FOR DELIVERY: 9:30 A.M., E.D.T.
                            FRIDAY, JUNE 6, 1997


Advance copies of this statement are made available to the
press under lock-up conditions with the explicit
understanding that the data are embargoed until 8:30 a.m.
Eastern Daylight Time.

Statement of

Katharine G. Abraham
Commissioner
Bureau of Labor Statistics

before the

Joint Economic Committee

UNITED STATES CONGRESS

Friday, June 6, 1997




Mr. Chairman and Members of the Committee:

I appreciate this opportunity to comment on the labor
market data released this morning.
Nonfarm payroll employment rose in May, and the
unemployment rate was about unchanged following a drop in
April.  At 4.8 percent, the jobless rate is half a
percentage point lower than at the end of 1996.  Payroll
employment increased by 138,000 in May and has averaged
229,000 per month thus far this year.
Employment in the services industry rose by 125,000.
Amusement and recreation services added 32,000 jobs, after
showing little change in the prior 2 months.  Hotel
employment increased by 13,000 following a gain of similar
magnitude in April.  Job growth also continued in health
services, computer and data processing services, and
engineering and management services.  Help supply services
lost jobs for the second straight month, with a combined
loss of over the two months of 55,000.
In construction, employment rose by 23,000 in May,
following a decline in April.  The uneven month-to-month
movements in construction employment this winter and spring
have reflected the unusual weather conditions over the
period.  Taking a slightly longer-term perspective, the
number of construction jobs increased by 101,000 during the
first five months of 1997, somewhat less than the gain for
the same period in 1996.
In May, employment growth continued in trucking, air
transportation, finance, real estate, and the durable goods
component of wholesale trade.  In retail trade, employment
held steady following a substantial increase in April.
The number of factory jobs was about unchanged for the
second month in a row.  Employment continued to increase in
electronic components, industrial machinery, and aircraft
manufacturing; these gains, however, were offset by
continued declines in apparel and an over-the-month drop in
food products manufacturing.  Auto manufacturing employment
was down in May due to a strike.  Manufacturing hours and
overtime edged down in May, but at 42.0 and 4.8 hours,
respectively, both measures remain near historically high
levels.
Average hourly earnings increased 4 cents in May
following a gain of 1 cent in April.  Over the year, hourly
earnings rose 3.8 percent.  The over-the-year gains during
the first five months of this year have been running higher
than during the same period in 1996.
In accordance with standard practice, these payroll
survey figures reflect the incorporation of our regularly
scheduled annual benchmark adjustments.  Each year, we
adjust our sample-based survey estimates to full universe
counts of employment, derived principally from the
administrative records of the state unemployment insurance
tax system.  There is no benchmark source for the hours and
earnings data, but these series may be affected by the
benchmark process because of changes in the industry
employment weights and the introduction of new seasonal
factors.
The impact of the revisions on employment in the March
1996 reference month is a very small upward adjustment of
57,000, or less than one-tenth of one percent of the total
nonfarm employment level.  Estimates of payroll employment
for the post-benchmark period, April 1996 forward, also
have been revised to incorporate the new benchmark levels
as well as revised seasonal adjustment and bias factors;
the net effects of these post-benchmark revisions also were
small.
Turning to the data from our survey of households, the
unemployment rate was 4.8 percent in May, a level last
reached in 1973.  Over the month, the jobless rate
decreased for adult men; the rates for adults of both sexes
have edged down in recent months.  The number of long-term
unemployed--those unemployed for 27 weeks or more--also has
trended downward since the beginning of the year.
Since the end of 1995, employment as measured by our
household survey has increased by 4.3 million (after
adjusting for the change in population controls made in
January of this year).  Some analysts have wondered how
such a substantial increase in employment could have
occurred during a period when unemployment already was low.
Even with the current high level of labor force
participation, however, there are more than 66 million
people aged 16 or older who are not working or actively
seeking work.  Although our household survey tries to
measure whether these persons not in the labor force want a
job, changes in labor market conditions may cause people
who previously had expressed no desire to work to seek
employment or to take a job.  For example, a retired person
may have no interest in finding a job until he or she sees
a help wanted sign in a local store and realizes that
conveniently located employment can be readily obtained.
In other words, the size of the available labor force is
not fixed, but rather depends upon individual decisions
based on personal and economic conditions that are
constantly changing.
To summarize, unemployment remained below 5 percent in
May, and payroll employment growth continued, although the
increase for the month was smaller than the average thus
far in 1997.
My colleagues and I now would be glad to respond to
your questions.

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