Productivity and Costs: Adjusting March 2020 employment and hours to account for effects of COVID-19

BLS quarterly estimates of labor productivity growth combine output data published by the Bureau of Economic Analysis (BEA) with hours data primarily from the Current Employment Statistics (CES) survey. The reference period for the CES, the pay period that includes the 12th of the month, largely predated many of the COVID-19-related job losses and business closures that occurred in the latter part of March. (Please see the frequently asked questions that accompanied the March Employment Situation release.) BEA adjusted its advance estimate of GDP in areas where routine GDP estimation methods and sources did not sufficiently capture the changes in economic activity that occurred at the end of the first quarter of 2020. In order to publish an estimate of total hours that reflects the entire first quarter of 2020, BLS made analogous adjustments to its estimates of total hours worked.

Total hours are produced by combining employment and average weekly hours data. The adjustments to total hours were made through adjustments to employment, and are based primarily on the Department of Labor’s Employment and Training Administration weekly reports of the number of initial claims for unemployment insurance (UI) benefits. These weekly reports capture job losses that occurred after the CES reference period. No adjustment was made to average weekly hours.

BLS combined data from the CES with the initial UI claims data to estimate March employment week by week. BLS used CES data from February 2020 and recent trends in employment to estimate employment for the first week of March. These estimates account for employment growth that likely occurred between the end of the reference period in February and the first week of March. The March 2020 CES data were used directly to estimate employment in week two of March.

To account for the job losses that occurred in the latter part of March, BLS used not seasonally adjusted initial UI claims data to estimate job losses for 3-digit NAICS industries. BLS estimated employment for the third week of March using week two employment adjusted by the initial UI claims for the week ending on March 21. For the remainder of the month, BLS similarly estimated employment using the initial UI claims for the week ending on March 28, as well as a portion of the initial UI claims filed in the week ending April 4 to account for the last few days of March.

These estimates are subject to revision as source data are revised and new data become available.

Last Modified Date: May 7, 2020