FOR DELIVERY: 9:30 A.M., E.D.T.
                            FRIDAY, AUGUST 3, 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 Daylight Time.

                        Statement of

                    Katharine G. Abraham
                        Commissioner
                 Bureau of Labor Statistics

                         before the

                  Joint Economic Committee

                   UNITED STATES CONGRESS

                   Friday, August 3, 2001





Mr. Chairman and Members of the Committee:

     I would like to thank you for the opportunity to comment
on the labor market data for July released this morning.

     Total nonfarm payroll employment continued to erode in
July, with a net loss of 42,000.  Manufacturing employment
continued its year-long slide, and most other industry
divisions had little or no job growth.  The unemployment rate
remained at 4.5 percent in July and has been essentially
unchanged since April.

     Manufacturing employment declined by 49,000 in July.
During the first 6 months of the year, job losses had
averaged nearly 100,000 a month.  The largest declines in
July continued to be in electrical equipment (-24,000) and
industrial machinery (-21,000).  These two industries, which
produce high-tech products such as computers and
communications equipment, account for about 40 percent of the
632,000 manufacturing jobs lost thus far this year.
Elsewhere in manufacturing, autos, chemicals, and apparel
showed gains in July, following job losses over the April-
June period, although this month's gains may merely reflect
vagaries in the timing of summer plant shutdowns.

     Construction employment was little changed in July, as
growth in nonresidential and heavy construction was offset by
a decline in special trades.  Although many barometers of
construction activity remain at relatively high levels, we
have seen some recent softening in construction employment.

     The services industry, which has been a steady source of
employment growth for decades, has shown no net job gain
since March.  A major factor in this weakening has been the
large job losses in the help supply industry.  In July,
employment in help supply services declined for the tenth
month in a row, for a total job loss of 429,000 over the
period.  This industry provides workers to other businesses;
thus, the decline in its employment reflects the weakening in
manufacturing and other industries.  The services industry
also provided some of the very few bright spots in this
month's report, as substantial job gains continued in health
services and in engineering and management services.

     Average hourly earnings for production and
nonsupervisory workers in the private sector, at $14.35 in
July, rose by 4 cents over the month.  Over the year, average
hourly earnings were up 4.4 percent.

     Looking at some of the data obtained from the survey of
households, the unemployment rate, at 4.5 percent in July,
was unchanged from June and has remained essentially the same
since April.  The jobless rates for major worker groups saw
little or no change over the month.  Rates for all these
groups were somewhat higher than their recent lows reached
last year.

     I would note that the household survey data in today's
release reflect an expansion of the survey sample from about
50,000 to about 60,000 households.  The expansion, which
began last fall, was undertaken by the Census Bureau to meet
the program requirements of the State Children's Health
Insurance Program (SCHIP).

     Last fall, we said that we would defer the use of the
additional sample in the official national labor force
estimates.  This delay was intended to allow sufficient time
to evaluate the differences between the estimates obtained
from the current and the expanded samples.  Since there were
no significant differences in the national labor force
estimates derived from the two samples, we are incorporating
the additional sample into the official national estimates
beginning with today's release.

     In summary, total nonfarm employment declined further in
July.  Manufacturing continued to shed workers, and few
industries throughout the rest of the economy showed
significant job growth.  The unemployment rate remained at
4.5 percent.



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

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