FOR DELIVERY: 9:30 A.M., E.S.T.
                         FRIDAY, JANUARY 4, 2002

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 Standard Time.


                        Statement of

                          Lois Orr
                     Acting Commissioner
                 Bureau of Labor Statistics

                   Friday, January 4, 2002



     Good morning.  I appreciate this opportunity to comment
on the December employment and unemployment statistics that
we released this morning.

     Nonfarm payroll employment fell by 124,000 in December,
following job losses that averaged about 400,000 a month in
October and November.  Since the recession began in March,
payroll employment has fallen by 1.4 million.  The December
decline reflected continued losses in the private sector
(-187,000), particularly manufacturing, retail trade, air
transportation, and help supply. These losses were partially
offset by employment gains in several services industries
and in government.  The unemployment rate, at 5.8 percent in
December, continued its upward trend and has increased by
1.9 percentage points since October 2000.

     Looking in more detail at the December data from our
survey of employers, job losses continued in manufacturing
(-133,000).  The largest drops occurred in electronic
equipment, industrial machinery, and transportation
equipment, but almost every manufacturing industry
contributed to the employment decline.  In contrast to the
negative employment news, the factory workweek rose by 0.4
hour to 40.7 hours and factory overtime rose 0.2 hour to 3.9
hours.

     During 2001, manufacturing shed 1.3 million jobs, or
about 7 percent of its workforce.   A number of
manufacturing industries lost more than 1 in 10 of their
workers during the year, namely furniture, primary metals,
industrial machinery, electrical equipment, textiles,
apparel, and leather.

     In December, a large decline in retail trade employment
after seasonal adjustment (-77,000) was led by general
merchandise stores and miscellaneous retail establishments
(such as toy stores and jewelry stores), both of which fell
short of their typical holiday hiring.  These declines were
tempered somewhat by job gains in auto dealerships and
furniture and home furnishing stores.  During 2001, retail
trade added 200,000 jobs by July, but losses since then have
left employment down by 73,000 over the year.

     Transportation and public utilities employment fell by
36,000 in December.  Air transportation, which continues to
be affected by weakened demand for business and leisure
travel and parcel delivery, lost 26,000 jobs.  There were
also sizable losses in communications and public utilities.
Employment in finance, insurance, and real estate was little
changed as continued gains in mortgage brokerages nearly
offset declines in security brokerages and real estate.
Wholesale trade employment continued to decline (-10,000),
although at a slower pace than in the prior 3 months.

     Job growth in services and government partially offset
the many declines in December.  Services employment grew by
72,000 following losses totaling 248,000 in the prior 2
months.  Health services (especially hospitals and home
health care) and private education had the largest
employment gains in December.  Over the year, employment in
these industries rose by 304,000 and 112,000, respectively.
In contrast, help supply had another large job loss
(-55,000) in December.  This industry, which supplies
workers to other industries, has shed 688,000 jobs since
September 2000, or 19 percent of its employment.

     Besides services, the only other large upward movement
in December came from government, in which job gains from
the various components totaled 63,000.  In state and local
governments, employment in the education and non-education
components increased; both state and local education had
quite strong growth in 2001 compared with 2000.

     Construction employment was little changed in December.
While the number of construction jobs generally declines
substantially during recessions, the industry has shown
relatively little job loss since the recession began in
March.

     Average hourly earnings of production or nonsupervisory
workers in the private sector rose 7 cents over the month to
$14.61 in December.  This followed another gain of 7 cents
in November and 2 cents in October.  Hourly earnings
increased by 4.1 percent in 2001, compared with 4.3 percent
in 2000.

     Looking at some of the measures obtained from the
survey of households, the unemployment rate edged up to 5.8
percent in December from 5.6 percent in November, as
revised.  The jobless rate for adult women rose in December,
while the rates for other major worker groups were little
changed.  The number of part-time workers who would have
preferred full-time work (4.3 million) edged up in December
and rose by 1.1 million during 2001.

     Finally from the household data, the proportion of the
population with a job edged down to 63.0 percent.  This
ratio was 64.5 percent in December 2000.

     Before concluding, I would like to note that this is
the month in which we update our seasonal adjustment factors
and make revisions to previously published seasonally
adjusted household survey estimates going back 5 years.  All
of the seasonally adjusted household data in today’s news
release reflect these revisions.

     To summarize, the jobless rate continued to trend
upward in December and the number of workers on nonfarm
payrolls continued to shrink.  Manufacturing and help supply
services continued to be especially hard hit.  On the other
hand, employment continued to increase in health services,
social services, mortgage banking, and public and private
education.



     My colleagues and I now would be glad to answer your
questions.

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