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Economic SYNOPSES
short essays and reports on the economic issues of the day
2008 ■ Number 7

An Expanded Look at Employment
Kevin L. Kliesen

O

n the first Friday of each month, the Bureau of Labor
Statistics (BLS) releases its closely scrutinized monthly
employment report. Data in this report are derived from
two surveys: the Census Bureau’s Current Population Survey, also
known as the household survey; and the Current Employment
Statistics survey (CES), which is a survey of nonagricultural
business establishments (including government offices).1
One of the limitations of the CES is that data for average
weekly hours and average hourly earnings are reported for only
a subset of workers: currently, production, construction, and nonsupervisory workers. The production classification is used in the
goods-producing sector, while the non-supervisory classification
is used in the service-producing industries. Workers in these two
categories account for about 80 percent of private nonagricultural
employment.
According to the BLS, this classification system has become
increasingly archaic. Many employers do not classify workers by
these two categories, which has led to relatively high nonresponse
rates.2 Looking to the future, the BLS began publishing an experimental series in April 2006 that measures average hourly earnings
and average weekly hours of all nonfarm private-sector employees.
The BLS also began publishing an experimental gross monthly
earnings series that includes both wages and salaries and benefits
such as bonuses, stock options, and employer contributions to
401(k) plans. The existing BLS average hourly earnings series
excludes these kinds of benefits.
These experimental data are relatively new and so are not
seasonally adjusted, as the existing data are. Moreover, these data
are published with a two-month lag. (For example, if the official
data are available for January 2008, the experimental series are

available only through November 2007.) The experimental allemployee series for hours and earnings will become the official
data in February 2010, with the release of the January 2010 data.
At that time the BLS believes that it will have had enough time
to reliably estimate monthly seasonal factors.
These experimental hours and earnings series have potentially
significant implications for measures of nonfarm business productivity and personal income. For example, the BLS uses the CESbased series of hours paid of production and non-supervisory
workers as the key input into its measure of hours worked (the
denominator in output per hour).3 If the existing CES series is
not reporting a complete picture of hours worked, then measures
of productivity will be affected.
The charts show the percentage difference between the existing
and experimental series for average hourly earnings and average
weekly hours (not seasonally adjusted): The experimental measure
of hours is on average between 1 and 3 percent higher than the
existing measure. The experimental measure of average hourly
earnings is also consistently higher than the existing measure: As
of November 2007, this difference was about 19.5 percent ($21.12
versus $17.63, respectively). These charts seem to imply that
workers not currently classified as production or non-supervisory
employees tend to work longer hours and earn more per hour. ■
1 For more detail, see the BLS’s Handbook of Methods; www.bls.gov/opub/hom/
home.htm.
2 “CES Program: Changes Planned for Hours and Earnings Series.” Monthly Labor

Review, October 2003, pp. 38-39; www.bls.gov/opub/mlr/2003/10/ressum1.pdf.
3

See Parker, Robert P. “New Monthly Hours and Earnings Measures from the
Bureau of Labor Statistics’ Current Employment Statistics Program.” Business
Economics, April 2007, pp. 69-74.

Experimental Series Relative to Existing BLS Series
Average Weekly Hours

Average Hourly Earnings

Percentage Difference

Percentage Difference

4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0

22.0
21.5
21.0
November 2007

Mar
06

Jun
06

Sep
06

Dec
06

Mar
07

Jun
07

Sep
07

Dec
07

20.5
20.0
19.5
19.0

November 2007

Mar
06

Jun
06

Sep
06

Dec
06

Mar
07

Views expressed do not necessarily reflect official positions of the Federal Reserve System.

research.stlouisfed.org

Jun
07

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07

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07