Economic News Release

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Technical Note

   The Mass Layoff Statistics (MLS) program is a federal-state program
that uses a standardized automated approach to identifying, describing,
and tracking the effects of major job cutbacks, using data from each
state's unemployment insurance database.  Each month, states report on
employers which have at least 50 initial claims filed against them during
a consecutive 5-week period.  These employers then are contacted by the
state agency to determine whether these separations lasted 31 days or
longer, and, if so, other information concerning the layoff is collected.
States report on layoffs lasting more than 1 month on a quarterly basis.

   A given month contains an aggregation of the weekly unemployment
insurance claims filings for the Sunday through Saturday weeks in that
month.  All weeks are included for the particular month, except if the
first day of the month falls on Saturday.  In this case, the week is
included in the prior month's tabulations.  This means that some months
will contain 4 weeks and others, 5 weeks, the number of weeks in a given 
month may be different from year to year, and the number of weeks in a
year may vary.  Therefore, analysis of over-the-month and over-the-year
change in not seasonally adjusted series should take this calendar effect
into consideration.

   The MLS program resumed operations in April 1995 after it had been
terminated in November 1992 due to lack of funding.  Prior to April 1995,
monthly layoff statistics were not available.

   Information in this release will be made available to sensory impaired
individuals upon request.  Voice phone: 202-691-5200; TDD message referral
phone number:  1-800-877-8339.

Definitions

   Employer.  Employers in the MLS program include those covered by state
unemployment insurance laws.  Information on employers is obtained from the
Quarterly Census of Employment and Wages (QCEW) program, which is adminis-
tered by the Bureau of Labor Statistics (BLS).

   Initial claimant.  A person who files any notice of unemployment to
initiate a request either for a determination of entitlement to and
eligibility for compensation, or for a subsequent period of unemployment
within a benefit year or period of eligibility.
   
   Mass layoff event.  Fifty or more initial claims for unemployment 
insurance benefits filed against an employer during a 5-week period,
regardless of duration.

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Seasonal adjustment

   Effective with the release of data for January 2005, BLS began publish-
ing six seasonally adjusted monthly MLS series.  The six series are the
numbers of mass layoff events and mass layoff initial claims for the total,
private nonfarm, and manufacturing sectors.
   
   Seasonal adjustment is the process of estimating and removing the effect
on time series data of regularly recurring seasonal events such as changes
in the weather, holidays, and the beginning and ending of the school year.
The use of seasonal adjustment makes it easier to observe fundamental changes
in time series, particularly those associated with general economic expan-
sions and contractions.
   
   The MLS data are seasonally adjusted using the X-12-ARIMA seasonal adjust-
ment method on a concurrent basis.  Concurrent seasonal adjustment uses all
available monthly estimates, including those for the current month, in devel-
oping seasonal adjustment factors.  Revisions to the most recent 5 years
of seasonally adjusted data will be made once a year with the issuance of
December data.  Before the data are seasonally adjusted, prior adjustments
are made to the original data to adjust them for differences in the number
of weeks used to calculate the monthly data.  Because weekly unemployment
insurance claims are aggregated to form monthly data, a particular month's
value could be calculated with 5 weeks of data in one year and 4 weeks
in another.  The effects of these differences could seriously distort the
seasonal factors if they were ignored in the seasonal adjustment process.
These effects are modeled in the X-12-ARIMA program and are permanently
removed from the final seasonally adjusted series.