Tag Archives: BLS

12.25.2012 | The Christmas Price Index

How to measure inflation?

The Christmas Price Index.

Whereas the BLS (Bureau of Labor Statistics) Consumer Price Index includes food and medical care and cars, PNC Wealth Management’s CPI, its Christmas Price Index, has swans and hens and dancing maids. This year, the PNC market basket, filled with the 364 gifts in ”The 12 Days of Christmas,” would cost you $107,300 while last year, the total was $101,119.84. Its 6.1% increase far exceeds the 1.8% CPI change from November 2011 to November 2012.

Prices that remained the same:

the partridge
turtle doves
calling birds
milking maids
dancing ladies
leaping lords

Prices that increased:

pear tree
French hens
gold rings
geese
swans
piping pipers
drummers

We could hypothesize that an unchanged $7.25 minmum wage kept most of the labor expense steady while soaring commodity prices for corn and other bird feed pushed up the price of the hens.

Our bottom line: The inflation rate depends on what you place in your market basket.

A final fact: Called the rule of 70, you can calculate how long it will take a certain statistic to double by dividing 70 by the growth rate of that variable. For example, if the growth rate of prices is 2%, just divide 70 by 2 to see that prices will double in 35 years.

Sources and Resources: At the PNC Christmas Price Index site, you can participate in an interactive animation of the index and check out how it has fluctuated during the past 29 years. For a good summary of this year’s data, I suggest USA Today while to see the US CPI, you can go to BLS data, here. Also, Econlife has looked at the PNC index for 2 years, here and here.

Posted by: adminEcon
Tags: BLS, Christmas Price Index, Christmas spending, corn prices, CPI, inflation, minimum wage, PNC Wealth Management, rule of 70
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10.06.2012 | A Tale of Two Surveys

Everyone was surprised that the US unemployment rate for September dipped to 7.8%. Interpreting the number as evidence of an accelerated recovery, some people were delighted. Others advised caution, saying the statistical source of the unemployment rate is not always dependable.

To complicate matters further, the monthly employment report from the Bureau of Labor Statistics also includes job creation numbers that, at 114,000 new jobs for September, were below the number that would keep pace with population growth.

So, one number great and the other not. Why?

The numbers differ because the unemployment rate and job creation numbers are based on 2 entirely separate sources. Here are some of the differences:

1) The unemployment rate is based on the household survey (technically known as CPS, Current Population Survey), a canvas of just 60,000 households. The sample, based on home visits by Census Bureau workers, comes from the entire civilian non-institutional population aged 16 and over and even includes unpaid household workers.

2) The job creation numbers come from the establishments survey (technically known as Current Employment Statistics survey), collected from approximately 486,000 business and government establishments. Their sample, collected from submitted data, looks at nonfarm wage and salary jobs.

You can look here for more about how the 2 surveys differ.

Sources and Resources: The BLS link is the best for firsthand survey information and Fox has a good interview. If you watch the video, please note they got the labels backwards on their graph but the content is good. Also, NPR Planet Money has a good summary of the two surveys.

Posted by: adminEcon
Tags: BLS, census bureau, Current Employment Statistics survey, Current Population Survey, employment report, establishments survey, Household Survey, unemployment rate
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08.22.2010 | Apples, Oranges, and Government Pay

Hearing that federal employees earn more than people working in the private sector, how should we respond? Let’s look at the facts.

Assessing someone’s earnings involves salaries and benefits. According to the BEA (Bureau of Economic Analysis) at $81,258, the average federal worker earns 60% more than someone in the private sector. Looking at benefits, the gap grows larger with federal workers getting $41,791 and private workers at $10,589. Combining salaries and benefits, we have federal workers with total average compensation of $123,049 compared to privately employed workers at $61,051.

We can also look at raises and inflation. Between 2000 and 2009, the average federal worker’s salary increased by 33% more than inflation. Including benefits which primarily refer to pensions for federal employees, average compensation, adjusted for inflation, is up 36.9%. By contrast, privately employed workers are receiving 8.8% more.

Looking at salary data, Democrats and Republicans disagree about whether we are comparing “apples to oranges” or “apples to apples”. Saying “apples to oranges”, people who believe that the federal pay scale is appropriate emphasize that many federal jobs require a more highly skilled worker. Those who disagree say we are comparing similar issues, especially when focusing on yearly salary increases where percent increases can be compared.

The Economic Lesson

Having looked at the public/private sector pay gap and the debate that surrounds it, as economists, we should return to cost and benefit. To consider why there is a public/private sector pay gap, we can identify the opportunity cost experienced by private businesses and the federal government.

Posted by: adminEcon
Tags: BLS, federal employees, fiscal policy, labor, opportunity cost, wages
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