The US Bureau of Labour Statistics on Friday said it will change the way it estimates September employment due to the devastation of businesses and dislocation of workers in regions hit by Hurricane Katrina.
The BLS said it will change its estimation procedure for its payrolls survey to recognise the likelihood of businesses being temporarily or permanently out of business and will adjust sample weights in the disaster area to compensate for lower-than-average survey response rates.
"If there are sample units that BLS is unable to contact in the most heavily impacted disaster areas, CES will assume the business is not operating and therefore has an employment level of zero. This carries some risk of overstating employment loss," the BLS said.
It also said it will drop uninhabitable households from its survey of households in September and give a higher weight to responses from households it is able to reach, but noted that may introduce "some inaccuracy" to the data.
"For example, if persons who are interviewed are more likely to be employed than those who cannot be interviewed, the CPS would overstate employment in September," it said.
Economists have been awaiting word on how the BLS, which calculates employment each month for the Department of Labour, would adjust its count of payroll jobs and unemployment in September to take Katrina's devastation into account.
Each month, the BLS contacts 60,000 households to calculate the jobless rate and, separately, 400,000 work sites to determine how many jobs were added or lost. The two surveys are taken in the week or so around the 12th of the month.
Katrina slammed into the Gulf Coast on August 29, and many of the area's 2.7 million workers and 145,000 work sites likely could not respond to the employment count two weeks later.
The BLS said it will not be possible to "precisely quantify" the impact of the storm on the overall September estimates because its effects cannot be separated from other influences on the economy.
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