Changes to procedures for producing Current Employment Statistics (CES) State estimates

CES monthly employment data are widely recognized by policymakers, business analysts, and the media as a critical and sensitive gauge of the health of the U.S. and State labor markets.

CES National and State estimates, while using the same underlying survey reports and statistical methodology, are developed independently by BLS and the individual State Labor Market Information offices, respectively.  The independent development of estimates can lead to discrepancies between the employment trend shown by the National CES estimate and those obtained by summing the State CES estimates.  In the past, the discrepancy was generally greatest at labor market turning points, and resulted in the sum of the States estimates recording less employment change than was picked up by the National estimates.  This relationship was seen both when National estimates were rising sharply or falling sharply.

Since 2006, BLS and its State partners have been developing and testing alternative approaches for substantially eliminating the potential for discrepancy between the National and sum of States estimates.

With the recent sharp deterioration in the U.S. labor market, a substantial discrepancy between the job loss reflected in the CES National and State estimates has emerged.  On a not seasonally adjusted basis, U.S. total private employment for November 2008 fell 762,000, while the change reflected in the sum of the State estimates was ‑267,000.  BLS has confidence in the accuracy of the National payroll employment estimate because of its large sample size and use of proven statistical methodology.

Because of the large discrepancy, BLS determined that it needed to take immediate action to provide users with State CES estimates that are more consistent with the National estimate and that help in understanding developments in the labor market at this very critical time for the U.S. economy.

Beginning with the process for developing November 2008 final and December 2008 preliminary State CES estimates (which are scheduled for release by BLS on January 27, 2009), BLS implemented an intensified review of the State estimation process, and began requiring States to provide fact-based justifications for any proposed estimates that diverged significantly from the estimates derived solely from standard BLS methods.  An example of an acceptable fact-based justification that a State might provide is documented information about a large strike or layoff that is not captured in a CES sample report.  The changes that BLS implemented to the State estimates review process more closely align it with the National estimate review process, and strengthen the consistency and transparency of the CES State estimation process.  Further, the changes improve the collective accuracy of the CES State estimates, bringing them into closer alignment with the National estimates.

The majority of States’ proposed November final and December preliminary estimates were immediately accepted by BLS.  Slightly less than half of the States proposed estimates diverged substantially from a result that would be expected from use of standard BLS methodology.  In most of these cases States made modifications and proposed new estimates that were accepted by BLS.

Due to both the routine incorporation of additional sample reports and the review process changes described above, the State CES data that BLS will release on January 27 will include some unusually large revisions to November final estimates.  Some States have already issued November final and December preliminary CES estimates through their own news releases.

The review changes implemented by BLS do not create a series break in the monthly CES employment series.

BLS plans to continue the intensified State review process indefinitely to achieve and maintain consistency between employment changes seen in CES National and the sum of CES State estimates.

Last Modified Date: January 26, 2009