Current Employment Statistics - CES (National)

# CES Birth-Death Model Frequently Asked Questions

1. Do the net birth-death forecasts vary from first preliminary to final estimate?

No, the net birth-death forecast for a given month does not change between first preliminary, second preliminary, and final sample-based estimates. However, the net birth-death forecasts used in the reestimated values from April of the benchmark year to December of the benchmark year are updated during the benchmarking process to reflect newly forecasted birth-death values.

2. Are net birth-death forecasts seasonally adjusted?

No, they are calculated using population data that is not seasonally adjusted, and the forecasts are applied to the sample-based not seasonally adjusted estimates. Months with generally strong seasonal increases such as April, May, and June generally have a relatively large positive forecast. Conversely, months with overall strong seasonal decreases, such as January, generally have a relatively large negative forecast.

3. Can I subtract the net birth-death forecast from the seasonally adjusted over-the-month change to determine what it is adding to employment?

No, net birth-death forecasts are a component of the not seasonally adjusted estimate and, therefore, are not directly comparable to the seasonally adjusted monthly changes. Instead, the net birth-death forecast should be assessed in the context of its effect on the not seasonally adjusted estimate.

4. Can BLS provide an estimate of the contribution of the net birth-death forecast to the seasonally adjusted monthly payroll change?

BLS does not calculate an estimate of the seasonally adjusted contribution of the birth-death model. The sample, the imputation of business births using deaths, and the net birth-death forecast are all necessary components for obtaining an accurate total employment estimate. The components are not seasonally adjusted separately because they do not have any particular economic meaning in and of themselves.

5. How frequently are the net birth-death forecasts revised, and why do the values change?

Prior to the release of preliminary January 2011 employment estimates in February 2011, net birth-death forecasts were calculated on an annual basis and then applied each month during development of monthly estimates. With the release of the January 2011 preliminary estimates, CES began updating the net birth-death model component of the estimation process on a quarterly basis instead of annually. This change allows for the incorporation of QCEW data into the birth-death model as soon as it becomes available and reduces the post-benchmark revision in the CES series. This change does not impact the timing or frequency of CES monthly and annual releases or when benchmarking is done. For more information on the timing and updates to the inputs for the net birth-death forecasts, please see www.bls.gov/ces/methods/ces-quarterly-birthdeath.htm.

6. How long has CES been using the net birth-death forecasts, and is the history of birth-death available?

Implementation of the birth-death model was associated with the implementation of a new probability-based sample design and estimator. The new methodology was phased in gradually under the following schedule:

Table 1. Schedule for Implementation of the Birth-Death Model
Release Date Benchmark Date Industry Updated to Birth-Death Model

June 2000

March 1999 Wholesale trade on an SIC-basis

June 2001

March 2000 Mining, construction, and manufacturing on an SIC-basis

June 2002

March 2001 All of total private with the exception of services on an SIC-basis

June 2003

March 2002 All total private industries with the conversion to NAICS

Historical net birth-death forecasts are available at www.bls.gov/web/empsit/cesbdhst.htm. More information about the conversion from SIC to NAICS is available at www.bls.gov/ces/naics/home.htm.

7. Were estimates purely sample-based before 2003?

No, prior to the implementation of birth-death modeling, CES used a technique known as bias adjustment to account for business births, business deaths, and other limitations of the survey. More information about the bias adjustment model and the CES transition to the birth-death model is available in the 2002 Benchmark Article, available at www.bls.gov/ces/publications/benchmark/ces-benchmark-revision-2002.pdf.