Back to the Future: Using Current Regression Variables to Forecast Forward from Historical Net Birth/Death Employment

• Activity Number: 442
• Type: Contributed
• Date/Time: Tuesday, August 6, 2013 : 2:00 PM to 3:50 PM
• Sponsor: Government Statistics Section
• Author(s): Victoria Battista*+ and Nathan Clausen
• Companies: Bureau of Labor Statistics and Bureau of Labor Statistics
• Keywords: Current Employment Statistics ; Birth/death ; Business Openings/Closings ; Establishment Survey ; Employment Estimates ; Modeling Techniques

Abstract

The Current Employment Statistics (CES) program estimates employment in the United States using sample-based calculations of over-the-month employment change plus a birth/death model forecast. The birth/death model accounts for changes in employment that are not accounted for in the CES sample. One part of this model, the net birth/death forecasts, has regularly added between 800,000 and 1,000,000 jobs to the CES employment level on an annual basis. During the most recent recession, the birth/death residual dropped to less than 300,000, a change that was not picked up by the forecasting model and resulted in a very large benchmark revision. CES has been conducting research to determine if the CES birth/death model, based currently on historical time series, could benefit from the incorporation of an additional, more timely regression variable.