April 21, 2015
Just got a Smartphone
I just got a smartphone; it's harder to text with. Sometimes the auto-correct doodle guesses right and that's cool. But the first time I typed in "im", which it correctly made into "I'm", the next word that was the phone's first guess at what my next word would be was "sorry". Listen phone, sorry I'm not sorry, and you better learn that.
April 20, 2015
The Two Employment Surveys
The BLS produces two main monthly employment reports, taken from different surveys. One, the Current Economic Statistics (CES), or Establishment Survey, estimates the change in non-farm payroll employment. The other, the Current Population Statistics (CPS), or Household Survey, estimates the change in the size of the labor force and employment. Information from the CPS is used to generate the unemployment rate. Both surveys exclude those committed to institutions, such as prisons and mental health facilities, and the military.
The CES surveys around 140,000 businesses each month. But it does not capture those who are self-employed, working under the table, or on unpaid leave during the sample period. An individual with more than one job will show up on multiple payrolls. An individual who works two part time jobs, but gives up one to work full time would show up as a net loss of one payroll job.
An issue arises from the fact that businesses are created and fail all the time. Without proper accounting of business creation and failure, the CES's sample will become less representative over time. The BLS attempts to correct for this in its benchmarking process, where they use more accurate UI tax data (available bi-annually) to adjust the sample. They also use econometric models to predict business creation and failure to adjust the sample between benchmarks.
The CPS surveys 60,000 households each month to estimate the size of the labor force, employment, weekly hours, earnings, and demographic information. The labor force is defined as individuals who are employed or unemployed – those who are not employed but have actively looked for a job within the past month.. Those who are self-employed, farm workers, or unpaid workers in a family business are included in the CPS. The CPS has a smaller sample size than the CES, and is more volatile from month to month.
Due to its larger sample size and lower volatility, the CES is often considered to be the more accurate source. But the relative usefulness of the two sources depends on what data is needed, as well as when and for what time period. Much of the relative monthly volatility of the CPS is removed by averaging over a quarter or year. And less volatility is not necessarily a sign of greater accuracy. Both series often go through large revisions.
The CES surveys around 140,000 businesses each month. But it does not capture those who are self-employed, working under the table, or on unpaid leave during the sample period. An individual with more than one job will show up on multiple payrolls. An individual who works two part time jobs, but gives up one to work full time would show up as a net loss of one payroll job.
An issue arises from the fact that businesses are created and fail all the time. Without proper accounting of business creation and failure, the CES's sample will become less representative over time. The BLS attempts to correct for this in its benchmarking process, where they use more accurate UI tax data (available bi-annually) to adjust the sample. They also use econometric models to predict business creation and failure to adjust the sample between benchmarks.
The CPS surveys 60,000 households each month to estimate the size of the labor force, employment, weekly hours, earnings, and demographic information. The labor force is defined as individuals who are employed or unemployed – those who are not employed but have actively looked for a job within the past month.. Those who are self-employed, farm workers, or unpaid workers in a family business are included in the CPS. The CPS has a smaller sample size than the CES, and is more volatile from month to month.
Due to its larger sample size and lower volatility, the CES is often considered to be the more accurate source. But the relative usefulness of the two sources depends on what data is needed, as well as when and for what time period. Much of the relative monthly volatility of the CPS is removed by averaging over a quarter or year. And less volatility is not necessarily a sign of greater accuracy. Both series often go through large revisions.
Subscribe to:
Posts (Atom)