CES Net Birth/Death Model
Currently, the CES sample includes about 142,000 businesses and government
agencies drawn from a sampling frame of Unemployment Insurance tax accounts
which cover approximately 689,000 individual worksites. The active CES sample
includes approximately one-third of all nonfarm payroll workers. The
sample-based estimates are adjusted each month by a statistical model designed
to reduce a primary source of non-sampling error which is the inability of the
sample to capture, on a timely basis, employment growth generated by new
business formations.
There is an unavoidable lag between an establishment opening for business
and its appearance on the sample frame making it available for sampling.
Because new firm births generate a portion of employment growth each month,
non-sampling methods must be used to estimate this growth.
Earlier research indicated that while both the business birth and death
portions of total employment are generally significant, the net contribution
is relatively small and stable. To account for this net birth/death portion of
total employment, BLS uses an estimation procedure with two components: the
first component excludes employment losses due to business deaths from
sample-based estimation in order to offset the missing employment gains from
business births. This is incorporated into the sample-based estimate procedure
by simply not reflecting sample units going out of business, but imputing to
them the same trend as the other firms in the sample. This step accounts for
most of the birth and death employment.
The second component is an auto-regressive integrated moving average (ARIMA) time series model designed to estimate
the residual 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 UI universe micro level database, and reflects the actual residual of births and
deaths over the past 5 years. This ARIMA model was originally applied once a year using
new data to calculate the net birth/death forecasts. Effective with the release
of preliminary January 2011 employment estimates
in February 2011, BLS began updating the Current Employment Statistics
(CES) net birth/death model component of the estimation process more frequently,
generating birth/death forecasts on a quarterly basis instead of annually. For
more information about the quarterly birth/death forecasts, please see
www.bls.gov/ces/methods/ces-quarterly-birthdeath.htm.
For a comparison of annual birth/death forecasts to quarterly birth/death forecasts for all years
from 2004 to the 2014 benchmark, please see
www.bls.gov/ces/methods/quarterly-birth-death-comparison.htm.
The net birth/death model components are unique to each month and
exhibit a seasonal pattern that can result in negative adjustments in some
months. These models do not attempt to correct for any other potential error
sources in the CES estimates such as sampling error or design limitations. Note
that the net birth/death forecasts are not seasonally adjusted, and are
applied to the not seasonally adjusted monthly employment estimates to derive
the final CES employment estimates.
The table below shows the net birth/death model adjustment used in the
published CES estimates since the establishment of the most recent benchmark
level for March 2018.
2018 Net Birth/Death Adjustment, not seasonally adjusted (in thousands)
| CES Industry Code |
Supersector |
Jan |
Feb |
Mar |
Apr |
May |
Jun |
Jul |
Aug |
Sep |
Oct |
Nov |
Dec |
10-000000 |
Mining and logging |
|
|
|
0 |
1 |
1 |
1 |
1 |
0 |
1 |
0 |
0 |
20-000000 |
Construction |
|
|
|
35 |
39 |
23 |
12 |
10 |
4 |
22 |
-9 |
-13 |
30-000000 |
Manufacturing |
|
|
|
0 |
7 |
6 |
-1 |
3 |
3 |
5 |
2 |
2 |
40-000000 |
Trade, transportation, and utilities |
|
|
|
5 |
22 |
7 |
8 |
16 |
11 |
37 |
10 |
6 |
41-420000 |
Wholesale trade |
|
|
|
-3 |
4 |
-1 |
-2 |
2 |
-2 |
6 |
2 |
1 |
42-000000 |
Retail trade |
|
|
|
6 |
13 |
5 |
8 |
9 |
7 |
20 |
2 |
0 |
43-000000 |
Transportation and warehousing |
|
|
|
2 |
5 |
3 |
2 |
5 |
6 |
11 |
6 |
5 |
44-220000 |
Utilities |
|
|
|
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
50-000000 |
Information |
|
|
|
4 |
6 |
0 |
6 |
5 |
-3 |
9 |
4 |
-1 |
55-000000 |
Financial activities |
|
|
|
2 |
6 |
1 |
6 |
4 |
-4 |
21 |
1 |
9 |
60-000000 |
Professional and business services |
|
|
|
97 |
22 |
-4 |
40 |
22 |
-23 |
97 |
1 |
-26 |
65-000000 |
Education and health services |
|
|
|
40 |
16 |
-20 |
28 |
17 |
-2 |
62 |
10 |
-7 |
70-000000 |
Leisure and hospitality |
|
|
|
79 |
88 |
92 |
73 |
23 |
-44 |
11 |
-23 |
0 |
80-000000 |
Other services |
|
|
|
13 |
8 |
6 |
-2 |
4 |
-3 |
10 |
-1 |
-2 |
00-000000 |
Total nonfarm
birth/death adjustment |
|
|
|
275 |
215 |
112 |
171 |
105 |
-61 |
275 |
-5 |
-32 |
2018 Total nonfarm over-the-month change, not seasonally adjusted (in thousands)
|
Jan |
Feb |
Mar |
Apr |
May |
Jun |
Jul |
Aug |
Sep |
Oct |
Nov |
Dec |
|
Total nonfarm over-the-month change |
|
|
|
1,015 |
977 |
702 |
-1,114 |
505 |
340 |
1,060 |
522 |
-172 |
2019 Net Birth/Death Adjustment, not seasonally adjusted (in thousands)
| CES Industry Code |
Supersector |
Jan |
Feb |
Mar |
Apr |
May |
Jun |
Jul |
Aug |
Sep |
Oct |
Nov |
Dec |
10-000000 |
Mining and logging |
-1 |
0 |
0 |
-1 |
1 |
1 |
1 |
1 |
0 |
|
|
|
20-000000 |
Construction |
-47 |
15 |
20 |
32 |
39 |
24 |
6 |
10 |
4 |
|
|
|
30-000000 |
Manufacturing |
-11 |
4 |
3 |
0 |
7 |
5 |
-2 |
4 |
2 |
|
|
|
40-000000 |
Trade, transportation, and utilities |
-40 |
13 |
10 |
4 |
21 |
8 |
4 |
13 |
11 |
|
|
|
41-420000 |
Wholesale trade |
-17 |
5 |
1 |
-4 |
3 |
-2 |
-4 |
1 |
-1 |
|
|
|
42-000000 |
Retail trade |
-9 |
5 |
6 |
6 |
13 |
6 |
6 |
7 |
5 |
|
|
|
43-000000 |
Transportation and warehousing |
-14 |
3 |
3 |
2 |
5 |
4 |
2 |
5 |
7 |
|
|
|
44-220000 |
Utilities |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
|
|
50-000000 |
Information |
-8 |
5 |
-1 |
3 |
5 |
0 |
4 |
2 |
-1 |
|
|
|
55-000000 |
Financial activities |
-24 |
8 |
1 |
2 |
6 |
1 |
5 |
3 |
-6 |
|
|
|
60-000000 |
Professional and business services |
-50 |
30 |
-11 |
97 |
17 |
-9 |
42 |
19 |
-28 |
|
|
|
65-000000 |
Education and health services |
13 |
18 |
-11 |
52 |
14 |
-19 |
27 |
17 |
-4 |
|
|
|
70-000000 |
Leisure and hospitality |
1 |
39 |
37 |
79 |
87 |
86 |
63 |
21 |
-46 |
|
|
|
80-000000 |
Other services |
-8 |
5 |
3 |
13 |
7 |
5 |
-2 |
3 |
-3 |
|
|
|
00-000000 |
Total nonfarm
birth/death adjustment |
-175 |
137 |
51 |
281 |
204 |
102 |
148 |
93 |
-71 |
|
|
|
2019 Total nonfarm over-the-month change, not seasonally adjusted (in thousands)
|
Jan |
Feb |
Mar |
Apr |
May |
Jun |
Jul |
Aug |
Sep |
Oct |
Nov |
Dec |
|
Total nonfarm over-the-month change |
-2,908 |
853 |
716 |
1,074 |
672 |
633 |
-1,074 |
418 (p) |
362 (p) |
|
|
|
Additional information on the CES Birth/Death Model is available in the CES
Technical Notes under Business birth and death estimation
(www.bls.gov/web/empsit/cestn.htm#section6c)
as well as on the birth/death frequently asked questions page at
www.bls.gov/web/empsit/cesbdqa.htm.
Historical birth/death forecasts are available at
www.bls.gov/web/empsit/cesbdhst.htm.
An overview of the CES birth/death model, including a detailed description of
the original methodology is available at
www.bls.gov/opub/mlr/2006/05/art4full.pdf.
Last Modified Date: October 4, 2019
