[Joint House and Senate Hearing, 113 Congress]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 113-220
 
                THE EMPLOYMENT SITUATION: DECEMBER 2013 

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

                                HEARING

                               before the

                        JOINT ECONOMIC COMMITTEE
                     CONGRESS OF THE UNITED STATES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                            JANUARY 10, 2014

                               __________

          Printed for the use of the Joint Economic Committee

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                        JOINT ECONOMIC COMMITTEE

    [Created pursuant to Sec. 5(a) of Public Law 304, 79th Congress]

HOUSE OF REPRESENTATIVES             SENATE
Kevin Brady, Texas, Chairman         Amy Klobuchar, Minnesota, Vice 
John Campbell, California                Chair
Sean P. Duffy, Wisconsin             Robert P. Casey, Jr., Pennsylvania
Justin Amash, Michigan               Mark R. Warner, Virginia
Erik Paulsen, Minnesota              Bernard Sanders, Vermont
Richard L. Hanna, New York           Christopher Murphy, Connecticut
Carolyn B. Maloney, New York         Martin Heinrich, New Mexico
Loretta Sanchez, California          Dan Coats, Indiana
Elijah E. Cummings, Maryland         Mike Lee, Utah
John Delaney, Maryland               Roger F. Wicker, Mississippi
                                     Pat Toomey, Pennsylvania

                 Robert P. O'Quinn, Executive Director
                 Niles Godes, Democratic Staff Director



                            C O N T E N T S

                              ----------                              

                     Opening Statements of Members

Hon. Kevin Brady, Chairman, a U.S. Representative from Texas.....     1
Hon. Amy Klobuchar, Vice Chair, a U.S. Senator from Minnesota....     3

                               Witnesses

Hon. Erica L. Groshen, Commissioner, Bureau of Labor Statistics, 
  U.S. Department of Labor, Washington, DC; accompanied by Dr. 
  Michael Horrigan, Associate Commissioner for Prices and Living 
  Conditions, Bureau of Labor Statistics; and Mr. Thomas J. 
  Nardone, Jr., Associate Commissioner for Employment and 
  Unemployment Statistics, Bureau of Labor Statistics............     5

                       Submissions for the Record

Prepared statement of Hon. Kevin Brady...........................    22
Prepared statement of Hon. Erica L. Groshen......................    22
Questions for the record from Representative Coats to 
  Commissioner Groshen...........................................    23
Letter dated February 26, 2014, from Commissioner Groshen to 
  Representative Coats...........................................    25
Letter dated January 29, 2014, from Commissioner Groshen to 
  Senator Klobuchar..............................................    27
Letter dated January 30, 2014, from Commissioner Groshen to 
  Representative Hanna...........................................    29
Letter dated January 27, 2014, from Commissioner Groshen to 
  Representative Paulsen.........................................    31


                       THE EMPLOYMENT SITUATION: 
                             DECEMBER 2013

                              ----------                              


                        FRIDAY, JANUARY 10, 2014

                    United States Congress,
                          Joint Economic Committee,
                                                    Washington, DC.
    The committee met, pursuant to call, at 9:34 a.m. in Room 
G-50 of the Dirksen Senate Office Building, the Honorable Kevin 
Brady, Chairman, presiding.
    Representatives present: Brady of Texas, Duffy, Amash, 
Paulsen, Hanna, Carolyn B. Maloney, Sanchez, Delaney.
    Senators present: Klobuchar.
    Staff present: Ted Boll, Hank Butler, Gail Cohen, Al 
Felzenberg, Niles Godes, Paige Halen, Colleen Healy, Patrick 
Miller, Robert O'Quinn, and Andrew Silvia.

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

    Chairman Brady. Good morning, everyone, Vice Chair 
Klobuchar, Members of the Committee, and Commissioner Groshen. 
Good morning, and welcome to the New Year.
    This is Commissioner Groshen's first appearance before the 
Joint Economic Committee. On behalf of the millions of 
Americans who cannot yet find jobs, we are hopeful and we hope 
that you can bring us better news in the future.
    I would like to recognize Tom Nardone, who is retiring from 
the Bureau of Labor Statistics after 37 years of service. He 
has been ``Mr. Numbers'' for the Commissioner and this 
Committee over the last several years.
    Tom, we thank you for your dedicated service and wish you 
the very best in your future endeavors--which, by the way, 
sound wonderful.
    Payroll job growth was, unfortunately, incredibly weak last 
month. December saw a gain of only 87,000 private sector jobs 
and 74,000 nonfarm jobs.
    The unemployment rate did fall by 0.3 percentage points to 
6.7 percent. However, this drop was largely due to falling 
labor force participation. More than a half a million Americans 
left the labor force last month. Consequently, the labor force 
participation rate dropped to 62.8 percent, tying a 36-year 
low.
    While it sounds impressive to boast that the U.S. economy 
added 8.2 million private-sector jobs over the past 46 months, 
economic growth in an average recovery during the past half 
century has been 50 percent larger than in the Obama recovery. 
As a result of this growth gap, America today is missing a 
whopping 4.5 million jobs along Main Street--and I don't think 
that is acceptable to anyone.
    Consider this: the best--the best--monthly private sector 
jobs report of the Obama recovery is lower than the equivalent 
of the average private jobs report of the Reagan recovery. In 
other words, not a single month of the current recovery matches 
even the equivalent of an average month of the Reagan recovery. 
And that is disappointing. We all know we have got to do 
better.
    We should be encouraged that the unemployment rate has 
declined from its peak of 10 percent in October, 2009, to 6.7 
percent today. However, that is nowhere near the 5 percent 
level the White House promised the American people when the 
controversial $800 billion stimulus was rushed through Congress 
on a party-line vote.
    Now unfortunately the decline in the unemployment rate is 
largely due to falling labor force participation. If you look 
at it, if the labor force participation rate had not declined 
since President Obama took office, the unemployment rate would 
be nearly 11 percent. Another disappointing jobs indicator: a 
smaller percentage of Americans are employed today than when 
the recession ended over four-and-a-half years ago.
    The American people are deeply dissatisfied with the 
President's leadership on the economy. We need solutions that 
get Washington out of the way so Main Street businesses can 
start hiring with confidence again.
    Raising the minimum wage and forcing small businesses to 
pay nearly $5,000 more per worker won't increase hiring. 
Washington mandating the equality of income won't increase 
hiring. Extending emergency unemployment programs won't 
increase hiring because what the long-term unemployed really 
need and are crying for are new jobs.
    The emergency unemployment program is designed for 
extraordinary circumstances when America's unemployment rate is 
high and going higher. As the White House reminds us, the 
unemployment rate has declined in all 50 states and is at the 
lowest since 2008.
    So you ask why are the President and the Senate seemingly 
turning their backs on job creation? Why doesn't the Senate 
pick up and pass, and the President sign into law, any of the 
dozens of jobs bills the House has already approved, including 
the Keystone XL pipeline which would create thousands of well-
paying middle-class jobs.
    It is not helpful, either, that the White House continues 
to delay bipartisan unemployment reforms the President signed 
into law two years ago to make it easier for states to match 
local workers with local jobs and conduct drug testing for 
applicants seeking jobs that require those tests.
    We all know it is an election year, and some in Washington 
are trying to change the conversation from the disappointing 
economy and the bungled roll-out of the troubled Affordable 
Care Act. I just hope my colleagues on both sides of the aisle 
remember that the measure of America's compassion is not how 
long we provide unemployment benefits, but how soon we get 
people into good-paying jobs. That should be Washington's 
focus.
    Commissioner Groshen, welcome again, and I look forward to 
your testimony.
    I recognize the Vice Chair.
    [The prepared statement of Chairman Brady appears in the 
Submissions for the Record on page 22.]

  OPENING STATEMENT OF HON. AMY KLOBUCHAR, VICE CHAIR, A U.S. 
                     SENATOR FROM MINNESOTA

    Vice Chair Klobuchar. Thank you very much, Chairman Brady, 
and thank you for holding this hearing today.
    I also want to thank Mr. Nardone for his 37 years of 
numbers, of experience crunching numbers for us so we can do 
our jobs. And also, welcome, Dr. Horrigan.
    I am pleased we are having this hearing on the monthly 
employment situation, and I look forward to hearing from all of 
you today, not just on the past month but really on the past 
year. This would be a good time to talk about the past year.
    These hearings are an opportunity to dig more deeply into 
the numbers and have a chance to get a more complete 
understanding of the employment data.
    I want to make a couple of overall comments first about the 
economy. As we know, the economy has grown for 10 straight 
quarters, with GDP growing at a 4.1 percent annual rate in the 
third quarter of 2013. Each month, an average of 182,000 jobs 
were added on average last month, and that would include last 
month's numbers.
    Consumer spending, which accounts for about 70 percent of 
economic activity, was the strongest it has been in nearly two 
years. And as a home state for Target and Best Buy in 
Minnesota, we like that consumers are getting more confidence 
in buying things.
    Critical industries like housing are recovering. Housing 
starts were up almost 23 percent in November. Home prices in 20 
leading cities have increased by nearly 14 percent over the 
past 12 months.
    Manufacturing, which is of course the engine of innovation, 
has rebounded, adding 568,000 jobs since February of 2010.
    Exporting, which Chairman Brady and I were just talking 
about, is another bright spot. Exports are growing in each of 
the past four years, exceeding the pre-recession peak.
    While all this is good news and shows that the economy has 
improved greatly since the worst of the downturn when, I 
remember in January of 2009 we lost more jobs in a single 
month, more than there were people in the State of Vermont. We 
have seen great improvement since then. We all know, as the 
Chairman has pointed out, that there is still more work to do.
    Five years later, though, we are still adding jobs. And if 
you look at the chart here, it is showing 46 consecutive months 
of private-sector job growth. It is not exactly where we want 
to be, but we still have seen 46 straight months of private-
sector job growth.
    In that time, 8.2 million private-sector jobs have been 
created since the downturn.
    The number of unemployed workers per job opening has 
decreased from nearly 7 in July of 2009 to less than 3 
approaching the pre-recession level of roughly 2 unemployed 
workers for every job opening.
    In 2013, the recovery in the labor market continued to 
strengthen with the private sector adding 2.2 million jobs 
during the course of the year, including the 87,000 jobs in 
December. But because of the drop in government employment, 
total nonfarm payrolls increased by only 74,000, which is a 
number we are talking about today.
    The unemployment rate, currently 6.7 percent, is down more 
than a percentage point from last December when it was 7.9 
percent. In my State, the unemployment rate is at 4.6 percent. 
The truth is that for most workers the job market is better 
today than it has been for a number of years.
    Commissioner Groshen, I do look forward to your assessment 
of the labor market in 2013.
    Despite the recent progress and the drop in the national 
unemployment rate to its lowest level in five years, long-term 
unemployment is still a very real problem. Nearly 4 million 
Americans, over one-third of unemployed workers, have been out 
of work for more than 6 months. Long periods of joblessness do 
significant damage to our Nation's productivity, as we 
discussed at our Long-Term Unemployment Hearing last year. In 
fact, Chairman Bernanke came yesterday to speak to some of the 
Senators, looking back at his term, and he talked about the 
fact that there has been significant economic progress but he 
sees the challenges ahead being productivity and also the 
income disparity issue.
    I know that we are making progress on an agreement to 
provide a one-year extension of unemployment benefits to people 
who have been out of work for more than six months in the 
United States Senate. That is a bipartisan bill sponsored by 
Senator Jack Reed and Senator Heller, Republican of Nevada. 
Extending unemployment insurance benefits will ensure that the 
1.3 million workers whose benefits were cut off on December 
28th will get the support that they need, allowing them to pay 
their rent and fill their gas tanks as they continue their job 
search.
    Earlier this week I released a JEC report laying out the 
economic case for continuing Federal Unemployment Insurance. It 
showed that the long-term unemployment rate is nearly twice 
what it was--nearly twice what it was--when Congress allowed 
Federal Unemployment Insurance to expire after the recessions 
of 1990 to 1991 and 2001. And you can see that chart of the 
level at which we had long-term unemployment in past cases, 
where the unemployment was allowed to expire.
    So I would like to hear about the data you have, 
Commissioner Groshen, on long-term unemployment. The report 
also showed that in several states high long-term unemployment 
is masked by a lower overall unemployment rate. For example, 
Florida has an unemployment rate below the national rate, but 
46 percent of its unemployed have been jobless for more than 6 
months.
    This leads us to look at things like ramping up our job 
training. I can tell you in my State 60 percent of our 
manufacturers say they have openings for jobs where they cannot 
find workers with quite the right skills. And I think this is 
something that is a bipartisan issue.
    Senator Hoeven, Republican of North Dakota, and I have a 
bill about investing in effective workforce training. And there 
are a number of other ideas out there.
    So I would say overall today's employment report shows that 
we still have recovery in the labor market. The economy proved 
resilient in 2013. The numbers are not, as I have said many 
times, where we want to have them, but we continue, when you 
look back at the entire year to that average gain of about 
182,000 jobs a month, we have seen significant change that 
shows we are heading in the direction of being a country that 
does not just churn money but a country that makes stuff, 
invents things, exports to the world, and most importantly has 
a strong private-sector job economy.
    Thank you, very much. I look forward to your testimony.
    Chairman Brady. I would like to welcome the 14th 
Commissioner of the Bureau of Labor Statistics, Erica Groshen.
    Prior to joining BLS she was a Vice President of the 
Research and Statistics Group at the Federal Reserve Bank of 
New York. She also served on advisory boards for BLS and the 
U.S. Census Bureau.
    She has been a Visiting Assistant Professor of Economics at 
Barnard College, at Columbia University, and a Visiting 
Economist at the Bank for International Settlements in Basel, 
Switzerland.
    She earned a Ph.D. in Economics from the Harvard 
University, and a Bachelor's Degree in Economics and 
Mathematics at the University of Wisconsin Madison.
    Commissioner, welcome, and we look forward to your 
testimony.

  STATEMENT OF HON. ERICA L. GROSHEN, COMMISSIONER, BUREAU OF 
  LABOR STATISTICS, U.S. DEPARTMENT OF LABOR, WASHINGTON, DC; 
 ACCOMPANIED BY: DR. MICHAEL HORRIGAN, ASSOCIATE COMMISSIONER 
 FOR PRICES AND LIVING CONDITIONS, BUREAU OF LABOR STATISTICS; 
  AND MR. THOMAS J. NARDONE, JR., ASSOCIATE COMMISSIONER FOR 
    EMPLOYMENT AND UNEMPLOYMENT STATISTICS, BUREAU OF LABOR 
                   STATISTICS, WASHINGTON, DC

    Commissioner Groshen. Mr. Chairman and Members of the 
Committee:
    Thank you for recognizing Tom's public service and 
retirement, and for the opportunity to discuss the employment 
and unemployment data that we released this morning. I must say 
that you had very prescient timing in choosing a very 
interesting report for me to discuss.
    So the unemployment rate declined from 7.0 to 6.7 percent 
in December, and nonfarm payroll employment edged up by 74,000 
jobs.
    Monthly job gains averaged 182,000 jobs in 2013, about the 
same as in 2012. In December, employment rose in retail trade 
and wholesale trade but fell in the information industry.
    Incorporating the revisions for October and November, which 
increased employment by 38,000 on net, monthly job gains have 
averaged 172,000 over the past 3 months.
    Retail trade added 55,000 jobs in December. Job gains 
occurred in food and beverage stores which added 12,000; 
clothing stores, which also added 12,000 jobs; general 
merchandise stores, which added 8,000 jobs; and motor vehicles 
and parts dealers, which added 7,000 jobs. Retail trade 
employment increased by an average of 32,000 per month in 2013.
    Wholesale trade employment rose by 15,000 in December. Over 
the past year, wholesale trade added an average of 8,000 jobs 
per month.
    Employment in professional and business services continued 
to trend up in December, adding 19,000 new jobs. This industry 
has added 637,000 jobs over the past 12 months. Within this 
industry, temporary help services added 40,000 jobs in 
December. In contrast, accounting and bookkeeping services lost 
25,000 jobs over the month.
    Manufacturing employment continued to trend up in December, 
adding 9,000 jobs. Manufacturing added 77,000 jobs in 2013, 
compared with an increase of 154,000 jobs in 2012.
    Employment in the information industry decreased by 12,000 
jobs in December. This reflected a decline in motion picture 
and sound recording of 14,000 jobs. Employment in the motion 
picture industry can be very volatile from month to month. Over 
the year, employment in information has shown little net 
change.
    Construction employment edged down in December, losing 
16,000 jobs. However, in 2013 the industry added an average of 
10,000 jobs per month.
    Employment in nonresidential specialty trades contractors 
declined by 13,000 in December, possibly reflecting unusually 
cold weather in parts of the country.
    Health care employment changed little in December, with a 
decrease of 6,000 jobs. Over the past year, job growth in this 
industry has slowed to an average of 17,000 per month, compared 
with an average monthly gain of 27,000 in 2012.
    In December, employment in most other major industries 
changed little.
    Average hourly earnings of all employees on private nonfarm 
payrolls edged up by 2 cents in December. Over the past 12 
months, average hourly earnings have risen by 42 cents, or 1.8 
percent. From November 2012 to November 2013, the Consumer 
Price Index--a measure for inflation--for All Urban Consumers, 
the CPI-U, rose by 1.2 percent.
    Turning now to our survey of households, the unemployment 
rate decreased by 0.3 percentage points in December to 6.7 
percent. Over the year, the unemployment rate declined by 1.2 
percentage points, and the number of unemployed persons fell by 
1.9 million.
    In December, there were 3.9 million unemployed persons who 
had been jobless for 27 weeks or more. This was little changed 
over the month, but down by 894,000 over the past year.
    The labor force participation rate declined to 62.8 percent 
in December. And over the year, this rate has declined by 0.8 
percentage point. The employment to population ratio, at 58.6 
percent, was unchanged in December, and over the past 12 
months. In fact, this measure has held at or near this level 
since late 2009.
    Among those neither working nor looking for work in 
December, 2.4 million were classified as marginally attached to 
the labor force, and this is little changed from a year 
earlier.
    These individuals wanted a job, were available for work, 
and had looked for a job within the past 12 months. The number 
of discouraged workers, which is a subset of the marginally 
attached who believed that no jobs were available for them, was 
917,000 in December, down by 151,000 from a year earlier.
    In summary, the unemployment rate declined from 7 percent 
to 6.7 percent in December, and nonfarm payroll employment 
edged up by 74,000.
    My colleagues and I would now be glad to answer your 
questions.
    [The prepared statement of Hon. Erica L. Groshen appears in 
the Submissions for the Record on page 22.]
    Chairman Brady. Thank you, Commissioner. As you know, the 
unemployment rate fell pretty dramatically. Do you see this 
as--would you describe it as an encouraging sign of a 
sustainable recovery?
    Commissioner Groshen. This is one--this is one month's 
number. Of course you don't want to get hung up on one 
particular number. But most of the change in the unemployment 
rate, about two-thirds of it probably, was due to falling labor 
force participation, which is----
    Chairman Brady [continuing]. People simply giving up on the 
market, the workforce?
    Commissioner Groshen. Well the interesting thing is that 
when we looked at flows, it looked like most of the flows into 
nonparticipation were from employment rather than from 
unemployment. But generally speaking, it is not as robust a 
sign as if the fall in unemployment had come from creation of a 
lot of jobs.
    Chairman Brady. Do you think that drop, and the reasons for 
it, is a troubling indicator, or a concerning indicator?
    Commissioner Groshen. Um, well I guess it depends on the 
question you are asking. It is certainly not a sign of 
strength.
    Chairman Brady. When we look at, in your report you make 
the case that here we are four-and-a-half years after the 
Recession ended and there are still fewer payroll jobs than 
when the Recession began, which is creating a dramatic gap in 
jobs in America. So at the rate of the 180,000 jobs a month 
that has occurred over the last two years, how long will it 
take before America is simply back to even in payroll jobs?
    Commissioner Groshen. In total payroll jobs, it would take 
about seven months, into July. For private-sector payrolls, it 
would take about four months, to April.
    Chairman Brady. Okay, so we are looking at mid-year before 
we get back to break-even on the pre-Recession payroll----
    Commissioner Groshen. That's right.
    Chairman Brady. Good. The numbers of 74,000 and 87,000 
private-sector jobs were disappointing I think for most of us 
who want to see a much stronger recovery, far below the 
consensus for the report. From an economic standpoint, I am 
told that numbers that small are statistically insignificant in 
the sense of what you read.
    What in your report--where were the areas--I think you 
mentioned retail, information, perhaps wholesale--what areas 
last month were statistically significant that you can tell us 
about?
    Commissioner Groshen. The 55,000 jobs created in retail 
trade were statistically significant.
    Chairman Brady. And that was in food and clothing, 
predominantly?
    Commissioner Groshen. Widespread in retail trade. So quite 
a few of the subsectors.
    Wholesale, the wholesale trade increase of 15,000 jobs was 
also statistically significant.
    Chairman Brady. Is there any insight into that number?
    Commissioner Groshen. Well a lot of that was in electronic 
trading. So these are services provided to firms that are 
buying products, and they do it electronically. So they do not 
actually take possession of the products that they purchase on 
behalf of other firms, but they facilitate the purchase of 
these products by firms.
    Chairman Brady. Right.
    Commissioner Groshen. The other sector that had growth that 
I want to call your attention to is not a super sector but it 
is very important is the temporary help services industry. That 
added a statistically significant 40,000 new jobs. That is 
often a harbinger of further growth.
    Chairman Brady. Right. Thank you.
    Vice Chair Klobuchar.
    Vice Chair Klobuchar. Thank you very much. Thank you, 
Commissioner.
    This morning's report shows job growth not exactly where it 
was expected, but I think we do know that December marks the 
46th consecutive month of private-sector job growth. During 
this time, more than 8.2 million private-sector jobs have been 
added.
    What employment trends did you see in 2013 as a whole in 
the last year? And how would you characterize the state of the 
labor market this year?
    Commissioner Groshen. Okay. Well, yes, well overall today's 
report is not strongly encouraging. There was growth. And 
month-to-month variation is normal in our measures. So it is 
not entirely surprising. I don't think we should----
    Vice Chair Klobuchar. So you are just basing your 
assessment on December? I was asking about----
    Commissioner Groshen. About the entire year, yes.
    So over the year, what we have seen is steady, modest 
growth mostly in the services. We do still have a ways to go to 
return to pre-Recession conditions, but we have seen growth in 
the industries that we talked about, primarily in professional 
and business services, in health care, in leisure and 
hospitality that are some of the areas where we've had the 
strongest growth.
    Vice Chair Klobuchar. One number I did want to ask about 
for December, you made some reference to the construction 
number, and you talked about the severe cold. I am aware of 
this since people keep citing the number that northern 
Minnesota was colder than Mars for a period of time last week.
    [Laughter.]
    And so what was the----
    Chairman Brady. We tweeted that a lot, by the way, just so 
you know.
    Vice Chair Klobuchar. Oh, I see Representative Duffy. That 
was probably true of northern Wisconsin, as we know from the 
Green Bay Packers game, but I won't go into that.
    So could you talk about that construction number and how 
the cold could have affected it?
    Commissioner Groshen. Right. So over the year we have added 
122,000 jobs in construction. And the average--let me take a 
quick look here--okay, but this particular month most of the 
decline was in nonresidential specialty trade. And when we 
looked into this further, we found that most of these declines 
were concentrated in the Northeast and the Midwest, and those 
were the areas that had lower temperatures than normal over the 
past month.
    Vice Chair Klobuchar. But overall there's been 122,000 jobs 
added in construction?
    Commissioner Groshen. Yes.
    Vice Chair Klobuchar. When you mention the regional issues, 
I remember in the past that at these hearings we've discussed 
that. Do you see any regional trends overall, not just 
construction, with the numbers for 2013?
    Commissioner Groshen. I'm not sure.
    Vice Chair Klobuchar. You can get back to me with that in 
writing.
    Commissioner Groshen. Yes, I'm going to let Tom look this 
up for me.
    [The response from Commissioner Groshen to Senator 
Klobuchar appears in the Submissions for the Record on page 
27.]
    Vice Chair Klobuchar. All right, and how about Veterans 
unemployment? Do we know where that is?
    Commissioner Groshen. Yes. Okay, Gulf War Era II Veterans 
had an unemployment rate of 7.3 percent in December. And this 
is down from 10.8 percent a year earlier. In December 2013, 
there were 2.9 million Gulf War Era II Veterans, and they 
served anywhere in the world since September 2001.
    In December 2013, the unemployment rate for Veterans aged 
18 to 24 was 15.6 percent, which is little different because 
these sample sizes are so small. This is a little different 
from the 11.4 percent unemployment rate for non-Veterans of 
that age.
    Veterans overall make up about 4.6 percent of unemployed 
persons as of December.
    Vice Chair Klobuchar. Okay. I do remember. We have been 
working hard in various ways on this issue because of the fact 
that for awhile we were having extraordinarily high 
unemployment rates with Veterans, and I know we have seen some 
improvement.
    Commissioner Groshen. Okay, so let me get back to the 
regional question. Looking at the November numbers, which is 
the latest for which we have unemployment rates, the states 
with the highest unemployment rates, seasonally adjusted, are 
Nevada at 9 percent; Rhode Island at 9 percent; Michigan at 8.8 
percent; Illinois at 8.7 percent. And the other ones were kind 
of in that rate: District of Columbia, California, Mississippi, 
Kentucky, Tennessee, Arizona, New Jersey, they top out, the top 
group, at 7.8 percent.
    The states with the lowest unemployment rates are North and 
South Dakota at 2.6 percent and 3.6 percent, respectively; 
Nebraska at 3.7 percent; Utah at 4.3 percent; Hawaii, Iowa, 
Vermont, Wyoming, all at 4.4 percent. Here comes Minnesota at 
4.6 percent. And then Kansas and New Hampshire at 5.1 percent.
    Vice Chair Klobuchar. All right, I am not going to go into 
an analysis of that because it does not seem to be in a 
particular region, but I think it does have something to do 
with what industries are in those states, or what type of 
employment are in those states. And that is something that you 
have mentioned by what you are seeing with growth in certain 
areas and not growth in others.
    Commissioner Groshen. Also the aftermath of the housing 
crisis.
    Vice Chair Klobuchar. Exactly. And as I have pointed out, 
we have seen some pretty dramatic improvements in just the past 
year in that area.
    So I appreciate it. Thank you, very much.
    Commissioner Groshen. You're welcome.
    Chairman Brady. Thank you.
    Representative Hanna.
    Representative Hanna. Thank you. Thank you for being here.
    Commissioner, the labor participation rate is pretty well 
at an historic low. And if we took that into consideration 
based on the Bureau of Labor Statistics, the actual 
unemployment rate would be closer to someplace between 10 and 
11, closer to 11 percent.
    I want to talk about that in the context of the jobs that 
you have said have been created: food, merchandise, retail, 
wholesale, service-oriented jobs, and relate that back to what 
Senator Klobuchar talked about, which is something that is 
generally referred to as a skills gap.
    Do you have an idea of what that looks like in the real 
world? We talk about our lack of capacity to provide people to 
the employment that is available that are higher tech, higher, 
more technologically oriented jobs, and what that means, and 
what we should be doing differently than we are.
    Chairman Brady. If you could hit the microphone, please?
    Commissioner Groshen. Sorry. You are getting perilously--
you are getting really into the realm of policy right here, and 
here I want to remind you that the BLS and other statistical 
agencies don't engage in policy analysis. With all due respect, 
that's your job.
    Representative Hanna. Right.
    Commissioner Groshen. We, um, in particular we don't study 
and make determinations about whether policies are achieving 
their goals, or propose policies to achieve those goals, 
because such work could raise questions about our neutrality 
and our impartiality.
    Chairman Brady. Commissioner, if I could stop you there, I 
may have misheard Representative Hanna's question, but I think 
it was: How does the growth that you're seeing in certain of 
these significant industries tie into the labor participation 
rate, which is, we've all agreed, is at a very low rate.
    Commissioner Groshen. It's not obvious what connection 
there is between laborforce participation and where growth is 
occurring. I don't think I have an answer for that.
    Representative Hanna. So clearly there's an increasing 
number of people dropping out of the workforce, and I accept 
your notion that that's not necessarily where you're going with 
the Bureau of Labor Statistics. But as an economist you must 
have an opinion about that. Would you like to talk about that? 
Maybe not?
    Commissioner Groshen. Well, so I have to, you know, right 
now my job is as Commissioner and I really think it is most 
important for me to uphold the principles and practices of 
statistical agencies.
    But I can talk a little bit about where growth has been 
occurring, and what we've seen in terms of industry wage growth 
is that by and--much of the growth when you divide it up by 
broad industries, much of the wage growth has been in the lower 
wage industries.
    When you divide it up by occupations, which is a different 
kind of way to divide up job growth, there you see growth in 
high-wage--more growth in high-wage occupations and low-wage 
occupations than you see in the middle of the distribution.
    Representative Hanna. Thank you for that. I yield back.
    Chairman Brady. Commissioner, can I ask one question, 
because again I want to be clear. In your testimony you said 
the employment rate, or labor participation rate was 
principally due not to people dropping out but people leaving 
jobs. And Mr. Hanna's question was----
    Commissioner Groshen. Oh, okay. Yes, I may have 
misunderstood.
    Chairman Brady [continuing]. You know, in those growth 
industries, clearly there probably is a relationship between 
which industries you are seeing contributing to the labor 
participation rate. I think that is what he's trying to get to; 
not a policy issue, more of an insight into this.
    Commissioner Groshen. Okay, so we can look into that for 
you. That is something that we see. We do track flows, so I 
think we can do that.
    [The response from Commissioner Groshen to Representative 
Hanna appears in the Submissions for the Record on page 29.]
    Chairman Brady. Great. Representative Delaney.
    Representative Delaney. Thank you, Mr. Chairman. And, 
Commissioner, welcome.
    Commissioner Groshen. Thank you.
    Representative Delaney. And I want to tie my comments into 
some of the comments my friend, Mr. Hanna, just made.
    Could you expand upon this disaggregation of the employment 
statistics around low-, middle-, and high-skilled workers? What 
trends that we've observed in the last year, and perhaps in the 
last several years, with respect to those categories?
    Commissioner Groshen. All right, let's see what I'm going 
to look at. I'll take a quick look by education, yes. I'm going 
to look at--we're taking a look at what's happening to 
unemployment rates by education.
    Representative Delaney. Sure.
    Commissioner Groshen. Okay? We have seen declines in 
unemployment rates by education for all of the categories: for 
less-than-high school, for high school graduates, for some 
college and associate degrees. They have all declined.
    The largest decline has been for less-than-a-high school 
diploma, and that is partly a factor because it increased also 
the most during the recession.
    Representative Delaney. But that is getting into employment 
attainment based on educational attainment and the correlation 
there. I am more getting at the growth in jobs based on the 
skill profile of the jobs.
    Commissioner Groshen. Uh-huh.
    Representative Delaney. So you made the observation that we 
have seen growth in high-skilled jobs----
    Commissioner Groshen. Um-hmm.
    Representative Delaney [continuing]. And low-skill jobs----
    Commissioner Groshen. Yes.
    Representative Delaney [continuing]. And a lack of growth 
in these middle-skill jobs, which implies a barbelling of our 
economy, which is something that I have tried to be very 
focused on in the last year or two because I think it reflects 
a broader trend about how highly specialized our economy is 
becoming and the implications of that.
    But do you have any data to show the materiality of the 
growth of high- versus low- as compared to middle-skill jobs?
    Commissioner Groshen. So I don't have a single measure of 
skill, but I can tell you which major occupational groups had 
the most wage growth--I'm sorry, most employment growth.
    So in the 2012 to 2013 timeframe, we added 669,000 jobs in 
management, professional, and related occupations.
    Representative Delaney. And that's the numerator. What's 
the denominator of jobs in those areas?
    Commissioner Groshen. Uh, this is not a--oh, I'm sorry. So 
that was a 1.2 percent----
    Representative Delaney. Growth.
    Commissioner Groshen [continuing]. Growth.
    Representative Delaney. Okay, got it.
    Commissioner Groshen. And in natural resource construction 
maintenance occupation, there was 1.8 percent growth. Sales and 
office occupations, 3/10ths of a percent growth. Production, 
transportation, and material moving occupations, a decrease of 
a tenth of a percent. And in service occupations, an increase 
of 1.8 percent.
    Representative Delaney. Got it. Do you broadly categorize 
jobs in these categories of high, middle, or low skilled? Or do 
you not disaggregate the data, generally speaking, that way?
    Commissioner Groshen. Generally, we do not.
    Representative Delaney. Got it.
    Commissioner Groshen. I have, though----
    Representative Delaney. No, I understand, because that is 
somewhat of a subjective or qualitative assessment.
    Commissioner Groshen. Right. And it may be in the bottom 
part of these distributions, or in the top part, yes.
    Representative Delaney. Do you observe any--as we've seen 
the rate of growth of health care has slowed significantly over 
the last several years, has that--does that correlate to growth 
of jobs in the health care sector?
    Commissioner Groshen. We are still adding, although not in 
this past month, but generally we've been adding jobs in the 
health care sector. It has just been--the pace has slowed over 
the past year.
    Representative Delaney. So you do see correlations between 
health care expenditures and growth in the health care sector?
    Commissioner Groshen. I haven't done that correlation.
    Representative Delaney. Got it. Okay, thank you.
    Commissioner Groshen. Yes.
    Chairman Brady. Thank you.
    Representative Paulsen.
    Representative Paulsen. Thank you, Mr. Chairman, and thanks 
also for being here today to testify.
    You know, it goes without saying that today's employment 
report has some disappointing news. As you mentioned, it's not 
strongly encouraging. The numbers are well below what the 
country needs to add on a monthly basis--130,000 need to be 
added per month just to keep up with population growth. So I'm 
sure you'd agree we have a long way to go on the road to 
recovery.
    We are still well over a million jobs short of where we 
were in December of 2007 at the start of the last Recession, 
and labor force participation is still really, really low, just 
almost dropping 350,000 last month alone.
    Let me just turn to something that many of us refer to as 
the jobs gap, the difference between the average employment 
growth following a recession and the more anemic employment 
growth that has followed the most recent recession.
    Four-and-a-half years after the Recession ended, there are 
still fewer payroll jobs than pre-Recession. So by various 
measures there is a huge jobs gap. The Brookings Institution, 
for example, estimates that it is as high as 8 million jobs.
    Has the BLS done an estimate at all of that jobs gap, of 
those type of numbers?
    Commissioner Groshen. We have made a comparison to where we 
were when the Recession started, but we generally don't do the 
kind of forecasting that would be required about what job 
growth would have been in the absence of the Recession. That's 
not really within our skill set.
    Representative Paulsen. Okay. Chairman Brady mentioned in 
his opening statement that when the stimulus bill was passed--
and that was controversial for many reasons when it was pushed 
through--the Administration had said at this point we would be 
at about a 5 percent unemployment rate, which we're not 
anywhere near. At the average rate of job creation during 2013, 
how much longer would it take for unemployment, for the rate to 
reach 5 percent? How long would it take?
    Commissioner Groshen. I have not done that calculation. I 
know it will take about seven months for us to get back to the 
total payroll, where we were, total payrolls where we were 
before.
    Representative Paulsen. But there will be a longer period 
of time to get to that 5 percent level?
    Commissioner Groshen. I mean, we can estimate that. We can 
straight-line that for you.
    [The response from Commissioner Groshen to Representative 
Paulsen appears in the Submissions for the Record on page 31.]
    Representative Paulsen. And let me turn a little bit to 
part-time, because part-time employment and full-time 
employment have been something else discussed with some 
concerns. I would like to ask some questions about that.
    Part-time employment for economic reasons is a measure, 
some would say, of weakness in the labor market. As an 
economist, would you agree that part-time employment could be 
viewed as a weakness in the labor market?
    Commissioner Groshen. Well generally speaking, during 
recessions you do see an increase in the number of people who 
are part-time, for economic reasons. These people are not 
getting as many hours as they would like, or that they would 
prefer to work full-time, and that's why they are in that 
category.
    So either they are not getting as many hours, or they have 
taken a part-time job because they have not found a full-time 
job.
    Representative Paulsen. And we have been post-Recession now 
for awhile, technically, right, on the technical side?
    Commissioner Groshen. Um-hmm.
    Representative Paulsen. So a lot of employers are unsure 
they need workers long-term, or there are regulatory 
disincentives for employers to hire full-time workers. Is it 
both of those factors, would you say? Or are there other 
factors as well that would contribute to that measure?
    Commissioner Groshen. Well, so let me make a distinction. 
Actually, the number of part-time workers as a percent of the 
total employed has not changed very much of late. That has been 
fairly constant.
    Representative Paulsen. Okay.
    Commissioner Groshen. So, and so we have had a decline in 
the part-time for economic reasons, although it is still 
historically high.
    Representative Paulsen. One of the things it will be 
interesting to watch in the near future is the implementation 
now of the Affordable Care Act, or the President's new health 
care law. I have spoken with several employers in Minnesota, 
for example, that are now concerned about being forced to scale 
back full-time workers into part-time jobs because of the 
Affordable Care Act.
    And one restaurateur--and restaurants normally have part-
time workers--there is one restaurateur I spoke with who has 
530-some employees, and 41 percent of those workers are full-
time. But now he has essentially looked at moving all of those 
full-time workers into 29 hours, into part-time status.
    And so there are consequences, obviously, of moving good 
full-time jobs into part-time jobs. Along those lines what role 
do mandated employer benefits play in employer decisions to 
hire workers part-time as opposed to full time?
    Commissioner Groshen. Our data wouldn't allow us to answer 
that question.
    Representative Paulsen. It wouldn't? Okay.
    Commissioner Groshen. It would be a policy research 
question.
    Representative Paulsen. Okay. Good. I think we are going to 
be hearing more about that, Mr. Chairman, so I was just 
curious. I yield back.
    Chairman Brady. Thank you, sir. Representative Sanchez.
    Representative Sanchez. Thank you, Mr. Chairman.
    I want to say something before I ask our panel a question. 
Thank you, Mr. Chairman, for this morning, actually trying to 
delve into these numbers instead of, you know, doing real 
partisan bickering and everything, because I think we are all 
at that point where we want to try to understand what is going 
on. So I appreciate that the majority of the Members who have 
been talking this morning have been really trying to stick to 
what the picture looks like in hopes to move and to try and do 
the policy, as you said, Commissioner, that we are supposed to 
do.
    I want to go back to something that Mr. Delaney asked about 
and this whole issue of barbelling, or the fact that you said 
that employment has occurred at the higher, at least higher 
educational level, and lower educational level; and that that 
middle portion I guess we're trying to figure out what types of 
jobs would those be that aren't growing, and if you have some 
indication of that.
    And, if you are a--because you have it by education and not 
necessarily skill set, which of course when we're looking at it 
we're trying to figure out skill set--if you are an employer 
trying to figure out skill sets, not whether somebody went to 
college or not, so my question to you is: When we see these 
young people coming out of university and they have a college 
degree but they may not have a set, a skill set because they 
maybe don't have the work experience, would those students fall 
into that barbell middle portion where hiring is not happening? 
Do you have any statistics on that?
    Commissioner Groshen. Yeah, let me see. Well, the middle, 
the middle area of these very large occupational groups that I 
am talking about are sales and office occupations where we 
added only 94,000 jobs.
    Representative Sanchez. So would that be like entry sales 
person, entry, like, you know, cold calling, entry 
receptionist, that type of thing?
    Commissioner Groshen. Administrative work, it could be. 
Sure. And then the other areas are production, transportation, 
and material moving occupations, which usually you would not 
associate with a college degree, but actually I am sure some of 
them probably will have.
    Representative Sanchez. Well, logistics maybe, or something 
of the sort. I mean, when you're trying to get your foot in, if 
you don't have a lot of work experience, you probably start at 
the bottom of the rung.
    Commissioner Groshen. Um-hmm.
    Representative Sanchez. My next question for you is: as 
you've seen over the last month or two, I am trying to feel--I 
am trying to figure out if companies--because I look at 
companies' balance sheets, the ones that we can see, and we see 
two things happening. And we've seen it for awhile now, years 
now, of capital accumulation, cash on hand, growth, as well as 
buy-back of stock. And this is where at least the public 
companies, those that I can see, are using their cash.
    So do you think that the shutdown we had is reflective in 
any way of these numbers? I know these are policy issues, but 
did that have--do you think that that had anything--and I am 
trying to figure out how we get companies to begin to spend 
cash. I mean, it's a risk. Our Orange County Register, my 
hometown newspaper for the County of Orange where I represent, 
and they are creating journalist jobs. They've hired over 400 
new people in the newspaper business, which supposedly is 
totally contrarian to what we've seen in the news business 
these days.
    So do you think that when we do certain things that that's 
maybe what is holding people, companies back?
    Commissioner Groshen. Let me answer something a little 
related, which is that a characteristic of the market where we 
are now is that we have seen a decline in job destruction rates 
back down to essentially pre-Recession levels.
    So one area in which our labor market has improved is that 
our job destruction rates are now more typical of what you 
would see in an expansion. So what has lagged for us has been 
job creation. And you can see this in new firms, both in the 
number of new firms, and in the number of jobs created by new 
firms. And you can see it also in expansions by firms, and this 
is from our business employment dynamics data.
    So that corroborates some of perhaps what you are picking 
up. We did look at the effect--we have looked at the effect of 
the shutdown in a very direct way, and we saw an increase in 
temporary layoffs associated with the shutdown, and then a 
decrease after that.
    So we did not see numbers that were suggestive of a lot of 
very quick multiplier effects in the payroll data from the 
shutdown. We think maybe there was some displacement rather 
than actually multiplier effects.
    Representative Sanchez. Thank you, Commissioner. Thank you, 
Mr. Chairman.
    Chairman Brady. Thank you.
    Representative Duffy.
    Representative Duffy. Thank you, Mr. Chairman, and 
Commissioner thank you for being here today.
    I just want to go back to I think some things that Mr. 
Paulsen brought up. You would agree that with population growth 
we have to see about 130,000 new jobs created every month just 
to maintain the status quo? Is that right?
    Commissioner Groshen. You know, it's not a very precise 
number but, you know, there are numbers kind of along those 
lines, yes.
    Representative Duffy. Am I hitting the middle point there? 
Is that a number that is a range, around 130,000?
    Commissioner Groshen. Yes.
    Representative Duffy. Am I off?
    Commissioner Groshen. No, Tom agrees. Therefore, it's true.
    [Laughter.]
    Representative Duffy. Thank you, Tom.
    And this month we created only 74,000 new jobs, right?
    Commissioner Groshen. Um-hmm.
    Representative Duffy. So if you look at just to maintain 
our employment rate it has to be 130,000, but this month we are 
at 74,000. And I think oftentimes America will hear the 
unemployment rate going from 7 percent down to 6.7 percent and 
they would view that as the country going in the right 
direction in regard to job creation and economic growth, but 
would you agree that actually the reduction in the unemployment 
rate is not an indicator of strong job growth like many 
Americans may think?
    Commissioner Groshen. Um, so I am going to unpack things 
just a little bit.
    Representative Duffy. Thank you.
    Commissioner Groshen. So the decline in the unemployment 
rate certainly this month we think is somewhere around two-
thirds due to the decline in laborforce participation, and 
about a third to job creation.
    Generally speaking, though, the employment to population 
ratio has essentially stayed about the same since late 2009. So 
that is problematic. But we have two different forces acting on 
employment to population.
    One is demographic changes that would tend to depress 
participation. Just as Baby Boomers like myself age, our 
population is generally getting older and we are getting into 
times--we are more heavily weighted towards parts of the 
population that participate less.
    So we have to increase employment to population. We not 
only have--we need to compensate for this downward pressure. So 
that is one effect.
    The other effect is the recovery from the Recession, and 
that would require creation of many more jobs.
    Representative Duffy. This may be going back to the 
question for Tom earlier----
    Commissioner Groshen. Yes, employment.
    Representative Duffy. So since pre-2009 traditionally we 
needed 130,000 jobs per month to maintain employment with 
population growth. Are you saying that this year, and the year 
before, that that is actually not true? It's been static, our 
population growth, so if we actually have a 74,000 dollar--
74,000 job gain, that's actually 74,000--we're moving in the 
right direction? Are you saying that our population growth is 
taking place at 130,000 roughly per month right now?
    Commissioner Groshen. Well, our average monthly job gain 
has been, over this past year has been 182,000. But Tom is 
going to take a stab at this.
    Mr. Nardone. Just in general, what the EP ratio, Employment 
to Population ratio, that being steady would indicate that job 
growth is basically enough to keep track with population 
growth--the growth of the population 16 and over.
    You're not--but obviously it's lower than it was at the 
start of the Recession, so we are not gaining ground in terms 
of increasing the proportion of the population that's employed, 
getting it back to the pre-Recession levels. But we're 
basically keeping track with population growth, is a way to 
look at it.
    Representative Duffy. Okay. I just want to quickly switch 
gears. I think a lot of the disagreement that we find on both 
sides of the aisle over the last several years comes to the 
economy and job growth.
    Do you guys look at statistics and have an analysis on 
whether raising the minimum wage will create more jobs? Or does 
the effect of that create less jobs?
    Commissioner Groshen. This is very much a policy question.
    Representative Duffy. But I'm asking statistically do you 
look at--do you analyze that on the statistics' front?
    Commissioner Groshen. We do not have any statistics that 
would allow us to answer that question.
    Representative Duffy. Okay. I yield back.
    Chairman Brady. Thank you. A vote has been called in the 
House, and so the former Chairman of the Joint Economic 
Committee, Representative Maloney, will be our final 
questioner.
    Representative Maloney. Thank you.
    First of all I want to congratulate you on your 
appointment. You are the fourth woman to head this important 
panel, building on the fine work of Katharine Abraham, whom I 
believe is still on the Council of Economic Advisers. So thank 
you.
    Commissioner Groshen. You're welcome. She actually stepped 
down in I think April.
    Representative Maloney. Well, but in the statistics of the 
Women's Movement, they say more important than the first woman 
appointed is consistent, fine performance of women where it is 
no longer something unexpected. But I believe that you are 
going to be adding to that very important statistic.
    And I think the statistics today are very, very 
encouraging. With the employment increase by 74,000, 
unemployment fell to 6.7 percent, but if you put it into the 
context of the overall economy, private-sector jobs have grown 
for 46 consecutive months, and a total of 8.2 million private-
sector jobs have been created over that period.
    And I believe that in 2013, private-sector employment 
increased by 2.2 million jobs, largely unchanged from the 2.3 
million private-sector jobs added in 2012. So I believe that 
this shows that the economy is steady, it's durable, it's 
improving, and I would also like to note that the private-
sector job growth has been revised upwards generally. In 
October, from 217,000 and in November to 226,000 for an average 
of 177,000 new jobs per month being created.
    And could you elaborate on how these numbers fit into the 
overall economy, and comment on the trend? It looks to me like 
we are trending in the right direction. We are trending with an 
improved economy--not as good as we would like--but could you 
comment in the overall context of the economy and trends in the 
economy?
    Commissioner Groshen. All right. Well, I would say that 
generally speaking what we have been seeing over the past year 
is very steady, modest job growth that has been primarily in 
the services.
    And this has led to improvements by many measures. Yet 
there's still a long ways to go to return to pre-Recession 
conditions.
    Representative Maloney. Well in the report you say that the 
payroll growth was concentrated in wholesale, retail, temporary 
help services added jobs.
    Commissioner Groshen. Um-hmm.
    Representative Maloney. Last night there were very 
disturbing numbers out of New York City, that I have the 
privilege of representing, one of our great retail stores, 
Macy's, laid off 2,500 people. Now this is not the trend in New 
York State where we have added more than 140,000 private-sector 
jobs during the past 12 months. But the progress in the City, 
the unemployment rate has been slower. We are now at 8.5 
percent unemployed to 8.9 percent.
    My question is: Is New York City's experience, how does 
that fit into the broader perspective, or the broader national 
picture? Are other urban areas experiencing higher rates of 
unemployment than the Nation as a whole?
    Commissioner Groshen. Well the Nation is a combination of 
many different regions and many different cities within those 
regions. So there's always quite a variety of experiences 
because cities are affected both by their long-term secular 
trends, as well as by the cycle that they're under, that 
they're within.
    Representative Maloney. Now in joblessness recovery, is it 
faster usually in rural and suburban parts of the country over 
urban areas? Is there any data on that?
    Commissioner Groshen. (Nods in the negative.)
    Representative Maloney. No? Okay----
    Commissioner Groshen. I think it varies, yes.
    Representative Maloney. I really want to publicly 
congratulate Senator Klobuchar on the Unemployment Insurance 
Report that she did. And I think our Report also shows that 
there is a need for this type of support. Because of the drop, 
you said in your testimony the decline was driven primarily by 
a drop in the laborforce participation rate. And it seems that 
keeping people hoping to find a job, working to find a job, 
having that support system while they try to become part of the 
economy, and also that she noted in her report: this is a 
passthrough.
    Anyone who is unemployed is obviously going to put that 
money right back in to the economy and help to create other 
jobs, and to help the hope of the country in this very 
difficult time moving forward.
    I do want to note that manufacturing employment rose by 
9,000. I was thrilled to see the auto industry added jobs. As 
one that supported the restructuring of the auto industry, to 
see that it has added over 8,000 jobs. But I did note that 
women have been losing jobs in manufacturing, while men have 
gained them.
    Do you understand? That I noticed in the Report, and I 
guess basically the question is: Are sectors of the economy 
where men are more heavily represented adding more jobs than 
other sectors where women traditionally have a larger presence?
    Your numbers showed that there's been a more rapid drop in 
the unemployment rate for men.
    What explains that rapid drop in the unemployment rate for 
men? In the beginning, during the Recession men faced a 
significantly higher unemployment rate than women, and 
unemployment for men peaked at 11 percent in October of 2009, 
while the unemployment rate for women never exceeded 9 percent.
    Chairman Brady. Commissioner, this is a very important 
question. We have run out of time. Could you briefly answer, 
but provide a written response to Representative Maloney?
    Representative Maloney. Thank you, Mr. Chairman.
    Commissioner Groshen. Right. We certainly can.
    Commissioner Groshen. The basic answer we found is that, is 
that there's no very strong pattern of job growth being 
concentrated in male- or female-dominated industries. So it 
doesn't seem to be a simple industry mix story.
    Chairman Brady. Commissioner, thank you for your 
professional presentation. This was a cakewalk, and we look 
forward to having you back.
    Tom, best of luck in retirement.
    The hearing is adjourned.
    (Whereupon, at 10:35 a.m., Friday, January 10, 2014, the 
hearing was adjourned.)
                       SUBMISSIONS FOR THE RECORD

Prepared Statement of Hon. Kevin Brady, Chair, Joint Economic Committee
    Vice Chair Klobuchar, Members of the Committee, and Commissioner 
Groshen, good morning and welcome to the New Year.
    This is Commissioner Groshen's first appearance before the Joint 
Economic Committee. On behalf of the millions of Americans who cannot 
yet find jobs, we hope that you can bring us better news in the future.
    I would like to recognize Tom Nardone, who is retiring from the 
Bureau of Labor Statistics after 37 years of service. He has been ``Mr. 
Numbers'' for the Commissioner and this Committee over the last several 
years. Tom, we thank you for your dedicated service, and wish you the 
very best in your future endeavors.
    Payroll job growth was incredibly weak last month. December saw a 
gain of only 87,000 private-sector jobs and 74,000 nonfarm jobs.
    The unemployment rate fell by 0.3 percentage points to 6.7%. 
However, this drop was largely due to falling labor force 
participation. More than \1/2\ million Americans left the labor force 
in December. Consequently, the labor force participation rate dropped 
to 62.8%, tying a 36-year low.
    While it sounds impressive to boast that the U.S. economy added 8.2 
million private-sector jobs over the past 46 months, economic growth in 
an average recovery during the past half century has been 50% larger 
than in the Obama recovery. As a result of this growth gap, America 
today is missing a whopping 4.5 million jobs along Main Street--and 
that's not acceptable.
    Consider this: the best monthly private sector jobs report of the 
Obama recovery is lower than the equivalent of the average private jobs 
report of the Reagan recovery. In other words, not a single month of 
the current recovery matches even the equivalent of an average month of 
the Reagan recovery. That's disappointing. We've got to do better.
    We should be encouraged that the unemployment rate has declined 
from its peak of 10.0% in October 2009 to 6.7% today. However, that is 
nowhere near the 5% level the White House promised the American people 
when the controversial $800 billion stimulus was rushed through 
Congress on a party-line vote.
    Unfortunately, the decline in the unemployment rate is largely due 
to falling labor force participation. If the labor force participation 
rate had not declined since President Obama took office, the 
unemployment rate would be nearly 11%. Another disappointing jobs 
indicator: a smaller percentage of Americans are employed today than 
when the recession ended over four and a half years ago.
    The American people are deeply dissatisfied with the President's 
leadership on the economy. We need solutions that get Washington out of 
the way so Main Street businesses can start hiring with confidence 
again.
    Raising the minimum wage and forcing small businesses to pay nearly 
$5,000 more per worker won't increase hiring. Washington mandating the 
equality of income won't increase hiring. Extending emergency 
unemployment programs won't increase hiring because what the long-term 
unemployed really need are new jobs.
    The emergency unemployment program is designed for extraordinary 
circumstances, when America's unemployment rate is high and rising. As 
the White House reminds us, the unemployment rate has declined in all 
50 states and is at the lowest since 2008.
    Why are the President and the Senate turning their backs on job 
creation? Why doesn't the Senate pick up and pass and the President 
sign into law any of the dozens of jobs bills the House has already 
approved, including the Keystone XL pipeline, which would create 
thousands of well-paying middle-class jobs.
    It's not helpful, either, that the White House continues to delay 
bipartisan unemployment reforms the President signed into law two years 
ago to make it easier for states to match local workers with local jobs 
and conduct drug testing for applicants seeking jobs that require such 
tests.
    We all know it's an election year, and some in Washington are 
trying to change the conversation from the disappointing economy and 
the bungled roll-out of the troubled Affordable Care Act. I just hope 
my colleagues remember that the measure of America's compassion is not 
how long we provide unemployment benefits, but how soon we get people 
into good-paying jobs. That should be Washington's focus.
    Commissioner Groshen, welcome again, and I look forward to your 
testimony.
                               __________
Statement of Erica L. Groshen, 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.
    The unemployment rate declined from 7.0 to 6.7 percent in December, 
and nonfarm payroll employment edged up (+74,000). Monthly job gains 
averaged 182,000 in 2013, about the same as in 2012. In December, 
employment rose in retail trade and wholesale trade but fell in the 
information industry.
    Incorporating the revisions for October and November, which 
increased employment by 38,000 on net, monthly job gains have averaged 
172,000 over the past 3 months.
    Retail trade added 55,000 jobs in December. Job gains occurred in 
food and beverage stores (+12,000), clothing stores (+12,000), general 
merchandise stores (+8,000), and motor vehicle and parts dealers 
(+7,000). Retail trade employment increased by an average of 32,000 per 
month in 2013.
    Wholesale trade employment rose by 15,000 in December. Over the 
past year, wholesale trade added an average of 8,000 jobs per month.
    Employment in professional and business services continued to trend 
up in December (+19,000). This industry has added 637,000 jobs over the 
past 12 months. Within this industry, temporary help services added 
40,000 jobs in December. In contrast, accounting and bookkeeping 
services lost 25,000 jobs over the month.
    Manufacturing employment continued to trend up in December 
(+9,000). Manufacturing added 77,000 jobs in 2013, compared with an 
increase of 154,000 jobs in 2012.
    Employment in the information industry decreased by 12,000 in 
December, reflecting a decline in motion picture and sound recording 
(-14,000). Employment in the motion picture industry can be volatile 
from month to month. Over the year, employment in information has shown 
little net change.
    Construction employment edged down in December (-16,000). However, 
in 2013, the industry added an average of 10,000 jobs per month. 
Employment in nonresidential specialty trade contractors declined by 
13,000 in December, possibly reflecting unusually cold weather in parts 
of the country.
    Health care employment changed little in December (-6,000). Over 
the past year, job growth in this industry slowed to an average of 
17,000 per month, compared with an average monthly gain of 27,000 in 
2012.
    In December, employment in most other major industries changed 
little.
    Average hourly earnings of all employees on private nonfarm 
payrolls edged up by 2 cents in December. Over the past 12 months, 
average hourly earnings have risen by 42 cents, or 1.8 percent. From 
November 2012 to November 2013, the Consumer Price Index for All Urban 
Consumers (CPI-U) rose by 1.2 percent.
    Turning now to our survey of households, the unemployment rate 
decreased by 0.3 percentage point in December to 6.7 percent. Over the 
year, the unemployment rate declined by 1.2 percentage points, and the 
number of unemployed persons fell by 1.9 million. In December, there 
were 3.9 million unemployed persons who had been jobless for 27 weeks 
or more, little changed over the month but down by 894,000 over the 
past year.
    The labor force participation rate declined to 62.8 percent in 
December. Over the year, this rate declined by 0.8 percentage point. 
The employment-population ratio, at 58.6 percent, was unchanged in 
December and over the past 12 months. In fact, this measure has held at 
or near this level since late 2009.
    Among those neither working nor looking for work in December, 2.4 
million were classified as marginally attached to the labor force, 
little changed from a year earlier. These individuals wanted a job, 
were available for work, and had looked for a job within the last 12 
months. The number of discouraged workers, a subset of the marginally 
attached who believed that no jobs were available for them, was 917,000 
in December, down by 151,000 from a year earlier.
    I would like to note that seasonal adjustment factors for the 
household survey are updated each year with the release of the December 
data. Seasonally adjusted estimates going back 5 years (to January 
2009) were subject to revision.
    In summary, the unemployment rate declined from 7.0 to 6.7 percent 
in December, and nonfarm payroll employment edged up (+74,000).
    My colleagues and I now would be glad to answer your questions.
                               __________
                        Questions for the Record
    Senior Senate Republican Dan Coats
    Hearing on ``The Employment Situation: December 2013''
    The Honorable Erica L. Groshen, Commissioner, Bureau of Labor 
Statistics
    Friday, January 10, 2014
    Coats staff contact: [email protected]

      EPA's fossil fuel restrictions have greatly increased the 
cost of power to Hoosiers. How many Hoosier jobs may be lost as a 
result of increased power costs?
      What is the economic multiplier of a lost Hoosier job?
      What is the rate of college tuition inflation in Indiana 
and how does this compare to other states?

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