FOR DELIVERY: 9:30 A.M., E.S.T.
                            FRIDAY, FEBRUARY 2, 2001

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

                    Katharine G. Abraham
                        Commissioner
                 Bureau of Labor Statistics

                  Friday, February 2, 2001




     Good morning.  I appreciate this opportunity to comment
on the highlights of the labor market data we released this
morning.

     The unemployment rate rose to 4.2 percent in January.
Payroll employment increased by 268,000, but this follows a
gain of only 19,000 (as revised) in December and a total of
just 138,000 in the entire fourth quarter of 2000.  Moreover,
to a great extent, January's job gain reflected unusually
large seasonally adjusted increases in just two areas--
construction and the Federal government.  Elsewhere, the
services industry turned in another subpar performance, and
the downward trend in manufacturing employment continued.

     Construction employment rose by 145,000 in January,
after seasonal adjustment.  This more than offset weather-
related employment declines in November and December.  The
weather in those months was unusually severe, resulting in
larger-than-expected seasonal layoffs.  In contrast,
January's weather was relatively mild, and there were far
fewer layoffs than expected, particularly in outside
activities such as masonry, roofing, concrete work, and heavy
construction.  Over the 3 months combined, construction
employment rose by 39,000 a month, on average, well above the
trend for the rest of last year.  We will need to wait for
future months' data to see whether January's large job gain
reflects underlying strength in construction or merely the
problems inherent in seasonally adjusting estimates of
employment for the industry during the winter months.

     In government, Federal employment rose by 37,000, but
that gain resulted from an unusually large increase in postal
employment (after seasonal adjustment).  January is typically
a layoff month at the Postal Service, as workers hired for
the holiday mailing rush are let go.  This holiday season,
however, our survey did not register the typical holiday
buildup in postal employment and consequently did not
register the typical post-holiday layoffs.

     The services industry added 81,000 jobs in January.
Although this is a bigger gain than in any of the prior 3
months, services job growth clearly has dropped off since the
middle of last year.  During the first 6 months of 2000, the
industry added an average of 116,000 jobs a month; average
growth has slowed to 69,000 a month during the last 7 months.
Much of this slowdown is attributable to the help supply
industry.  Since its most recent peak in April, help supply
employment has fallen by 184,000, including a decline of
39,000 in January.  Some of the weakness in this industry may
be tied to the recent downturn in manufacturing.  Although we
do not collect this information on a monthly basis, we know
from periodic surveys that many workers in help supply are
assigned to jobs in manufacturing.

     On the positive side, health services had an above-
average gain in January, with growth concentrated in doctors'
offices and hospitals.  Newly signed legislation increases
Medicare payments that benefit both of these industries.
Other industries showing some strength in January were real
estate and mortgage banking.  The former has benefited from
continued strength in home sales, while the latter has
experienced an upswing in mortgage refinancing.

     The biggest negative in the employment picture is still
manufacturing, which lost 65,000 jobs in January.  This
brings factory job losses since June to about a quarter of a
million.  The factory workweek increased by half an hour in
January, but this is only a partial rebound from the sharp
drop in December, when several severe snowstorms curtailed
manufacturing activity.  Since July of 2000, factory hours
have dropped by 0.8 hour, and factory overtime by half an
hour.  In January, there was an especially large decline
(38,000) in auto manufacturing.  Employment in this industry
is down by 85,000 from its most recent peak in June.  Auto
industry employment has been on a downward trend for several
months.  January's large decline reflects temporary plant
shutdowns to reverse the recent buildup in car inventories
due to declines in auto sales in the last 3 months of 2000.
Auto workers' hours also have declined; the workweek in
January (40.8 hours) was about 3 hours lower than just a few
months ago.

     Average hourly earnings of production or nonsupervisory
workers were unchanged in January after experiencing
accelerated growth in the fourth quarter of 2000.  Over the
year, hourly earnings are up 3.9 percent.

     Some of the weakness that has been evident in our
establishment survey in recent months may have started to
show up in our household survey in January, although I would
caution against reading too much into one month's numbers.
The unemployment rate increased to 4.2 percent, and both the
number of unemployed job losers and the number of newly
unemployed (those unemployed less than 5 weeks) rose.
Obviously, though, January's jobless rate is still very close
to the narrow 3.9 to 4.1 percent band that had prevailed for
over a year.  It also is worth noting that the proportion of
the population with jobs, at 64.5 percent, remains near a
record high.

     In summary, unemployment rose in January.  Payroll
employment increased, but special factors may have led to an
overstatement of the over-the-month job gain in construction
and in government.  Manufacturing employment continued on its
downward trend.



     My colleagues and I now would be glad to answer any
questions you might have.

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