Academic journal article Monthly Labor Review

Changes in the Publication of Seasonally Adjusted Employment Cost Index Series

Academic journal article Monthly Labor Review

Changes in the Publication of Seasonally Adjusted Employment Cost Index Series

Article excerpt

Various factors have influenced the publication of ECI seasonally adjusted series, increasing the number of series published; these factors include the transition to NAICS and SOC, new publication procedures, the seasonal status of a series, and improvements in ECI processing

Since the first seasonally adjusted Employment Cost Index (ECI) data were published in the December 1990 ECI news release, which contained 33 seasonally adjusted series, the Bureau of Labor Statistics (BLS) has periodically introduced improvements to the publication of ECI seasonally adjusted data. (1) That first release of data included a total of 43 series in the seasonally adjusted data table, 10 of which were not seasonally adjusted because no measurable seasonality was found. In September 1991, 3 more series were added to the list of candidates for seasonal adjustment, and 37 of the 46 series published in the seasonal adjustment table were seasonally adjusted. From September 1991 through 2005, the year before major changes were introduced into the ECI, the number of series published in the seasonal adjustment table remained the same, at 46, and by 2005, 44 of them were seasonally adjusted. Except for the additions in 1991, from 1990 through 2005 changes in the number of seasonally adjusted series were due solely to changes in the seasonal status of the series. Beginning with the March 2006 estimates, however, changes in the publication of seasonally adjusted series were due not only to changes in the seasonal status of a series, but also to changes in how ECI data are classified, published, and processed. As of 2012, the ECI news release contains 136 candidate series for seasonal adjustment, and 132 seasonally adjusted series are published each quarter, providing users with more extensive information on changes in the cost of wages and benefits, free from the effects of events that follow regular patterns each year. This article describes the changes implemented by BLS and their effect on the availability of seasonally adjusted data.

The Employment Cost Index (ECI) is a measure of change in the cost of labor, without the influence of shifts in occupational and industry employment. The ECI, which is part of the National Compensation Survey, is a Principal Federal Economic Indicator, which means that it is one of the major statistical series that describe the current condition of the economy of the United States. Uses of the ECI include formulating monetary policy, adjusting wages in long-term contracts, and indexing hospital charges for Medicare reimbursement, to name a few. (2)

BLS publishes ECI estimates for civilian, (3) private industry, and state and local government workers by occupational and industry groups, excluding federal government workers, self-employed workers, and households. Published ECI estimates include indexes, 3-month percent changes, and 12-month percent changes for total compensation, wages and salaries, and benefits costs. (4) These data are published each quarter in the ECI news release and in historical listings. (5) Selected ECI series are seasonally adjusted and published in tables 1 through 3 of the ECI news release and the current-dollar ECI historical listings. (6) Each year, historical revisions to seasonally adjusted indexes, 3-month percent changes, and revised seasonal factors for the coming year are published 2 days before the release of the March ECI data. When the March ECI estimates are released, the seasonally adjusted revisions appear in the current-dollar historical listing. BLS also publishes ECI data in LABSTAT, the agency's public database on the Internet. (7)

Seasonal adjustment is a procedure that removes from an economic data series the effects of events that follow a more or less regular pattern each year. Examples of such events are increased construction activities during warm weather and school openings in the fall of the year. Removing these effects from an economic data series makes it easier for analysts to observe the long-run and cyclical changes in the series. …

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