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



                                                        S. Hrg. 112-190
 
                  THE EMPLOYMENT SITUATION: JULY 2011

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

                                HEARING

                               before the

                        JOINT ECONOMIC COMMITTEE
                     CONGRESS OF THE UNITED STATES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                             AUGUST 5, 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

                              ----------                              

                      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

                               Witnesses

Dr. Keith Hall, Commissioner, Bureau of Labor Statistics; 
  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.....................................................     7

                       Submissions for the Record

Prepared statement of Representative Kevin Brady.................    20
    Chart titled ``May to June Change in Sector Employment''.....    22
    Chart titled ``Employment Change in Government Since the 
      Beginning of the Recession''...............................    23
    Chart titled ``Employment Change in Various Sectors Since the 
      Beginning of the Recession''...............................    24
Prepared statement of Representative Elijah E. Cummings..........    25
Prepared statement of Dr. Keith Hall, Commissioner, Bureau of 
  Labor Statistics, together with Press Release No. 11-1151......    26


                  THE EMPLOYMENT SITUATION: JULY 2011

                              ----------                              


                         FRIDAY, AUGUST 5, 2011

             Congress of the United States,
                          Joint Economic Committee,
                                                    Washington, DC.
    The committee met, pursuant to call, at 12:46 p.m. in Room 
106 of the Dirksen Senate Office Building, the Honorable Robert 
P. Casey, Jr., Chairman, presiding.
    Senators present: Casey.
    Representatives present: Brady and Cummings.
    Staff present: Gail Cohen, Will Hansen, Colleen Healy, 
Jesse Hervitz, Matt Solomon, Connie Foster, 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. Today I am pleased to 
have Commissioner Hall with us again. We are all pleased by 
that, and we are also here to recognize Deputy Commissioner 
Phil Rones, who is retiring at the end of this month. We just 
had a picture taken. Phil, if it does not turn out, we will do 
it again.
    [Laughter.]
    But we are grateful for your many years of service. I am 
told that Phil has been working at BLS--for those who do not 
know in the television audience, the Bureau of Labor 
Statistics, BLS--since 1974. And he has served as the Deputy 
Commissioner since 2003, including a year-and-a-half as Acting 
Commissioner during the Bush Administration.
    So thank you, Phil, for your years of service and your 
dedicated commitment to the United States of America. We are 
grateful for that service.
    Is this your last hearing in Congress?
    Mr. Rones. Yes, it is.
    Chairman Casey. We will try to make it memorable for you.
    [Laughter.]
    Mr. Rones. That's okay.
    [Laughter.]
    Chairman Casey. In the past few weeks we have gotten a 
number of economic reports, including today's Employment Report 
about which we will talk mostly about, and no matter what 
report it is I think so many of them indicate to us the 
fragility of this economy, and some of the basic weaknesses 
that we are seeing.
    The Gross Domestic Product numbers released last Friday 
showed the economic growth in the first half of this year was 
weak, growing at an annual rate of less than--unfortunately, 
less than one percent during the first half of 2011.
    This week we have received additional data that suggest 
that the pace of the recovery is decelerating. Months ago we 
were saying it was moving too slowly; now there is some 
evidence to indicate actual deceleration of it.
    Two examples of that, or two highlights:
    First, the so-called ISM Manufacturing Index dropped to 
50.9 percent in July. While this marked the 24th consecutive 
month of expansion in the manufacturing sector, it was the 
lowest reading since 2009, since July of 2009.
    On Tuesday we learned that in the month of June consumer 
spending declined for the first time since September of 2009. 
Consumer spending, as many of you know, accounts for 70 percent 
of U.S. economic activity. So that needs to be growing and not 
shrinking, obviously.
    I know that the Committee members and those in the audience 
agree that we need much, much stronger economic growth. And 
there will be, and there should be, and will continue to be a 
vigorous debate about how to achieve that.
    The labor market we know--and we will get further into this 
today--faces significant challenges. More than eight quarters 
into the recovery, unemployment remains above 9 percent, and 
nearly 45 percent of the unemployed have been out of work for 
six months or longer. It is hard to comprehend that, that 
almost half of them, out of work for six months or longer.
    We need to be immediately focused on providing incentives 
for job creation. Just yesterday this Committee, the Joint 
Economic Committee, released a report on the near-record long-
term unemployment workers continue to face. Just a couple of 
highlights from that:
    First of all, while so many groups within this study are 
having a great difficulty, if you are one of the following your 
challenges are even greater than the population at large. The 
following categories: Those with a high school degree or less, 
older workers, construction workers, and African Americans. 
Those categories, those groups of unemployed Americans face 
disproportionately high rates of long-term unemployment.
    Second, the longer an individual is unemployed, the harder 
it is to find work. If you look at both ends of the spectrum--
those out of work for more than six months, and those out of 
work at the other end of the spectrum for as little as five 
weeks--those who are at that end of the spectrum are three 
times as likely to find work in comparison to those at the 
other end.
    Third, employers report that they are having difficulty 
finding skilled workers. We know that that is a continuing 
problem. So I think we can move quickly, despite all that bad 
news, I think we can move very quickly on a couple of 
strategies that will help.
    I and others have been pushing for a small business jobs--
the so-called Small Business Jobs Tax Credit Act, which would 
create a one-year quarterly tax credit equal to 20 percent of 
the total increase in employee wages. So if you are hiring and 
you are increasing your payroll, you are increasing your wage 
levels in total, you can get a tax credit for that.
    Certainly Vice Chairman Brady and I and others have been 
working on the Life Sciences Jobs and Investment Act, a good 
idea. It is a way to both create high-paying jobs in all parts 
of the country, but also to move forward on healing and hope 
that comes from the discovery of new scientific advancements. 
And thirdly, I would say it is a way to get jobs back from 
overseas.
    Many people here agree--both Democrats and Republicans--
that we ought to make the Research and Development Tax Credit 
permanent. It makes a lot of sense to do that. I don't know why 
we have not, but we should.
    We also I believe need a new approach to manufacturing, and 
actually have a strategy to make sure that we are following in 
the years ahead, and especially in the next year, because one 
of the small glimmers of hope in some of this bad economic and 
jobs data has been manufacturing.
    Since the end of 2009 manufacturing has added 290,000 jobs, 
a little bit of good news in the midst of all this bad news.
    So we are going to hear a lot more about today's report. We 
know that during the month of July the economy added 154,000 
private-sector jobs. That is good news, but obviously not 
enough. The overall number, when you net it out, is 117,000, a 
lot better than maybe the last two months individually, but 
certainly not nearly enough.
    So we have got a long way to go with strategies to create 
jobs and incentivize the creation of jobs.
    And with that, I will turn to our Vice Chairman, Vice 
Chairman Brady.

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

    Vice Chairman Brady. Thank you, Chairman.
    Commissioner Hall, members of your staff, welcome back to 
the Joint Economic Committee for another hearing on the jobs 
situation.
    Mr. Rones, thank you for your many years of service to our 
country. You will be missed, and we appreciate all that you 
have done for the Committee.
    Clearly today's increase in the number of payroll jobs 
provided relief to the market, mainly because it exceeded such 
very low expectations. It is certainly nothing to celebrate 
today. And the unemployment rate fell largely because of a 
193,000 decline in the labor force. The actual number of 
employed people in the household survey fell by 38,000. The 
broader measure of unemployment remains over 16 percent. And 
what troubles me is that we have the fewest--we have the fewest 
number of people participating in the workforce than in a 
quarter of a century. Those are not signals of a healthy 
economy.
    Two and a half years ago this month, President Obama signed 
his historic stimulus bill, promising to jump-start the 
economy, restore consumer confidence, and put people back to 
work. Today, with historic numbers of Americans desperate for 
work, consumer confidence plunging, the risk of a double-dip 
recession growing, and the stock market reeling, it is long 
past time to pull the plug on the President's failed economic 
policies.
    I do not fault the President for trying. Lord knows he has 
thrown every big government solution at this economy. But it 
has not worked, as we warned, and I now have concluded that the 
White House simply does not understand how to create jobs in 
America--or certainly at least not government jobs in America.
    How much longer must Americans watch their economy stumble? 
After trillions of dollars in poorly designed stimulus and 
monetary intervention, must 9 percent unemployment be the new 
norm? After all the big-government bullets have been spent, how 
many more years will families and businesses suffer until 
America enjoys a strong, prosperous economy again?
    Mr. President, America is fair. It has been patient, more 
than patient. But after two and a half years, enough is enough. 
You have tried and failed to revive this economy. America 
deserves better than a second-rate economy that is held up to 
ridicule by other nations.
    When the economy is headed in the wrong direction, common 
sense dictates you change course. Instead of threatening to 
raise taxes on job creators along Main Street, we need to lower 
the cost of capital to increase business investment that has 
proven time and time again to create real jobs.
    Instead of branding companies as somehow un-American for 
competing in the global marketplace, we should tear down the 
barriers to sales abroad, reduce the cost of regulation and 
taxes that place them miles behind at the starting line, and 
lower the tax gate so an estimated one trillion dollars in 
American profits stranded abroad can flow back home to be 
invested here in America right now in new jobs, more research, 
business expansions, and a stronger financial future.
    Passing the three pending trade agreements will create 
250,000 new American jobs. Putting our energy companies back to 
work in the Gulf, Alaska, and in abundant American fields 
onshore and off will create more than one million new American 
jobs this decade.
    Another 800,000 jobs will be saved this decade merely by 
calling a halt to the President's new national health care law. 
That will also eliminate a costly cloud of worry among small, 
medium, and large job creators throughout the country.
    There is much more that needs to be done, but perhaps 
nothing more important that the White House ending its campaign 
of demonizing in press conferences the free market and our job 
creators who built the greatest economy in the world and can do 
so again if Washington will simply get out of its way.
    It is telling that news reports on the economy today are 
often given with the Capitol or the White House as a backdrop--
not along Main Street or in front of the headquarters of an 
American company. The entrepreneurs who make the critical 
decisions that create jobs have been forced to become 
Washington-centric because Washington is directing this economy 
to a degree not seen in our lifetimes.
    That is the problem. Washington needs to get out of the 
way. It needs to end its job-killing rhetoric, the regulations, 
and intervention and give Americans confidence to do what we do 
best: innovate and lead the world in creating economic 
opportunity based on what the market demands, not on what 
Washington demands.
    Finally, America's financial health does matter. We know 
our perilous debt and deficits are shaking markets and 
confidence at home and abroad. We also know from 40 years of 
economic study that our global competitors in similar straits 
have boosted their economies significantly and quickly by 
reducing their debt, by cutting spending, and restoring 
business and consumer confidence.
    Congress has taken an important first step to reduce the 
size of government this decade with passage of the Budget 
Control Act, which the President signed. Excluding the winding 
down of the wars in Iraq and Afghanistan, without recent 
passage of the Budget Control Act, the government would grow to 
over 23 percent of the size of our economy this decade. With 
its passage, the Federal Government will shrink to 21.6 percent 
of GDP this decade.
    President Reagan began to reduce the size of the Federal 
Government relative to the economy, as well. As Federal 
spending shrank from 22.2 percent of GDP in 1981 to around 18 
percent in 2001, entrepreneurs on Main Street created 37 
million--37 million--new private-sector jobs. But since the 
Federal Government began to grow again, adding $5.5 trillion in 
new debt just in the last 4 years, we have lost almost 3 
million private sector jobs.
    I will conclude with this: America deserves a strong, 
growing economy that fully employs our people and is the envy 
of the world. We cannot do that until we pry Washington's hands 
off the throats of America's job creators. Our free market 
economy will create jobs, Mr. President, if we change course 
today and get government out of the way.
    Dr. Hall, I look forward to your testimony.
    [The prepared statement of Representative Brady appears in 
the Submissions for the Record on page 20.]
    [Chart titled ``May to June Change in Sector Employment'' 
appears in the Submissions for the Record on page 22.]
    [Chart titled ``Employment Change in Government Since the 
Beginning of the Recession'' appears in the Submissions for the 
Record on page 23.]
    [Chart titled ``Employment Change in Various Sectors Since 
the Beginning of the Recession'' appears in the Submissions for 
the Record on page 24.]
    Chairman Casey. Thank you, Vice Chairman Brady.
    Congressman Cummings.

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

    Representative Cummings. Thank you very much, Mr. Chairman.
    It is good to be with you again, Commissioner Hall.
    To Mr. Rones, I want to thank you for your service since 
1974. I am sure you have given your blood, sweat, and tears to 
support our Nation. And in a time when so many of our public 
employees are being called everything but a Child of God, I 
pause here to thank you. I thank you for what you have given. I 
thank you for the lives you have touched. And I say thank you 
for a grateful Congress, and certainly a grateful Senate, but 
also a grateful Nation.
    I also want to take a moment to talk about the issue before 
us. Today's report indicates that in July employers created 
117,000 jobs, and the unemployment rate dropped to 9.1 percent. 
These numbers are moving in the right direction, but obviously 
we have a long way to go to resolve our economic challenges and 
to ensure that everyone who wants to work can work.
    Last week we learned that the economy grew just .4 percent 
in the first three months of this year, and only 1.3 percent in 
the second quarter. In June, American consumers decreased their 
spending. Additionally, the already battered housing market, 
which continues to be a severe drag on the economy and thus on 
job creation, took another hit in June as existing home sales 
fell sharply due to cancelled sales contracts.
    Unfortunately, the policies coming out of Congress are 
doing nothing to rebuild confidence or spur economic growth. 
According to many experts, they may even hinder the recovery 
and cause us to give up the small gains we have already won.
    Thus, an economist at Barclays Capital has warned that the 
debt deal that Congress struck earlier this week could reduce 
economic growth by a tenth of a percent in the first year 
alone. He said, and I quote, ``When the economy is only growing 
a point and a half, a lot of economists feel that this is not 
the right time to be finding fiscal restraint.''
    Similarly, a chief global economy's Deutsche Bank advisor 
asked: ``Why would you want to impose restraint on an economic 
recovery that is already fragile? You are removing spending 
power from the economy at a time when it needs it. It is likely 
to make the economy weaker and, in turn, the budget gets weaker 
because tax revenues are going slow.''
    The recent nosedive in the Dow suggests others may agree 
with this assessment, and that investors like frankly all 
Americans are worried that Congress is unable or unwilling to 
address the most important issue facing this Nation: the need 
to create jobs, jobs, jobs.
    Some of the terrible consequences of our failure to focus 
on restoring economic growth are made clear in the results of a 
recent Pew Research Center analysis which found that the wealth 
gap between white households and African American and Hispanic 
households is the largest since the government began reporting 
on income a quarter of a century ago.
    Specifically, the analysis finds that the housing bubble 
and the Great Recession took a much deeper toll on Black 
families and Hispanic families than it did on White families. 
We can do better, and we must do better.
    I voted against the debt deal because I could not in good 
conscience support the use of a manufactured crisis to 
implement ideologically based policies that will further 
threaten our Nation's economic growth and job creation 
potential.
    Further, the debt deal intends to reduce our debt by 
limiting discretionary spending, potentially requiring deep 
cuts in programs critical to our most vulnerable citizens. At 
the same time, the deal demands nothing--nothing--from the 
wealthiest Americans, or from corporations that are receiving 
billions in tax breaks.
    I believe that, as we work to reduce what certainly is an 
unsustainable level of debt, we need a balanced plan that 
prioritizes the restoration of economic growth and that upholds 
the full faith and credit of the United States through what 
should be a national commitment that entails shared sacrifice.
    I believe this is only fair, given that the national debt 
we now face has been created both by increased spending and by 
foregone revenues resulting from tax cuts provided to the 
wealthiest among us.
    With that, Mr. Chairman, I yield back.
    [The prepared statement of Representative Cummings appears 
in the Submissions for the Record on page 25.]
    Chairman Casey. Thank you, Congressman.
    I want to introduce Dr. Keith Hall before his testimony. 
Dr. Keith Hall is the Commissioner of Labor Statistics for the 
U.S. Department of Labor. As I mentioned before, 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 served as the Chief Economist for the White House 
Council of Economic Advisers for two years under President 
George W. Bush. And prior to that he was Chief Economist for 
the United States Department of Labor. Dr. Hall also spent 10 
years at the U.S. International Trade Commission. He received 
his B.A. Degree from the University of Virginia and his M.S. 
and Ph.D. Degrees in Economics from Purdue University.
    Dr. Hall, we are grateful you are here with us again, and 
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 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 rose by 117,000 in July, 
following 2 months of little change. The unemployment rate was 
9.1 percent in July and has shown little definitive movement 
since April. Private-sector employment increased by 154,000 
over the month.
    Health care employment rose by 31,000 in July, as both 
hospitals and ambulatory care services added jobs. Retail trade 
employment increased by 26,000. In the manufacturing sector, 
employment expanded by 24,000, with gains in motor vehicles and 
semiconductors.
    Mining employment grew by 9,000 over the month and was up 
by 140,000 since the most recent low in October 2009. 
Employment in professional and technical services continued to 
trend up in July; this industry has added 246,000 jobs since a 
recent low in March of 2010.
    Employment in temporary help services was flat over the 
month and on net has changed little in 2011. Other private-
sector industries showed little or no change in July.
    Employment in state government decreased by 23,000 over the 
month. The decline was almost entirely due to the partial 
government shutdown in Minnesota. Local government employment 
continued to trend down over the month. Since an employment 
peak in September 2008, local government has shed 475,000 jobs.
    Turning to measures from the survey of households, the 
unemployment rate was 9.1 percent in July. The jobless rate has 
held in a narrow range between 9.0 and 9.2 percent since April.
    Of the 13.9 million persons unemployed in July, 44.4 
percent have been out of work for 27 weeks or longer. This 
proportion was unchanged over the month and essentially 
unchanged over the year.
    Labor force participation edged down from 64.1 to 63.9 
percent in July. The proportion of the population that was 
employed was essentially unchanged over the month at 58.1 
percent.
    In summary, nonfarm payroll employment rose by 117,000 in 
July, with the private sector adding 154,000 jobs. The 
unemployment rate was little changed at 9.1 percent.
    As I close my official statement, I also would like to take 
a moment to recognize my colleague, Phil Rones, the Deputy 
Commissioner of BLS.
    As you have noted, this is his last appearance before the 
Joint Economic Committee after a 37-year career with the Bureau 
of Labor Statistics. Phil is retiring on August 26th, and I 
thought I would just take a moment to voice my appreciation for 
his work and make a note about his career and accomplishments 
over the years.
    As you have noted, Phil joined BLS in 1974, graduating from 
the University of Maryland's system with degrees in economics 
and social work. His first position was a GS-7 economist 
position in the Office of Employment and Unemployment 
Statistics, and he has now risen almost entirely through the 
ranks.
    He has held several positions, including Supervisory 
Economist, Chief of The Division of Labor Force Statistics, and 
Assistant Commissioner for Current Employment Analysis. He has 
been the Deputy Commissioner since 2003, and served as the 
Acting Commissioner between 2006 and 2008.
    And during my three-and-a-half years as Commissioner, Phil 
has been by my side not only at these hearings but in the day-
to-day operations of the Bureau.
    Throughout his career, Phil has directly worked with 
literally most of the members of the BLS family. He has 
always--even now, he continually meets with every new staff 
member to welcome them to the Bureau as part of our new 
employee orientation.
    He has actually been I think a really big part of our long, 
rich tradition as an independent agency charged with providing 
impartial, timely, and accurate data free of political 
considerations or manipulations. He has been a big part of 
that, and he will be missed.
    And on behalf of all BLS employees, I want to convey our 
sincere gratitude to Phil for a career of dedicated and 
exemplary service to the Bureau and to the American People. We 
at the Bureau wish him a long and happy retirement.
    [The prepared statement of Commissioner Hall, together with 
Press Release No. 11-1151, appears in the Submissions for the 
Record on page 26.]
    Mr. Rones. Thank you, very much.
    Chairman Casey. Dr. Hall, thank you very much for your 
testimony, as well as your tribute to Phil. I wish some of the 
economic news was as upbeat as your tribute to Phil, but we 
have to look at only the numbers. But thank you very much for 
that.
    I wanted to start with--there is a lot to talk about, and a 
lot to be concerned about, frankly. One of the sentences from 
your statement that just jumps off the page is at the bottom of 
page 2, and I am quoting: ``Of the 13.9 million persons 
unemployed in July, 44.4 percent had been out of work for 27 
weeks or longer.'' Unquote.
    That is a stunning number, and I know it has been a 
recurring problem about long-term unemployment. And as I 
mentioned before, our Committee has taken a close look at this.
    Can you put that in some historical context in terms of the 
length of months of those who were in the category of long-term 
unemployed?
    Commissioner Hall. Sure. I will start with the basic facts. 
The number of long-term unemployed, the share of the unemployed 
that are long-term unemployed, were at easily record levels. It 
has never been nearly this high in the history that we have 
been collecting this data. So the number is extremely high.
    It is particularly concerning because one of the things 
that economic research has pretty consistently shown is the 
longer somebody is unemployed the longer it takes to get them 
re-employed. So this is going to be a real challenge going 
forward.
    To give you some idea, the median week of unemployment 
before someone finds a job has basically doubled during this 
Recession. It has gone from about 5 weeks to 10 weeks. And we 
are at a very high share of the long-term unemployed, or the 
people who are unemployed for longer than a year.
    So these numbers are clearly very concerning.
    Chairman Casey. And you said they are historic numbers?
    Commissioner Hall. Yes. Both in level and percent and 
almost any way you look at it, yes.
    Chairman Casey. In the testimony I gave today, I mentioned 
a couple of categories where the numbers are disproportionately 
higher. I just wanted to--I didn't put the numbers in, but I 
wanted to review those.
    The African American unemployment rate in this report is 
what, by way of percentage?
    Commissioner Hall. It is 15.9 percent.
    Chairman Casey. 15.9. What was it the month before?
    Commissioner Hall. It actually declined three-tenths of a 
percent, but that is not really statistically significant. So I 
would call it essentially unchanged.
    Chairman Casey. But that number alone, the African American 
number for most of the last year seems like it has been in the 
14 to 15 range? Is that about right?
    Commissioner Hall. Yes. It has been probably over 15 for 
most of the time.
    Chairman Casey. And I also mentioned a few other 
categories. I will just mention one more to get the number. 
Those Americans who were unemployed and have a high school 
diploma or less, what number is that?
    Commissioner Hall. The unemployment rate for those folks is 
15 percent.
    Chairman Casey. And that has been about--it has been that 
high that long?
    Commissioner Hall. Yes.
    Chairman Casey. For awhile. I wanted to ask you about, I 
think we--because there are so many reports, so much data out 
there and sometimes it is hard for even people that follow it 
closely to keep it straight--we know that we get the 
unemployment rate, it is derived from the so-called Household 
Survey. And that of course those numbers have not been very 
encouraging.
    That Household Survey has indicated a weaker employment 
situation than the Survey of Employers. Can you talk about that 
in terms of comparing the two sets of data and what that means, 
if anything, that would be relevant?
    Commissioner Hall. Sure. From month to month you will 
sometimes see different signals between the Household and the 
Payroll, but I find that if you look at it over slightly longer 
time periods, say three months, they do tend to move together 
pretty well. So you do not typically get a conflicting picture 
for very long between the two.
    Chairman Casey. And in terms of, if you could just describe 
the Survey of Employers, how that is arrived at, that number?
    Commissioner Hall. Sure. The Employer Survey is an 
establishment survey. So what we are doing is we are surveying 
places of work, businesses, establishments, and it is a very 
large survey. In fact, it is something on the order of 440,000 
establishments, but it represents something like 40 million 
people that we are counting directly every month. So it 
actually really is a very large survey. So the number is really 
pretty accurate.
    But the drawback of it is that we are surveying employers. 
So we are just looking at the number of jobs on payroll, what 
their average hourly earnings are doing, et cetera. When we 
want to get more rich detail, we go to the Household Survey 
where we collect all sorts of demographic information about 
education, ethnicity, et cetera.
    So the two together really give you a complete picture, I 
think, or as complete a picture as we can of the labor market 
by month.
    Chairman Casey. Thank you very much.
    Vice Chairman Brady.
    Vice Chairman Brady. I share Chairman Casey's concerns 
about the long-term unemployed. Clearly the longer they are 
without a job, the bigger the challenge it is getting them back 
to work.
    One of the areas that continues to trouble me, because it 
is the sign of weakness in the labor market rather than 
strength, is the labor force participation--how many people are 
actually in the labor force, or are actively participating. It 
has declined yet again in July to about 63.9 percent. This is 
the lowest since the early 1980s, and it continues to stay 
there.
    So just an editorial question. Are we, Commissioner, 
settling into a new norm where there are, going forward, going 
to be fewer people participating in the workforce and where 
there is a higher unemployment rate?
    Commissioner Hall. Well obviously I hope not. To tell the 
truth, I don't know. But I can tell you that so far in this 
recovery we have really seen no recovery at all in the labor 
force participation. That is something that is typically 
starting to rise at some point during a recovery. And I think 
as I have noted before, I think that is an important phase of 
the recovery, is when we start to get people entering back into 
the labor force.
    I think once that starts to happen, we may get a better 
idea of what the new norm will be; what the new labor force 
participate rate is going to be like.
    Vice Chairman Brady. Well it looks like it may take awhile, 
because I think the decline is twice that of any previous 
recession. Any ideas what the factors are for that lower 
participation rate?
    Commissioner Hall. It is not obvious to me that it is 
anything but this has been a very severe, long Recession and we 
have had a very large number of long-term unemployed. And 
although the long-term unemployed have stayed in the labor 
market a bit longer than they have in the past, we have still 
had quite a few people exit the labor force entirely.
    So I just think it is the severity and the length of the 
Recession.
    Vice Chairman Brady. At the current rate this month, for 
example, of 117,000 net jobs, how--just for the average person 
back home wondering how long we are going to be stuck in a 
tough economic time--at the current rate of 117,000 per month, 
how long would it take to regain the payroll jobs total we had 
prior to the Recession? I understand it will be years.
    Commissioner Hall. Yes. I don't want to be flip, but at 
117,000 we would never regain. You need about 130,000, at least 
by my rough calculation, to keep up with the population growth.
    So really, if you are looking in terms of recovery, I think 
the way you should look at these numbers if how far above 
130,000 we can get. And that is really the recovery. 117,000 
still is treading water, I think.
    Vice Chairman Brady. Right. Thank you. Yield back, 
Chairman.
    Chairman Casey. Congressman Cummings.
    Representative Cummings. Thank you very much, Mr. Chairman.
    Commissioner Hall, I was listening to what you were saying 
in response to one of Mr. Brady's questions with regard to 
people in the labor market, or coming back in. Let's talk about 
those who are starting out.
    A few months ago, millions of our young people graduated 
from high school and college. And while many of them are 
pursuing higher education--and we have had testimony actually 
before this Committee in the past where young people were--we 
were told that young people, many of them, were basically kind 
of suspending going into the job market and actually depending 
upon their parents and staying in school to get masters and 
graduate degrees.
    And I am just wondering what kind of pressure does the 
influx of job seekers place on the labor market? And what are 
the employment prospects for recent high school or college 
graduates?
    Commissioner Hall. Well first of all I think our data 
supports what you said, that the new entrants into the labor 
market are having a very difficult time finding work.
    If you look at something like the employment-to-population 
ratio and break it out by age range, those members of the 
population that are working age, that are let's say 25 and 
below, the employment-to-population ratio is very low and has 
declined considerably during this Recession.
    And of course the big concern of course is that at some 
point you start to feel like you are getting a generation, a 
cohort of high school and college graduates who are not finding 
work. And that could put a real strain on the labor market 
going forward. I would say it is something that we should be 
concerned about.
    Representative Cummings. A significant part of the 2009 
Recovery Act was a provision to aid the state and local 
governments to protect jobs for teachers, fire fighters, police 
officers, et cetera. As we know, much of that aid is coming to 
an end.
    How is the state and local government job market trending? 
And how much are the trends in this market contributing to the 
overall rise in unemployment?
    Commissioner Hall. Well I would say that right now in most 
industries we are no longer losing jobs. We are at least 
holding constant. We are growing in some. But one notable area 
where we do continue to lose jobs is in government employment, 
and in particular with both state government employment and 
local government employment.
    They both lost significant numbers of jobs. More so for 
state government than in most past recessions; probably with 
state government it might be the biggest decline we have had 
ever during a recession.
    Representative Cummings. It appears that less money will be 
going to the states. And, you know, it has always puzzled me, 
you know we hear these comments that we should not raise taxes 
on the richest of the rich during a fragile economy, but at the 
same time in my State we have had to lay off people, and we had 
furloughs, and I am sure that is happening in a number of 
states. And yet these people--and even on the Hill, in our 
committee, the committee I am the Ranking Member over, we have 
got employees who have taken a 5 percent to 10 percent cut. And 
we have got Federal employees who their wages have been 
frozen--in a fragile economy, by the way.
    And I am just wondering, can you talk about this Minnesota 
situation? You referenced it. Tell me about that as it relates 
to state jobs.
    Commissioner Hall. Sure.
    Representative Cummings. Your statistics.
    Commissioner Hall. Right. We have not produced official 
statistics yet for Minnesota, but the Governor's office has 
released the numbers; that the State of Minnesota laid off 
about 22,000 workers. I believe they held on to about 13,000. 
But that was a pretty significant layoff. And that was, as I 
mentioned, that was pretty much the bulk of the decline in 
state employment this month.
    Representative Cummings. And we are about to--we have got 
some folks who are getting ready to run out of unemployment 
benefits, and it is predicted that it is possible that those 
unextended may have a point five percent decrease in GDP.
    How might that affect this jobs situation?
    Commissioner Hall. I do not want to speculate too much on 
that. Certainly the Unemployment Insurance benefits is a real 
serious policy concern and such, but I am not sure I want to 
try to make a connection between the two.
    Representative Cummings. Thank you very much.
    Chairman Casey. Thank you, Congressman.
    Commissioner, I wanted to look at some of the areas where 
there has been an increase, trying to add some good news here. 
The private sector number is up 154,000. That is good news--but 
let's call it good news, but not good enough. That number I 
noticed, and I just want to see if you have this information 
nearby. I do not have it right in front of me, but I remember 
going back into kind of the January to April period we were 
getting at least three months that I can recall in a row where 
private-sector job creation, or private-sector job growth was 
above 220, I think three months in a row, it was like 220, 230, 
240, somewhere in there.
    Commissioner Hall. Yes, your memory is good. It averaged 
about 240,000 jobs per month over that period.
    Chairman Casey. Basically January to April.
    Commissioner Hall. That's right.
    Chairman Casey. And this month is a good number. But I was 
also noticing where we got growth--in other words, the reason 
we got 154,000 private-sector, and then if you net it out for 
the overall number 117,000, health care is up by 31,000, right?
    Commissioner Hall. Yes.
    Chairman Casey. Retail trade is up 26,000.
    Commissioner Hall. Yes.
    Chairman Casey. Manufacturing is up 24,000. And Mining is 
up 9,000. The one that took the biggest hit, I guess, was 
government, and I guess that is all government, right, the 
37,000?
    Commissioner Hall. That is correct.
    Chairman Casey. I guess in terms of the private-sector 
number, which I think is a pretty important number for us to 
watch, ideally what would we want? Maybe not the ideal number, 
but what would be a healthier number? In other words, if we 
were averaging just on the private sector increase, say 125 to 
150 the next few months. Would that be enough? Or does the 
private number have to be very close to what the overall number 
is? In other words, we know we cannot recover on the 117,000--
--
    Commissioner Hall. Right.
    Chairman Casey [continuing]. We know we have got to get 
that closer to 200,000 or more. But any correlation between 
private-sector growth and the health of the economy? Or is it 
better to focus on the overall number?
    Commissioner Hall. Well I think it is fine to focus on 
either one. Obviously the private sector is giving you some 
idea of private-sector job creation; whereas, you know, the 
government numbers, while they are also important, they are an 
indication obviously of government employment but not quite the 
private-sector.
    In terms of strong job growth, we are so deep into job 
loss--we have really lost quite a few jobs; we have really 
fallen really behind--that we really need really significantly 
higher job growth than we have had to make a dent, and even 
then it would probably take years to recover the jobs.
    Chairman Casey. I was noticing as well the manufacturing 
numbers I mentioned was up. I guess part of that, or a good 
part of that is automobile manufacturing? Is that up?
    Commissioner Hall. Yes. This month motor vehicles were 
about half that.
    Chairman Casey. Half? Okay. And I was wondering if you 
think that this part of the manufacturing number going up, the 
automobile manufacturing number, is the rebound partly the 
result of supply issues as it relates to what happened in 
Japan? Or do you think, is there any way to attribute it to 
that?
    Commissioner Hall. I think it would have been hard to 
figure out much of the impact of Japan all along, but I do 
think the evidence now is, if you look at something like motor 
vehicle inventories, that whatever Japan effect there was 
before, it is now out of the system; that inventories are back 
up to normal levels.
    So certainly now, and maybe going forward, we are probably 
not going to see any impact.
    Chairman Casey. And I am over time, but just one question, 
one more question. On the government number, can you tell us 
what the overall government number, the decline, has been say 
from July 2009 to July 2010 to now? In other words, over the 
last year, or the last two years? In other words, how many 
government jobs have we lost?
    Commissioner Hall. We are down about a half a million jobs 
in that period.
    Chairman Casey. A half a million. Thank you.
    Vice Chairman Brady.
    Vice Chairman Brady. Thank you, Chairman. I can't resist 
asking this. Earlier this morning when the jobs numbers came 
out, Mark Zandi, one of the White House's chief economic 
cheerleaders, called these numbers ``fabulous.''
    Commissioner, would you call these numbers fabulous?
    Commissioner Hall. I would say it is welcome to see the 
numbers, the job growth increase, but, no, they are not 
fabulous. They are still not strong.
    Vice Chairman Brady. It is Mr. Rones' last meeting. Can I 
ask him that, as well? No, I'm kidding. You don't need to go 
there.
    [Laughter.]
    I agree. I think it provides some relief only because we 
were so worried about, especially in the last few days, where 
this economy is headed.
    It is no secret that I am not a big fan of the stimulus. A 
lot of money. A lot of debt. Few jobs. The impact was pretty 
minor and pretty limited. We were told if we passed it that 
unemployment would be about 6.3 percent today. Way off. We are 
about 6 million jobs short of the claims we would have in new 
jobs if we passed that stimulus. So I felt like--continue to 
feel like we were told: Take the debt; you will get jobs. We 
certainly got the debt, and now that too is a drag on our 
economy, on business confidence and on family confidence.
    And when you look at the job gains in today's report, you 
know one view of the job market is that, as layoffs return to 
what they were before the Recession, the job numbers improved 
because separations didn't exceed any more the hires. But new 
hires have increased very little. They are far below what there 
were before the Recession.
    So it seems to me premature to speak of a real job market 
recovery to begin with, and the meager job gains recently 
really are not a surprise. This is an argument that the former 
Council of Economic Advisers Chairman Professor Ed Lazear of 
Stanford makes, and I agree with that.
    As you look at this report, Commissioner, is there a way to 
distinguish between job gains that result from fewer people 
leaving their jobs and job gains from a sustained increase in 
hiring? Because they send significantly different signals of 
the health of our labor market.
    Commissioner Hall. We do collect data--we call them Gross 
Flows--where we look at how many people are exiting jobs, and 
how many people are entering the labor market. And actually 
your observation is correct. Most of the improvement has been 
that the number of people losing jobs has leveled out and 
stopped going down, but we have not yet gotten a significant 
increase in the number of people entering the employed.
    Vice Chairman Brady. And the second portion is critical.
    Commissioner Hall. Yes.
    Vice Chairman Brady. And the fact that that is struggling, 
is that also why we have fewer people in that market while we 
again had 190-some-thousand step back out of the labor market 
this month?
    Commissioner Hall. Yes, I think that is consistent with 
what I mentioned about the labor force. You know, I think one 
of the things we would like--we need to see at some point is 
the labor force start to grow because people think they are 
going to get jobs, and we are going to see--people are going to 
start to expect, reasonably expect that they are going to be 
able to move from unemployed to employed, and that has not 
happened very strongly yet.
    Vice Chairman Brady. You know, I noticed--and I will finish 
with this--I noticed that retail jobs were up slightly in the 
report. But recent reports have the consumer spending and 
consumption down for the first time in a long time. Is there a 
mismatch there? Or maybe it's a timing issue because of when 
the survey was taken versus the lastest data on consumer 
demand?
    Commissioner Hall. There is certainly a timing issue. This 
is some of the very earliest data we have for July, and this is 
the start of the third quarter; and the consumer spending 
numbers are back from say the second quarter. So there is a 
timing issue there.
    Vice Chairman Brady. What kind of seasonal adjustments do 
you make this time of the year in the Jobs Report?
    Commissioner Hall. It sort of depends by industry. For 
example, in motor vehicle production there is a pretty good 
seasonal because plants often close down in July to retool, and 
they reopen in August. So there is a part of it there.
    There are workers in education that leave the labor market 
for the summer. So we have a seasonal there. Last month's 
seasonal actually was the really big one. That one overall was 
about a million. So we expect the labor employment to go down 
by a million because of seasonal job loss in June.
    Vice Chairman Brady. So you adjust for that?
    Commissioner Hall. We adjust for that. The seasonal this 
month is not quite so big.
    Vice Chairman Brady. Good. Thank you, Commissioner. 
Chairman.
    Chairman Casey. Congressman Cummings.
    Representative Cummings. Do you think that when you look at 
the rate of loss of government jobs and when you look at that 
as a portion of all jobs lost, is it trending pretty much the 
same over the last year or so? Do you follow my question? In 
other words, if you lose 50,000 jobs and 10,000 of them are 
government jobs, is that 20 percent pretty much the norm for 
the last say several months, or year?
    Commissioner Hall. For example, say over the last two years 
we have grown about 700,000 jobs, but we have lost about a half 
a million government jobs. So the job growth would have been 
not double, but it would have been close to double what it has 
been without the loss of government jobs.
    Representative Cummings. You know, I also heard Mr. Zandi, 
who was one of John McCain's--at first people used to say he 
was John McCain's advisor; now John McCain, Senator McCain has 
made it clear that he was ``one'' of his advisors during the 
campaign. So one of his advisors, Mr. Zandi. I also heard his 
testimony, his comments this morning. And one of the things he 
said is: We've got to move from cutting to creating, creating 
jobs.
    And, you know, I was just trying to figure out if we 
continue to go at the rate we are going--in other words, if we 
do not come up with methodologies to create jobs and push that, 
we are going to find ourselves in some real difficulty. And we 
can only slide downward. And I do not want to see that happen.
    I know the numbers are not great, but can you tell us, what 
would you tell the President today if he called you right now 
and said, you know, I usually do not bother you but since Mr. 
Rones is leaving today, could both of you all get on the phone 
and tell me what the deal is? What would you say?
    Commissioner Hall. Well I would say that it is of course 
welcome news that the job growth in July accelerated over the 
May and June growth. So that is good news. But it is not yet 
strong. In fact, this is pretty tepid job growth. And going 
forward, we really are going to have to do better in job growth 
in order to start to really recover in the labor market.
    Representative Cummings. And the African American numbers 
are pretty stubborn, aren't they?
    Commissioner Hall. Yes, they are.
    Representative Cummings. And what about the Hispanic 
numbers?
    Commissioner Hall. Yes, the unemployment rate there is 
above average, too. That is about 11.3 percent. And let me just 
mention, I just throw this out, but those unemployment rates to 
some degree underestimate the problem because the labor force 
participation rates for both those groups are below average as 
well.
    So actually they sound bad, but it actually may be worse 
than it sounds.
    Representative Cummings. Yes. And I would venture to guess 
that there are some areas in my District where the African 
American male unemployment rate may be as much as 50 percent. 
And so whenever I see those numbers, I am, you know, I say to 
myself that they are probably very, very low.
    The Chairman talked briefly about this whole correlation 
between the amount of education and the impact that this 
recession has had on folks. And do you see that trend 
continuing? In other words, the less education you have, the 
more negative impact the Recession has on folks?
    Commissioner Hall. Absolutely. For example, the 
unemployment rate for those with less than a high school 
diploma is about 15 percent. For those with a bachelor's degree 
or higher it is only about 4 percent. So that is a pretty 
significant difference.
    Representative Cummings. And finally, let me ask you this. 
I always ask you if someone was watching us right now and they 
were trying to figure out what kind of field they might want to 
go into, what kind of training they might want to get, what 
area they might want to move to to get a job, what would you 
say, just based upon--I know you do not like to draw a lot of 
conclusions, but just tell me based on what you have there in 
front of you, what would you say?
    Commissioner Hall. Well obviously education pays off and is 
very important. And the United States is, like other wealthy 
countries, we are a country of service jobs, service-providing 
jobs. Something like 70 to 80 percent of our jobs are in fact 
in the service-providing sector. So that is important.
    And then you get into, you know, some of the things like 
some of the demographics that we have got going on. So a lot of 
the health care jobs are, I would expect are going to have 
strong growth going forward as we have an aging population, 
some things like that. That is the sort of thing I think is the 
sort of advice I would give.
    Representative Cummings. Thank you very much.
    Chairman Casey. Unless there are further questions, Dr. 
Hall, Commissioner Hall, we are grateful for your testimony 
again. Dr. Horrigan, your colleague, we didn't say hello 
earlier. And, Phil, we hope you can come back here in your 
years of retirement. You said you were going to be fishing a 
lot. If you can squeeze in a couple of hearings between 
fishing, we would love to have you back.
    But unless there any further questions or comments, we are 
adjourned.
    [Whereupon, at 1:41 p.m., Friday, August 5, 2011, the 
hearing was adjourned.]

                       SUBMISSIONS FOR THE RECORD

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

    Commissioner Hall, members of your staff, welcome back to the Joint 
Economic Committee for another hearing on the employment situation. 
Today's increase in the number of payroll jobs barely exceeded very low 
expectations, and the unemployment rate fell largely because of a 
193,000 decline in the labor force. The actual number of employed 
people in the household survey fell by 38,000.
    Two and half years ago President Obama signed his historic stimulus 
bill, promising to jump-start the economy, restore consumer confidence, 
and put people back to work. Today, with historic numbers of Americans 
desperate for work, consumer confidence plunging, the risk of a double-
dip recession growing, and the stock market reeling, it is long past 
time to pull the plug on the President's failed economic experiment.
    How much longer must Americans watch their economy stumble? After 
trillions of dollars in poorly designed stimulus and monetary 
intervention, must nine percent unemployment be the ``new norm''? After 
all of the big-government bullets have been spent, how many more years 
will families and businesses suffer until America enjoys a strong, 
prosperous economy again?
    Mr. President, America is fair. It has been patient, more than 
patient. But after two and a half years, enough is enough. You've tried 
and failed to revive this economy. America deserves better than a 
second-rate economy that's held up to ridicule by other nations.
    When the country is headed in the wrong direction, common-sense 
dictates that you should change course.
    Instead of threatening to raise taxes on job creators along Main 
Street, we need to lower the cost of capital to increase business 
investment that has proven time and time again to create real jobs.
    Instead of branding companies as somehow un-American for competing 
in the global marketplace, we should tear down the barriers to sales 
abroad, reduce the cost of regulation and taxes that place them miles 
behind at the starting line, and lower the tax gate so an estimated one 
trillion dollars in American profits stranded abroad can flow back 
home--to be invested here in America right now in new jobs, more 
research, business expansions, and a stronger financial future.
    Passing the three pending trade agreements will create 250,000 new 
American jobs. Putting our energy companies back to work in the Gulf, 
Alaska, and in abundant American fields onshore and off will create 
more than one million new American jobs.
    Another 800,000 jobs will be saved this decade merely by calling a 
halt to the President's new national health care law. That will 
eliminate a costly cloud of worry among small, medium and large job 
creators throughout the nation.
    There's much more that needs to be done, but perhaps nothing more 
important than the White House ending its campaign of demonizing the 
free market and the job creators--who built the greatest economy in the 
world--and can do so again if Washington will get out of its way.
    It's telling that news reports on the economy today are given with 
the Capitol or the White House as a backdrop--not along Main Street or 
in front of the headquarters of an American company. The entrepreneurs 
who make the critical decisions that create jobs have been forced to 
become Washington-centric because Washington is directing this economy 
to a degree not seen in our lifetimes.
    That's the problem. Government needs to get out of the way. It 
needs to end its job-killing rhetoric, regulations, and intervention 
and give Americans confidence to do what we do best--innovate and lead 
the world in creating economic opportunity based on what the market 
demands--not what Washington demands.
    Finally, America's financial health matters. We know our perilous 
debt and deficits are shaking markets and confidence at home and 
abroad. We also know from forty years of economic study that our global 
competitors in similar straits have boosted their economies 
significantly and soon by reducing their debt, cutting spending, and 
restoring business and consumer confidence.
    Congress has taken an important first step to reduce the size of 
government this decade with passage of the Budget Control Act, which 
the President signed. Excluding the winding down of the wars in Iraq 
and Afghanistan--without recent passage of the Budget Control Act, the 
government would grow to over 23% of the size of our economy. With its 
passage, the federal government will shrink to 21.6% of GDP this 
decade.
    President Reagan began to reduce the size of the federal government 
relative to the economy. As federal spending shrank from 22.2% of GDP 
in 1981 to 18.2% of GDP in 2001, entrepreneurs on Main Street created 
37 million new private-sector jobs. Since the federal government began 
to grow again--adding five and a half trillion dollars in new debt the 
last four years--we have lost almost three million private-sector jobs.
    America deserves a strong, growing economy that fully employs our 
people and is the envy of the world. We cannot do that until we pry 
Washington's hands off the throats of America's job creators. Our free 
market economy will create jobs, Mr. President, if we change course 
today and get government out of the way.
    Dr. Hall, I look forward to hearing your testimony.

    [GRAPHIC] [TIFF OMITTED] T0623.039
    
    [GRAPHIC] [TIFF OMITTED] T0623.040
    
    [GRAPHIC] [TIFF OMITTED] T0623.041
    
        Prepared Statement of Representative Elijah E. Cummings
    I thank Chairman Casey for holding today's hearing to examine the 
most recent data on the employment situation across America. I also 
thank Commissioner Hall for joining us today--it is always nice to see 
you. Today's report indicates that in July, employers created 117,000 
jobs and the unemployment rate dropped to 9.1 percent. These numbers 
are moving in the right direction--but obviously we have a long way to 
go to resolve our economic challenges and to ensure that everyone who 
wants to work can work.
    Last week, we learned that the economy grew just .4 percent in the 
first three months of this year, and only 1.3 percent in the second 
quarter. In June, American consumers decreased their spending. 
Additionally, the already-battered housing market, which continues to 
be a severe drag on the economy--and thus on job creation--took another 
hit in June as existing home sales fell sharply due to canceled sales 
contracts.
    Unfortunately, the policies coming out of Congress are doing 
nothing to rebuild confidence or spur economic growth. According to 
many experts, they may even hinder the recovery and cause us to give up 
the small gains we have won. Thus, an economist at Barclays Capital has 
warned that the debt deal that Congress struck earlier this week could 
reduce economic growth by a tenth of a percent in the first year alone. 
He said, ``When the economy is only growing a point and half, a lot of 
economists feel that this is not the right time to be finding fiscal 
restraint.''
    Similarly, a chief global economist at Deutsche Bank Advisors, 
asked: ``Why would you want to impose restraint on an economic recovery 
that's already fragile? You're removing spending power from the economy 
at a time when it needs it. That's likely to make the economy weaker . 
. . [and in turn] the budget gets weaker, because tax revenues are 
going to slow.''
    The recent nosedive in the Dow suggests others may agree with this 
assessment--and that investors, like frankly almost all Americans--are 
worried that Congress is unable or unwilling to address the most 
important issue facing this nation: the need to create jobs.
    Some of the terrible consequences of our failure to focus on 
restoring economic growth are made clear in the results of a recent Pew 
Research Center analysis, which found that the wealth gap between white 
households and African American and Hispanic households is the largest 
since the government began reporting on income a quarter century ago.
    Specifically, the analysis finds that the housing bubble and Great 
Recession took a much deeper toll on Black families and Hispanic 
families than it did on white families.
    We can do better, and we must do better. I voted against the debt 
deal because I could not, in good conscience, support the use of a 
manufactured crisis to implement ideologically based policies that will 
further threaten our nation's economic growth and job creation 
potential.
    Further, the debt deal intends to reduce our debt by limiting 
discretionary spending, potentially requiring deep cuts in programs 
critical to our most vulnerable citizens. At the same time, the deal 
demands nothing from the wealthiest Americans or from corporations that 
are receiving billions in tax breaks.
    I believe that as we work to reduce what certainly is an 
unsustainable level of debt, we need a balanced plan that prioritizes 
the restoration of economic growth and that upholds the full faith and 
credit of the United States through what should be a national 
commitment that entails a shared sacrifice.
    I believe this is only fair given that the national debt we now 
face has been created both by increased spending and by forgone 
revenues resulting from tax cuts provided to the wealthiest among us.
    Again, I thank the 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 rose by 117,000 in July, following 2 
months of little change. The unemployment rate was 9.1 percent in July 
and has shown little definitive movement since April. Private-sector 
employment increased by 154,000 over the month.
    Health care employment rose by 31,000 in July, as both hospitals 
and ambulatory care services added jobs. Retail trade employment 
increased by 26,000. In the manufacturing sector, employment expanded 
by 24,000, with gains in motor vehicles and semiconductors. Mining 
employment grew by 9,000 over the month and was up by 140,000 since the 
most recent low in October 2009. Employment in professional and 
technical services continued to trend up in July; this industry has 
added 246,000 jobs since a recent low in March 2010. Employment in 
temporary help services was flat over the month and on net has changed 
little in 2011. Other private-sector industries showed little or no 
change in July.
    Employment in state government decreased by 23,000 over the month. 
The decline was almost entirely due to the partial government shutdown 
in Minnesota. Local government employment continued to trend down over 
the month. Since an employment peak in September 2008, local government 
has shed 475,000 jobs.
    Average hourly earnings of all employees on private nonfarm 
payrolls were up by 10 cents in July to $23.13. Over the past 12 
months, average hourly earnings have risen by 2.3 percent. From June 
2010 to June 2011, the Consumer Price Index for All Urban Consumers 
(CPI-U) increased by 3.4 percent.
    Turning to measures from the survey of households, the unemployment 
rate was 9.1 percent in July. The jobless rate has held in a narrow 
range between 9.0 and 9.2 percent since April.
    Of the 13.9 million persons unemployed in July, 44.4 percent had 
been out of work for 27 weeks or longer. This proportion was unchanged 
over the month and essentially unchanged over the year.
    Labor force participation edged down from 64.1 to 63.9 percent in 
July. The proportion of the population that was employed was 
essentially unchanged over the month at 58.1 percent.
    In summary, nonfarm payroll employment rose by 117,000 in July, 
with the private sector adding 154,000 jobs. The unemployment rate was 
little changed at 9.1 percent.
    My colleagues and I now would be glad to answer your questions.

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