Noneconomic fluctuations in hours and earnings data (EXCERPT), Monthly Labor Review Online, Aug. 1999

Noneconomic fluctuations in hours and earnings data

Jurgen Kropf and Patricia Getz

The Current Employment Statistics (CES) survey collects payroll information from a
sample of about 390,000 business establishments across the Nation and provides monthly estimates of nonfarm wage and salary employment, average weekly hours, and average hourly earnings. The month-to-month movements in these series are closely watched by policymakers, forecasters, and other analysts as timely indicators of the overall strength and direction of the Nation’s economy. In recent years, some CES data users have inquired about the possibility of noneconomic, calendar-related fluctuations in the hours and earnings series.

In 1997, researchers at the Bureau of Labor Statistics established a correlation between over-the-month changes in the hours and earnings series and the number of weekdays in a calendar month. An initial review of the hours and earnings series revealed that the fluctuations were concentrated in the service-producing industries—especially in finance, insurance and real estate—and that they could be traced to survey reporters with a high proportion of salaried employees and semi-monthly or monthly payrolls. These findings led to an examination of how these reports are treat-ed within the CES production system. The examination revealed that both response error and the "normalization" process used to convert reports with other-than-weekly pay periods to the weekly equivalent were contributing to the noneconomic fluctuations in the hours and earnings series.

This excerpt is from an article published in the August 1999 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.

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