Technical information: Revisions to CES data for late sample reports, annual benchmarking, and other factors
Background
The Current Employment Statistics (CES) program (also known as the payroll survey
or the establishment survey) is designed to measure trends in employment, hours, and
earnings by industry. Each month BLS surveys approximately 141,000 businesses and
government agencies representing approximately 486,000 worksites throughout the United
States. The monthly Employment Situation news release provides national CES data on
employment, hours, and earnings, as well as labor force and unemployment estimates
from the Current Population Survey (CPS), also known as the household survey.
The Employment Situation is typically released on the first Friday of the month
following the reference month. For example, the February 3, 2012 Employment Situation
published CES first preliminary employment estimates for January 2012. CES estimates
represent information reported by survey respondents for their pay periods that include
the 12th of the month.
Not all sampled firms are able to report their data in time to be used in the first
preliminary estimates. Therefore, BLS continues to collect sample responses after the
release of first preliminary estimates for incorporation into second preliminary and
final sample-based estimates. Second preliminary estimates for a reference month are
published the month following the initial release, and final sample-based estimates are
published two months after the initial release.
Sample-based estimates remain final until employment levels are reset to universe
employment counts, or benchmarks, for March of each year; the benchmarks are
primarily derived from Unemployment Insurance (UI) tax records. The annual benchmarking process
results in revised data back to the last annual benchmark for not seasonally adjusted series
and back five years for seasonally adjusted series.
CES data are principal economic indicators and serve as input to many other economic series.
Each time the CES employment estimates are revised, additional information that was not
previously available is incorporated into the estimates. Below are discussions of how CES data
revise:
- Monthly, to include late sample reports;
- Annually, due to benchmarking; and
- Irregularly, to avoid discontinuities while incorporating methodological changes.
Monthly Revisions to Include Late Sample Reports
CES data users typically are most concerned with revisions to over-the-month changes.
This section profiles these monthly revisions of CES seasonally adjusted over-the-month
changes and the sample collection rates that underlie the revisions.
Revisions to CES over-the-month changes are calculated by comparing each month's
second preliminary over-the-month change to the first preliminary over-the-month change,
the final sample-based over-the month change with the second preliminary over-the-month
change, and the final sample-based over-the-month change to the first preliminary
over-the-month change.
See www.bls.gov/web/empsit/cesnaicsrev.htm
for a table of revisions to seasonally adjusted Total nonfarm over-the-month changes from
January 1979 forward. The monthly employment change figures shown in the table do not reflect
subsequent changes due to the introduction of benchmark revisions, seasonal adjustment, or
other updates.
Mean revisions and mean absolute revisions for each calendar year are included in the table.
Mean absolute revisions indicate the overall magnitude of change to the estimates, while the mean
revisions are a measure of whether there is a bias in direction of the revisions. The closer the
mean revision is to zero, the less indication that revisions are predominantly either upward or
downward. For example, if in a given year there were six upward revisions of 50,000 and six
downward revisions of 50,000, the mean revision would be zero; however, the mean absolute revision
would be 50,000.
BLS begins collecting sample reports for a reference month as soon as the reference period, the
establishment's pay period that includes the 12th of the month, is complete. Collection time
available for first preliminary estimates ranges from 9 to 15 days, depending on the scheduled
date for the Employment Situation news release. The Employment Situation is scheduled for the
third Friday following the week including the 12th of the prior month, with an exception for
January. (For January, the news release is delayed a week if the third Friday following the week
of the 12th occurs on January 1, 2, or 3.)
Given this short collection cycle for the first preliminary estimates, many establishments are
not able to provide their payroll information in time to be included in these estimates. Therefore,
CES sample responses for the reference month continue to be collected for two more months and are
incorporated into the second preliminary and final sample-based estimates published in subsequent
months. Additional sample receipts are the primary source of the monthly CES employment revisions.
Prior to 1991, most of the CES sample was collected by mail in a decentralized environment by
each State Workforce Agency. BLS has gradually centralized collection and adopted automated sample
collection methods with the result that collection rates have gradually risen over time. BLS uses
a variety of collection techniques, tailored to individual firm preferences to encourage
participation in this voluntary survey. Computer Assisted Telephone Interviewing (CATI) is
used for initial enrollment and collection of sample. Sample units are often transferred later
to an automated method of self-reporting, such as through Fax, Internet, or Touchtone Data Entry
(TDE). Many large, multi-establishment firms report through Electronic Data Interchange (EDI);
the firms provide electronic files to BLS that include all of their worksites. A small percentage
of sample units still report via mail.
Collection rates are defined as the percent of reports received for a monthly estimate compared
to the total number of actively-reporting sample units on the sample registry.
CES collection rates back to 1981 can be found on
www.bls.gov/web/empsit/cesregrec.htm.
Much of the month-to-month variation in the first preliminary collection rates is a function
of the number of collection days in the individual months. The overall upward trend over time
is attributable to replacing decentralized mail collection with automated techniques.
Benchmark Revisions
Annual CES benchmark revisions are published along with January first preliminary estimates
in February of each year. Benchmark revisions reflect a re-anchoring of CES sample-based estimates
to incorporate near universe counts of employment. These comprehensive counts of employment, or
benchmarks, are derived primarily from employment counts reported on UI
tax reports that nearly all employers are required to file with State Workforce Agencies.
The benchmark revision is the difference between the universe count of employment for March and
its corresponding sample-based estimate. A table of benchmark revisions from 1979 forward:
CES Total nonfarm benchmark revisions 1979-2011
Year |
Percent difference |
Difference in thousands |
1979 |
0.5 |
447 |
1980 |
-.1 |
-63 |
1981 |
-.4 |
-349 |
1982 |
-.1 |
-113 |
1983 |
(1) |
36 |
1984 |
.4 |
353 |
1985 |
(1) |
-3 |
1986 |
-.5 |
-467 |
1987 |
(1) |
-35 |
1988 |
-.3 |
-326 |
1989 |
(1) |
47 |
1990 |
-.2 |
-229 |
1991 |
-.6 |
-640 |
1992 |
-.1 |
-59 |
1993 |
.2 |
263 |
1994 |
.7 |
747 |
1995 |
.5 |
542 |
1996 |
(1) |
57 |
1997 |
.4 |
431 |
1998 |
(1) |
44 |
1999 |
.2 |
258 |
2000 |
.4 |
468 |
2001 |
-.1 |
-123 |
2002 |
-.2 |
-313 |
2003 |
-.1 |
-122 |
2004 |
.2 |
203 |
2005 |
-.1 |
-158 |
2006 |
.6 |
752 |
2007 |
-.2 |
-293 |
2008 |
-.1 |
-89 |
2009 |
-.7 |
-902 |
2010 |
-.3 |
-378 |
2011 |
.1 |
162 |
(1) Less than 0.05 percent
Each annual benchmark revision affects 21 months of data for not seasonally adjusted series and five
years of data for seasonally adjusted series as described below. BLS revises employment from the
current March benchmark month back to the previous year's March benchmark using a simple linear
wedge procedure. Revised estimates for post-benchmark months are derived by applying the previously
calculated over-the-month sample changes to the revised March levels for April through October. Revised
business birth/death estimates also are incorporated into the post-benchmark months. Additionally, seasonal
adjustment models are rerun, and seasonally adjusted estimates are replaced for five years back.
November and December estimates revise due to both impacts of benchmarking and additional sample.
Additionally, new sample units are rotated into the survey starting with November.
As an example of benchmark effects, the March 2011 benchmark revisions (published in February 2012)
resulted in revised series from April 2010 through December 2011 on a not seasonally adjusted basis
and revised series from January 2007 through December 2011 on a seasonally adjusted basis.
See www.bls.gov/web/empsit/cesbmart.htm for more details on
the benchmarking process.
Historical Time Series Reconstructions to Avoid Discontinuities when Incorporating Methodological Changes
Beyond the monthly revisions and the benchmark revisions, CES employment estimates have been reconstructed
several times in order to avoid series breaks and provide users with continuous, comparable employment time
series suitable for economic analysis. The major reconstruction efforts are briefly described below.
Improvement to seasonal adjustment methodology. With the release of the 1995 benchmark revision
(in June 1996), BLS refined its seasonal adjustment procedures to control for survey interval variations, sometimes
referred to as the 4- versus 5-week effect. This improvement mitigated the effects that a variable number of
weeks between surveys had on the measurement of employment change, thus improving the measurement of true
economic trends. At that time, data for 1988 forward were revised to incorporate this new methodology.
CES sample redesign. Over a 4-year period, BLS introduced a new probability-based sample design;
it replaced an outmoded and less scientific quota sample-based design. The new design was phased in by major
industry division with the June 2000 through June 2003 benchmark releases. As each industry was phased in,
the post-benchmark estimates for that year were affected by the new sample composition.
CES Sample Redesign Phase-in Schedule
Year |
Industries converted to new sample design |
2000 |
Wholesale trade |
2001 |
Mining, Construction, Manufacturing |
2002 |
Transportation and public utilities; Finance, insurance, and real estate; Retail trade |
2003 |
Services |
Industry reclassification. CES periodically updates the National nonfarm payroll series to
revised North American Industry Classification System (NAICS) structures. This update usually occurs
every four to five years. For all NAICS updates, affected series are reconstructed back to at least 1990,
and in some cases, where longer histories are available, they are reconstructed back further. With the
release of the 2011 benchmark in February of 2012, CES converted from NAICS 2007 to NAICS 2012. The
conversion to NAICS 2012 resulted in minor content changes within the Manufacturing and the Retail
trade sectors, as well as minor coding changes within the Utilities and the Leisure and hospitality sectors.
Several industry titles and descriptions were also updated. For more information about the conversion to
the current NAICS 2012 structure, please visit http://www.bls.gov/ces/cesnaics12.htm.
Prior to the NAICS 2012 structure, CES estimates were classified under NAICS 2007 system, preceded by
the NAICS 2002 system. The NAICS system was updated from NAICS 2002 to NAICS 2007 in early 2008. For more
information about this conversion please visit
http://www.bls.gov/ces/cesnaics07.htm. Before
switching to NAICS 2002, the CES estimates were classified under the Standard Industrial Classification
(SIC) system. CES estimates were converted from SIC to NAICS 2002 in mid-2003. For more information about
the conversion from SIC to NAICS please visit http://www.bls.gov/ces/cesnaics.htm.
Other factors contributing to revisions. Over the time period covered by the revision and
collection rate tables referenced above, CES has introduced many program improvements; some of these
affect the revision patterns observed over time.
Monthly revisions. As noted above, the overall magnitude of these revisions has trended down
over time mainly due to automated and improved data collection techniques which raised the collection rates
for the first and second preliminary estimates. Other factors of note include:
Timing of benchmark revisions. Between 1980 and 2003, annual benchmark revision updates were
introduced in June of each year, concurrent with the March final sample-based estimates and the April second
preliminary estimates. The monthly revisions for March and April for these years were often larger than for
other months, because the March final and April second preliminary estimates were incorporating not only
additional sample but also other benchmark-related changes.
Beginning with the 2003 benchmark revision (published in 2004), BLS reduced the time required
to produce the annual revisions by four months and thus began publishing benchmark revisions in
February rather than June. Therefore from 2004 forward, the November final and December second
preliminary estimates are affected by benchmark revision updates, rather than the March final and
April second preliminary estimates.
Timing of seasonal adjustment updates. Between 1980 and June 1996 seasonal factors were updated on
an annual basis along with the benchmark revisions. Thus March final and April second preliminary were affected
by the recomputation of seasonal factors as well as other benchmarking procedures and additional sample receipts.
Between November 1996 and November 2002, BLS updated seasonal factors on a semi-annual basis, meaning that
September final and October second preliminary estimates as well as March final and April second preliminary
revisions were affected by seasonal factor updates.
Since June 2003 the CES program has used a concurrent seasonal adjustment procedure, meaning that seasonal
adjustment is rerun every month using all available months of estimates including the month currently being
estimated for first preliminary. This technique yields the best possible seasonal adjustment for the current
month and reduces benchmark revisions to over-the-month changes. In the application of the concurrent procedure,
the previous two months are revised to incorporate not only additional sample receipts but also new seasonal factors.
Thus there are no longer individual months that are more affected than others by seasonal factor updates. However,
this practice does mean that revisions from second preliminary to final sample-based estimates for each month are
affected by the CES replacement policy. Because CES revises only two months of estimates each month, the fourth
month back from the current first preliminary estimate is adjusted using a different set of seasonal factors than
the third month back. For example, with the release of October first preliminary data, factors are revised for
September and August, but not July.
Last Modified Date: April 6, 2012