commissioner Hall. Dr. Keith Hall is 
the Commissioner of the Bureau of Labor Statistics for the U.S. 
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, 
businesses, and labor.
    Dr. Hall also served as Chief Economist for the White House 
Council of Economic Advisers for two years under President 
Bush. Prior to that he was Chief Economist for the U.S. 
Department of Commerce. Dr. Hall also spent 10 years at the 
U.S. International Trade Commission.
    Welcome. We look forward to your testimony.

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

    Commissioner Hall. Thank you. Madam 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 declined by 131,000 in July, and the unemployment 
rate remained at 9.5 percent.
    The decrease in employment largely reflects continued cuts 
in the number of temporary workers previously hired for the 
Census 2010. Private sector employment edged up over the month. 
Thus far in 2010, private sector employment has risen by 
630,000, although nearly two-thirds of that gain occurred in 
March and April.
    In July, employment in the Federal Government fell for the 
second month in a row. The number of temporary Census 2010 
workers decreased by 143,000, following a decline of 225,000 in 
June. This leaves 196,000 temporary decennial Census workers on 
the payroll.
    Within the private sector, employment gains continued in 
manufacturing, health care, and mining. Manufacturing 
employment rose by 36,000. Most of the gain occurred in motor 
vehicles and parts, as some plants deviated from the normal 
practice of shutting down in July for retooling.
    Motor vehicles and parts had added 32,000 jobs during the 
first half of the year. Employment in fabricated metals 
increased by 9,000 over the month. The manufacturing workweek 
rose by one-tenth of an hour in July, after falling by half an 
hour in June.
    Health care employment grew by 27,000 over the month. Since 
the recession began in December 2007, health care has added 
665,000 jobs. Employment in mining rose by 7,000 in July, 
largely in support services.
    Employment in temporary help services was nearly unchanged 
for the second month in a row. Job gains had averaged 45,000 
per month from October through May.
    Construction employment was little changed in July. A 
strike in the industry reduced payrolls by about 10,000. 
Financial sector employment continued to trend down over the 
month, though the pace of job loss has been slower this year. 
Thus far in 2010, monthly job declines have averaged 12,000 
compared with 29,000 in 2009. Employment in most other private 
sector industries was little changed in July.
    Turning now to the data from our Survey of Households, most 
key labor force measures were essentially unchanged in July. 
The jobless rate remained at 9.5 percent, and the number of 
unemployed held at 14.6 million.
    The unemployment rate has declined from 9.9 percent in 
April, reflecting decreasing labor force participation. The 
participation rate had risen during the first 4 months of the 
year to 65.2 percent in April, but has now returned to 64.6 
percent--its December 2009 level.
    Among the employed, the number of individuals working part-
time who preferred full-time work was nearly unchanged over the 
month at 8.5 million. Since April, the number of such workers 
has declined by 623,000. However, the level remains 3.9 million 
above that of December 2007 when the Recession began.
    In summary, payroll employment declined by 131,000 in July, 
largely reflecting a decrease in the number of temporary Census 
workers. Small job gains continued in the private sector. The 
unemployment rate held at 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-10-1076, appears in the Submissions for 
the Record on page 22.]
    Chair Maloney. I thank you very much for your testimony. As 
you know, I always like to start with the positives. So would 
you really focus on the bright spots and the areas that you 
feel are particularly encouraging in this jobs report?
    Commissioner Hall. Sure. While the private sector 
employment was not strong, it did increase this month, and it 
has increased now for seven months in a row.
    Manufacturing employment once again edged up, and that has 
been increasing now for seven months in a row as well and that 
is actually quite unusual. Manufacturing employment has not 
risen in quite awhile, so that is a good sign.
    Chair Maloney. Why do you think that is happening?
    Commissioner Hall. It is just hard to say. I can tell you 
it has happened. It's been fairly broad. This month in 
particular motor vehicles and parts added 21,000 jobs, which is 
most of that manufacturing increase. So I think that is a good 
sign.
    Manufacturing took quite a hit during most of the 
Recession, so the last seven months have been welcome.
    Chair Maloney. What other sectors are experiencing more job 
creation than loss?
    Commissioner Hall. The health care industry continues to 
grow jobs. This month it grew about 27,000 jobs. And it has 
pretty consistently throughout the whole Recession.
    Chair Maloney. You mentioned that manufacturing was very 
encouraging. Do you have any breakdowns on the subsectors in 
manufacturing that showed significant changes to help us 
understand how we can support manufacturing, and the 
subsectors? Do you have any numbers or information on that?
    Commissioner Hall. Sure. Over the month we had gains in a 
number of areas. We had fabricated metal products, machinery, 
computer and electronic products, electrical equipment and 
appliances. So it was fairly broad. It wasn't strong growth in 
every one of those sectors, but there was growth especially as 
you mentioned in your earlier statement in durable goods.
    Chair Maloney. And are there any further indicators that 
overall job gains will continue in the coming months? Do you 
see any trends there you could report?
    Commissioner Hall. You know, I think the fact that, 
although the job gains the last three months have been fairly 
modest, they have been gains so far. I think that is 
encouraging. And the manufacturing work week continues to hold. 
It hasn't declined any. So I think that is encouraging, as 
well.
    Chair Maloney. Well I feel that we really are going to be 
coming into session this coming Tuesday to vote for the state 
government support, and I think that is critically important 
given the fragile economy we are confronting.
    State governments have reduced payrolls by 169,000 since 
the beginning of the year, and this I believe underscores the 
importance of the state aid package that was passed by the 
Senate yesterday, and will be passed by the House on Tuesday, 
will prevent the layoffs of tens of thousands of teachers, and 
help states provide for vital health care services, and have 
the teachers in place for the school year beginning in 
September. So in my own State they estimate that it will save 
the jobs of 7,000 teachers, and that is critically important.
    In the first six months of 2010 I believe that employment 
of the states declined dramatically. Did state and local 
governments see further employment declines in July? Did you 
track that?
    Commissioner Hall. Yes. In fact, they both did. State 
government lost about 10,000 jobs; and local government lost 
about 38,000 jobs, which is a pretty large number for local 
government.
    Chair Maloney. And how would you characterize recent 
months' trends in these sectors?
    Commissioner Hall. Both sectors have lost jobs, continued 
to lose jobs even this year, actually, despite the fact that we 
have had some growth in the private sector.
    Chair Maloney. And are you able in your numbers to separate 
out changes in education employment from the other types of 
state and local jobs?
    Commissioner Hall. Yes. For example, of the 38,000 jobs 
lost in local government this month, 27,000 were in education, 
and 2,000 were in state government in education.
    Chair Maloney. And has the Bureau of Labor Statistics done 
any research on spillover effects associated with state and 
local government employment?
    Commissioner Hall. There almost certainly are spillover 
effects, but we haven't done any research on that. It is 
something that probably someone could do, but we haven't done 
that.
    Chair Maloney. Well my time has expired. Thank you.
    Representative Brady. Thank you, Madam Chairman.
    Why is it that only government workers, Commissioner, get a 
bailout? You know, why do you have to have a government check 
before Congress comes back from its recess to try to rescue 
your job?
    You know, what about Americans along Main Street who just 
want to go back to work? Who have seen, gosh, some 3.5 million, 
almost 3.5 million jobs lost along Main Street since the 
stimulus took effect. The only sector that's gained is the 
Federal Government. They've gotten jobs; everyone else gets 
pink slips.
    What about the energy workers who are losing their jobs due 
to the drilling moratorium the President has in place today? 
And the small businesses who hire all the workers who supply 
those rigs? What about them? They're not asking for a bailout. 
They just want to go back to work.
    You have pointed out you don't know why manufacturing 
improvement is occurring, but other economists say that the 
balance of manufacturing has come from, one, restocking their 
inventories, about 60 percent, 59 percent of growth for the 
last three quarters came from restocking their shelves.
    The rest of it, the bulk of the rest of it has come from 
export sales to other countries. And none of which, you know, 
is created by the stimulus. And the manufacturing this week, 
we've lost since the stimulus began 660,000 manufacturing jobs. 
The improvement this month, according to your numbers in 
manufacturing, comes mainly from autos. And according to your 
briefing, the majority of that is a seasonally adjusted 
situation where normally at this time of year they are shutting 
plants down for retooling and maintenance. They did that 
earlier. And had them actually operating. So even that's not as 
good news as we would like.
    So my question is: The economy weakened significantly 
during the second quarter of this year. It is half what it was 
at the beginning of the year. Real GDP growth slowed to 2.4 
percent. Last month consumer confidence fell dramatically, the 
lowest it has been since February of last year. Since the 
Housing Tax Credit expired, housing starts, existing new home 
sales, are all down. Durable goods' orders are down for two 
months in a row.
    We are all looking for positive signs, but do these 
weakening economic data indicate that job growth will slow and 
the unemployment rate will remain stubbornly high for the rest 
of this year? Do you see unemployment staying high through the 
rest of this year?
    Commissioner Hall. I would not want to spec--since we 
produce the data, I would not want to speculate on what the 
data might show. So with respect to talking about the rest of 
the year, I would not want to offer an opinion on that.
    But I can tell you that it is true that certainly in the 
last three months there has been private sector job growth but 
it has not been strong yet.
    Representative Brady. May I ask, the White House predicted 
that employment in construction, for example, would make up a 
major component of the total number of jobs created or saved by 
the stimulus. What change has occurred in the level of payroll 
employment in construction since the stimulus was enacted 
last--February of last year?
    Commissioner Hall. We're going to have to look it up, since 
February--I will tell you what I can really quickly, and we'll 
see if we can get the more precise number. Construction has 
continued to lose jobs. It has lost about--this month it lost 
about 11,000 jobs, and I think over the last three months it 
has lost about 20,000 jobs a month. So we have not had 
consistent job growth in construction lately.
    Representative Brady. Not job growth. We have actually had 
consistent job loss in construction?
    Commissioner Hall. That's February of '09?
    Representative Brady. Yes.
    Commissioner Hall. He will give you the number in just a 
minute if you want to go ahead and go on.
    Representative Brady. Let me ask. We have lost 660,000 jobs 
in the manufacturing sector since the stimulus took place. 
Retail trade, we were told if that massive stimulus was passed, 
would be expected to see a large increase. Is that happening? 
Are we seeing large increases in retail trade? Because consumer 
confidence is very low, the lowest it has been in a year.
    Commissioner Hall. Yeah, retail trade was not greatly 
changed this month. It grew about 7,000 jobs this month. And 
over the past three months we have averaged the loss of about 
7,000 jobs in retail trade.
    Representative Brady. So it is consistently, like 
construction, losing jobs in retail trade?
    Commissioner Hall. Over the last few months it has.
    Representative Brady. We were told that 90 percent of the 
jobs from the stimulus that were created or saved would be in 
the private sector. Is it true that the Federal Government is 
the only economic sector to experience payroll job growth since 
February of the stimulus last year?
    Commissioner Hall. Yeah, I think other than the health care 
sector I do think the total payroll jobs have declined since 
February of last year.
    Representative Brady. In the private sector?
    Commissioner Hall. In the private sector.
    Representative Brady. And Federal jobs, government job 
growth, though is the only positive at this point?
    Commissioner Hall. Well I think education and health care 
and the federal government, I think that is right, since 
February, overall.
    Representative Brady. Thank you, Commissioner, appreciate 
it.
    Chair Maloney. Thank you.
    In terms of construction jobs that were saved due to the 
stimulus, as you know a third of the stimulus went to 
infrastructure projects which are construction jobs. Can you 
contrast the average job loss in construction in 2008 and the 
first half of 2009 to more recent months? And are we still 
losing as many construction jobs? And what would have happened 
if we didn't have the stimulus supporting infrastructure jobs?
    Commissioner Hall. The job loss through 2008 and the first 
half of 2009 in construction was very high. It got as high as 
153,000 in a single month. It was very, very high. And the job 
loss since the middle of last year has declined. Although job 
loss has continued, it has moderated a fair amount.
    Chair Maloney. And we are still losing quite a few jobs.
    Okay, in the Recession in the labor market, at last month's 
hearing you testified that coming out of a recession it's 
fairly typical to average about 100,000 private sector jobs per 
month. And we have another month behind us. Is the recovery in 
the labor market still similar to what we have seen coming out 
of recent recessions?
    Commissioner Hall. It is actually not completely out of 
line. The labor market, at this moment the labor market 
troughed in December of last year, and since then we have 
averaged about 90,000 jobs a month.
    During the last recession, we averaged something like 140 
thousand jobs per month over the first seven months. In the 
prior recession we actually continued to lose some private 
sector jobs in the first seven months. So it is not 
inconsistent with other stretches past the labor market trough.
    Chair Maloney. And how would you characterize the labor 
market today?
    Commissioner Hall. Well obviously the large job loss has 
ended. We do have some sectors that are losing jobs, but we 
have sectors that are now gaining jobs. The job growth in the 
private sector has been 630,000. It just has not gotten strong 
yet, but it is job growth.
    Chair Maloney. Is there anything in your data that you 
could call attention to as a potential pitfall in this 
recovery?
    Commissioner Hall. Yes. I think my biggest concern would be 
that a lot of the strength this year has come from just a 
couple of months. We had two months there where a lot of the 
numbers early in the year looked up, the payroll job growth 
strengthened, and the labor force participation rose. But that 
seems to have backed off a little bit now, so we are in a 
weaker spot I think than we were a few months ago.
    Chair Maloney. Last month I asked you about the impact of 
the oil spill on jobs in the Gulf region. You mentioned that 
BLS is doing some tracking and that you would be able to show 
areas that could be affected. I truly do understand that it is 
difficult to determine the precise impact, as there are job 
losses relating, for example, to tourism, fishing, and other 
industries. Do you have anything at this point on the 
employment impact of the spill in the Gulf that you are able to 
share with the Committee?
    Commissioner Hall. Well what we have done, and we have 
actually put it up on our web site so it's publicly available, 
is that we've identified the number of jobs that are on the 
Coast areas, the county employment levels, to get some idea of 
the kinds of jobs that are potentially at risk.
    And we mentioned that a number of the jobs that could be 
affected, like commercial fishing vessels, and independent 
contractors, are not part of the scope, they aren't payroll 
jobs so they wouldn't be captured here. So we have got the 
levels up.
    It is not obvious to see a big impact. There might well be 
an impact there, but we don't see a real obvious impact. For 
example, we haven't seen any real spikes in the unemployment 
insurance filings, for example, like that. And from talking 
with our state partners a little bit in the Gulf States, one of 
the things they mentioned that has helped somewhat with leisure 
and hospitality is that workers working on the oil spill have 
sort of moved into hotels and restaurants, and that has 
actually helped some of the leisure and hospitality numbers 
that normally would have gone down more because of lost 
tourism.
    So the bottom line is, it is not an obvious impact that I 
can see there. That does not mean that there isn't an impact 
there, and if somebody does a more sophisticated look they 
might be able to find a little something.
    Chair Maloney. Well, my time has expired.
    Representative Brady. Commissioner, you had said in your 
testimony that--or comments, that the unemployment rate has 
declined from 9.9 percent in April to 9.5 percent this month. 
But did you also say that's not exactly good news? That that 
decline is because fewer Americans have simply given up looking 
for work? Last month it was 650,000 people who had given up 
looking for work.
    Commissioner Hall. Right, right.
    Representative Brady. This month, it stayed fairly stable 
but jobs claims were up again last week. But the major reason 
for the decline is at this point fewer people looking for work?
    Commissioner Hall. That's actually correct. I would say 
early in the year we had a drop in the unemployment rate--I'm 
sorry, a rise in the unemployment rate from around 9.7 to 9.9. 
And that was primarily because of people entering the labor 
force.
    So that wasn't necessarily as bad news as it looked. But 
now we've seen an unwinding of that, where people have now left 
the labor force and left unemployment. So the unemployment rate 
going down and holding isn't necessarily good news because of 
that.
    Representative Brady. That's what I see at home. I see a 
lot of people who are discouraged and have just given up work. 
We see more who will likely lose their jobs because of the 
drilling moratorium in the Gulf of Mexico. Very devastating. 
Economic disaster. That one is a government-made economic 
disaster, unfortunately.
    I see consumers who are frightened by the debt, reluctant 
to come back shopping. And I see businesses reluctant to hire. 
And as a result, that seems to be reflected in your data. The 
consumer confidence is the lowest it's been in years, so retail 
sales are very anemic growth.
    Job creators are very impacted by the uncertainty of all 
these wild policies in Washington, so they are not creating 
jobs. The initial jobs' claims again were up last week, which 
caught everyone by surprise.
    Back in May you suggested that small- and medium-sized 
firms were not driving economic growth like they used to; 
instead, large firms were creating more private sector jobs. 
And of course government was the only sector that had grown 
significantly.
    Why do you think--well, let me ask this. Are small- and 
medium-sized businesses hiring more, doing better now in this 
regard than they were in May?
    Commissioner Hall. The data we have on that lags a fair 
amount, but the hires in small businesses actually has declined 
in May a little bit while medium- and large establishments 
increased slightly.
    Representative Brady. I'm sorry? Run that first part by me 
again?
    Commissioner Hall. Sure. Hiring in small establishments 
declined; the hire rate declined from about 3.8 percent to 3.5 
percent in May. That's our most recent data--between February 
and May while with medium and large establishments, the hire 
rates went up a little bit.
    So most of that hiring that occurred that I mentioned in 
those two strong months was in medium and large establishments.
    Representative Brady. So small businesses are hiring less. 
Medium size slightly more?
    Commissioner Hall. Yes.
    Representative Brady. At this point. Good. Why is it that 
consumer confidence, you think, is so far down? You would think 
after a year of, you know, stimulus spending, all sorts of huge 
government bailouts, and now more of them next week, that 
consumer confidence would be higher than this. What is the 
reason for that?
    Commissioner Hall. You know, I can't speculate on what 
drives that. You know, I just know a lot of things affect 
consumer confidence, but as far as trying to guess as to what's 
caused that, I don't know.
    Representative Brady. Okay. Are there any other points 
about this month's report you want to comment upon?
    Commissioner Hall. No. I think this report in its way is 
pretty similar to the last two months--that we do have some 
private sector job growth, but there is just not strong job 
growth yet.
    Representative Brady. Are you able to identify in your 
report why the economy has slowed by half since the beginning 
of the year? I mean, obviously we want the recovery to go in 
the right direction. Right now it is actually slowing fairly 
significantly. What are the reasons for that?
    Commissioner Hall. I don't know. I can tell you that the 
pickup in March and April, and the slowdown in the last three 
months has been fairly broad. It has not been in particular 
sectors.
    Construction has been a big part of that, but it has also 
been in retail trade, leisure and hospitality. So there's not 
an obvious explanation for the slowdown.
    Representative Brady. Okay. Well, great. Thank you, 
Commissioner.
    Chair Maloney. Thank you very much, Commissioner. I think 
it is important to put this in perspective. When you look at 
the V chart, or the deep red valley chart, you see the first 
month that President Obama took office, the last month that 
President Bush was in office, this country shed 790,000 jobs.
    And as you see the chart trending in the right direction in 
the light blue, it shows the overall job gains in the private 
sector. We are moving in the right direction, and I would say 
it is because of the policies of the Democratic Majority, most 
specifically the stimulus--the Economic Recovery Act.
    Last week, two economists, bipartisan economists, Blinder, 
a former Democratic appointment to the Federal Reserve and now 
a professor, and Mark Zandi, the economic adviser to McCain 
during his Presidential bid, came out with a joint report that 
showed that if we had not taken the steps in the recovery we 
would be in a Great Depression, not a Recession, and this 
country would have lost 8.5 million jobs.
    What we do know is that America cannot afford to go back to 
the policies of the prior Administration where we were shedding 
so many jobs.
    Do you agree with the Zandi/Blinder report, Commissioner 
Hall?
    Commissioner Hall. I wouldn't want to--in my role, I 
wouldn't want to speculate on what the labor market would look 
like under different circumstances, since we just report the 
data.
    Chair Maloney. Well just reporting the data, you have said 
in our prior hearings that female single heads of households 
were particularly hard hit. I would like to know, is that 
continuing? Is there a difference between male heads of 
households and female heads of households in terms of 
employment, and in terms of men and women? Are they faring 
about the same? Or are men more hurt than women in this 
recovery? Are women more hurt than men? In terms of just the 
numbers, how is it breaking down?
    Commissioner Hall. The unemployment rate for the female 
head of household is about 13.4 percent, which is a bit higher 
than the 9.5 percent overall unemployment rate. And in terms of 
job loss, although men have lost a lot more jobs than women, 
women have lost significant numbers of jobs during this 
Recession. And to be honest, that doesn't always happen because 
of the industry distribution.
    So women have----
    Chair Maloney. So women have achieved equality in job loss?
    Commissioner Hall [continuing]. I would say that's fair, 
yes.
    Chair Maloney. And is there any difference with male heads 
of households? Are single male heads of households, are they 
more hurt than a regular male? Do you understand what I'm 
saying?
    Commissioner Hall. Yes. And I don't have that information 
with me. We can, if you like we can follow up.
    Chair Maloney. Because that directly affects families.
    Commissioner Hall. Sure.
    Chair Maloney. We call it sometimes the ``mom bomb,'' 
because women who have children often do not, according to 
statistics, continue to proceed economically in a better light.
    Could you make a comparison and give us an analysis of how 
Hispanics are doing in this recovery? And African Americans? 
And put that in perspective for us?
    Commissioner Hall. Sure. The African American unemployment 
rate remains high, 15.6 percent. And that has increased about 
6.6 percentage points since the Recession. So they have been 
hit very hard by the Recession.
    Hispanics, their unemployment rate is 12.1 percent, which 
is a 5.8 percentage point increase. So both have had a larger 
percentage point increase in unemployment than Whites have.
    Chair Maloney. Also, your statement on small businesses was 
very interesting. How do you define a small business? What is 
your definition of a small business?
    Commissioner Hall. In the numbers I have quoted you, it was 
below 50.
    Chair Maloney. Below 50 employees?
    Commissioner Hall. Yes, that's correct.
    Chair Maloney. So below 50 employees is your description of 
a small business.
    Commissioner Hall. Yes.
    Chair Maloney. But in prior economies, it's fair to say 
that a lot of the recovery came from small businesses which 
employ, I've been told, 98 percent of the workers in America. 
Is that true?
    Commissioner Hall. That's true.
    Chair Maloney. So 98 percent of the workers in America are 
in small businesses. We are not going to really recover until 
they start recovering. And I have been told that usually it is 
the small businesses that rebound, not the middle and large 
businesses. Is that true in this Recession? I think you said 
that earlier to my colleague that that's not true. Do you have 
any economic data that explains why that is happening, this 
break in trends?
    Commissioner Hall. I don't have any data that shows why 
that has happened, but you're right that small businesses have 
borne a bit bigger brunt of the job loss than in past 
recessions.
    Chair Maloney. And more importantly, they are not gaining.
    Commissioner Hall. Correct.
    Chair Maloney. They're not gaining.
    Commissioner Hall. And they're not yet participating in the 
recovery so far quite as much as they usually do. That's 
correct.
    Chair Maloney. That's why the Democratic Congress passed 
the HIRE Act that gave incentive to small businesses and large 
businesses to hire unemployed workers with a tax credit. We 
have passed in the House a $30 billion loan fund that would be 
directed completely to lending to small businesses to get the 
liquidity back into the markets and to help them continue--help 
them to grow, and hire, and be stronger participants in the 
economy.
    My time has expired.
    Representative Brady. Commissioner, we were told if we 
spent that $862 billion of stimulus--or a trillion dollars when 
you count the interest; it's all borrowed--that it would jump 
start the economy and restore consumer confidence.
    As for jump starting the economy, it is now slowing and 
every sector has lost jobs, unless you're a government worker. 
As for restoring consumer confidence, 90 percent of Americans 
believe that the economy is in bad shape. Almost 3 out of every 
4 believe it won't get better anytime soon.
    Consumer confidence is back--has lost so much, it is back 
to where it was when the stimulus was passed. We have lost a 
year-and-a-half of consumer confidence. They are clearly not 
going back to the stores.
    Have you seen anything in your statistics that show 
consumer confidence has been restored?
    Commissioner Hall. Um----
    Representative Brady. Because I don't see it in real sales 
growth. I don't see it in retail growth. I just don't see it.
    Commissioner Hall [continuing]. Yes. In terms of the 
employment, the changes in employment have been pretty broad. 
That's about all I can say about that, that large job growth--
large job loss from last year was broad, and now the moderation 
has been broad as well.
    Representative Brady. What is the impact--obviously 
consumer confidence is lost at this point. The stimulus didn't 
restart and jump start the economy, except if you are a 
government worker.
    Next week again we will come back and bail out more 
government workers, while Main Street continues to suffer. The 
average American worker does not get a bailout. They just get a 
pink slip these days.
    My question is: What impact will the tax bomb, the $3.8 
trillion tax increase that will hit the American public at the 
end of this year if it is not extended, and there's 
considerable debate among our Democrats whether they will 
extend it or not, what would be the impact of increasing taxes, 
income taxes, on most Americans? On cutting the child tax 
credit in half?
    In bringing back the marriage penalty, which is about a 
$600 hit for most families? What's the impact of capital gains, 
and dividends' rates skyrocketing? If the death tax comes back 
in full force? The alternative minimum tax, that second tax, 
the double tax, on families, middle class Americans? What is 
the economic impact if Americans find themselves, wake up on 
January 1st and that tax bomb has gone off?
    Commissioner Hall. I wouldn't want to speculate on the 
possible impact of anything like that.
    Representative Brady. Do tax increases on families--for 
example, if the tax bomb does go off at the end of this year, 
Congress fails to act, the average Texas family will see 
increases, tax increase of about $3,000 a year--that may not be 
big by Washington standards; it's huge for our families--if you 
raise taxes $3,000 for a family, does that restore consumer 
confidence? Does that increase retail sales?
    Commissioner Hall. Again, I wouldn't want to talk about tax 
policy.
    Representative Brady. Well if you take $3,000 a family out 
of people's pockets, they send it here to Washington rather 
than going to the local store, or the mall, or eating out, or 
buying an iPod for their children, does that improve retail 
sales when money is diverted from the local economy up to 
Washington?
    Commissioner Hall. Again, I wouldn't want to talk about the 
impact of something like that.
    Representative Brady. What are you seeing in the energy 
sector? Speaking of people who are losing their jobs, right now 
the energy sector for last month stayed fairly even. We've seen 
announcements in the Gulf of companies redeploying workers 
overseas because the rigs are no longer being able to work in 
the Gulf of Mexico.
    Small businesses tell us that they have begun layoffs 
because they cannot go until the end of November, six months, 
without their primary source of revenue. And each of the rigs 
that is idle in the Gulf has between 1,000 and 1,500 workers 
tied directly to it, as well as on average 1,000 vendors who 
supply those services. Those rigs are now idle.
    As well as in the shallow water, the Interior Department 
has a de facto moratorium that has virtually shut down 
exploration in the shallow waters, again tens of thousands of 
workers and many independent energy production workers looking 
forward. If the moratorium holds until the end of November, or 
if Washington succeeds in driving independent contractors, or 
independent producers out of the Gulf, what will be the job 
losses in the energy sector going forward?
    Commissioner Hall. I wouldn't want to speculate on that.
    Representative Brady. But the companies that do drill in 
the Gulf, especially the independents that make up about 80 
percent, the largest shareholder in 80 percent of those wells, 
those are almost all U.S. American companies, if those 
companies lay off workers, those will be Americans----
    Chair Maloney. The gentleman's time has expired, but, 
Commissioner Hall, you may answer.
    Commissioner Hall. Again, I wouldn't want to speculate on 
what could happen.
    Representative Brady [continuing]. Okay. Thank you.
    Chair Maloney. Well, one way that we do not speculate is 
when we look at numbers. Numbers do not lie. And when we look 
at this monthly change in private payrolls, it shows that in 
the last month that the former President was in office we lost 
over 700,000 jobs.
    Because of Democratic policies and helping to get the 
economy moving again, we are trending in the right direction. 
And it is clear that actions taken by the Democrats in Congress 
have helped to get our economy back on track. But the recovery 
is fragile, and the pace of growth is modest.
    While business investment is picking up, consumers continue 
to face challenges and remain very cautious. Job creation is 
number one on the top of my list, and I would say job creation 
is the number one top of the list, the to-do list, of all 
Democrats, where it will remain until every American who wants 
a job has a job.
    This hearing is adjourned.
    [Whereupon, at 10:25 a.m., Friday, August 6, 2010, the 
hearing was adjourned.]
                       SUBMISSIONS FOR THE RECORD

     Statement of Carolyn Maloney, Chair, Joint Economic Committee
    Today's Employment Report from the Bureau of Labor Statistics shows 
that in July, the economy added 71,000 private sector jobs, the seventh 
straight month of employment gains in the private sector. Since the 
beginning of the year, the economy has added 630,000 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 second month this year.
    Additionally, the June employment report showed that the 
unemployment rate remained unchanged at 9.5 percent.
    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 15.6 percent is lower the peak of 16.5 percent.
    In addition to overall private sector job gains,

      Manufacturing employment has risen for seven months in a 
row, after falling 3 straight years. The last time this sector gained 
jobs for 7 months in a row or longer was in 1998.

      GDP grew for the fourth consecutive quarter in the second 
quarter of 2010 with businesses' purchases of equipment and software 
growing by 20 percent for the second quarter in a row.

      Surveys of both the service sector and the manufacturing 
sector show that growth is 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.
    The recent GDP report from the Bureau of Economic Analysis also 
told us that this recession was even more severe than previously 
reported.
    We now know that GDP fell by 6.8 percent in the fourth quarter of 
2008 and fell by 4.9 percent in the first quarter of 2009.
    A recent study by noted economists Alan Blinder and Mark Zandi 
shows that without the actions taken by the Administration, Congress 
and the Fed, this recession would have been another Great Depression. 
Without these actions, we would have lost another 8\1/2\ million jobs 
by the end of 2010.
    We have made real progress in the past year. While today's job 
gains are not as robust as earlier this year, the trend is in the right 
direction.
    But we cannot let down our guard. The recovery is still fragile and 
our economy is still vulnerable.
    The policies that Democrats in Congress quickly put into place over 
the last year are working.
    Policies DO matter.
    That is one reason I am glad to see that yesterday, the Senate 
passed legislation to extend funding to states to pay for their 
increased Medicaid costs and to provide additional funding for 
teachers.
    The Department of Education estimates that 140,000 teacher jobs 
will be saved because of this increase in funding.
    The House will be reconvening on Tuesday to pass this legislation 
so that it will be in place before the school year begins.
    This legislation will also help the economy grow. According to the 
CEA's fourth quarterly report, aid given to the states in the Recovery 
Act was quickly implemented and provided a large boost to the economy.
    Recently, the JEC Majority Staff took a deeper look into the 
employment increases in the manufacturing sector seen in 2010.
    Most of the job creation in the manufacturing sector is in the 
durable goods sector, and may be due to inventory restocking or 
temporary export surges due to fiscal stimulus in other countries.
    Manufacturing is a key source of good jobs that can play an 
important role in spurring growth in other sectors of the economy.
    This JEC report shows that Congress and the Administration need to 
take further actions to create a robust rebound in manufacturing 
employment.
    Some actions have been taken by the House of Representatives 
already but we need to do more.
    In particular, more actions are needed to help small businesses. 
The House has already passed legislation to help small businesses get 
credit and provide tax credits for these engines of job creation. It is 
time for all members of Congress to work together to pass legislation 
that will create jobs and 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.
    Unfortunately, today we received more bad news for American workers 
and their families. The unemployment rate remained elevated at 9.5 
percent. Total nonfarm payroll employment decreased by 131,000. After 
excluding the layoffs of 143,000 temporary Census workers, private 
sector payroll job growth remains anemic at 71,000. At this slow pace 
it will take much of the decade to return to normal employment levels.
    Despite their promises, the economic plan of President Obama and 
Congressional Democrats has failed to restore consumer confidence--a 
key element to economic recovery.
    The University of Michigan's July Index of Consumer Sentiment fell 
dramatically by 10.8 percent to 67.8, the lowest level in a year. The 
Index of Consumer Expectations fell even further to 62.3, the lowest 
level since March of last year--the month after Congress enacted the 
stimulus.
    According to Richard Curtin, the economist in charge of producing 
theses indices:

        Rather than the economy gaining strength, consumers now 
        anticipate a slowing pace of growth, and rather than economic 
        policies acting to improve prospects, the policies of the Obama 
        Administration have increased economic uncertainty among 
        consumers. Overall, the data suggest that the current slowdown 
        in spending is likely to persist well into 2011 as it reflects 
        a widespread and general realignment of job and wage 
        expectations. While a double dip is still unlikely, it now has 
        a non-ignorable 25% probability.

    It's discouraging to American workers and small businesses that 
this unusually sluggish, sub-par recovery will persist well into next 
year.
    But it's not surprising.
    Along with the failure of the massive Democratic stimulus to put 
people back to work--except in federal government jobs--families and 
businesses fear the dangerous levels of debt incurred by this Congress 
and a host of job-killing, anti-growth policies coming out of 
Washington including higher taxes, higher energy prices, burdensome 
regulations, and constant bailouts of special interests.
    While tens of thousands of American energy workers risk losing 
their jobs right now due to the White House moratorium on drilling in 
the Gulf of Mexico, Congress next week will consider another $26 
billion bailout of state and local government workers. The signal this 
Democratic Congress is sending is clear: we'll spend whatever taxpayer 
money it takes to save a government job, the rest of you American 
workers can take a hike.
    And three weeks after we extended the invitation to President Obama 
to travel to Houston to meet face-to-face with energy workers and small 
businesses whose livelihoods are threatened by the President's 
moratorium--we have heard nothing but silence. To add insult to injury, 
the President is coming to Texas next week to raise campaign cash but 
apparently does not have an hour--not even 15 minutes--to spare for our 
American workers whose jobs he is killing.
    Maybe if our energy workers worked for the government, they could 
get a bailout, too. But that's not what they are asking. They just want 
to go back to work on the rigs the President has idled and some that 
now are forced to leave America for foreign countries.
    So much for ``hope and change.''
    The prospects for other workers who have lost their jobs isn't much 
better. Real GDP growth slowed by more than one-half from 5.0 percent 
in the fourth quarter of last year to 2.4 percent in the second quarter 
of this year. One-off inventory restocking accounted for 59 percent of 
real GDP growth during the last three quarters. Restocking your shelves 
isn't a sustainable basis for job creation, but consumers confident in 
the recovery are.
    Unfortunately, real final sales growth, which is a better indicator 
of the underlying trend than real GDP, averaged an anemic 1.5 percent 
during the last three quarters. Consequently, economists are 
downgrading their forecasts for the remainder of 2010 and for 2011.
    Earlier this week, Committee Democrats released a report stating 
that manufacturing payroll jobs increased by 136,000 during the first 
half of 2010. I rejoice that some American workers have found new 
manufacturing jobs.
    However, this report tells only one-half of the story. Actually, 
manufacturing payroll jobs decreased by 660,000 since the Obama 
stimulus was enacted. Moreover, manufacturing payroll jobs fell by 2.3 
million since the Democrats took control of Congress in 2007.
    With so many families struggling, how can Congressional Democrats 
possibly be proud of these devastating economic failures?
    Ironically, the slight improvement in the manufacturing sector 
isn't due to sales here in America but rather foreign demand, 
especially in Canada, Mexico, and rapidly growing countries in Asia.
    Monthly U.S. manufacturing exports are up 31 percent from February 
2009 to May of this year. To satisfy higher foreign demand, U.S. 
manufacturers boosted their output by 6 percent during the same period. 
Since the beginning of the year this export-driven recovery is 
beginning to reverse the decline in manufacturing employment under the 
failed White House economic plan.
    In contrast, demand here in America, which the Obama stimulus was 
supposed to boost, remains lackluster. So unless Speaker Pelosi and 
Majority Leader Reid want to pat themselves on the back for increasing 
demand in foreign countries, which is preposterous, Democrats can claim 
little credit for the improving outlook in manufacturing.
    Indeed, many Congressional Democrats oppose selling more American 
goods and services overseas by failing to pass the pending free trade 
agreements with Colombia, Panama, and South Korea that would accelerate 
export-driven job creation.
    Dr. Hall, amid this grim economic data I look forward to hearing 
your testimony.
                               __________
    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 declined by 131,000 in July, and the 
unemployment rate remained at 9.5 percent. The decrease in employment 
largely reflects continued cuts in the number of temporary workers 
previously hired for Census 2010. Private sector employment edged up 
(+71,000) over the month. Thus far in 2010, private sector employment 
has risen by 630,000, although nearly two-thirds of that gain occurred 
in March and April.
    In July, employment in the Federal government fell for the second 
month in a row. The number of temporary Census 2010 workers decreased 
by 143,000, following a decline of 225,000 in June. This leaves 196,000 
temporary decennial census workers on the payroll.
    Within the private sector, employment gains continued in 
manufacturing, health care, and mining. Manufacturing employment rose 
by 36,000. Most of the gain occurred in motor vehicles and parts 
manufacturing (+21,000), as some plants deviated from their normal 
practice of shutting down in July for retooling. Motor vehicles had 
added 32,000 jobs during the first half of the year. Employment in 
fabricated metals increased by 9,000 over the month. The manufacturing 
workweek rose by one-tenth of an hour in July, after falling by half an 
hour in June.
    Health care employment grew by 27,000 over the month. Since the 
recession began in December 2007, health care has added 665,000 jobs. 
Employment in mining rose by 7,000 in July, largely in support 
activities.
    Employment in temporary help services was nearly unchanged for the 
second month in a row. Job gains had averaged 45,000 per month from 
October 2009 through May.
    Construction employment was little changed in July (-11,000). A 
strike in the industry reduced payrolls by 10,000. Financial sector 
employment continued to trend down over the month (-17,000), though the 
pace of job loss has been slower this year. Thus far in 2010, monthly 
job declines have averaged 12,000, compared with 29,000 in 2009. 
Employment in most other private sector industries was little changed 
in July.
    Average hourly earnings of all employees on private nonfarm 
payrolls rose by 4 cents in July to $22.59. Over the past 12 months, 
average hourly earnings have risen by 1.8 percent. From June 2009 to 
June 2010, the Consumer Price Index for All Urban Consumers (CPI-U) 
rose by 1.1 percent.
    Turning now to data from our survey of households, most key labor 
force measures were essentially unchanged in July. The jobless rate 
remained at 9.5 percent, and the number of unemployed held at 14.6 
million. The rate has declined from 9.9 percent in April, reflecting 
decreasing labor force participation. The participation rate had risen 
during the first 4 months of this year, to 65.2 percent in April, but 
has now returned to 64.6 percent, its December 2009 level.
    Among the employed, the number of individuals working part time who 
preferred full-time work was nearly unchanged over the month at 8.5 
million. Since April, the number of such workers has declined by 
623,000. However, the level remains 3.9 million above that of December 
2007 when the recession began.
    In summary, payroll employment declined by 131,000 in July, largely 
reflecting a decrease in the number of temporary census workers 
(-143,000). Small job gains continued in the private sector. The 
unemployment rate held at 9.5 percent.
    My colleagues and I now would be glad to answer your questions.

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