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Employment- Unemployment EMPLOYMENT- UNEMPLOYMENT HEARINGS BEFORE THE JOINT ECONOMIC COMMITTEE CONGRESS OF THE UNITED STATES NINETY-FIFTH CONGRESS FIRST SESSION PART 10 MAY 6, JUNE 3, JULY 8, AND AUGUST 5, 1977 Printed for the use of the Joint Economic Committee U.S. GOVERNMENT PRINTING OFFICE 98-520 0 WASHINGTON : 1977 For sale by the Superintendent of Documents, U.S. Government Printing Office Washington, D.C. 20402 Stock Number 052-070-04402-1 r' I ; \ I ) JOINT ECONOMIC COMMITTEE (Created pursuant to see. 5(a) of Public Law 304, 79th Cong.) RICHARD BOLLING, Missouri, Chairman HUBERT H. HUMPHREY, Minnesota, Vice Chairman HOUSE OF REPRESENTATIVES SENATE HENRY S. REUSS, Wisconsin JOHN SPARKMAN, Alabama WILLIAM S. MOORHEAD, Pennsylvania WILLIAM PROXMIRE, Wisconsin LEE H. HAMILTON, Indiana ABRAHAM RIBICOFF, Connecticut GILLIS W. LONG, Louisiana LLOYD BENTSEN, Texas OTIS G. PIKE, New York EDWARD M. KENNEDY, Massachusetts CLARENCE J. BROWN, Ohio JACOB K. JAVITS, New York GARRY BROWN, Michigan WILLIAM V. ROTH, Ja., Delaware MARGARET M. HECKLER, Massachusetts JAMES A. McCLURE, Idaho JOHN H. ROUSSELOT, California ORRIN G. HATCH, Utah JOHN R. STAaK, Executive Director LouIs C. KRAUTHOFF II, Assistant Director RICHARD F. KAUFMAN, General Counsel ECONOMISTS 0. THOMAS CATOR KENT H. HUGHES PHILIP MCMARTIN WILLIAM A. Cox SARAH JACKSON DEBORAH NORELLI THOMAS F. DEaNBUaG JOHN R. KARLIK GEORGE R. TYLEa ROBERT D. HAMRIN L. DOUGLAS LEE MISNSETY CHARLES H. BRADFORD STEPHEN J. ENTIN GEORGE D. KRUMBHAAR, Ja. M. CATHERINE MILLER MARK R. PoLICINSKI (II) CONTENTS WITNESSES AND STATEMENTS FRIDAY, MAY 6, 1977 Long, Hon. Gillis W., member of the Joint Economic Committee: Opening Page statement -_----------_ -------- ___ -------- 1737 Shiskin, Hon. Julius, Commissioner, Bureau of Labor Statistics, Depart- ment of Labor, accompanied by Robert L. Stein, Assistant Commissioner, Office of Current Employment Analysis, and John F. Early, Chief, Division of Industrial Prices and Price Indexes -_- _- __-_-_1738 FRIDAY, JUNE 3, 1977 Bolling, Hon. Richard, chairman of the Joint Economic Committee: Open- ing statement -_-------------------------- _1767 Shiskin, Hon. Julius, Commissioner, Bureau of Labor Statistics Department of Labor, accompanied by W. John Layng, Assistant Commissioner, Office of Prices and Living Conditions, and Robert L. Stein, Assistant Commissioner, Office of Current Employment Analysis -_- _- _1768 FRIDAY, JULY 8, 1977 Proxmire, Hon. William, member of the Joint Economic Committee: Opening statement - _------------------------ 1797 Shiskin, Hon. Julius, Commissioner, Bureau of Labor Statistics, Depart- ment of Labor, accompanied by W. John Layng, Assistant Commissioner, Office of Prices and Living Conditions, and Robert L. Stein, Assistant Commissioner, Office of Current Employment Analysis - __ 1798 FRIDAY, AUGUST 5, 1977 Proxmire, Hon. William, member of Joint Economic Committee: Opening statement -_--_--_----_ ---------- _------ 1851 Shiskin, Hon. Julius, Commissioner, Bureau of Labor Statistics, Depart- ment of Labor, accompanied by W. John Layng, Assistant Commissioner, Office of Prices and Living Conditions, and Robert L. Stein, Assistant Commissioner, Office of Current Employment Analysis -_- _- _1852 Ruggles, Richard, professor of economics, Yale University - ___-_-_ 1889 SUBMISSIONS FOR THE RECORD FRIDAY, MAY 6, 1977 Shiskin, Hon. Julius, et al.: Chart reflecting the two-tier patterns of unemployment -1740 Table reflecting unemployment rates by alternate seasonal adjustment methods -_--------__----_ ---------------- _ 1741 Press release No. USDL 77-412 entitled "The Employment Situation: April 1977," Bureau of Labor Statistics, Department of Labor, May 6, 1977 - _-- _------------------------ 1743 FRIDAY, JUNE 3, 1977 Shiskin, Hon. Julius, et al.: Table reflecting unemployment rates by alternate seasonal adjust- ment methods -__--_ -- ----------- 1770 Press release No. USDL 77-504 entitled "The Employment Situation: May 1977," Bureau of Labor Statistics, Department of Labor, June 3, 1977 - _------------------------------ _----_1772 (MI) IV FRIDAY, JULY 8, 1977 Shiskin, Hon. Julius, et al.: Tables: 1. Unemployment rates by alternate seasonal adjustment 'age methods ----- _------------- 1802 2. Labor force measures for 11 central cities, 1970 and 1976 annual averages ------------------------- 1804 Press release No. USDL 77-610 entitled "The Employment Situa- tion: June 1977," Bureau of Labor Statistics, Department of Labor, July 8, 1977 _-_-____-_-____-_----_-_-_- _____-_ 1806 Press release No. USDL 77-611 entitled "Wholesale Price Index- June 1977," Bureau of Labor Statistics, Department of Labor, July 8, 1977 ------------------------------------------------- _1823 Tables reflecting unemployment rates and consumer prices in eight countries ___----------- _-_-_---_-_-_-_-_- __1848 FRIDAY, AUGUST 5, 1977 Proxmire, Hon. William: Letter to Prof. Richard Ruggles, dated June 15, 1977, thanking him for his suggestion to hold hearings on price measurement -_-_-___1907- Letter from Prof. Richard Ruggles, with an enclosure, dated June 3, 1977, suggesting Senator Proxmire hold hearings on the problem of price measurement by Federal agencies - _-___-_-_-_-__-_-_ 1907 Ruggles, Richard: Prepared statement -_--------------_--------_--_1895 Shiskin, Hon. Julius, et al.: Table reflecting unemployment rates by alternative seasonal adjust- ment methods - _------------ ___1854 Press release No. USDL 77-693 entitled "The Unemployment Situa- tion: July 1977," Bureau of Labor Statistics, Department of Labor, August 5, 1977--_------____----_-- 1856 Response to Senator Javits' request to supply for the record a com- parison of total employment during the current business cycle ex- pansion with previous expansions - _-_-_-_- _- __-_- _1880 Response to Senator Javits' request to supply for the record a com- parison of total unemployment during the current business cycle expansion with previous expansions - _____-_- _-__-_-_-_1881 EMPLOYMENT-UNEMPLOYMENT FRIDAY, MAY 6, 1977 CONGRESS OF THE UNITED STATES, JOINT ECONOMIC COMMITrEE, Washi'ngton,D.C. committee met, pursuant to notice, at 11 a.m., in room 6226, The of Dirksen Senate Office Building, Hon. Gillis W. Long (member the committee) presiding. Present: Representatives Reuss and Long. Also present: John R. Stark, executive director; Louis C. Kraut- G. hoff II, assistant director; Richard F. Kaufman, general counsel; Thomas Cator, professional staff member; Mark Borchelt, adminis- trative assistant; and Charles H. Bradford, Stephen J. Entin, M. staff Catherine Miller, and Mark R. Policinski, minority professional members. OPENING STATEMENT OF REPRESENTATIVE LONG Representative LONG. The committee will come to order. Mr. Shiskin, on behalf of the Joint Economic Committee, I would and like to welcome you here once again to discuss the unemployment inflation figures for April. un- According to this morning's "Employment Situation" release, employment in April declined significantly from 7.3 percent in March to 7 percent. If I recall correctly, this is the lowest unemployment rate since December 1974. Mr. SmsEIN. It is the lowest figure in 29 months. Representative LONG. This month's improvement was apparently the result of a rather large 550,000 gain in total employment, combined with a relatively moderate increase in the labor force of just over 200,000. I hope you will evaluate these two figures in your statement, and tell us whether you think this pattern will hold for the rest of the year or will be reversed. As to inflation, yesterday's figures on wholesale price increases are very disturbing. The April increase in the wholesale price index of 1.1 percent is the third increase in a row of that magnitude. Since this index rose at a much more moderate rate during 1976, I think we should spend some time during this hearing exploring whether the past 3 months represent a temporary blip that will moderate dur- ing the spring and summer, or whether it represents the start of new inflationary pressures. We are pleased to have Congressman Reuss with us. Do you have anything before we call on Mr. Shiskin? Representative REuss. No, let's just get to the meat of it. Reperenstative LONG. Go ahead, Mr. Shiskin. (1737) 1738 STATEMENT OF HON. JULIUS SHISKIN, COMMISSIONER, BUREAU OF LABOR STATISTICS, DEPARTMENT OF LABOR, ACCOMPANIED BY ROBERT L. STEIN, ASSISTANT COMMISSIONER, OFFICE OF CURRENT EMPLOYMENT ANALYSIS, AND JOHN F. EARLY, CHIEF, DIVISION OF INDUSTRIAL PRICES AND PRICE INDEXES Mr. SHEIEIN. Thank you, Mr. Chairman. As usual, I have a brief statement. Before reading it, I will point out that Mr. Robert L. Stein, Assist- ant Commissioner for Current Employment Analysis is with me again today. Mr. Layng, who usually accompanies me, is on a business trip, so Mr. John Early is going to help me out with questions on prices. Mr. Chairman and members of the committee, I wish to offer the Joint Economic Committee a few brief comments to supplement our press release, "The Employment Situation," issued this morning at 10 a.m. The economy completed the 25th month of the current economic expansion in April with another sharp rise in employment and aggre- gate hours and a further decline in unemployment. The labor force increased by 220,000 in April; employment rose by 550,000; and unemployment declined by 330,000. Over the past 6 months, employment has risen by 2.3 million, an average of 380,000 per month; this compares with virtually no job growth during the previous 6 months. Unemployment has declined by nearly a full point since last October.
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