A note on spurious seasonal patterns and other distortions in the BLS local area unemployment statistics

Article type: Research Article

Authors: Phillips, Keith R.^{a; *} | Wang, Jianguo^b

Affiliations: [a] Federal Reserve Bank of Dallas, San Antonio Branch, San Antonio, TX, USA | [b] Federal Reserve Bank of Dallas, Dallas, Texas, USA

Correspondence: [*] Corresponding author: Keith R. Phillips, Federal Reserve Bank of Dallas, San Antonio Branch, 402 Dwyer Avenue, San Antonio, TX 78204, USA. Tel.: +1 210 978 1409; E-mail: keith.r.phillips@dal.frb.org

Abstract: This paper examines the potential sources behind statistically significant seasonal patterns in the state level seasonally adjusted Local Area Unemployment Statistics (LAUS) released by the U.S. Bureau of Labor Statistics (BLS). We find that these seasonal patterns are likely spurious and may be due to the pro-rata factors used in benchmarking the states to census regions and national totals. In addition we find that the Henderson 13 filter used by the BLS to smooth the seasonally adjusted state data often makes the data inconsistent with national labor market data. We conclude that the BLS should use seasonally adjusted data when estimating the pro-rata factors used to benchmark states to regional and national totals.

Keywords: Local area unemployment statistics, data revisions, seasonal adjustment, C8

DOI: 10.3233/JEM-140389

Journal: Journal of Economic and Social Measurement, vol. 39, no. 3, pp. 145-152, 2014