Visualization: Employment measures

There is more than one way to count employment and jobs.

The Bureau of Labor Statistics, part of the United States Department of Labor, is the most-commonly cited source for employment data for the nation, states, counties, and metropolitan statistical areas (MSAs). BLS provides two major types of such data which may seem similar, but have important differences.

The sources of the data BLS provides each month are two surveys of a sample of employers and households. BLS uses sampling because a census (an attempt to count everything) would be costly. Like most survey data, it is subject to sampling error, and it is not uncommon for BLS to revise previously released data as more data becomes available.

Data about employment and unemployment comes from two surveys:

  • The Current Population Survey (CPS), according to BLS, “is a monthly survey of households conducted by the Bureau of Census for the Bureau of Labor Statistics. It provides a comprehensive body of data on the labor force, employment, unemployment, persons not in the labor force, hours of work, earnings, and other demographic and labor force characteristics.” It is commonly referred to as the household survey. (1)Local Area Unemployment Statistics. Available at https://www.bls.gov/lau/.
  • The Current Employment Statistics (CES) program “produces detailed industry estimates of nonfarm employment, hours, and earnings of workers on payrolls.” It is commonly referred to as the employer survey. (2)State and Metro Area Employment, Hours, & Earnings. Available at https://www.bls.gov/sae/.

Both programs are surveys, not a complete count or census, according to BLS. Each month, CES surveys approximately 145,000 businesses and government agencies, representing approximately 697,000 individual worksites. CPS is a monthly survey of households conducted by the Bureau of Census for the Bureau of Labor Statistics. The sample size is 60,000 households, covering about 110,000 individual persons.

Both programs count data for a survey reference period, which is usually the pay period that includes the twelfth day of a month. The data for the nation is usually released on the first Friday of a new month, with state and MSA data later. Previous values are subject to revision as BLS refines estimates with additional sources of data. (3)Exploring Differences in Employment between Household and Establishment Data. Available at https://www.nber.org/papers/w14805. (4)Understanding the employment measures from the CPS and CES survey. Available at https://www.bls.gov/opub/mlr/2006/02/art2full.pdf.

The important difference between the two sets of data is that the household survey counts people, while the employer survey counts jobs. If a person has two jobs with different employers, this person counts as one employed person in the household survey, but as two jobs in the employer survey.

Further, the unemployment rate is calculated only from the household survey. This is because the unemployment rate needs two numbers: the number of people in the labor force (the number of people working plus the number of people looking for work) and the number of employed people. This data is not available from the employer survey, as employers do not know the size of the labor force. But the household survey captures this data.

Another difference has to do with location. For national data, this is not an issue (except possibly near the Canadian and Mexican borders). But for state data it may be a factor, especially when a metropolitan area straddles multiple states, as does the Kansas City MSA. When counting employed people and the labor force in the household survey, people are counted in their state of residence, even though their job might be in a different state. Similarly, when counting jobs in the employer survey, jobs are counted in the state of the employer, even though the employee may live in a different state.

There are some other differences, such as the household survey including “the unincorporated self-employed, unpaid family workers in family businesses, agriculture and related workers, workers in private households, and workers on unpaid leave.” These are excluded from the employer survey. (5)Comparing employment from the BLS household and payroll surveys. Available at https://www.bls.gov/web/empsit/ces_cps_trends.htm.

BLS offers these definitions:

  • The labor force is the sum of employed and unemployed persons. The labor force participation rate is the labor force as a percent of the civilian noninstitutional population.
  • Employed persons consist of: persons who did any work for pay or profit during the survey reference week; persons who did at least 15 hours of unpaid work in a family-operated enterprise; and persons who were temporarily absent from their regular jobs because of illness, vacation, bad weather, industrial dispute, or various personal reasons.
  • Persons are classified as unemployed if they do not have a job, have actively looked for work in the prior 4 weeks, and are currently available for work. Persons who were not working and were waiting to be recalled to a job from which they had been temporarily laid off are also included as unemployed. Receiving benefits from the Unemployment Insurance (UI) program has no bearing on whether a person is classified as unemployed.
  • The unemployment rate represents the number unemployed as a percent of the labor force.
  • Persons who are neither employed nor unemployed are not in the labor force. This category includes retired persons, students, those taking care of children or other family members, and others who are neither working nor seeking work.

In addition, some data is seasonally adjusted. This help make month-to-month comparisons more revealing, according to BLS: “Seasonal adjustment eliminates the part of the change attributable to the normal seasonal variation and makes it possible to observe the cyclical and other nonseasonal movements in CES State and Area series.” (6)Seasonal Adjustment. Available at https://www.bls.gov/sae/seasonal-adjustment/.

See Labor Force Statistics from the Current Population Survey and Current Employment Statistics – CES (National) for more information on both programs.

To examine the differences in the values produced by the different data series, I’ve prepared an interactive visualization with data for Kansas.

Click here to access my intercative visualization of employment and unemployment data from the household survey (CPS).

For more visualizations, click here.

Click on images for larger versions.

References

References
1 Local Area Unemployment Statistics. Available at https://www.bls.gov/lau/.
2 State and Metro Area Employment, Hours, & Earnings. Available at https://www.bls.gov/sae/.
3 Exploring Differences in Employment between Household and Establishment Data. Available at https://www.nber.org/papers/w14805.
4 Understanding the employment measures from the CPS and CES survey. Available at https://www.bls.gov/opub/mlr/2006/02/art2full.pdf.
5 Comparing employment from the BLS household and payroll surveys. Available at https://www.bls.gov/web/empsit/ces_cps_trends.htm.
6 Seasonal Adjustment. Available at https://www.bls.gov/sae/seasonal-adjustment/.

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