How did BEA adjust March 2020 wages and salaries to account for the effects of COVID-19?
BEA's monthly estimates of wages and salaries are 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. As BLS notes in its release, the reference period for the March 2020 survey preceded many of the COVID-19-related business closures and job losses that occurred in the latter half of March. As a result, BEA's estimates of March wages and salaries include adjustments that are intended to reflect activity not captured in the source data.
The adjustments to March 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. Because these reports are a weekly series, they capture the impact of COVID-19-related job losses more quickly than data in BLS' monthly establishment survey. BEA used UI claims data reported for the weeks ending March 21, March 28, and April 4. Because some people were unable to file for unemployment insurance given the high volume of claims submitted, BEA made an adjustment for additional job losses using the analysis of COVID-19 impacts on the labor market prepared by the Federal Reserve, the National Bureau of Economic Research, news media, and other sources.
Estimated job losses are multiplied by the average monthly wage per employee and prorated to account for approximate wages earned in the days of the month prior to the layoffs. The adjustment was made for each industry based on supplemental information provided by BLS. Estimates of private employer contributions for employee pension and insurance funds were also adjusted using a similar methodology.