Impact of COVID-19 Pandemic on Productivity and Costs, Second Quarter 2020, Preliminary Data

The COVID-19 pandemic has had an unprecedented impact on the U.S. labor market. In March 2020, declines in employment were large and occurred over a short period of time. These changes were difficult to measure because the reference periods of the two BLS labor force surveys predated the COVID-19-related job losses that occurred in the latter part of March. To estimate monthly employment for BLS productivity measures, BLS adjusted its standard methodology for estimating total hours worked in the first quarter of 2020 to account for these job losses by incorporating data from the Unemployment Insurance claims data. The COVID-19 pandemic continues to affect the U.S. labor market. BLS conducted additional analysis to determine whether a similar adjustment for the second quarter of 2020 was necessary. The analysis showed that the adjusted estimates were very close to the published CES estimates. Based on this analysis, BLS determined that no adjustment was warranted.

For more information on the adjustments made to the first quarter 2020 estimates, please see:

• Statement on first quarter 2020, revised estimates
• Statement on first quarter 2020, preliminary estimates

Adjustment to employment and hours to account for production of ventilators in motor vehicle industry

The hours measures within durable manufacturing for second quarter 2020 were adjusted to account for the production of ventilators at facilities that normally produce motor vehicle parts. This adjustment had a negligible impact on durable manufacturing sector hours growth. The adjustment was unusual because, in general, the hours worked for a particular industry reflect overall hours worked of the establishments in that industry, even if those establishments also produce secondary and tertiary products associated with other industries.

Before the enactment of the Defense Production Act (DPA), the domestic motor vehicle manufacturing began to cease production of motor vehicle parts because of decreasing demand and supply shortages. Given assistance from the DPA, domestic motor vehicle manufacturing establishments were able to convert their production process to mass produce ventilators using custom parts. To capture this economic event, the Federal Reserve adjusted output. Similarly, BLS assigned estimated hours worked by autoworkers in ventilator production to the electro-medical and electrotherapeutic apparatus industry (NAICS 334510).

Last Modified Date: August 14, 2020