THE EMPLOYMENT SITUATION -- JANUARY 2012



Total nonfarm payroll employment rose by 243,000 in January, and the

unemployment rate decreased to 8.3 percent, the U.S. Bureau of Labor

Statistics reported today. Job growth was widespread in the private

sector, with large employment gains in professional and business

services, leisure and hospitality, and manufacturing. Government

employment changed little over the month.



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  |                                                                 |

  |            Changes to The Employment Situation Data             |

  |                                                                 |

  |Establishment survey data have been revised as a result of the   |

  |annual benchmarking process and the updating of seasonal         |

  |adjustment factors. Also, household survey data for January 2012 |

  |reflect updated population estimates. See the notes at the end of|

  |the news release for more information about these changes.       |

  |                                                                 |

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Household Survey Data



The unemployment rate declined by 0.2 percentage point in January to

8.3 percent; the rate has fallen by 0.8 point since August. (See table

A-1.) The number of unemployed persons declined to 12.8 million in

January. (See the note and tables B and C for information about annual

population adjustments to the household survey estimates.)



Among the major worker groups, the unemployment rates for adult men

(7.7 percent) and blacks (13.6 percent) declined in January. The

unemployment rates for adult women (7.7 percent), teenagers (23.2

percent), whites (7.4 percent), and Hispanics (10.5 percent) were

little changed. The jobless rate for Asians was 6.7 percent, not

seasonally adjusted. (See tables A-1, A-2, and A-3.)



In January, the number of job losers and persons who completed

temporary jobs fell to 7.3 million. The number of long-term unemployed

(those jobless for 27 weeks or more) was little changed at 5.5 million

and accounted for 42.9 percent of the unemployed. (See tables A-11 and

A-12.)



After accounting for the annual adjustments to the population

controls, the employment-population ratio (58.5 percent) rose in

January, while the civilian labor force participation rate held at

63.7 percent. (See table A-1. For additional information about the

effects of the population adjustments, see table C.)



The number of persons employed part time for economic reasons, at 8.2

million, changed little in January. These individuals were working

part time because their hours had been cut back or because they were

unable to find a full-time job. (See table A-8.)



In January, 2.8 million persons were marginally attached to the labor

force, essentially unchanged from a year earlier. (The data are not

seasonally adjusted.) These individuals were not in the labor force,

wanted and were available for work, and had looked for a job sometime

in the prior 12 months. They were not counted as unemployed because

they had not searched for work in the 4 weeks preceding the survey.

(See table A-16.)



Among the marginally attached, there were 1.1 million discouraged

workers in January, little different from a year earlier. (The data

are not seasonally adjusted.) Discouraged workers are persons not

currently looking for work because they believe no jobs are available

for them. The remaining 1.7 million persons marginally attached to the

labor force in January had not searched for work in the 4 weeks

preceding the survey for reasons such as school attendance or family

responsibilities. (See table A-16.)



Establishment Survey Data



Total nonfarm payroll employment rose by 243,000 in January. Private-

sector employment grew by 257,000, with the largest employment gains

in professional and business services, leisure and hospitality, and

manufacturing. Government employment was little changed over the

month. (See table B-1.)



Professional and business services continued to add jobs in January

(+70,000). About half of the increase occurred in employment services

(+33,000). Job gains also occurred in accounting and bookkeeping

(+13,000) and in architectural and engineering services (+7,000).



Over the month, employment in leisure and hospitality increased by

44,000, primarily in food services and drinking places (+33,000).

Since a recent low in February 2010, food services has added 487,000

jobs.



In January, health care employment continued to grow (+31,000). Within

the industry, hospitals and ambulatory care services each added 13,000

jobs.



Wholesale trade employment increased by 14,000 over the month. Since a

recent employment low in May 2010, wholesale trade has added 144,000

jobs.



Employment in retail trade continued to trend up in January. Job gains

in department stores (+19,000), health and personal care stores

(+7,000), and automobile dealers (+7,000) were partially offset by

losses in clothing and clothing accessory stores (-14,000). Since an

employment trough in December 2009, retail trade has added 390,000

jobs.



In January, employment in information declined by 13,000, including a

loss of 8,000 jobs in the motion picture and sound recording industry.



In the goods-producing sector, manufacturing added 50,000 jobs. Nearly

all of the increase occurred in durable goods manufacturing, with job

growth in fabricated metal products (+11,000), machinery (+11,000),

and motor vehicles and parts (+8,000). Durable goods manufacturing has

added 418,000 jobs over the past 2 years.



Employment in construction increased by 21,000 in January, following a

gain of 31,000 in the previous month. Over the past 2 months,

nonresidential specialty trade contractors added 30,000 jobs.



Mining added 10,000 jobs in January, with most of the gain in support

activities for mining (+8,000). Since a recent low in October 2009,

mining employment has expanded by 172,000.



Government employment changed little in January. Over the past 12

months, the sector has lost 276,000 jobs, with declines in local

government; state government, excluding education; and the U.S. Postal

Service.



The average workweek for all employees on private nonfarm payrolls was

unchanged in January. The manufacturing workweek increased by 0.3 hour

to 40.9 hours, and factory overtime increased by 0.1 hour to 3.4

hours. The average workweek for production and nonsupervisory

employees on private nonfarm payrolls edged up by 0.1 hour to 33.8

hours. (See tables B-2 and B-7.)



In January, average hourly earnings for all employees on private

nonfarm payrolls rose by 4 cents, or 0.2 percent, to $23.29. Over the

past 12 months, average hourly earnings have increased by 1.9 percent.

In January, average hourly earnings of private-sector production and

nonsupervisory employees edged up by 2 cents, or 0.1 percent, to

$19.62. (See tables B-3 and B-8.)



The change in total nonfarm payroll employment for November was

revised from +100,000 to +157,000, and the change for December was

revised from +200,000 to +203,000. Monthly revisions result from

additional sample reports and the monthly recalculation of seasonal

factors. The annual benchmark process also contributed to these

revisions.



____________

The Employment Situation for February is scheduled to be released on

Friday, March 9, 2012, at 8:30 a.m. (EST).



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  |                                                                 |

  |                 Changes to the Household Survey                 |

  |                                                                 |

  |Effective with the collection of household survey data for       |

  |January 2012, the questions on race and Hispanic or Latino       |

  |ethnicity were modified to incorporate minor wording changes.    |

  |                                                                 |

  |In January 2012, the Census Bureau, which conducts the household |

  |survey, began a year-long process of reorganizing its regional   |

  |office structure; for more information on these changes see      |

  |www.census.gov/newsroom/pdf/General_QAs_FINAL2.pdf. Both the     |

  |Census Bureau and the Bureau of Labor Statistics will monitor    |

  |survey operations during the transition period. No impact on the |

  |employment and unemployment estimates from the survey is         |

  |anticipated from this organizational change.                     |

  |                                                                 |

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                  Revisions to Establishment Survey Data



  In accordance with annual practice, the establishment survey data

  released today have been revised to reflect comprehensive counts of

  payroll jobs, or benchmarks. These counts are derived principally from

  unemployment insurance tax records for March 2011. In addition, the

  data were updated to the 2012 North American Industry Classification

  System (NAICS) from the 2007 NAICS. This update resulted in minor

  changes to several detailed industries. The benchmark process resulted

  in revisions to not seasonally adjusted data from April 2010 forward

  and to seasonally adjusted data from January 2007 forward. Some

  historical data predating the normal benchmark revision period also

  were revised due to the implementation of NAICS 2012 and other minor

  changes related to rounding and the recalculation of aggregate series.



  Table A presents revised total nonfarm employment data on a seasonally

  adjusted basis for January through December 2011. The revised data for

  April 2011 forward incorporate the effect of applying the rate of

  change measured by the sample to the new benchmark level, as well as

  updated net business birth/death model adjustments and new seasonal

  adjustment factors. The November and December 2011 data also reflect

  the routine incorporation of additional sample receipts into the

  November final and December second preliminary estimates. The total

  nonfarm employment level for March 2011 was revised upward by 165,000

  (162,000 on a not seasonally adjusted basis). The previously published

  level for December 2011 was revised upward by 266,000 (231,000 on a

  not seasonally adjusted basis).



  An article that discusses the benchmark and post-benchmark revisions,

  the change to NAICS 2012, and the other technical issues, as well as

  all revised historical Current Employment Statistics (CES) data, can

  be accessed through the CES homepage at www.bls.gov/ces/. Information

  on the revisions released today also may be obtained by calling (202)

  691-6555.



    Table A. Revisions in total nonfarm employment, January-December 2011,

    seasonally adjusted                                                    



    (Numbers in thousands)                                                         

    ___________________________________________________________________________________

                   |                                 |                     	       |

                   |              Level              |    Over-the-month change        |

                   |---------------------------------|---------------------------------|

     Year and month|    As    |          |           |    As    |          |           |

                   |previously|    As    | Difference|previously|    As    | Difference|

                   |published |  revised |           |published |  revised |           |

    _______________|__________|__________|___________|__________|__________|___________|

                   |          |          |           |          |          |           |

         2011      |          |          |           |          |          |           |

         	   |          |	         |	     |	        |	   |           |

    January........|  130,328 | 130,456  |   128     |    68    |   110    |    42     |

    February.......|  130,563 | 130,676  |   113     |   235    |   220    |   -15     |

    March..........|  130,757 | 130,922  |   165     |   194    |   246    |    52     |

    April..........|  130,974 | 131,173  |   199     |   217    |   251    |    34     |

    May............|  131,027 | 131,227  |   200     |    53    |    54    |     1     |

    June...........|  131,047 | 131,311  |   264     |    20    |    84    |    64     |

    July...........|  131,174 | 131,407  |   233     |   127    |    96    |   -31     |

    August.........|  131,278 | 131,492  |   214     |   104    |    85    |   -19     |

    September......|  131,488 | 131,694  |   206     |   210    |   202    |    -8     |

    October........|  131,600 | 131,806  |   206     |   112    |   112    |     0     |

    November.......|  131,700 | 131,963  |   263     |   100    |   157    |    57     |

    December (p)...|  131,900 | 132,166  |   266     |   200    |   203    |     3     |

    -----------------------------------------------------------------------------------

     p = preliminary.



        Adjustments to Population Estimates for the Household Survey



  Effective with data for January 2012, updated population estimates

  which reflect the results of Census 2010 have been used in the

  household survey. Population estimates for the household survey are

  developed by the U.S. Census Bureau. Each year, the Census Bureau

  updates the estimates to reflect new information and assumptions about

  the growth of the population during the decade. The change in

  population reflected in the new estimates results from the

  introduction of the Census 2010 count as the new population base, 

  adjustments for net international migration, updated vital statistics and

  other information, and some methodological changes in the estimation

  process. The vast majority of the population change, however, is due

  to the change in base population from Census 2000 to Census 2010.



  In accordance with usual practice, BLS will not revise the official

  household survey estimates for December 2011 and earlier months. To

  show the impact of the population adjustment, however, differences in

  selected December 2011 labor force series based on the old and new

  population estimates are shown in table B.



  The adjustment increased the estimated size of the civilian

  noninstitutional population in December by 1,510,000, the civilian

  labor force by 258,000, employment by 216,000, unemployment by 42,000,

  and persons not in the labor force by 1,252,000. Although the total

  unemployment rate was unaffected, the labor force participation rate

  and the employment-population ratio were each reduced by 0.3

  percentage point. This was because the population increase was

  primarily among persons 55 and older and, to a lesser degree, persons

  16 to 24 years of age. Both these age groups have lower levels of

  labor force participation than the general population.



  Data users are cautioned that these annual population adjustments

  affect the comparability of household data series over time. Table C

  shows the effect of the introduction of new population estimates on

  the comparison of selected labor force measures between December 2011 and

  January 2012. Additional information on the population adjustments and

  their effect on national labor force estimates is available at

  www.bls.gov/cps/cps12adj.pdf.



  Table B. Effect of the updated population controls on December 2011 estimates by sex, race, and

  Hispanic or Latino ethnicity, not seasonally adjusted                                    



  (Numbers in thousands)                                                      



  _____________________________________________________________________________________________________

                                              |      |     |      |       |        |       |           

                                              |      |     |      |       |  Black |       |           

                                              |      |     |      |       |    or  |       |  Hispanic 

                  Category                    |Total | Men | Women| White | African| Asian | or Latino 

                                              |      |     |      |       |American|       | ethnicity 

                                              |      |     |      |       |        |       |           

  ____________________________________________|______|_____|______|_______|________|_______|___________

   					      |	     |	   |	  |	  |	   |	   |

  Civilian noninstitutional population........| 1,510| -116| 1,626| -1,181|     407|  1,161|   1,330

    Civilian labor force......................|   258| -413|   671| -1,385|     166|    731|     781

      Participation rate......................|   -.3|  -.3|   -.2|    -.3|     -.3|    -.2|     -.3

     Employed.................................|   216| -368|   584| -1,266|     165|    676|     675

      Employment-population ratio.............|   -.3|  -.3|   -.2|    -.3|     -.2|    -.2|     -.3

     Unemployed...............................|    42|  -45|    87|   -119|       2|     55|     106

      Unemployment rate.......................|    .0|   .0|    .0|     .0|     -.1|     .1|      .1

    Not in labor force........................| 1,252|  297|   955|    205|     240|    430|     550

  ____________________________________________|______|_____|______|_______|________|_______|___________



   NOTE:  Detail may not sum to totals because of rounding. Estimates for the above race groups (white,

 black or African American, and Asian) do not sum to totals because data are not presented for all races.

 Persons whose ethnicity is identified as Hispanic or Latino may be of any race.           



  Table C. December 2011-January 2012 changes in selected labor force        

  measures, with adjustments for population control effects                   



  (Numbers in thousands)                                                      



  ____________________________________________________________________________

                                       |           |            |             

                                       |           |            |  Dec.-Jan.  

                                       | Dec.-Jan. |    2012    |   change,   

                                       |  change,  | population |  after re-  

                Category               |    as     |   control  |  moving the 

                                       | published |   effect   |  population 

                                       |           |            |   control   

                                       |           |            |  effect(1) 

  _____________________________________|___________|____________|_____________

                                       |           |            |             

  Civilian noninstitutional population.|  1,685    |      1,510 |     175

    Civilian labor force...............|    508    |        258 |     250

      Participation rate...............|    -.3    |        -.3 |      .0

     Employed..........................|    847    |        216 |     631

      Employment-population ratio......|     .0    |        -.3 |      .3

     Unemployed........................|   -339    |         42 |    -381

      Unemployment rate................|    -.2    |         .0 |     -.2

    Not in labor force.................|  1,177    |       1,252|     -75    

  _____________________________________|___________|____________|_____________



    (1) This Dec.-Jan. change is calculated by subtracting the population 

  control effect from the over-the-month change in the published seasonally

  adjusted estimates.

Frequently Asked Questions about Employment and Unemployment Estimates



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 100,000 is statistically significant in

the establishment survey, while the threshold for a statistically significant

change in the household survey is about 400,000. However, the household survey has

a more expansive scope than the establishment survey because it includes the self-

employed, 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.



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.



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/ces/cesrevinfo.htm.



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/cesbmart.htm.



Does the establishment survey sample include small firms?



Yes; about 40 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 total nonfarm employment estimate; firms

from all size classes and industries are appropriately sampled to achieve that goal.



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.



Is the count of unemployed persons limited to just those people receiving

unemployment insurance benefits?



No; the estimate of unemployment is based on a monthly sample survey of households.

All persons 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.



Does the official unemployment rate exclude people who have stopped

looking for work?



Yes; however, there are separate estimates of persons outside the labor force who

want a job, including those who have stopped 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 The Employment

Situation news release.



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.



In order for severe weather conditions to reduce the estimate of payroll employment,

employees have to be off work without pay for the entire pay period. About half of

all employees in the payroll survey have a 2-week, semi-monthly, or monthly pay

period. Employees who receive pay for any part of the pay period, even 1 hour, are

counted in the payroll employment figures. It is not possible to quantify the effect

of extreme weather on estimates of employment from the establishment survey.



In the household survey, the reference period is generally the calendar week that

includes the 12th of the month. Persons 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 persons who usually work full

time but had reduced hours, or had a job but were not at work due to bad weather.

Current and historical data are available on the household survey’s most requested

statistics page at http://data.bls.gov/cgi-bin/surveymost?ln.

Technical Note



   This news release presents statistics from two major surveys, the

Current Population Survey (CPS; household survey) and the Current Employment

Statistics survey (CES; establishment survey). The household survey provides

information on the labor force, employment, and unemployment that appears

in the "A" tables, marked HOUSEHOLD DATA. It is a sample survey of about

60,000 eligible households conducted by the U.S. Census Bureau for the U.S.

Bureau of Labor Statistics (BLS). 



   The establishment survey provides information on employment, hours, 

and earnings of employees on nonfarm payrolls; the data appear in the 

"B" tables, marked ESTABLISHMENT DATA. BLS collects these data each 

month from the payroll records of a sample of nonagricultural business

establishments. Each month the CES program surveys about 141,000 businesses

and government agencies, representing approximately 486,000 individual worksites,

in order to provide detailed industry data on employment, hours, and earnings of

workers on nonfarm payrolls. The active sample includes approximately one-third

of all nonfarm payroll employees. 



   For both surveys, the data for a given month relate to a particular week

or pay period. In the household survey, the reference period is generally

the calendar week that contains the 12th day of the month. In the establishment

survey, the reference period is the pay period including the 12th, which 

may or may not correspond directly to the calendar week.



Coverage, definitions, and differences between surveys



   Household survey. The sample is selected to reflect the entire

civilian noninstitutional population. Based on responses to a series

of questions on work and job search activities, each person 16 years

and over in a sample household is classified as employed, unemployed,

or not in the labor force.



   People are classified as employed if they did any work at all as paid

employees during the reference week; worked in their own business, 

profession, or on their own farm; or worked without pay at least 15 

hours in a family business or farm. People are also counted as employed

if they were temporarily absent from their jobs because of illness, bad

weather, vacation, labor-management disputes, or personal reasons.



   People are classified as unemployed if they meet all of the following

criteria: they had no employment during the reference week; they were

available for work at that time; and they made specific efforts to find

employment sometime during the 4-week period ending with the reference

week. Persons laid off from a job and expecting recall need not be 

looking for work to be counted as unemployed. The unemployment data

derived from the household survey in no way depend upon the eligibility

for or receipt of unemployment insurance benefits.



   The civilian labor force is the sum of employed and unemployed persons.

Those not classified as employed or unemployed are not in the labor 

force. The unemployment rate is the number unemployed as a percent of

the labor force. The labor force participation rate is the labor force

as a percent of the population, and the employment-population ratio is

the employed as a percent of the population. Additional information about

the household survey can be found at www.bls.gov/cps/documentation.htm.



   Establishment survey. The sample establishments are drawn from private

nonfarm businesses such as factories, offices, and stores, as well as 

from federal, state, and local government entities. Employees on nonfarm

payrolls are those who received pay for any part of the reference pay 

period, including persons on paid leave. Persons are counted in each job

they hold. Hours and earnings data are produced for the private sector

for all employees and for production and nonsupervisory employees. 

Production and nonsupervisory employees are defined as production and 

related employees in manufacturing and mining and logging, construction

workers in construction, and nonsupervisory employees in private service-

providing industries. 



   Industries are classified on the basis of an establishment’s principal

activity in accordance with the 2012 version of the North American Industry

Classification System. Additional information about the establishment survey

can be found at www.bls.gov/ces/#technical.



   Differences in employment estimates. The numerous conceptual and

methodological differences between the household and establishment

surveys result in important distinctions in the employment estimates

derived from the surveys. Among these are:



   --The household survey includes agricultural workers, the self-

     employed, unpaid family workers, and private household workers

     among the employed. These groups are excluded from the

     establishment survey.



   --The household survey includes people on unpaid leave among the

     employed. The establishment survey does not.



   --The household survey is limited to workers 16 years of age and

     older. The establishment survey is not limited by age.



   --The household survey has no duplication of individuals, because

     individuals are counted only once, even if they hold more than one

     job. In the establishment survey, employees working at more than

     one job and thus appearing on more than one payroll are counted

     separately for each appearance.



Seasonal adjustment



   Over the course of a year, the size of the nation's labor force and

the levels of employment and unemployment undergo regularly occurring

fluctuations. These events may result from seasonal changes in weather, 

major holidays, and the opening and closing of schools. The effect of 

such seasonal variation can be very large.



   Because these seasonal events follow a more or less regular pattern

each year, their influence on the level of a series can be tempered by

adjusting for regular seasonal variation. These adjustments make 

nonseasonal developments, such as declines in employment or increases

in the participation of women in the labor force, easier to spot. For

example, in the household survey, the large number of youth entering

the labor force each June is likely to obscure any other changes that

have taken place relative to May, making it difficult to determine if

the level of economic activity has risen or declined. Similarly, in

the establishment survey, payroll employment in education declines by

about 20 percent at the end of the spring term and later rises with

the start of the fall term, obscuring the underlying employment trends

in the industry. Because seasonal employment changes at the end and

beginning of the school year can be estimated, the statistics can be

adjusted to make underlying employment patterns more discernable.  The

seasonally adjusted figures provide a more useful tool with which to

analyze changes in month-to-month economic activity.



   Many seasonally adjusted series are independently adjusted in both

the household and establishment surveys. However, the adjusted series

for many major estimates, such as total payroll employment, employment

in most major sectors, total employment, and unemployment are computed

by aggregating independently adjusted component series. For example,

total unemployment is derived by summing the adjusted series for four

major age-sex components; this differs from the unemployment estimate

that would be obtained by directly adjusting the total or by combining

the duration, reasons, or more detailed age categories.



   For both the household and establishment surveys, a concurrent

seasonal adjustment methodology is used in which new seasonal factors

are calculated each month using all relevant data, up to and including

the data for the current month. In the household survey, new seasonal

factors are used to adjust only the current month's data. In the 

establishment survey, however, new seasonal factors are used each month 

to adjust the three most recent monthly estimates. The prior 2 months 

are routinely revised to incorporate additional sample reports and 

recalculated seasonal adjustment factors. In both surveys, 5-year revisions

to historical data are made once a year.



Reliability of the estimates



   Statistics based on the household and establishment surveys are

subject to both sampling and nonsampling error. When a sample rather

than the entire population is surveyed, there is a chance that the

sample estimates may differ from the "true" population values they

represent. The exact difference, or sampling error, varies depending

on the particular sample selected, and this variability is measured by

the standard error of the estimate. There is about a 90-percent chance, 

or level of confidence, that an estimate based on a sample will differ 

by no more than 1.6 standard errors from the "true" population value 

because of sampling error. BLS analyses are generally conducted at the 

90-percent level of confidence.



   For example, the confidence interval for the monthly change in

total nonfarm employment from the establishment survey is on the order

of plus or minus 100,000. Suppose the estimate of nonfarm employment

increases by 50,000 from one month to the next. The 90-percent confidence

interval on the monthly change would range from -50,000 to +150,000 

(50,000 +/- 100,000). These figures do not mean that the sample results

are off by these magnitudes, but rather that there is about a 90-percent

chance that the "true" over-the-month change lies within this interval.

Since this range includes values of less than zero, we could not say with

confidence that nonfarm employment had, in fact, increased that month.

If, however, the reported nonfarm employment rise was 250,000, then all

of the values within the 90-percent confidence interval would be greater

than zero. In this case, it is likely (at least a 90-percent chance) that

nonfarm employment had, in fact, risen that month. At an unemployment rate

of around 5.5 percent, the 90-percent confidence interval for the monthly

change in unemployment as measured by the household survey is about 

+/- 280,000, and for the monthly change in the unemployment rate it is

about +/-0.19 percentage point.



   In general, estimates involving many individuals or establishments

have lower standard errors (relative to the size of the estimate) than

estimates which are based on a small number of observations. The precision

of estimates also is improved when the data are cumulated over time, such

as for quarterly and annual averages.



   The household and establishment surveys are also affected by

nonsampling error, which can occur for many reasons, including the failure

to sample a segment of the population, inability to obtain information

for all respondents in the sample, inability or unwillingness of 

respondents to provide correct information on a timely basis, mistakes

made by respondents, and errors made in the collection or processing of

the data.



   For example, in the establishment survey, estimates for the most

recent 2 months are based on incomplete returns; for this reason, these

estimates are labeled preliminary in the tables. It is only after two

successive revisions to a monthly estimate, when nearly all sample

reports have been received, that the estimate is considered final.



   Another major source of nonsampling error in the establishment survey

is the inability to capture, on a timely basis, employment generated by

new firms. To correct for this systematic underestimation of employment

growth, an estimation procedure with two components is used to account

for business births. The first component excludes employment losses from

business deaths from sample-based estimation in order to offset the 

missing employment gains from business births. This is incorporated into

the sample-based estimation procedure by simply not reflecting sample

units going out of business, but imputing to them the same employment

trend as the other firms in the sample. This procedure accounts for most

of the net birth/death employment.



   The second component is an ARIMA time series model designed to estimate

the residual net birth/death employment not accounted for by the 

imputation. The historical time series used to create and test the ARIMA

model was derived from the unemployment insurance universe micro-level

database, and reflects the actual residual net of births and deaths over

the past 5 years.



   The sample-based estimates from the establishment survey are adjusted

once a year (on a lagged basis) to universe counts of payroll employment

obtained from administrative records of the unemployment insurance program.

The difference between the March sample-based employment estimates and

the March universe counts is known as a benchmark revision, and serves as

a rough proxy for total survey error. The new benchmarks also incorporate

changes in the classification of industries. Over the past decade, absolute

benchmark revisions  for total nonfarm employment have averaged 0.3 percent,

with a range from -0.7 to 0.6 percent.



Other information



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