Marcia Hultman

Cabinet Secretary

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LMI Myth Busting Series


LMI Myth Busting: Duplication of Effort in Producing Job Levels by Industry


Myth:

Because the nonfarm worker data series and the Quarterly Census of Employment and Wages (QCEW) program both provide job counts by industry, the programs are essentially duplicative.

Busted:

TThere are a number of inherent differences in the scope of the two data sets. Perhaps the most noteworthy difference is the timeframes involved and how they affect data availability. Both play an important role in reflecting industry employment trends.

Because of the source of data for the QCEW program, there is an inherent lag time in the availability of data. Although every effort is made to publish QCEW data in as timely of manner as possible, it takes a minimum of five months before QCEW data can be published. More about that later.

One of the greatest strengths of the nonfarm wage and salaried worker data is its role as a leading economic indicator. The data are produced through a nationwide employer survey (the Current Employment Statistics, CES) conducted monthly. The resulting estimates of nonfarm worker levels by industry are available for the month prior. At the national level, the data for the prior month are typically published, by the U.S. Bureau of Labor Statistics, on the first Friday of each month in “The Employment Situation.”

(See the most recent release.) 

The CES monthly employment series is the first economic indicator of current economic trends each month. In concert with the unemployment rate, the nonfarm worker data help inform such decisions as:

  • Public policy
  • Wage negotiations
  • Economic research and planning
  • Industry studies

In South Dakota, statewide nonfarm worker levels by industry are released about mid-month for the prior month. For example, statewide worker levels by industry for March will be published April 15. (Release dates can be found on our website.) The nonfarm wage and salaried worker estimates by industry for the state’s two Metropolitan Statistical Areas are published as part of the monthly South Dakota e-Labor Bulletin, typically on the fourth Friday each month.

About the lag time in the availability of QCEW data

One of the greatest strengths of the QCEW program is the “census” concept. It is considered the most accurate and complete source of wage and salaried employment data. It is based largely on worker data provided by employers to the South Dakota Division of Reemployment Assistance’s tax unit. Under South Dakota unemployment insurance law, all employers liable for unemployment tax must report, on a quarterly basis, each of their paid employees and the wages paid to that employee. Since the industry classification and physical location are also determined for each employer, in part through the QCEW program, the resulting data set is powerful.

One of the downsides of this powerful data set is the inherent time lag involved with data availability. Employers’ quarterly reports to the RA tax unit are due one month after the end of a quarter. From there, the data in the reports must be processed for their primary purposes—covering South Dakota’s workers with unemployment insurance, verifying employment data of benefit claimants, adjusting employers’ unemployment tax rates, etc.
On the statistical or QCEW side, once the data from the quarterly reports is made available to LMIC staff, it is then carefully analyzed for consistency and accuracy. Data for those employers not reporting by the deadline must be added as it becomes available, with those same processes then completed to ensure data quality. Additional steps, such as follow-up efforts to collect missing data and greater, more detailed break-outs of employment by location for those employers with multiple work sites, are also completed.

It takes a minimum of five months after the close of a quarterly report cycle for those various processes and procedures, to ensure QCEW data is accurate and appropriately reflects the recent labor market before that quarter’s data can be published. For example, third quarter 2020 (July, August, September) data was published in the virtual labor market data system March 11.

Differences between the two data sets

The table below illustrates the differences between the two data sets.

  Current Employment Statistics
(CES)
Nonfarm Employment
Quarterly Census of Employment & Wages
(QCEW)
Covered Workers
Data Collection Instrument Monthly survey of businesses. The current active CES sample includes approximately 2,900 individual worksites. Quarterly state-mandated unemployment insurance (UI) contribution report based on the physical location of business establishment, which includes employment count during reference week and corresponding quarterly wages. 
Reference Period Monthly    Quarterly   
Data Measurement Number of jobs held. Number of jobs held.
Reference Period The week inclusive of the 12th calendar day. The week inclusive of the 12th calendar day.
Definition Persons on establishment payrolls who receive pay for any part of the pay period which includes the 12th of the month.   Persons covered under state UI laws or the Unemployment Compensation for Federal Employees (UCFE) program.
Coverage Inclusion Includes all ages of employed. Includes most covered workers and segments of non-covered employment (NCE).
Includes all ages who are paid a wage or salary from an employer liable to pay UI. Agricultural workers and domestic workers are included if employer meets liability criteria.
Coverage Exclusion Self-employed, agricultural workers, domestic workers and military. Self-employed, military, unpaid family workers, railroad workers, work-study students, elected officials, or any business not covered by unemployment insurance.
Statewide Estimates Statewide and MSA estimates are created using sample based estimates and a modeled series. Industry employment data is calculated directly from UI reports.
Substate Estimates An economic model is used to produce preliminary estimates for current month nonfarm worker levels until covered worker data for this time period becomes available, at which point the preliminary estimates are updated.  Industry employment data is calculated directly from establishment-reported employment; establishment employment by county is based on establishment location.

Learn more about the Current Employment Statistics and the Quarterly Census of Employment and Wages (QCEW) program on our Program Overviews page.