In This Chapter |
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Chapter 2.
Employment, Hours, and Earnings from the Establishment
Survey
Uses Data from the CES program, along with the CPS data, are
the first major economic indicators released each month.
As such, they are used in the formulation of fiscal and
economic policy. CES employment estimates are a primary
component of the Index of Coincident Economic Indicators
and have proved to be an extremely reliable measure of
current economic activity. The manufacturing average
weekly hours series is used in the Index of Leading
Economic Indicators, which forecasts changes in the
business cycle.
Aggregate earnings data are the major component of
the preliminary Personal Income estimates in the National
Income and Product Accounts. Productivity measures
(chapters 12 and 13) and the Industrial Production Index
are based on the aggregate hours data. Employment series
are a basic input for employment projections by BLS
(chapter 15) and State Employment Security Agencies.
The series also are used in the private sector by
business firms, labor unions, universities, trade
associations, and private research organizations to
study economic conditions and to develop plans for
the future. Business firms, for example, use the
employment, hours, and earnings data for guidance in
plant location, sales, and purchases. In addition, firms
negotiating long-term purchase contracts often use
escalation clauses based on the average hourly earnings
series as an aid to adjust payments for changes in wages.
Escalation clauses permit an adjustment of the contract
price of the products or services being purchased depending
on the movement of average hourly earnings in a selected
industry.
Both labor and business have shown wide need for
industry series on hourly earnings and weekly hours to
provide a basis for labor-management negotiations. They
not only furnish current and historical information on
a given industry but also provide comparative data on
related industries.
Next: Reliability
of Estimates
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Last Modified Date: February 9, 2004
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