6.8: Payroll Employment

So far, we have examined the labor force and the u-rate. Statistics in both of these areas come from data gathered from the CPS, which covers the employee side of the labor market. We will now turn our attention to the employer side of the labor market and examine data compiled from the Current Employment Statistics (CES) survey.

Sometimes the CES is referred to as the establishment payroll survey. The CES produces monthly nonfarm payroll estimates for: all employees, women workers, production workers, average weekly hours, average hourly earnings (in nominal and real terms), average weekly earnings, average overtime, index of aggregate hours and payrolls, and diffusion indexes.

Employment, except for the national Federal Government estimates, is the total number of people on business payrolls employed full- or part-time who receive pay for any part of the pay period, which includes the 12th day of the month. Temporary and intermittent employees are included, as are any workers who are on paid sick leave, on paid holiday, or who work during only part of the specified pay period. A striking worker who only works a small portion of the survey period, and is paid, would be included as employed under the CES definitions. People on the payroll of more than one establishment are counted in each establishment. CES data excludes proprietors, self-employed, unpaid family or volunteer workers, farm workers, and domestic workers. People on layoff for the entire pay period, on leave without pay, on strike for the entire period, or who have not yet reported for work are not counted as employed. Government employment covers only civilian workers.

Payroll employment figures are usually reported as month-to-month changes. Table 1 shows how three months’ worth of 2002 data would be reported.

Table 1

	Thousands
	Monthly Change
	May	June	July	Three Month	Six Month	Twelve Month
Nonfarm Payroll Employment	22	66	6	31	-16	-106
Previous Report	24	36

Table 1 shows that businesses added 6,000 workers to their payrolls in July 2002. This was down considerably from the 66,000 that were hired the month before. June and July are good examples of how volatile the month-to-month changes in payroll employment can be (actually, month-to-month swings of 100k or more are not uncommon). This is why economists prefer to focus on longer-term changes, such as 3-, 6-, and 12-month rates of change (see the last three columns of table 1). By comparing the average 3- and 12-month rates of change you can see how the employment situation has improved over the year. Though the U.S., on average, had lost 106,000 jobs in the 12-months prior to July 2002, the trend started to reverse during the last three months (May – July) of that 12-month period (job gains averaged 31,000).

Figure 8 shows the growth (year-on-year percent change) in payroll employment since 2000.

Figure 8

Note the sustained periods of job creation during the late 2000’s and most of the 2020’s. From 2000 to 2020 the U.S. economy created a total of 21 million jobs!

The COVID recession of 2020 caused massive job losses. From March 2020 to May 2020, the U.S. lost over 21 million jobs! Fortunately, by early 2022 most of those job losses were recovered.

Part-time Workers

The payroll employment numbers do count those who are working less than full-time. However, the CES survey does not have a specific category for part-time workers. Since the survey captures the number of all employees on the payroll, part-time employees are part of the total. They are not counted separately. The CPS does have a separate tally for part-time workers.

Of Interest: To find out what kind of impact the terrorist attack September 11, 2001 had on BLS nonfarm payroll employment, go to: http://www.bls.gov/web/cesspec.htm