BEA’s early monthly estimates of wages and salaries—which are based on the Bureau of Labor Statistics monthly survey of employment, hours, and earnings—are revised when more comprehensive data from the BLS quarterly census of employment and wages become available, and some of these revisions have been quite large. Data on withheld income tax receipts are very timely, and forecasters have noted that large differences between the trend in tax receipts and the trend in wages and salaries are sometimes associated with subsequent revisions to wages and salaries. However, so far BEA has not found that tax receipt data are sufficiently reliable to consider using these data as a general extrapolator for early estimates of wages and salaries. Withheld income taxes include taxes on various kinds of income that may be taxed at different rates and that may be based on different numbers of exemptions. Furthermore, the tax data are reported when they are received by the government, which may not be the same period in which the corresponding wages were paid, and as a consequence this may introduce an inconsistency in the accounts. BEA staff are continuing to conduct research on methods for improving the early estimates of wages and salaries (including research on withheld tax data), and are also planning to evaluate and incorporate new BLS data on the wages of all employees (see FAQ, What is BEA planning to do to improve the accuracy of early estimates of wages and salaries?).
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