[Joint House and Senate Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
S. Hrg. 111-670
THE EMPLOYMENT SITUATION: JULY 2010
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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
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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
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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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