Understanding the Employment Measures from the CPS and CES Survey: The Monthly BLS "Employment Situation" News Release Includes Two Distinct Employment Measures from Two Different Surveys; Although These Measures Track Well over the Long Term, Occasional Differences in Trend Have Confounded Labor Market Analysts
Bowler, Mary, Morisi, Teresa L., Monthly Labor Review
Each month, the Bureau of Labor Statistics (BLS, the Bureau)releases data on current employment in the "Employment Situation" news release. The data come from two different surveys: the Current Population Survey (CPS), also known as the household survey, and the Current Employment Statistics (CES) survey, also known as the establishment or payroll survey. These data are important indicators of the strength of the labor market and provide an early snapshot of the state of the Nation's economy.
Although both surveys measure employment in the United States, they have different definitions of employment, along with different samples, estimation procedures, and concepts. Despite these differences, the two series track well together over long periods; at times, however, their rates of growth or decline differ significantly. These diverging movements in employment between the two surveys have been researched in the past. Most recently, they gained prominence in the mid-to late 1990s and during the recession and recovery from 2001 to 2004. (1) In the mid-to late 1990s, employment from the establishment survey grew faster than employment as measured by the household survey. During the recent recession and postrecession period, establishment survey employment declined for a number of months after the end of the recession, while household survey employment expanded.
Why do these two employment surveys sometimes give different pictures of the labor market? There are a number of differences between the two surveys that can be quantified. Other areas of difference, however, are more difficult to measure. This article discusses the various differences and suggests reasons those differences may or may not affect the divergences between the two employment series. The first portion of the article offers a general background on the two surveys and a summary of past research into earlier divergences in the 1960s, 1970s, and 1980s. The second portion examines the latest BLS research into the divergences in the mid-to late 1990s through 2004. (2)
The two surveys
The cPs and the CES survey are monthly sample surveys; the CPS is a household survey, while the CES survey is a survey of businesses as well as government establishments. (Exhibit 1 summarizes the key features of the two surveys.) With a sample of about 60,000 eligible households, the cps covers the U.S. civilian noninstitutional population aged 16 years and older. The survey results are collected for the Bureau of Labor Statistics by the U.S. Census Bureau. Interviewers from the Census Bureau contact households and ask questions regarding the labor force status of members of the household during the calendar week that includes the 12th day of the month. The broad coverage of the cps encompasses not only wage and salary workers, but also the self-employed, farmworkers, unpaid family workers, persons employed by private households, and workers temporarily absent from work without pay. The CPS provides information on labor force status by detailed demographic characteristics, such as sex, age, race, and ethnicity. Data are collected not only on the employed, but also on the unemployed and on those persons who are not in the labor force. (3)
The CES survey is a Federal-State cooperative program in which the Bureau of Labor Statistics works with State employment security agencies to collect data each month on employment, hours, and earnings from a sample of nonfarm establishments, including government. The CES survey sample, which includes about 160,000 U.S. firms of all sizes, covers about 400,000 worksites. The survey counts nonfarm payroll jobs only--with no age restriction on the employed--and does not include the self-employed. Businesses report the number of persons on their payrolls who received pay during the pay period that includes the 12th day of the month. Workers who did not receive pay during the pay period are not counted. CES data are available by detailed industry and geographic area. …