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 about 100,000 is statistically significant in
the establishment survey, while the threshold for a statistically significant
change in the household survey 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?

It is likely that both surveys include at least some undocumented immigrants. However,
neither the establishment nor the household survey is designed to identify the legal
status of workers. Therefore, it is not possible to determine how many are counted in
either survey. The establishment survey does not collect data on the legal status of
workers. The household survey does include questions which identify the foreign and
native born, but it does not include questions about the legal status of the foreign
born.

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 succeeding 2 months, to incorporate
additional sample receipts from respondents in the survey and recalculated seasonal
adjustment factors. For more information on the monthly revisions, please visit
www.bls.gov/ces/cesrevinfo.htm.

On an annual basis, the establishment survey incorporates a benchmark revision 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 business
establishments with fewer than 20 employees. The establishment survey sample 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 sampling 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 households.
All persons who are without jobs and are actively seeking and available to work
are included among the unemployed. (People on temporary layoff are included even if
they do not actively seek work.) There is no requirement or question 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 (some of which include discouraged workers and other groups not
officially counted as unemployed) are published each month in The Employment
Situation news release.

How can unusually severe weather affect employment and hours estimates?

In the establishment survey, the reference period is the pay period that includes
the 12th of the month. Unusually severe weather is more likely to have an impact
on average weekly hours than on employment. Average weekly hours are estimated for
paid time during the pay period, including pay for holidays, sick leave, or other
time off. The impact of severe weather on hours estimates typically, but not always,
results in a reduction in average weekly hours. For example, some employees may be
off work for part of the pay period and not receive pay for the time missed, while
some workers, such as those dealing with cleanup or repair, may work extra hours.

In order for severe weather conditions to reduce the estimate of payroll employment,
employees have to be off work without pay for the entire pay period. About half of
all employees in the payroll survey have a 2-week, semi-monthly, or monthly pay
period. Employees who receive pay for any part of the pay period, even 1 hour, are
counted in the payroll employment figures. It is not possible to quantify the effect
of extreme weather on estimates of employment from the establishment survey.


In the household survey, the reference period is generally the calendar week that
includes the 12th of the month. Persons who miss the entire week’s work for weather-
related events are counted as employed whether or not they are paid for the time off.
The household survey collects data on the number of persons who usually work full
time but had reduced hours, or had a job but were not at work due to bad weather.
Current and historical data are available on the household survey’s most requested
statistics page at http://data.bls.gov/cgi-bin/surveymost?ln.