Economic News Release

    Frequently Asked Questions about Employment and Unemployment Estimates

Why are there two monthly measures of employment?

The household survey and establishment survey both produce sample-based
estimates of employment and both have strengths and limitations. The
establishment survey employment series has a smaller margin of error on
the measurement of month-to-month change than the household survey because
of its much larger sample size. An over-the-month employment change of
107,000 is statistically significant in the establishment survey, while
the threshold for a statistically significant change in the household sur-
vey is about 400,000. However, the household survey has a more expansive
scope than the establishment survey because it includes the self-employed,
unpaid family workers, agricultural workers, and private household workers,
who are excluded by the establishment survey. The household survey also
provides estimates of employment for demographic groups.

Are undocumented immigrants counted in the surveys?

Neither the establishment nor household survey is designed to identify the
legal status of workers. Thus, while it is likely that both surveys include
at least some undocumented immigrants, it is not possible to determine how
many are counted in either survey. The household survey does include ques-
tions about whether respondents were born outside the United States. Data
from these questions show that foreign-born workers accounted for 15.6 per-
cent of the labor force in 2008.

Why does the establishment survey have revisions?

The establishment survey revises published estimates to improve its data
series by incorporating additional information that was not available at
the time of the initial publication of the estimates. The establishment
survey revises its initial monthly estimates twice, in the immediately suc-
ceeding 2 months, to incorporate additional sample receipts from respondents
in the survey and recalculated seasonal adjustment factors. For more informa-
tion on the monthly revisions, please visit www.bls.gov/ces/cesrevinfo.htm.

On an annual basis, the establishment survey incorporates a benchmark revi-
sion that re-anchors estimates to nearly complete employment counts available
from unemployment insurance tax records. The benchmark helps to control for
sampling and modeling errors in the estimates. For more information on the
annual benchmark revision, please visit www.bls.gov/web/cesbmart.htm.

Does the establishment survey sample include small firms?

Yes; about 40 percent of the establishment survey sample is comprised of busi-
ness establishments with fewer than 20 employees. The establishment survey sam-
ple is designed to maximize the reliability of the total nonfarm employment
estimate; firms from all size classes and industries are appropriately sampled
to achieve that goal.
  
Does the establishment survey account for employment from new businesses?

Yes; monthly establishment survey estimates include an adjustment to account 
for the net employment change generated by business births and deaths. The
adjustment comes from an econometric model that forecasts the monthly net 
jobs impact of business births and deaths based on the actual past values of
the net impact that can be observed with a lag from the Quarterly Census of
Employment and Wages. The establishment survey uses modeling rather than sam-
pling for this purpose because the survey is not immediately able to bring new
businesses into the sample. There is an unavoidable lag between the birth of a
new firm and its appearance on the sampling frame and availability for selection.
BLS adds new businesses to the survey twice a year.

Is the count of unemployed persons limited to just those people receiving
unemployment insurance benefits?

No; the estimate of unemployment is based on a monthly sample survey of house-
holds. All persons who are without jobs and are actively seeking and available
to work are included among the unemployed. (People on temporary layoff are in-
cluded even if they do not actively seek work.) There is no requirement or ques-
tion relating to unemployment insurance benefits in the monthly survey.

Does the official unemployment rate exclude people who have stopped looking for
work?

Yes; however, there are separate estimates of persons outside the labor force who
want a job, including those who have stopped looking because they believe no jobs
are available (discouraged workers). In addition, alternative measures of labor
underutilization (discouraged workers and other groups not officially counted as
unemployed) are published each month in the Employment Situation news release.