- THE EMPLOYMENT SITUATION: APRIL 2011

[Joint House and Senate Hearing, 112 Congress]
[From the U.S. Government Publishing Office]

S. Hrg. 112-60

THE EMPLOYMENT SITUATION: APRIL 2011

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

HEARING

before the

JOINT ECONOMIC COMMITTEE
CONGRESS OF THE UNITED STATES

ONE HUNDRED TWELFTH CONGRESS

FIRST SESSION

__________

MAY 6, 2011

__________

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]

SENATE HOUSE OF REPRESENTATIVES
Robert P. Casey, Jr., Pennsylvania, Kevin Brady, Texas, Vice Chairman
Chairman Michael C. Burgess, M.D., Texas
Jeff Bingaman, New Mexico John Campbell, California
Amy Klobuchar, Minnesota Sean P. Duffy, Wisconsin
Jim Webb, Virginia Justin Amash, Michigan
Mark R. Warner, Virginia, Mick Mulvaney, South Carolina
Bernard Sanders, Vermont Maurice D. Hinchey, New York
Jim DeMint, South Carolina Carolyn B. Maloney, New York
Daniel Coats, Indiana Loretta Sanchez, California
Mike Lee, Utah Elijah E. Cummings, Maryland
Pat Toomey, Pennsylvania

William E. Hansen, Executive Director
Robert P. O'Quinn, Republican Staff Director

C O N T E N T S

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Opening Statement of Members

Hon. Robert P. Casey, Jr., Chairman, a U.S. Senator from
Pennsylvania................................................... 1
Hon. Kevin Brady, Vice Chairman, a U.S. Representative from Texas 3
Hon. Elijah E. Cummings, a U.S. Representative from Maryland..... 5
Hon. Michael C. Burgess, M.D., a U.S. Representative from Texas.. 7

Witnesses

Dr. Keith Hall, Commissioner, Bureau of Labor Statistics; Dr.
Michael Horrigan, Associate Commissioner for Prices and Living
Conditions, Bureau of Labor Statistics; and Mr. Philip Rones,
Deputy Commissioner, Bureau of Labor Statistics................ 9

Submissions for the Record

Chart titled ``Monthly Change in Private Payrolls''.............. 24
Chart titled ``An Exceptionally Weak Employment Recovery''....... 25
Chart titled ``Labor Force Participation Rate Lowest Since 1984'' 26
Prepared statement of Senator Robert P. Casey, Jr................ 27
Prepared statement of Representative Kevin Brady................. 27
Prepared statement of Representative Michael C. Burgess, M.D..... 28
Prepared statement of Dr. Keith Hall, Commissioner, Bureau of
Labor Statistics, together with Press Release No. 11-0436...... 28
Letter dated May 18, 2011, transmitting Commissioner Hall's
response to Representative Burgess............................. 68
Letter dated May 24, 2011, transmitting Commissioner Hall's
response to Representative Cummings............................ 70
Letter dated May 6, 2011, transmitting questions from Senator Amy
Klobuchar to Commissioner Hall................................. 72
Letter dated June 1, 2011, transmitting Commissioner Hall's
response to Senator Klobuchar.................................. 73

THE EMPLOYMENT SITUATION: APRIL 2011

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FRIDAY, MAY 6, 2011

Congress of the United States,
Joint Economic Committee,
Washington, DC.
The committee met, persuant to call, at 9:31 a.m. in Room
106 of the Dirksen Senate Office Building, the Honorable Robert
P. Casey, Jr., Chairman, presiding.
Senators present: Casey.
Representatives present: Brady, Burgess, and Cummings.
Staff present: Will Hansen, Brenda Arredondo, Gail Cohen,
Colleen Healy, Andrew Wilson, Jayne McCullough, Ted Boll, and
Robert O'Quinn.

OPENING STATEMENT OF HON. ROBERT P. CASEY, JR., CHAIRMAN, A
U.S. SENATOR FROM PENNSYLVANIA

Chairman Casey. The Committee hearing will come to order. I
want to thank everyone for being here, and I have an opening
statement I will make and then I will turn to our Vice
Chairman, Congressman Brady, and any other Members who want to
make a statement before introducing Commissioner Hall for his
statement.
We are again pleased to have Commissioner Hall and his team
here with us today. We appreciate your service to the country.
We have a lot to report on today. Before we get into the
numbers for this month, I just wanted to add a few words about
some of the trends we have been seeing over the last couple of
months.
While the labor market is still facing significant
challenges, we know that unemployment is too high, and overall
employment is still well below the levels prior to the
recession. We have seen some real strengthening in the labor
market since the spring of 2010. More private-sector jobs have
been created, and the unemployment rate has begun to come down,
though it ticked up this month--and we will get to that in a
moment.
If we look at the last 14 months, we have now recorded over
those 14 months private-sector job gains. During that time we
have added 2.1 million private-sector jobs. Since the beginning
of 2011, the labor market has also shown resilience in the face
of rapidly rising oil and gas prices, continued weakness in the
housing market, slowing export growth, and winter blizzards
that delayed some investment and hiring.
Against these challenges, the trend has been clear. In
eight of the past nine months the economy has added more than
100,000 private-sector jobs during each month. In February,
March, and now April, we have added more than 200,000 private-
sector jobs each month. And I think that is a very good sign
and a very good trend.
We are moving in the right direction. We are benefitting,
in my judgment, from the actions taken in 2009 and 2010 in
dealing with this challenge. These actions that we have taken
have put us on the path to growth, and I am pleased to see some
signs of that this month as well.
Today's employment report provides further evidence that
the labor market is getting healthier as the economy continues
to improve and the recovery continues.
During April, the economy added 268,000 private-sector
jobs. Due to the loss of government jobs, overall, the economy
added 244,000 jobs in April. One of the charts behind me
clearly shows the trend in employment over the past 14 months,
a sign that some of the work that we have done in the last 14
months or so has begun to have an impact.
[The chart titled ``Monthly Change in Private Payrolls''
appears in the Submissions for the Record on page 24.]
[The chart titled ``An Exceptionally Weak Employment
Recovery'' appears in the Submissions for the Record on page
25.]
[The chart titled ``Labor Force Participation Rate Lowest
Since 1984'' appears in the Submissions for the Record on page
26.]
One sector that has been showing sustained employment
growth is the manufacturing sector, a key source of good-paying
jobs and central to our nation's long-term competitiveness. In
April this sector added 29,000 jobs, and since the end of 2009,
manufacturing has added a quarter of a million jobs.
In addition, the professional and business sector added
51,000 jobs, it's ninth consecutive monthly gain.
As we know from the news this morning, and we'll hear more
about this, in the hearing, the unemployment rate has edged up
to 9.0 from 8.8 in March. While down from its peak of 10.1
percent in October of 2009, the unemployment rate remains too
high, with 13.7 million Americans looking for work who cannot
find it.
As Chairman of this Committee, I monitor these unemployment
numbers for each demographic group to ensure that as the
overall employment rate continues to drop, the unemployment
rate falls for every group; but unfortunately that is not the
case.
The unemployment rate for this month for workers with a
disability, as one example, workers with a disability, their
unemployment rate was 14.5 percent, compared to 15.2 percent a
year ago.
The high rate of unemployment among people with
disabilities underscores the need for legislation that I and
others have worked on. I will be reintroducing, along with
Congressman Crenshaw from Florida, the Achieving A Better Life
Experience Act, the so-called A-B-L-E, ABLE Act. In the
previous Congress, this legislation had substantial bipartisan
support in both Chambers. The ABLE Act will give individuals
with disabilities and/or their families access to new, highly
flexible tax-free savings accounts that could be used to help
cover a variety of essential expenses for people with
disabilities, including employment training and educational
expenses.
In combination with other support, the ABLE Act can help
people with disabilities gain new skills and training and
strengthen their employment prospects.
Additionally, when we look at particular demographic
groups--the unemployment rate for veterans was 7.7 percent,
which is below the overall 9.0 rate. Gulf-Era II veterans,
meaning those who have served in Iraq and Afghanistan, faced an
unemployment rate of 10.9 percent. Obviously it is higher than
both the overall veteran rate and higher than the overall
unemployment rate.
The unemployment rate in the African-American community was
16.1 percent, well above its prerecession level. That number
for African-Americans was as low as 7.7 percent in August of
2007.
For Hispanic workers, the unemployment rate was 11.8, which
is much higher than it was in 2007. We have got to examine
these numbers as well as the overall rate.
In summary, the unemployment rate shows that we are on the
right track. The economy is continuing its recovery. The
economy is stronger than a year ago. More people are working.
Fewer are unemployed. But we must do more to continue down the
path of this recovery.
As the first-quarter GDP data show, the recovery is modest,
and the recent spike in oil and gas prices and continued
weakness in the housing market present real challenges.
Federal Reserve Chairman Bernanke and others have noted
that the weather and other transitory factors contributed to
the slowdown in the rate of economic growth in the first
quarter. While they have said that, it is important that
Congress tackles issues that will protect American workers and
families now and in the future.
I believe we need to stop subsidizing the major oil and gas
companies at a time when the price of oil has spiked, and their
profits have surged. We have this strange situation where they
get our tax subsidies; they're getting record profits; and the
gas prices for families go through the roof.
I think we must crack down on the unfair trade practices
that China engages in on a daily basis, and we need to put our
fiscal house in order: cutting spending, reducing waste, fraud,
and abuse, and bringing down the deficit and especially long-
term debt.
The job before us is to build upon the progress to date,
creating more jobs and bringing the unemployment rate down, and
I look forward to working with members of the Committee on
these and other challenges to support the economic recovery.
And now I would like to turn to our Vice Chairman,
Congressman Brady.
[The prepared statement of Senator Casey appears in the
Submissions for the Record on page 27.]

OPENING STATEMENT OF HON. KEVIN BRADY, VICE CHAIRMAN, A U.S.
REPRESENTATIVE FROM TEXAS

Vice Chairman Brady. Well thank you, Chairman.
Dr. Hall, we welcome you and your colleagues again this
morning.
During April, initial unemployment claims surged from
385,000 for the first week to 474,000 for the last week in
April. The last time that initial claims were this high was
October of last year. This development is extremely unsettling,
as we have been expecting continued improvement in the labor
market.
While the job growth is welcomed, today's employment
report, coming on the heels of these troubling initial claims
data, is showing some disconcerting signs. Nine percent
unemployment and a rise in the number of workers who have
recently lost their jobs are disappointing statistics. We need
still faster private sector job creation. Otherwise, millions
of U.S. workers will languish in unemployment whether they are
counted as such or have dropped out of the labor force, and
millions more will remain underemployed or live in fear of
losing their jobs. The Economist recently asked the question:
``What's wrong with America's economy?'' In answering its
question, The Economist pointed to America's public finances
and its labor market. Moreover, The Economist stated that the
recent decline in the unemployment rate is misleading because
it is a result of surprisingly small growth in the work force
as discouraged workers drop out. The labor force participation
rate remains at the lowest level in more than a quarter
century.
It is frustrating beyond words to see the excruciatingly
slow progress in employment growth, especially while President
Obama pursues policies that obstruct economic activity and job
creation. The energy industry in America is a prime example.
Under this Administration, the energy manufacturing and energy
services industry is suffering from the de facto drilling
moratorium on vast offshore areas, a molasses-like permitting
process, and threats of adverse tax changes that will ship jobs
and production overseas.
We should not be content with pouring over these employment
numbers month after month and bemoaning the slow progress.
Perhaps we can blame it on the weather, or China, or on
American energy, but we know what is causing this growth
problem. So let's fix it.
Let me show you again, as I did at last month's hearing,
the payroll job performance during and after this recession,
compared with that during and after the other two major postwar
recessions. This chart demonstrates how we are underperforming
relative to past experience. This is an exceptionally weak
recovery.
There is no excuse for the dismal job performance. You
cannot explain it by saying the financial crisis caused the
severe recession but then fail to encourage private-sector
growth by every means possible. Why does the President have an
obsession with raising taxes? Why does he persist with his
``green jobs'' mantra when the one percent of our energy sector
for which wind and solar account clearly cannot revive
America's job market? Americans are demanding real solutions.
JEC Republicans released one paper in the summer and
another in the fall of last year that warned treating the BP
Gulf oil spill as simply an environmental disaster would be a
mistake.
By the time the second paper came out in October, the price
of crude oil had just risen above $80 per barrel. These papers
explained the importance of continued exploration and
development in the fastest growth areas for oil production in
the country to help counteract future oil price volatility.
In 2010, the United States was the largest source of oil
supply growth outside of OPEC on the strength of offshore
production. But this year, the Energy Information
Administration expects federal Gulf of Mexico oil production to
fall by 240,000 barrels each and every day.
Energy consulting firm Wood McKinsey estimates a drop of
375,000 barrels per day in 2011 oil production because new
development wells could not be brought online. If those barrels
are imported, how does that help stabilize oil prices? How does
that help our economy? How does that help our job seekers?
The price of oil is now $100 per barrel, while the average
price of gasoline nationwide is just shy of $4 per gallon.
The private sector is boosting labor productivity. First-
quarter productivity was up by 1.6 percent. However, businesses
also are sitting on $2 trillion of cash that they will not
invest because of regulatory uncertainty and fear of higher
taxes and inflation.
Therefore, businesses are not creating the jobs necessary
to reemploy more people and increase the Nation's output
sufficiently to generate enough tax revenue to support those
who are sick, retired, or remain unemployed. The annual rate of
real GDP growth slowed to 1.8 percent in the first quarter.
President Obama has put the Federal Reserve in a position
where it feels compelled to hold the federal funds rate at zero
and buy hundreds of billions of dollars' worth of Treasury
Bonds.
The Joint Economic Committee Republicans just released a
paper on that subject as well entitled, ``Too Lose for Too
Long.'' The Federal Reserve is taking a great risk with
inflation that would not be necessary if the other levers of
the private economy that the government can impact were set to
``go.''
Dr. Hall, I look forward to your testimony.
[The prepared statement of Representative Brady appears in
the Submissions for the Record on page 27.]
Chairman Casey. Thank you.
Congressman Cummings.

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

Representative Cummings. Thank you very much, Mr. Chairman,
and I want to thank you for calling this hearing today to
enable us to examine the current state of employment in our
Nation.
I also thank our witness, Dr. Hall, for appearing before us
today and for following up with my office regarding my
questions from last month's hearing.
We learn from today's report, Mr. Chairman, that in April
the private sector added 268,000 jobs, resulting in an increase
in nonfarm payrolls of 244,000 jobs.
These numbers are heartening because they follow 13
consecutive months of positive job creation. In fact, 1.8
million new jobs have been created since February 2010.
When contrasted to an earlier period, January 2008 through
February 2010, a period during which our economy shed 8.8
million jobs, it is clear that we have averted a disaster.
Nonetheless, other indicators clearly show that we must
continue to make job growth our top economic policy priority.
We learned yesterday that new claims for unemployment
unexpectedly rose to an eight-month high of 474,000
applications. There are currently 13.7 million Americans who
are unemployed. Almost a third of these individuals have been
unable to find work for more than one year.
One out of every ten Americans without a college diploma
cannot find work. And one out of every six African American
workers remain unemployed.
Equally worrisome was a report Monday by The Wall Street
Journal indicating that there are currently 5.5 million long-
term unemployed Americans who are no longer receiving any
unemployment benefits. These are our fellow Americans, and they
are fighting for survival.
On April 18th I held my annual job fair in Baltimore which
connects employers with job seekers, and thousands of people
attended. I saw first-hand the determination and humility of my
constituents who were simply seeking the opportunity to provide
for themselves and for their families.
They are resilient, but they need a chance to succeed. That
is why I commend Congressman Hoyer and my House Democratic
colleagues who earlier this week unveiled the continuation of
our Make It In America Agenda.
This Agenda consists of numerous bills that will support
job creation today and in the future by encouraging investment
in innovation, infrastructure, and education right here at home
in America. Unfortunately, I fear that my friends across the
aisle are sacrificing our future in an effort to pay off debts
created by tax breaks and two wars.
Nobel Prize-winning economist Joseph Stiglitz wrote in
Politico last month, and I quote, ``The ballooning of the
deficit has understandably moved deficit reduction back to the
center of the debate, but the best way to reduce the deficit is
to put America back to work.'' End of quote.
Yet instead of making these critical investments, the House
Majority's budget proposes to slash job-training programs, Head
Start, and Pell Grants for college students. This week the
House Majority voted to pass H.R. 1214, which would repeal the
section of the Affordable Care Act that funds the construction
and improvement of school-based health centers. Funding the
construction of these centers not only ensures children's
access to these vital and cost-effective services, it creates
jobs in one of the hardest-hit sectors of the economy:
construction.
The Majority's proposed cuts--whether it's the school-based
health centers, or job training programs--are ostensibly
defended with the argument that tough times require tough
choices and sacrifices.
Unfortunately, these senseless cuts fail to meaningfully
reduce the debt and instead threaten hundreds of thousands of
jobs and the well-being of our fellow Americans. This is not
the time for symbolism. This is the time for smart choices that
will create jobs and once again make our Nation the land of
opportunity for all Americans.
I urge the House Majority to work across the aisle to find
solutions that will reduce the deficit, help the middle class,
and put Americans back to work.
Again, Mr. Chairman, I thank you for this hearing, and I
yield back.
Chairman Casey. Thank you, Congressman Cummings.
Congressman Burgess.

OPENING STATEMENT OF HON. MICHAEL C. BURGESS, M.D., A U.S.
REPRESENTATIVE FROM TEXAS

Representative Burgess. Thank you, Mr. Chairman.
Dr. Hall, Commissioner Hall, always good to see you. Always
good to start the month off with Commissioner Hall.
I do want to talk about why the U.S. economy has not
recovered, and some of the steps we could take to bring the
economy back. I would like to actually offer, as an example,
the State where Mr. Brady lives, and where I live, Texas, as a
good example of the direction where we might--should--head.
The unemployment rate in Texas is 8.1 percent, certainly
below the national average, certainly much higher than we would
like it to be in the State of Texas but nevertheless the Texas
economy has performed better than any other state because of,
why? A job-friendly regulatory regime, no state income taxes,
and the fact that Texas is a right-to-work state.
As of March, annual job growth in Texas was 3.6 percent,
compared with a U.S. job-rate growth of 2 percent. The Dallas
Fed says the unemployment rate in Texas would be even lower
except for the fact that Texas has had a rapid population
increase in the last 10 years, of which we are all aware.
We also accounted for 14 percent of the United States'
employment growth over the last year. The agreeable weather in
Texas, better job conditions, are attracting people from all
over the country, and people are voting with their feet and
moving to the Lone Star State.
Over 200,000 jobs were created in the last year. Other
states could achieve this growth by duplicating Texas's job-
friendly environment.
In spite of these statistics, our economy in Texas is not
perfect. We are concerned about unemployment rates for young
people just getting out of--beginning their earning years.
Unemployment rates for minorities are unacceptably high, and
the overall unemployment rate is still, as I said, over 8
percent, and that is high for Texas.
But the statistics cited earlier demonstrate that compared
to the rest of the country something in Texas is working, and
perhaps Washington and other states could consider a more job-
friendly regulatory regime in order to restore those jobs that
Mr. Cummings says we need in order to recover the economy.
One sector of the economy on which I would like to focus is
the housing market. Housing prices have continued to drop, and
demand for homes remains low. The housing market, which helps
drive our economy, is an area that can create job growth and
will be needed to boost our recovery.
I would like for Dr. Hall today to discuss the housing
market's drag on the economy and how that affects our national
growth.
Another area of concern, already mentioned by other people
on this dais, is high commodity prices. Consumers across the
country face higher oil and food prices. If we do not want the
economic revival to stall, these prices have to come down.
The good news yesterday is that oil prices did come under
$100 a barrel for the first time in a long time. In fact, it
was rather a significant drop.
Now what happened yesterday? Oh, the House passed a bill.
And here we are in the Senate today, and I would just mention
to the Senate that our bill yesterday to expedite lease sales
in the Gulf of Mexico, those very leases that have been delayed
or cancelled by the Administration in the past year, the fact
that we are willing to expedite those lease sales had a
profound effect on those people who like to speculate and hedge
in the oil market.
They saw that the Republican House was serious about
addressing the issue of the supply of our oil produced within
our shores. The Administration has harmed offshore exploration
in the past year. I don't think there is any question about
that. We have seen the effect by the price at the pump.
What will not create jobs is the debt. And the federal debt
at $14.3 trillion, the number has grown so large that most
people just simply cannot comprehend it and have given up even
trying. Canada's debt, to put it in perspective, is about $500
billion, a half a trillion dollars.
The Federal Government must find ways to operate like a
normal family. We all hear about cuts that need to be made, and
one of the first things we probably need to do is cut up the
government credit card and stop spending.
The talk in Washington recently has been about cutting
spending, and there are cuts that need to be made. But there
are other things we could be doing here in Congress to cut down
on government expenses, which are things like waste, which in
turn frees up resources for Congress to reduce the deficit and
help those Americans who are out of work.
Let me just comment briefly--and I will submit the rest of
my comments for the record. Mr. Cummings mentioned H.R. 1214
that passed in the House yesterday. This indeed was a bill that
would take back $100 million, I believe erroneously included as
a forward-appropriation, a blank check, if you will, a blank
postdated check, that was included in the Patient Protection
and Affordable Care Act. The Affordable Care Act is riddled
with this type of policy where the Federal Government has
written blank checks, postdated them, put them in the last, and
all of them are overdrawing the American account.
Yes, this was a relatively small sum of money, $100
million, but here's the deal. This money was for the
construction of clinics. The money--it said in statute, the
money could not be used to hire a doctor or a nurse, or anyone
else, to provide care in that clinic.
Well that is crazy. The American people recognize that that
is crazy. Even the Administration recognized that it was crazy,
because this is the only one of the so-called cut bills in the
Patient Protection and Affordable Care Act where the
Administration has refused to issue a veto threat as a
statement of Administration policy.
Even the President was embarrassed by slipping this $100
million into the Patient Protection and Affordable Care Act. I
assume it was done over here in the Senate for some reason, as
a payoff to someone. I don't--can't identify who, or how, or
why, but that's the way most of these things work.
But it was appropriate to bring this money back. We are not
against school-based clinics. We are against the funding of a
clinic with no provision for funding for staffing that clinic.
The normal Federal Qualified Health Center statute says we
won't build it. You build it; we will help you staff it. This
legislation had turned things on its head and it was
appropriate to reverse that course.
I thank the Chairman for his indulgence, and I will yield
back the balance of my time and submit the balance of my
statement for the record.
[The prepared statement of Representative Burgess appears
in the Submissions for the Record on page 28.]
Chairman Casey. Thank you very much.
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 U.S. Congress, other federal
agencies, state and local governments, business, and labor.
Dr. Hall also served as the Chief Economist for the White
House Council of Economic Advisers for two years under
President George W. 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. He received
his B.A. from the University of Virginia, and his Ph.D. and
M.S. degrees from Purdue University.
Doctor, thanks again for being here. We are grateful to
have 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. Mr. Chairman and Members of the
Committee:
Thank you for the opportunity to discuss the employment and
unemployment data that we released this morning.
Nonfarm payroll employment increased by 244,000 in April,
and the unemployment rate edged up to 9.0 percent. Over the
last three months, payroll employment has risen by an average
of 233,000 compared with an average of 104,000 in the prior 3
months.
In April, employment increased in several service-providing
industries, manufacturing, and mining. Retail trade added
57,000 jobs in April. This increase followed two months in
which retail employment changed little.
Over the month, job gains occurred in electronics and
appliance stores, building and garden supply stores, and
automobile dealerships. An employment increase in general
merchandise stores offset a decline of similar size in March.
Employment in professional and business services rose by
51,000 in April. Since a low point in September of 2009,
employment in this industry has increased by 745,000. Several
component industries continued to add jobs in April, including
management and technical consulting services, and computer
systems design services. Employment in temporary help services
was essentially unchanged in April.
Employment in leisure and hospitality grew by 46,000 over
the month and by 151,000 in the last 3 months. Food services
and drinking places added 27,000 jobs in April and has
accounted for nearly two-thirds of the gain in leisure and
hospitality since January.
Health care employment continued to increase in April, with
job growth occurring in ambulatory health care and in
hospitals.
In the goods-producing sector, manufacturing employment
rose by 29,000 in April. Since December 2009, manufacturing has
added a quarter of a million jobs. Durable-goods manufacturing
has been the source of this growth. Over the month, job gains
continued in machinery, primary metals, and computer and
electronic products.
Employment in mining increased by 11,000 in April following
a gain of similar magnitude in March. Most of the growth
occurred in support activities for mining. Since a recent low
in October of 2009, mining employment has risen by 107,000.
Elsewhere in the goods-producing sector, construction
employment was about unchanged over the month. It has shown
little movement since early 2010, after falling sharply during
the prior 3 years.
Employment in state and local government continued to trend
down in April. Both have been losing jobs since the second half
of 2008.
Turning now to measures from the Survey of Households, the
jobless rate edged up from 8.8 to 9.0 percent in April.
However, the rate was 0.8 percentage point lower than in
November of last year. In April, there were 13.7 million
unemployed persons, little changed from the prior month. The
number of people unemployed for less than 5 weeks increased by
242,000 in April. The number jobless for 27 weeks and over
declined by 283,000 to 5.8 million.
Other household indicators showed little or no change over
the month. The labor force participation rate has been 64.2
percent since January. The employment-to-population ratio has
changed little at 58.4 percent in April.
Despite increases in the Household Survey employment since
late 2009, the ratio has shown little movement. Among the
employed, the number of individuals working part time who
preferred full-time work was little changed at 8.6 million.
In summary, nonfarm payroll employment rose by 244,000 in
April, and the unemployment rate edged up to 9 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-11-0622, appears in the Submissions for
the Record on page 28.]
Chairman Casey. Doctor, thanks so much.
I wanted to start with the private sector numbers. Those
numbers, fortunately, have been going up the last several
months. I wanted to ask you, just by way of review, the number
for the month of April, that we are looking at is an increase
of private-sector jobs of 265,000?
Commissioner Hall. 268,000.
Chairman Casey. 268,000, I'm sorry. Can you give me the
numbers for January, February, and March?
Commissioner Hall. Sure. Well, the last three months it has
averaged 253,000.
Chairman Casey. That is the average for the first three
months of the year?
Commissioner Hall. The last three months.
Chairman Casey. The last three months, okay.
Commissioner Hall. And then the particular months before
were--yes, total private was 231,000 in March and 261,000 in
February.
Chairman Casey. Okay. And in particular I was just
wondering if you could comment by way of your analysis on the
sectors, the particular sectors within the private sector
overall. What are the sectors you see recovering most rapidly?
And where are there still areas of weakness?
Commissioner Hall. Sure. The sectors that are showing the
quickest recovery are professional and business services. We
have added 584,000 jobs since the labor market trough.
Education and health has added a little over a half a million
jobs. Leisure and hospitality has added 290,000 jobs. And
manufacturing has added 244,000 jobs.
Still struggling are financial activities. That has
actually continued to lose jobs. They've lost about 42,000 jobs
since February of 2010. And construction has held pretty flat.
They've dropped about 9,000 jobs.
The biggest declining industry has been--it's not in the
private sector--has been government. Government has actually
dropped about 391,000 jobs since June of 2009, since the
recession ended.
Chairman Casey. Since June of 2009. And all those other
numbers refer to that same period?
Commissioner Hall. Yes, those are since the labor market
trough. Those were since February of 2010. I changed times on
you a little bit there.
Chairman Casey. Okay. We know that this month the two
surveys, the household survey and the payroll survey, show
numbers that are in conflict. I just wanted to have you review
that.
The payroll survey shows strong growth in overall job
creation, about 200,000 jobs added. But the household survey
shows that there were 200,000 fewer workers employed. Is that
typical to have conflicting stories from those two surveys
during a recovery?
Commissioner Hall. Yes. It's certainly not typical. We
often get some slightly mixed signals. And the main reason is
that they are different surveys. So there is some variation
between the surveys.
I do find, though, that over say three months or so they do
tend to come into alignment, but month by month they sometimes
give you slightly mixed signals.
Chairman Casey. Could you just give us 30 seconds on the
difference between the two surveys? How they're compiled, what
they tell?
Commissioner Hall. Okay, sure. When we talk about payroll
jobs, we are actually talking about a very large survey where
we survey business establishments. We are asking them how many
people are on your payrolls.
We are taking advantage of the Unemployment Insurance
Program because they look at the Unemployment Insurance
records. That is a very, very large survey, and it in fact
represents about 4 million people. So that is 4 million out of
130 million payroll jobs. So that is what makes that a fairly
accurate number. And when we say we gained 244,000 jobs, we are
looking at that survey.
With the household survey, that is actually a telephone
survey. It is a much smaller survey. And it is designed to give
you an unemployment rate. It is not designed to give you a
number employed. So, for example, when the Household Survey,
you said it showed a drop of 200,000 jobs?
Chairman Casey. Right.
Commissioner Hall. The uncertainty in that is about 400,000
jobs. So really we are talking about plus-or-minus 400,000 jobs
when we say ``minus 200.'' So it is either like we gain 200,000
or we dropped 600,000. That is the range.
Chairman Casey. So it is almost like, I don't want to
create too much of a direct analogy, but it is more like a
survey; it is more like polling, in a sense. You have a margin
of error there.
Commissioner Hall. Right. Yes, that's right. And it is
really designed to give you a focus on the accuracy of the
unemployment rate itself. So, for example, typically the
uncertainty in the unemployment rate is point, two-tenths of a
percent. So it is fairly accurate for that, but not so accurate
for the levels.
Chairman Casey. Okay. Just so people are clear what we are
discussing, the household survey leads to the percentage
unemployment rate that we----
Commissioner Hall. Yes, that's correct.
Chairman Casey [continuing]. Pay attention to.
Thank you very much. Vice Chair Brady.
Vice Chairman Brady. Thank you, Mr. Chairman, Dr. Hall.
Every month of new job growth is welcome, but this is by
any measure an exceptionally weak recovery, especially given
the trillions of dollars thrown at the economy by the White
House and the Federal Reserve. And I always note that here we
are, after having spent all of that federal stimulus money, and
we actually have 1.8 million fewer Americans working than
before when all that money was spent.
As to this month, usually a small jump in the unemployment
rate signals people moving back into the work force, which can
be a good thing. But the rise in jobless claims and the jump in
workers recently laid off are not signs of a healthy economy,
or a healthy recovery.
The number of unemployed who lost their jobs recently
increased by 242,000. This jump comes on the heels of large
increases in initial unemployment claims, the 474,000, which we
have not seen that high since last summer.
Commissioner, shouldn't we be watching the statistics very
carefully going forward?
Commissioner Hall. I would say absolutely. The payroll job
growth is, at least the last three months, has been--is
accelerated. So that is a good sign. But we have not yet seen
some things that we would like to see in a strengthening
recovery.
Vice Chairman Brady. Well Initial Job Claims, that was a
big jump. We have had four weeks in a row of----
Commissioner Hall. Sure.
Vice Chairman Brady. [continuing] Increasing jobless
claims. That is not expected in a healthy recovery. And those
who have just lost their jobs recently is large, as well.
Could these data be pointing to a weakening job market?
Because normally we ought to have--it ought to be going in the
other direction.
Commissioner Hall. Right. I would say that the number of
new unemployment claims is in fact a helpful data. And that is
a--that rise is not a good signal.
Vice Chairman Brady. Yes. What do you think is happening
here?
Commissioner Hall. You know, it is hard to say.
Vice Chairman Brady. Because the numbers seem to be all
over the map, frankly. I mean----
Commissioner Hall. You know, I think, while focusing on one
month's data is important, but I think you need to sort of also
look back at the trend and sort of see how the trend goes.
Sometimes maybe at points like this you need to wait and
see how the data looks over the next month or two to sort of
see if that has signaled anything.
Vice Chairman Brady. Yes. Well we have been watching over
the last two years and seen the recovery much slower than 1981
and 1982. We have an estimated $2 trillion of capital sitting
on the sideline; businesses tell us they just are reluctant to
invest it in new jobs, new equipment, new structures, new
buildings, until they see more certainty coming out of
Washington.
I did notice--I always appreciate the data you give. I did
notice that there were increases in leisure and hospitality
this last month, but that you attributed it in your remarks,
two-thirds of it were related to drinking places and food
service. So is the bar industry doing better these days? And is
that a--I'm being facetious, but there is a jump in drinking
place employment?
Commissioner Hall. Yes, that was responsible for most of
the growth in leisure and hospitality.
Vice Chairman Brady. I'm teasing. I'm just trying to look
for the--we are all looking for, I think, the optimistic signs,
and we see some private-sector job growth that I think seems to
be a good sign. But the longer term recovery means to get more
people into the work force, because right now we are at the
lowest number of workers participating in the economy in a
quarter of a century.
So even as we look at the unemployment rate, look for
hopeful signs, the truth is very few people are participating.
Or at least a lot of people are not participating in this work
force. Again, troubling signs as we go forward.
So we will continue to watch these, obviously, month to
month, but this really is--we are seeing some disconcerting
signs.
I yield back.
Chairman Casey. Dr. Burgess.
Representative Burgess. Thank you.
Dr. Hall, just so I can be sure that I am clear. In your
prepared testimony you talked about gains in the mining sector.
And that includes oil and gas exploration and extraction?
Commissioner Hall. Yes, it does.
Representative Burgess. And does that include both offshore
and onshore?
Commissioner Hall. Yes.
Representative Burgess. Now just looking at the Table A-14
under the Household data, under that line item of Mining,
Quarrying, Gas & Oil Extraction, the unemployment rate a year
ago was 9.4 percent; April of 2011, 3.5 percent, which gives
that one of the lowest unemployment rates--in fact, it rivals
government workers for its low unemployment rate. Is that
correct?
Commissioner Hall. Yes.
Representative Burgess. Is there a way--I guess what is
confusing me is, on your prepared testimony you said employment
in mining increased 11,000 in April. And I assume we're talking
about oil and gas exploration and extraction in that 11,000?
Commissioner Hall. Yes, that's part of it. Yes.
Representative Burgess. But of course we also know that
because of federal policies we have put a lot of pressure on
the actual mining/mining, like coal mining. So do those two
things tend to offset each other?
Commissioner Hall. Actually, this particular month both oil
and gas extraction and mining, except oil and gas, added jobs
this month. Oil and gas added about 2,000 jobs. Mining, except
oil and gas, added about 2--did I say million? 2,000. Mining,
except oil and gas, added about 2,700.
Representative Burgess. Let me ask you this: Do we know
what is the total universe of people that are employed in these
industries?
Commissioner Hall. Well mining together is about 720,000
people.
Representative Burgess. But that includes offshore and
onshore, exploration and extraction?
Commissioner Hall. Right. Oil and gas extraction is about
170,000, and mining otherwise is about 210,000.
Representative Burgess. On the previous table, A-13,
construction and extraction occupations are lumped together.
This is the employed and unemployed persons by occupation, not
seasonally adjusted.
Commissioner Hall. Yes.
Representative Burgess. Can we break those out for which--
because obviously construction, I mean when I look at Table A-
14, the unemployment rate for construction in April of this
year is 17.8 percent, almost 18 percent. So that is one of the
highest--well, that is the highest unemployment rate in the
current jobs report, is in the construction industry. And yet
at Table A-13, it's construction and extraction are added
together. So like the total employed in April of 2011 is 7,042,
but we already know that the greatest number, the greatest
unemployment--the highest unemployment rate is in the
construction industry. So how am I to interpret that? How am I
to break that down?
Commissioner Hall. Umm----
Representative Burgess. If I am looking sort of like for
the total universe of people----
Commissioner Hall. Right.
Representative Burgess [continuing]. On which these
construction numbers and the mining numbers are based?
Commissioner Hall. Sure. Well we do not have it in this
release, but we can probably break this out a bit finer for
you, if you would like.
Representative Burgess. Well I think that would be helpful.
[Letter dated May 18, 2011, transmitting Commissioner
Hall's response to Representative Burgess appears in the
Submissions for the Record on page 68.]
Representative Burgess. I mean we, on the policy making
side, I mean you heard some of it referenced this morning where
some people are talking about significantly increasing taxes on
the oil and gas industry. I don't know, maybe that is
necessary, maybe it is not. We do seem to give a lot away to
the so-called green jobs' sector.
Now where are the green jobs on this?
Commissioner Hall. At the moment, the green--well, first of
all, it depends on how you define ``green jobs.''
Representative Burgess. I don't know how to define it. I
just hear people talking about green jobs. I am leaving that up
to you all, the smart people.
Commissioner Hall. Well, we are working on a project where
we will at some point be measuring green jobs. But the big
issue for us is pulling the green jobs out of the industries
because there are industries that specialize in green products
that are sort of spread out throughout. And the big challenge
for us is separating them from the rest of the industries.
Representative Burgess. Right. And of course these are
industries that receive huge subsidies, huge subsidies in the
stimulus bill and various other things that we have done, the
cash for caulkers, and various things that we have done--I say
``we'' euphemistically; I didn't vote for them and I don't
think Mr. Brady voted for them--but things that Congress has
done in the last two years.
Do we get any--is there any way for us to get a sense of
what our return-on-investment has been for those big, what
people call ``green jobs'' and other people call ``green
pork''? Is there any way to get an idea of the return-on-
investment there? We are talking about raising the ante on the
extraction and exploration and drilling sector, and again, I
don't know, maybe that's a good thing. Let's see some data on
that.
But we also ought to be supplied some return-on-investment
data for what has happened with the federal plus-up of these
other industries.
Commissioner Hall. Yes, I certainly think that with the
data as it is now, one might be able to get into that and see
how some of these industries have done to get some feel for
that. That is not something that we would normally do. But our
data probably would educate you somewhat on that as it is right
now.
Once we get our green jobs project sort of done where we're
pulling out the green jobs, you will probably get a better idea
of that, but that is a ways off.
Representative Burgess. When could we expect that?
Commissioner Hall. We are actually going to start
collecting data next year on it. And so the problem is going to
be of course, once you start collecting data you do not know
the baseline. You don't know--but we will have some idea I
think starting next year with the number of people employed in
these industries.
Representative Burgess. Well that is Heisenberg's
Uncertainty Principle, the mere fact that you're looking at
something means you can't be certain?
Commissioner Hall. Well, as I say, we have worked hard on
getting a definition that makes sense.
Representative Burgess. Very well. Well I will look forward
to that. And again, I think it would be so helpful for us on
the policy making side, because we are going to be asked some
big questions. It will be great to know what the return-on-
investment has been for the federal investment in this type of
activity.
I'm not complaining about it. Texas has a great number of
wind farms that we did not have 20 years ago, and surely there
has been some effect. But it would be nice to know what kind of
return-on-investment do we get for making those expenditures.
Thank you. I'll yield back, Mr. Chairman.
Chairman Casey. Thank you.
Congressman Cummings.
Representative Cummings. Thank you, Dr. Hall.
As you know, the Treasury Department has reported that the
United States is expected to hit its debt ceiling on May 16th.
Congressional Quarterly has reported that, in anticipation of
hitting the debt ceiling, today Treasury will stop issuing
state and local government series Treasury securities which
help state and local governments fund infrastructure and other
projects.
I find this deeply concerning because we are already seeing
layoffs taking place at the state and local level. If I
remember correctly, you said that we have had a significant
decrease in government jobs? Is that right?
Commissioner Hall. That's correct.
Representative Cummings. Dr. Hall, can you give us further
detail for the Committee on the current job situation
throughout the state and local governments across the country?
And can you offer any predictions regarding the impact that
that Treasury action may have on the state and local
governments' employment levels?
Commissioner Hall. Sure. In terms of government employment,
the government job loss has been centered primarily in local
government jobs. So, for example, local government, since the
end of the Recession, has continued to lose jobs, something on
the order of 370,000 jobs, which is a pretty high number. And
that has been the bulk of the government job loss since the end
of the Recession, which has lost 391,000. So that is not an
insignificant number of employees.
Representative Cummings. And would your research go into
whether women are disproportionately affected when it comes to
those government jobs? In other words, is it a high number of
women who are employed by government?
Commissioner Hall. Yes. I don't have it in front of me, but
I think we should be able to get you some idea of that. I would
think, especially in the local government.
[Letter dated May 24, 2011, transmitting Commissioner
Hall's response to Representative Cummings appears in the
Submissions for the Record on page 70.]
Representative Cummings. I notice that the African American
workers' unemployment rate increased. Is that right?
Commissioner Hall. Yes, it did.
Representative Cummings. What were those figures?
Commissioner Hall. The African American unemployment rate
went from 15.5 percent to 16.1 percent this month. So it was an
increase of about 6/10ths of a percent.
Representative Cummings. Do you consider that significant?
Commissioner Hall. It is not statistically significant. It
is not a really large sample, so statistical significance is
probably somewhere around 1.0 percentage point.
Representative Cummings. You know, when you were answering
I think it was one of Congressman Brady's questions, you were
saying that we have to--and you have said this in the past--
that we cannot take just one snapshot of a month, but we have
to look at a trend in where we are.
So how do you see this month's numbers fitting into the
trend? And do you see--do you have--does anything here cause
you to have any significant concerns that we may be going in
the wrong direction?
Commissioner Hall. I would say in terms of trends, let me
just say that the news that jumps out the most to me is that we
now have three months of payroll job growth, well above 200,000
jobs, about a quarter of a million a month in private sector.
Representative Cummings. Is that significant?
Commissioner Hall. Yes, that is significant. And I also
think it is important in that you need about, over a long time
period, you need about 130,000 jobs a month to employ new
people entering the job market, the growth in the population,
growth in the labor force.
So we are now getting well above the 130,000 per month jobs
you need. So this last three months looks like it has been an
acceleration of the job growth.
Representative Cummings. Now we are about to have many of
our young people graduating from college. How do you see that
impacting? In other words, when we have this month of May and
June where people are coming out of high school, coming out of
college, looking for jobs, how does that affect your numbers
during that course? In other words, is there a big bump-up in
demand, so therefore that affects the numbers?
And what has been the trend, I guess, I am asking you?
Commissioner Hall. You know, I think one of the things that
has been most concerning say over the past year has been the
labor force has not grown very much. The labor force has been
very flat, which means we have not had the normal entry into
the labor force on net that we normally get.
Representative Cummings. And some of those people are, I
guess, some of those young people are staying in school longer?
Commissioner Hall. Yes, that's right.
Representative Cummings. And then we are losing some people
that have just stopped looking for work? Is that it?
Commissioner Hall. That's right. That's right. I would
consider it to be another phase of the recovery when we start
to get an increase in the labor force, when people start to get
optimistic enough that they start to re-enter the labor force
and start to get some growth.
It has been concerning that we have not seen much growth in
the labor force yet.
Representative Cummings. And my two questions that I always
ask you: If the President were to ask you, Commissioner Hall,
where do we go from here? What does it look like? What would
you say to the President?
Commissioner Hall. I would say, the good news from this
report is what appears to be an acceleration in the payroll job
growth. It was a little bit of a mixed signal, because we did
have the unemployment rate tick up a little bit. And I think
kind of what I just mentioned, I think the thing that we would
look forward to, hopefully we'd like to see going forward, is
this payroll job growth to continue and maybe accelerate and
give us enough confidence that we actually see the labor force
start to grow. I think that would be, like I said, I think that
would be sort of the next phase in the recovery.
Representative Cummings. And my other question that I
always ask you is, if there are people watching this and they
are trying to find a job, what advice would you give them based
on geography, areas of growth, people who may be trying to go
back to school to retrain, based on what we have here, what
would you tell them?
Commissioner Hall. Well, you know, obviously I wouldn't
guide myself by a monthly report because this changes over
time.
Representative Cummings. Well let's just talk about trends,
just about the trends that you see.
Commissioner Hall. Sure. Well, you know, the trends are
that we are continuing to see growth in the service-providing
sector in particular. That sector historically has been a
little more recession proof than other sectors.
This recession has been deep enough and bad enough that it
really has lost jobs, but, as a general rule, that sector does
better than other sectors.
And, you know, within that there are lots of occupations
that are likely to have strong growth over the next 10 years or
so.
Representative Cummings. Like health?
Commissioner Hall. Like health care. Everything from health
care, to financial examiners, to computer software engineers. A
number of things like that.
Representative Cummings. All right. Thank you very much,
Mr. Chairman.
Chairman Casey. We will move to a second round, Doctor. I
wanted to go through this chart for a second.
What is striking about this chart is that it depicts
private payrolls starting with the month of January of 2008,
and it goes through this report that we are looking at now,
April of 2011. What is stunning about that chart, obviously, is
you have got, over the course of the last year, the month-by-
month number, the last year of one Administration into the next
Administration, but for a long, long period of time you have
negative numbers on private-sector job growth.
I want to make sure I am reading this right--when we go
into positive territory, it is what month?
Commissioner Hall. I believe it was March.
Chairman Casey. March of?
Commissioner Hall. March of 2010.
Chairman Casey. 2010, okay. Is there any way that you can--
I don't know if you have this number--calculate it, or if you
could get it to us, the number of total growth, the total
private sector job growth from that date in March of 2010
through April of 2011? You may have already given that number,
but I'm not sure where.
Commissioner Hall. Two million ninety thousand.
Chairman Casey. So 2,090,000 private-sector jobs created
since March of 2010 through this month?
Commissioner Hall. Yes.
Chairman Casey. Okay. I thought that was significant. And I
never thought of it in terms of all that, over that amount of
time.
The other thing I wanted to look at was the long-term
unemployed number. If you can provide any kind of, for lack of
a better word, characteristics of those who were long-term
unemployed? I am just reading from the first page of your
official report here.
The number of long-term unemployed, those jobless for 27
weeks or over, declined by 283,000 to 5.8 million. Now, 5.8
million is a huge number. I guess I would ask two questions,
the one I just referred to, the characteristics or common
denominator in terms of what type of work or what challenges
they face. That is question one.
Question two is: Is there any significance to that decline
of 283,000? Or is that more of a standard number we have been
seeing?
Commissioner Hall. Sure. Well first of all, the very large
number of long-term unemployed, the rise has been very broad.
So almost all demographic groups and almost all industries have
had a big rise of long-term unemployed. But there is some
overrepresentation in that.
For example, for those with less than a high school
diploma, they are very much overrepresented in that. In fact,
the unemployment rate is like 6.9 percent of just the long-term
unemployed for those without a high school diploma. Those who
were either never married, or widowed, divorced, or separated,
they are overrepresented in the long-term unemployed.
And then industries, construction stands out as having a
very large--larger than expected--share of the long-term
unemployed.
That number going down a little bit is not uncommon, but
the thing that is tricky about that is people can drop out of
being long-term unemployed by just leaving the labor force, or
by getting a job. And the way it is looking right now, two
people leave labor force for every one that gets a job out of
the long-term unemployed for 27 weeks or longer. So it isn't
necessarily good news to see that go down.
Chairman Casey. So one of the most compelling pieces of
data you just cited refers to education levels. So in other
words, if you have got a high school diploma or less, you are--
I am just trying to put a number on that in terms of the
likelihood of you being not just unemployed but being part of
the long-term unemployed.
Commissioner Hall. You are probably--you are over three
times more likely to be long-term unemployed than someone with
a college degree.
Chairman Casey. Thank you.
Dr. Burgess, do you have any more?
Representative Burgess. Thank you.
Dr. Hall, if I correctly interpreted your answer to Mr.
Cummings's questions about geographically and with which sector
of the economy if someone was really serious about getting a
job right now, they would move to Texas and practice medicine.
Is that right?
Commissioner Hall. If you have that option, it is not a bad
one.
Representative Burgess. Well, look. Let me ask you another
question. We deal here with nonfarm payrolls, is that correct?
Commissioner Hall. Yes.
Representative Burgess. But there is going to be an effect
from what is happening in the central part of this country. It
kind of gets obscured in the headlines of all the other news,
but there is a huge issue with flooding of the farmland of the
central part of the United States, more to the Mississippi
River.
Do you have an idea as to how that is going to affect
things? Because we see Missouri, and Arkansas, Memphis,
Tennessee they said water is up to the sidewalks. What sort of
effect is that going to have? Or is that just built into, sort
of baked into the process, baked into the cake where we can
have a tough agricultural year?
Commissioner Hall. Well first of all, we do not collect
data on farm employment. The Department of Agriculture does,
though, I believe. And they pay a fair amount of attention to
data on employment in farming. So I am probably not the right
one to ask.
Representative Burgess. But if those jobs are not there
during the growing season, and they certainly may not be if the
fields are under water, then that will push people into looking
for work in other sectors. Is that correct? There is bound to
be a ripple effect, no pun intended, into other parts of the
job market? Is that not correct?
Commissioner Hall. Yes. In fact, what would happen is it
would not--probably not show up in our payroll jobs numbers,
but it could well show up in our unemployment numbers. Because
they are two different surveys, and the coverage is slightly
different. With the unemployment rate, we are making phone
calls so we will catch some of those jobs with the phone calls.
But with the payroll jobs, we're only talking to nonfarm
establishments that pay payroll taxes, basically.
Representative Burgess. Well again it is an enormous
tragedy and story that is sort of not--below the radar screen
for most Americans. I am told by people who live there that it
is a flood of the proportions of 1927-1928 when fully one
percent of the usable housing stock of the United States of
America ended up under water. I mean, it is a similar sort of
circumstance today.
So I cannot help but feel it is going to have a profound
effect on whatever fragile recovery we are experiencing now.
This is going to take a toll.
Do you have a sense as to how the actual size of the labor
force itself, the behavior of that during what has been this
very prolonged recession? I mean, it seems like the number of
sort of the total size of the labor force is smaller today than
what we used to talk about.
Commissioner Hall. Yes, that is right. The labor force
participation rate gives you some idea of that, and the labor
force participation rate is at a very low level. So I think the
statistics that were up there a minute ago, it is the lowest
level since the 1980s at some point.
So that is a concern.
Representative Burgess. And we talk about all the trouble
we are having grappling with deficits and what have you, and we
need to get people back into the work force and paying taxes,
but I mean it is just going to be harder to do that, isn't it?
Commissioner Hall. Yes.
Representative Burgess. Thank you, Mr. Chairman. I will
yield back the balance of my time.
Chairman Casey. Thank you, Doctor.
Commissioner, we are going to let you go in a moment. I had
one question I meant to ask earlier with regard to Japan and
any impact that their current situation is having on our
economy.
I know it is not an easy question to answer, but with both
a tsunami and an earthquake, whether or not there is an impact?
I guess there is some speculation, that there could be an
impact--maybe on our manufacturing.
I was told that yesterday's unemployment insurance claims
data showed that 1,700 employees filed claims after being laid
off from auto manufacturers in Ohio. Any data that suggests
that that could be related to what is happening in Japan?
And then, secondarily, more broadly, is there any data that
indicates a broader impact from what has happened in Japan?
Commissioner Hall. As I understand it, there have been some
very short-term plant closings related to this, like one day,
et cetera. And since the workers were employed most of the
time, just having like a one-day plant closing, it doesn't show
up as a payroll job lost. It will lower our hours worked a
little bit, but not really affect the payroll jobs.
My expectation would be, if it is going to have an impact
on the payroll jobs in particular, that would likely start next
month. And we will see what we can see in the employment
numbers in the automobile plants next month, and see if maybe
there is an effect from that.
Chairman Casey. Okay. Dr. Hall, Dr. Horrigan, Mr. Rones, we
are grateful to have you here again, and this hearing is
adjourned.
[Whereupon, at 10:38 a.m., Friday, May 6, 2011, the hearing
of the Joint Economic Committee was adjourned.]

SUBMISSIONS FOR THE RECORD

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Prepared Statement of Robert P. Casey, Jr., Chairman, Joint Economic
Committee

Washington, DC--U.S. Senator Bob Casey (D-PA), Chairman of the U.S.
Congress Joint Economic Committee (JEC), released the following
statement on the Bureau of Labor Statistics' April jobs report showing
that the unemployment rate edged up to 9.0 percent and 244,000 total
nonfarm jobs were added:
``April was another solid month of job creation. In the past three
months, we've averaged more than 250,000 new private sector jobs each
month. The recent job creation is a sign that policies put into place
during the last Congress to spur hiring and strengthen small businesses
are gaining traction.
``It was encouraging to see that the economy added jobs across
nearly all sectors of the economy. Manufacturing, which is especially
important to the nation's competitive position, gained 29,000 jobs this
month, and professional and business services has now added jobs for
nine months in a row. The breadth of the job gains shows that the
recovery is strengthening, but clearly there is more to be done.
``Additional progress reducing unemployment is critical to the 13.7
million Americans who are looking for work, but can't find it, and who
are struggling to make ends meet. With so many people unemployed, the
economy is still operating below capacity and is not benefitting from
the skills and labor of those who are currently jobless. Congress needs
to continue to support the private sector in creating jobs and driving
new innovations that will boost future economic growth.''

__________
Prepared Statement of Representative Kevin Brady, Vice Chairman, Joint
Economic Committee

Dr. Hall, we welcome you and your colleagues again this morning.
During April, initial unemployment claims surged from 385,000 for
the week ending April 2nd to 474,000 for the week ending April 30th.
The last time that initial claims were this high was October 9, 2010.
This development is extremely unsettling, as we have been expecting
continued improvement in the labor market.
While the job growth is welcomed, today's employment report, coming
on the heels of those troubling initial claims data, is showing some
disconcerting signs. Nine percent unemployment and a rise in the number
of workers who have recently lost their jobs, i.e., within the last
five weeks, are disappointing statistics. We need still faster private
sector job creation. Otherwise, millions of U.S. workers will languish
in unemployment, whether they are counted as such or have dropped out
of the labor force, and millions more will remain underemployed or live
in fear of losing their jobs.
The Economist asked the question, ``What's wrong with America's
economy?'' In answering its question, the Economist pointed to
America's public finances and its labor market. Moreover, the Economist
stated that the recent decline in the unemployment rate is misleading
because it is the result of surprisingly small growth in the workforce
as discouraged workers drop out. The labor force participation rate
remains at the lowest level in more than a quarter century.
It is frustrating beyond words to see the excruciatingly slow
progress in employment growth, especially while President Obama pursues
policies that obstruct economic activity and job creation. The energy
industry is a prime example. Under this Administration, the energy
industry is suffering from de facto drilling moratoria on vast offshore
areas, a molasses-like permitting process, and threats of adverse tax
changes.
We should be content with pouring over these employment numbers
month after month and bemoaning the slow progress. We know what is
causing this growth problem, so let's fix it.
Let me show you again, as I did at last month's hearing, the
payroll job performance during and after this recession compared with
that during and after the other two major postwar recessions. This
chart demonstrates how we are underperforming relative to past
experience.
There is no excuse for this dismal job performance. You cannot
explain it by saying that financial crises cause severe recessions, but
then fail to encourage private sector growth by every means possible.
Why does President Obama have an obsession with raising taxes? Why does
he persist with his ``green jobs'' mantra? The one percent of our
energy sector for which wind and solar account clearly cannot revive
our job market. Americans are demanding real solutions.
JEC Republicans released one paper in the summer and another in the
fall of last year that warned treating the BP Gulf oil spill as simply
an environmental disaster would be a mistake. By the time the second
paper came out in October, the price of crude oil had just risen above
$80 per barrel. These papers explained the importance of continued
exploration and development in the fastest growth areas for oil
production in the country to help counteract future oil price
volatility.
In 2010, the United States was the largest source of oil supply
growth outside of OPEC on the strength of offshore production. But this
year, the Energy Information Administration expects federal Gulf of
Mexico oil production to fall by 240,000 barrels per day. Energy
consulting firm Wood McKinsey estimates a drop of about 375,000 barrels
per day in 2011 oil production because new development wells could not
be brought on-line. If those barrels are imported, how does that help
to stabilize the oil price? How does that help our economy? How does
that help our job seekers? The price of oil is now $100 per barrel,
while the average price of gasoline nationwide is just shy of $4 per
gallon.
The private sector is boosting labor productivity--first quarter
productivity was up by 1.6%. However, businesses also are sitting on $2
trillion of cash that they won't invest because of regulatory
uncertainty and fear of higher taxes and inflation. Therefore,
businesses are not creating the jobs necessary to reemploy more people
and increase the nation's output sufficiently to generate enough tax
revenue to support those who are sick, retired, or remain unemployed.
The annual rate of real GDP growth slowed to 1.8% in the first quarter.
President Obama has put the Federal Reserve in a position where it
feels compelled to hold the federal funds rate at zero and buy hundreds
of billions of dollars' worth of Treasury bonds. The JEC Republicans
just released a paper on that subject as well, ``Too Loose for Too
Long.'' The Federal Reserve is taking a great risk with inflation that
would not be necessary if the other levers of the private economy that
the government can move were set to ``go.''
Dr. Hall, I look forward to hearing your testimony.

__________
Prepared Statement of Representative Michael C. Burgess, M.D.

A report released in March from the Government Accountability
Office stated that hundreds of millions, even billions of dollars,
could be achieved by reducing improper federal payments, addressing the
gap between taxes owed and paid, reducing duplicative ethanol policies,
and many more.
These are just a few ways that efficiencies could be achieved. I
believe the federal government could also achieve greater efficiencies
by adopting some of the cost-cutting strategies used by private
businesses and certain executive agencies, including the U.S. Navy.
Lean Six Sigma is a plan that doesn't focus on cutting jobs but instead
concentrates on improving quality, cutting waste, and improving
efficiency.
Government workers serve their customers, American constituents,
just like people do in the private sector. With a $14 trillion debt,
which will grow by over $1 trillion this year, and has grown by over $1
trillion for the past two years, our government needs to find
efficiencies to lower costs.
Thank you Mr. Chairman, and I yield back.

__________
Prepared Statement of Keith Hall, Commissioner, Bureau of Labor
Statistics

Mr. Chairman and Members of the Committee:
Thank you for the opportunity to discuss the employment and
unemployment data we released this morning.
Nonfarm payroll employment increased by 244,000 in April, and the
unemployment rate edged up to 9.0 percent. Over the last 3 months,
payroll employment has risen by an average of 233,000 compared with an
average of 104,000 in the prior 3 months. In April, employment
increased in several service-providing industries, manufacturing, and
mining.
Retail trade added 57,000 jobs in April. This increase followed 2
months in which retail employment changed little. Over the month, job
gains occurred in electronics and appliance stores, building and garden
supply stores, and automobile dealerships. An employment increase in
general merchandise stores (+27,000) offset a decline of similar size
in March.
Employment in professional and business services rose by 51,000 in
April. Since a low point in September 2009, employment in this industry
has increased by 745,000. Several component industries continued to add
jobs in April, including management and technical consulting services
and computer systems design services. Employment in temporary help
services was essentially unchanged in April.
Employment in leisure and hospitality grew by 46,000 over the month
and by 151,000 in the last 3 months. Food services and drinking places
added 27,000 jobs in April and has accounted for nearly two-thirds of
the gain in leisure and hospitality since January.
Health care employment continued to increase in April (+37,000).
Job growth occurred in ambulatory health care and in hospitals.
In the goods-producing sector, manufacturing employment rose by
29,000 in April. Since December 2009, manufacturing has added a quarter
of a million jobs. Durable-goods manufacturing has been the source of
this growth. Over the month, job gains continued in machinery, primary
metals, and computer and electronic products.
Employment in mining increased by 11,000 in April, following a gain
of similar magnitude in March. Most of the growth occurred in support
activities for mining. Since a recent low point in October 2009, mining
employment has risen by 107,000. Elsewhere in the goods-producing
sector, construction employment was about unchanged over the month. It
has shown little net movement since early 2010, after falling sharply
during the prior 3 years.
Employment in state government and local government continued to
trend down in April. Both have been losing jobs since the second half
of 2008.
Average hourly earnings of all employees on private nonfarm
payrolls increased by 3 cents in April to $22.95. Over the past 12
months, average hourly earnings have risen by 1.9 percent. From March
2010 to March 2011, the Consumer Price Index for All Urban Consumers
(CPI-U) rose by 2.7 percent.
Turning now to measures from the survey of households, the jobless
rate edged up from 8.8 to 9.0 percent in April. However, the rate was
0.8 percentage point lower than in November of last year. In April,
there were 13.7 million unemployed persons, little changed from the
prior month. The number of people unemployed for less than 5 weeks
increased by 242,000 in April. The number jobless for 27 weeks and over
declined by 283,000 to 5.8 million.
Other household indicators showed little or no change over the
month. The labor force participation rate has been 64.2 percent since
January. The employment-population ratio was little changed at 58.4
percent in April. Despite increases in household survey employment
since late 2009, the ratio has shown little movement. Among the
employed, the number of individuals working part time who preferred
full-time work was little changed at 8.6 million.
In summary, nonfarm payroll employment rose by 244,000 in April,
and the unemployment rate edged up to 9.0 percent.
My colleagues and I now would be glad to answer your questions.

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