Working Paper

Spurious seasonal patterns and excess smoothness in the BLS local area unemployment

Abstract: State level unemployment statistics are some of the most important and widely used data sources for local analysts and public officials to gauge the health of their state?s economy. We find 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 the pro-rata factors used in the benchmarking process can invoke spurious seasonal patterns in this data. We also find that the Henderson 13 filter used by the BLS to smooth the seasonally adjusted data may reduce monthly volatility too much in the sense that the aggregated state data is much smoother than the independently estimated national data. To reduce these problems, we suggest that the BLS use seasonally adjusted data when benchmarking regions to national totals.

Keywords: Business; cycles;

https://doi.org/10.24149/wp1305

Bibliographic Information

Provider: Federal Reserve Bank of Dallas

Part of Series: Working Papers

Publication Date: 2013

Number: 1305

Note: Published as: Phillips, Keith and Jianguo Wang (2014), "A note on spurious seasonal patterns and other distortions in the BLS local area unemployment statistics," Journal of Economic and Social Measurement 39 (3): 145-152.