How does BEA adjust wages and salaries to account for the effects of COVID-19?

BEA's monthly estimates of wages and salaries are typically based on data from the Current Employment Statistics (CES) survey tabulated by the Bureau of Labor Statistics (BLS). The reference period for the CES establishment survey is the pay period that includes the 12th of the month. Beginning with March 2020, the reference period for the CES survey preceded many of the COVID-19-related business closures and job losses that occurred in the latter half of the same month. As a result, BEA's estimates of wages and salaries for March and April (and subsequent months as needed) include adjustments that are intended to reflect activity not captured in the standard source data.

These adjustments to monthly wages and salaries are based mainly on the Department of Labor's Employment and Training Administration (ETA) weekly reports of the number of initial claims for unemployment insurance (UI) benefits. Due to their high frequency, the reports capture job losses that occurred outside the reference period covered by the CES survey. Estimated job losses are multiplied by the average monthly wage per employee (by industry) and then prorated to identify that portion of wages lost that occurred after the reference period for the CES survey. BEA also considers analyses of COVID-19 impacts on the labor market prepared by the Federal Reserve, the National Bureau of Economic Research, news media, and other sources to inform its adjustments.

BEA reduces the effect of total claims on its adjustments to wages and salaries because ETA's UI claims data includes the Pandemic Unemployment Assistance provision of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. This Act expanded the UI program to cover classes of workers not previously eligible for the benefit, including self-employed and independent contractors who demonstrate income losses resulting from COVID-19.  Income for these workers is recorded in the NIPAs as part of proprietors' income, not wages and salaries.