Employment Situation Frequently Asked Questions

Frequently Asked Questions about Employment and Unemployment Estimates

1. 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 130,000 is statistically significant in
   the establishment survey, while the threshold for a statistically significant change
   in the household survey is about 600,000. However, the household survey has a more
   expansive scope than the establishment survey because it includes self-employed
   workers whose businesses are unincorporated, 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.
   For more information on the differences between the two surveys, please visit
   www.bls.gov/web/empsit/ces_cps_trends.htm.

2. 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. Data on the foreign and native born are published each month in table A-7 of
   The Employment Situation news release.

3. 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/web/empsit/cestn.htm#section7.

   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/empsit/cesbmart.htm.

4. Does the establishment survey sample include small firms?

   Yes. About 45 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 statewide total nonfarm employment
   estimate; firms from all states, size classes, and industries are appropriately
   sampled to achieve that goal.

5. 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.

6. Is the count of unemployed people limited to just those receiving unemployment
   insurance benefits?

   No. The estimate of unemployment is based on a monthly sample survey of households.
   All people 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.

7. Does the official unemployment rate exclude people who want a job but are not currently
   looking for work?

   Yes. However, there are separate estimates of people outside the labor force who
   want a job, including those who are not currently 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 table A-15 of The
   Employment Situation news release. For more information about these alternative
   measures, please visit www.bls.gov/cps/lfcharacteristics.htm#altmeasures.

8. 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.
   
   Typically, it is not possible to precisely quantify the effect of extreme weather on 
   payroll employment estimates. In order for severe weather conditions to reduce
   employment estimates, employees have to be off work without pay for the entire pay
   period. Employees who receive pay for any part of the pay period, even 1 hour, are
   counted in the payroll employment figures. For more information on how often employees
   are paid, please visit www.bls.gov/ces/publications/length-pay-period.htm.

   In the household survey, the reference period is generally the calendar week that
   includes the 12th of the month. People 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 people who had a job but
   were not at work due to bad weather. It also provides a measure of the number of
   people who usually work full time but had reduced hours due to bad weather. 
   
   Current and historical data are available on the household survey's most requested
   statistics page, please visit data.bls.gov/cgi-bin/surveymost?ln.