Feds Adopt New Jobless Counting Procedures for Storm Areas

September 23, 2005 (PLANSPONSOR.com) - The Department of Labor (DoL) primary data crunchers have put into place special procedures to count the nation's workforce, to cope with the effects of Hurricanes Katrina and Rita.

Officials at the Bureau of Labor Statistics (BLS) said the new procedures will be used when processing the September nonfarm-payrolls report scheduled to be released on October 7, according to a MarketWatch report. The regions most affected by the storm accounted for 1.9% of national employment, 1.7% of business establishments and 1.5% of wages, according to the BLS.

For the payroll survey, the BLS will try to contact the businesses in its sample. If no response is received, the BLS will assume that the location is closed and that payrolls for the month are zero. About one-third of jobs in the region are typically reported from a central business location elsewhere in the country.

In the separate survey of households, the BLS will not make changes to its procedures. If a household cannot be contacted, it will be removed from the sample, giving households outside the region greater weight in the final data.

The problem is that much of New Orleans was under a mandatory evacuation order during the second week in September when the government typically surveys both business locations and households.

Officials admit that the special procedures could result in the payroll survey overstating the job losses, while the separate household survey could understate the losses. “This carries some risk of overstating employment loss,” the BLS said  in a statement Friday. The nonfarm-payroll, average-earnings and hours-worked data come from the business-establishment survey.

Many companies have said they’ve kept employees on payrolls despite the storm. State and local government workers also would remain on payrolls, in most cases. But for many small businesses, jobs have been lost, perhaps permanently.

So, employment losses from the storm could be understated in the household survey. The unemployment-rate and other demographic-employment data come from the household survey

To be counted as employed in the household survey, a person must have worked for pay for at least one hour during the week of September 12, or have been absent from their job for reasons ranging from sick leave to weather-related causes.