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Weather-Adjusting Employment Data

Speaker: Jonathan H. Wright, Johns Hopkins University
Authors: Michael Boldin, Federal Reserve Bank of Philadelphia, and Jonathan H. Wright
Discussant: William R. Bell, Census Bureau
Chair: Richard Tiller, Bureau of Labor Statistics
Date and Time: (rescheduled from September 23) Wednesday, 04 November 2015, 10:30 a.m. — 12:00 p.m.
Location: Bureau of Labor Statistics Conference Center

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Sponsor: Methodology Section
POC e-mail: evans.thomas@bls.gov


This paper proposes and implements a statistical methodology for adjusting employment data for the effects of deviation in weather from seasonal norms. This is distinct from seasonal adjustment, which only controls for the normal variation in weather across the year. Unusual weather can distort both the data and the seasonal factors. We control for both of these effects by integrating a weather adjustment step in the seasonal adjustment process. We use several indicators of weather, including temperature, snowfall and hurricanes. Weather effects can be very important, shifting the monthly payrolls change number by more than 100,000 in either direction. The effects are largest in the winter and early spring months and in the construction sector.