Protecting the public’s trust in federal statistics

Why should people trust BLS and other federal statistical agencies? Today I want to celebrate a new publication that answers this question. The new Statistical Policy Directive Number 1 (which some of us now call our “Prime Directive”) lays out what federal statistical agencies do and don’t do.

The directive makes a convincing case for why people can trust federal statistics. I’m happy to have it in place for all to see. My compliments to the U.S. Office of Management and Budget, which coordinates policies for federal statistical agencies, for publishing the directive!

The directive fits right in with what I tell groups around the country about our work. These groups nearly always include users of our data and analysis. Often these groups also include the people and organizations that provide information we use to create our statistics. When I describe the goals of BLS, I often use the acronym AORTA. Here’s what it stands for:

  • Accurate
  • Objective
  • Relevant
  • Timely
  • Accessible

The aorta is your body’s largest artery. It carries oxygen-rich blood from your heart to the rest of your body. At BLS, we view good information as the lifeblood of democracy and free enterprise. People, businesses, and government leaders make better choices when they have crucial information that is accurate, objective, relevant, timely, and accessible.

The directive describes the four responsibilities of federal statistical agencies. These four reinforce our AORTA goals. Here’s a summary:

  1. We must produce information that is relevant for households, businesses, and governments. That means we must speak regularly to the people who use our information to understand their needs. We also must provide information as soon as we can and make it easy to get.
  2. We must produce information that is accurate and explain how we ensure accuracy. That means we must continue seeking new technologies and methods for collecting information and making it available for people to use. We must explain how we collect the information and any limitations or possible sources of error. When we discover errors, we need to tell the public and explain what we will do to correct the errors.
  3. We must do our work without political or other types of bias. That means we must separate our work from the parts of the government that make or enforce laws and regulations and run programs.
  4. We must protect the trust of the people and organizations that provide information for our surveys and administrative records. Most of the surveys that statistical agencies conduct are voluntary. Individuals, businesses, and other organizations don’t have to take part in our surveys, and yet they respond at high rates. They do so because we uphold their trust. We pledge to use the information they provide only for statistical purposes. In other words, we use the information to study groups and not the individuals or organizations that compose those groups. We never let other agencies use the information we collect to enforce laws or regulations or manage government programs.

These principles have been around for a while in other forms. Having them restated and enshrined in our new “Prime Directive” can help ensure the public’s trust in federal statistics. Please read them for yourself and let me know what you think!

Trade indexes in the Producer Price Index

At BLS, we strive to find the best methods for measuring the U.S. economy and to explain those methods clearly to our customers. We’re always eager to clarify issues that aren’t easy to understand. This week’s Producer Price Index (PPI) report for October 2014 received more attention than usual. The 0.2-percent increase in our headline number, the index for Final Demand, surprised many people who had seen recent news reports about large declines in energy prices and their impact on overall inflation trends. Although the index for Final Demand Energy fell 3.0 percent, the October advance in overall Final Demand prices resulted mainly from a 1.5-percent rise in the index for Final Demand Trade Services.

The trade services index is part of a new, more complete method of measuring producer prices that we introduced in January 2014. This new system includes prices for goods, services, and construction. We have some materials to help you understand this more complete picture of the domestic economy. We welcome your thoughts and questions, and I invite you to comment below.

The trade services indexes measure the changes in margins that wholesalers and retailers receive, rather than price changes for physical goods themselves. Businesses in the trade sector buy goods to resell. These businesses usually don’t change the goods before reselling them, so the PPI treats trade businesses as suppliers of services rather than goods. The PPI measures the output of a trade business as the difference between its selling price and purchase price of an item. (This measure reflects any discounts in the selling or purchase price.) This difference is the margin. Margin prices reflect the value that businesses add for marketing, storing, and making goods easily available to buy. You can read more about the methods for measuring trade services in the PPI.

The goal of the PPI is to measure price change for all domestic output. Trade is a significant part of the U.S. economy, so the PPI now includes trade services in the overall Final Demand index. BLS also publishes special indexes that exclude components such as food, energy, exports, and even trade services. For example, in October 2014, the index for Final Demand less Trade Services declined 0.2 percent, while the index for Final Demand less Foods, Energy, and Trade edged up 0.1 percent. Our goal is to allow you to view producer price changes from several different vantage points, while emphasizing the more comprehensive picture.

BLS regional webpages get a makeover

You probably know that BLS publishes national economic statistics and analyses on employment, unemployment, prices, compensation, productivity, and other topics. Chances are that you read at least some of those reports regularly. You also may know that BLS publishes economic information for regions, states, counties, and metropolitan areas. Our national office staff produces some of these reports, but you may not know that our regional staff around the country writes many of these reports. In fact, our regional staff produces about three-fourths of the economic news releases published by BLS.

Maybe you’ve heard the old expression that all politics is local. We don’t get involved in politics at BLS, but it turns out that much of economics also is local. People need to know not just the national economic conditions, but also what conditions are like where they live, work, and do business. For that reason, we think a lot about how we can serve the specific needs of our customers in each region, state, and community.

I’m very pleased to announce that we have given the webpages for our regional offices a makeover to serve our customers better. With the new pages, we have improved navigation to help you browse faster and more efficiently. The pages feature new maps and tabs to help you find information for the regions, states, areas, and subjects that interest you. The pages also have enhanced archives to make it easier to search for older news releases, CPI summaries, and notices.

I encourage you to read more about these improvements to our regional webpages. I also invite you to let me know how you like these changes by leaving a comment below.

Recognizing innovators at BLS

Every successful organization needs to innovate to remain effective and relevant—and BLS is no exception. We strive every day to provide our fellow citizens with the best value for their taxpayer dollars. To produce the best statistics, analyses, and services, we must foster a workplace that encourages innovation. We recently held our annual awards ceremony to recognize the good work of our staff members who work hard every day to provide the public with data that are accurate, objective, relevant, timely, and accessible. One of the honors we presented was the BLS Innovation Award. I want to tell you about the two groups that received the award this year.

The first group we honored found a way to blend data collection for two different but related surveys. BLS surveys rely on the voluntary cooperation of individuals, businesses, and other organizations to provide information about the labor market and economy. We realize that time is valuable for our survey respondents, and we do our best to make our collection as quick and efficient as possible. This year, a team of BLS national and regional office staff designed and tested a process to combine collection of information on the pay and benefits of workers with information on the physical demands and other requirements of jobs. This combined collection will support the data needs of our National Compensation Survey and the Occupational Requirements Survey. The approach relies on BLS field economists to manage the survey process efficiently and flexibly in a conversational interview process. The result is that collection interviews are shorter and therefore less costly in both time and money. Moreover, the survey process is less burdensome to employers that participate in both surveys. The new process is a win-win for BLS and businesses!

The second group honored with the BLS Innovation Award helped make data collection more efficient in a very different way. A team of national and regional office staff developed a self-paced course to impart better skills to manage time and workload. The course uses new technology as it follows “Kathy,” an animated field economist, through her work. The training module includes a process of reviewing course materials, keeping an activity log, viewing a video on the science of productivity, reviewing quick-reference tips and strategies, and taking a quiz. The training equips field staff with the time-management tools to collect data from respondents and manage caseloads efficiently. These new tools enable BLS to improve our efficiency and effectiveness in producing the nation’s statistics.

In addition to these two groups, a number of other excellent projects were nominated for the BLS Innovation Award. All of these projects (and many others) will help BLS provide better, more efficient products and services in the years to come—and are excellent examples of the innovation taking place daily at BLS.

Announcing new research data on jobs and pay in the nonprofit sector

Have you ever wondered how important the charitable nonprofit sector is to your regional economy or within some industry—and if it is adding jobs? BLS now has authoritative and detailed answers to your questions. I am delighted to announce a new research data series on employment and wages in the nonprofit sector of the U.S. economy. Annual data currently are available for 2007 through 2012. Here are a few facts about nonprofit organizations:

  • They employ a lot of people. Nonprofits accounted for 11.4 million jobs in 2012. That’s 10.3 percent of all private sector employment.
  • Nonprofit jobs are concentrated heavily in the healthcare and social assistance sector. This is the largest component of the nonprofit world, accounting for 68 percent of total nonprofit employment in 2012.
  • They’ve grown throughout the recession and recovery. Employment in nonprofit organizations increased steadily each year from 2007 through 2012.

What do we count as a nonprofit organization in these data? Under U.S. tax law, nonprofit organizations are exempt from paying federal income tax. Although there are several categories of nonprofits, the new BLS data are limited to the largest category, organizations covered under section 501(c)3 of the tax law. These nonprofits are commonly referred to as “charitable” organizations.

These new data are available at the national level for fairly detailed industries. Data for states are available for broad industry categories.

You may wonder how we did this. As with the hurricane maps that BLS published in June, the new research data on nonprofits required no new data collection or respondent burden. The data were created by merging existing BLS data from the Quarterly Census of Employment and Wages program with publicly available data from the Internal Revenue Service.

If policymakers, researchers, and the public find these data to be useful, BLS will consider updating them annually as resources permit.

So, please let us know what you think. I invite you to explore the nonprofit data and share your thoughts about the methods used to create the data, the published tables, and the overall usefulness of the information.