Improving Estimates of Employment in Expanding and Contracting Businesses

The Current Employment Statistics (CES) program produces estimates of employment, hours, and earnings by industry on a monthly basis for the non-agricultural economy. Recent research has suggested that the CES respondent data can be used to produce estimates of employment change in businesses with expanding and contracting employment. These research estimates have included a small overestimate because we have not accounted for the prior month employment of establishments going out of business. In this paper we will describe research to quantify, and to potentially account for, this issue. Data from the Quarterly Census of Employment and Wages program will be used with CES data to assess the size of the overestimate. ARIMA-X12 will be used to develop forecasts of factors that we will use to adjust the estimates to account for this error. The forecast factors will be compared to the actual factors to assess the feasibility of modeling these values