34  Monthly Labor Review • March 2010

 Program Report

Production and nonsupervisory employees as a share of all employees, 

2009 annual averages, employment levels in thousands

Industry

All 

employees

Production and 

nonsupervisory employees

Level Percent

Total private .................................................................... 108,371 89,271 82.4

Production employees

Goods-producing............................................................. 18,620 13,447 72.2

Mining and logging...................................................... 700 514 7

Construction ................................................................... 6,037 4,583 7

Manufacturing................................................................ 11,883 8,350 7

Durable goods.............................................................. 7,309 5,008

Nondurable goods...................................................... 4,574 3,341

Nonsupervisory employees

Private service-providing ............................................. 89,751 75,823 84.5

Trade, transportation, and utilities.......................... 24,949 21,149 8

 Wholesale trade ........................................................... 5,625 4,536 80.6

 Retail trade..................................................................... 14,528 12,475 85.9

Transportation and warehousing.......................... 4,235 3,687

 Utilities............................................................................ 561 451 80.3

 Information...................................................................... 2,807 2,243 79.9

Financial activities......................................................... 7,758 5,999 7

Professional and business services......................... 16,580 13,525 8

Education and health services.................................. 19,191 16,839 8

 Leisure and hospitality ................................................ 13,102 11,583 88.4

Other services................................................................. 5,364 4,486 8

New all-employee hours 

and earnings from the CES 

survey

Angie Clinton, John Coughlan,

and Brian Dahlin

The Current Employment Statistics (CES) Survey, also known as the 

establishment survey, has long been 

regarded as a primary source of average 

hourly earnings and hours paid for 

private-sector workers in the United 

States. The Bureau of Labor Statistics 

(BLS) first produced estimates of hours 

and earnings for production workers 

in 1909. The early data focused on 

earnings in manufacturing industries, 

but hours and employment data also 

were produced.

By 1947, industry coverage for hours 

and earnings was expanded to include 

all goods-producing industries; however, it remained impossible to compute estimates for the entire private 

nonagricultural economy. In 1964, collection was expanded to include hours 

and earnings data for nonsupervisory 

workers in private service-providing 

industries; then, in 1967, BLS began 

publishing hours and earnings data 

for all nonagricultural industries in the 

private sector. While the scope of the 

data on production and nonsupervisory 

employees has grown to cover more 

industries, the data still represent only 

about 80 percent of workers in the private sector. (See table 1.)

The BLS has now expanded payroll and hours measures derived from 

the Current Employment Statistics 

survey to cover all employees of private nonfarm establishments for the 

Nation, each State, and more than 

400 metropolitan areas. National 

estimates of hours and earnings for 

all employees were first published as 

experimental series in March 2007, 

and these series became official CES

estimates with the release of the Employment Situation on February 5, 

2010.

In this report, the scope and 

methods of CES hours and earnings 

for all employees are compared and 

contrasted with those for production 

and nonsupervisory employees. Also 

addressed is the development of the 

series, along with some of the issues 

that arose during the implementation 

process. Finally, the report analyzes 

and compares hours and earnings for 

all employees with hours and earnings 

data for production and nonsupervisory employees.

Expanding coverage to all 

employees

Hours and earnings data have been 

developed to provide more information on the pay and hours of all 

employees. The new data series cover 

all paid, private-sector employees 

(including production employees), 

thereby broadening coverage beyond 

that of the existing production–nonsupervisory employee concept. 

Respondents report total hours for 

which all employees received pay for 

the pay period that includes the 12th 

of the month. Total hours include 

regular work time, overtime, standby 

or reporting time, and hours not 

Table 1.

Angie Clinton is Chief of the Current

Employment Statistics (CES) National 

Estimates Branch, John Coughlan is an

economist in the CES National Estimates 

Branch, and Brian Dahlin is Chief of the

CES State and Area Branch; all are in the

Office of Employment and Unemployment

Statistics, Bureau of Labor Statistics. E-mail:

Clinton.Angie@bls.gov; Coughlan.John@

bls.gov; Dahlin.Brian@bls.gov.
Monthly Labor Review • March 2010  35

worked, but for which employees received pay, such as holiday, vacation, 

or sick pay. Manufacturing firms also 

report total overtime hours for employees who receive overtime premiums for hours beyond their regular 

hours. Overtime hours are a subset of 

total hours.

Total gross pay earned during the 

entire pay period (before deductions) is 

also reported. Payrolls include regular 

wages and salaries, paid leave, incentive 

pay, bonuses paid each pay period, and 

severance paid over multiple pay periods. Commissions also are reported if 

they are paid at least monthly. Irregular 

and lump-sum payments are excluded.1

Hours and payroll are defined the 

same for both production employees 

and all employees. Estimates are also 

made using the same formulas. The 

first monthly estimates begin with 

sample averages—average weekly 

hours per employee and average hourly 

earnings of all employees. Subsequent 

monthly estimates are calculated using the difference-link and taper formula.2

 The only difference in the data 

collected and the estimates produced 

from that data is who gets counted. 

Prior to the release of the new data 

series, BLS published hours and earnings for production and nonsupervisory employees (production employees), 

who represent about 80 percent of all 

employees in the private sector. The 

definition for these employees differs 

across industries—production employees in goods-producing industries 

and nonsupervisory workers in private 

service-providing industries. By definition, establishments in one industry 

may exclude certain types of production employees in their hours and 

earnings data, while establishments 

in another industry may include data 

for the same types of workers. For example, administrative clerks may work 

in a factory office or in a bank. Hours 

and earnings are excluded from the 

manufacturer’s payroll data for clerical employees, but the bank includes 

hours and earnings for them. 

Since production employees are 

defined differently depending on 

industry, it is not possible to derive 

an accurate “supervisory” hourly pay 

rate or average hours for all privatesector industries combined or for any 

goods-producing industry. One could 

calculate average weekly hours and 

earnings for all employees excluding 

production employees (production 

employees in goods-producing industries and nonsupervisory employees in 

private service-providing industries) 

by subtracting aggregate hours of 

production employees from aggregate hours for all employees and then 

dividing the difference by nonproduction employees. Average hourly 

earnings could be approximated in a 

similar manner by dividing the adjusted aggregate payroll by aggregate 

hours of nonproduction employees. 

Data collection and cleanup

BLS started collecting pay and hours 

data for all employees in September 

2005. Sample quality during the first 

several months of collection was rather 

poor, with low response rates compounded by large numbers of reporting 

errors among the participating sample. 

Significant efforts were made to 

educate respondents on the new data 

items and the importance of reporting each month. In addition, a comprehensive review of survey responses 

resulted in the development of screening tests to detect outliers. Based on 

improved reporting and response rates, 

experimental estimates for the United 

States were first produced for March 

2006. Response rates for all employee 

pay and hours have improved and now 

surpass those for production employees by about 7 percentage points, as the 

following tabulation shows:

Collection rates for hours and earnings by 

employment type, 2009

 Percent of reports 

 with all employees

 Employment type reported

All employees .................... 43.6

Production and 

 nonsupervisory 

 employees ......................... 36.5

Seasonal adjustment

Many CES data users analyze seasonally adjusted over-the-month changes 

as a primary means of measuring overall national economic trends. Thus, 

accurate seasonal adjustment is an 

important component in the usefulness of these monthly data. The CES

program employs concurrent seasonal 

adjustment methodology to seasonally 

adjust the National estimates of employment, hours, and earnings. New 

seasonal factors are calculated each 

month and use all relevant data up to 

and including the current month. 

The CES program uses X-12 

ARIMA software developed by the 

U.S. Census Bureau to seasonally 

adjust the monthly estimates.3 X-12 

ARIMA requires at least 3 years of 

data to perform seasonal adjustment. 

While it is technically possible to 

seasonally adjust the new hours and 

earnings data series with minimal 

history, satisfaction of the minimum 

series length requirement is not 

a sufficient condition to ensure a 

quality seasonal adjustment. At least 

5 years of data are required to adjust 

for variation due to calendar effects. 

The CES program’s current implementation of seasonal adjustment 

controls for several calendar effects. 

Inconsistencies in the seasonally adjusted series occur as a result of variations of either 4 or 5 weeks between 

reference periods in any given pair 

of months. The number of working 

days in a pay period may distort CES 
36  Monthly Labor Review • March 2010

Program Report

hours and earnings, especially when 

the industry is dominated by semimonthly (10 or 11 days) and monthly 

(20–21 or 22–23 days) pay periods. 

Floating holidays, such as Easter and 

Labor Day, can also cause significant 

variation associated with the relative 

timing of the survey reference period 

and the holiday.

An alternative approach has been 

implemented to address the calendar 

effects until 5 years of history are available. The existing method for production employees’ hours and earnings 

relies on a dummy-variable approach 

that implicitly treats each month; the 

alternate technique treats only the 

months for which calendar effects 

impact the data. Affected months 

are manually treated as outliers when 

defining parameters for X-12 ARIMA. 

This treatment dampens the calendar 

effects, but spikes from the 10/11 day 

effect are still present in the adjusted 

series. Furthermore, the series average for seasonally adjusted data is not 

preserved relative to the unadjusted 

average, because the adjustment is 

applied outside of X-12 ARIMA. A 

second step is required to preserve 

the average.

A correction factor forces the average of each series adjusted for calendar 

effects to the average of the corresponding unadjusted series. The factor 

is defined as follows:

Correction Factor = 

 Xt = Unadjusted value of series at 

month t ^

Xt = Adjusted, calendar-effect-treated value of series at month t

The factor is applied multiplicatively 

to all observations in the seasonally 

adjusted series. Testing has shown that 

this method effectively reconciles level 

shifts introduced by the modified calendar effects treatment procedure, thereby 

maintaining consistency between unadjusted and seasonally-adjusted levels 

of the series.4

Average weekly hours

Production and nonsupervisory employees represent approximately 80 

percent of all employees; thus their 

respective hours and earnings reflect 

similar trends over time. Average 

weekly hours for all employees and 

for production and nonsupervisory 

employees (production employees) 

reached high points in 2007 and 

started to trend down in 2008. The 

workweek for all employees is, on average, 0.8 hour higher than average 

hours for production employees. (See 

table 2.)

Although the workweek of all 

employees is higher than production and nonsupervisory employees 

for all private industries combined, 

this is not the case across industries. 

Hours for all employees are higher 

than those for production employees 

in most service-providing industries, 

while the workweek for production 

employees is higher than that for all 

employees in each major goods-producing industry. (See charts 1 and 2.)

In 2009, mining and logging had the 

longest average workweek for both all 

employees (42.1 hours) and for production employees (43.3 hours). Average 

weekly hours of production employees 

exceeded those for all employees by 1.2 

hours in both mining and logging and 

utilities, which has the second longest 

workweek. 

Leisure and hospitality had the 

shortest average weekly hours for all 

employees and for production employees in 2009. Hours for all employees exAverage weekly hours, 2009 annual averages

Industry All employees

Production and 

nonsupervisory 

employees

Difference

Average weekly hours

Total private................................................... 33.9 33.1 0.8

Goods-producing........................................ 38.5 39.2 –.7

Mining and logging.................................. 42.1 43.3 –1

Construction ............................................... 37.2 37.6 –

Manufacturing............................................ 39.0 39.8 –

Durable goods.......................................... 39.1 39.9

Nondurable goods.................................. 38.8 39.8 

Private service-providing ......................... 32.9 32.1 .8

Trade, transportation, and utilities...... 34.1 32.9 1

 Wholesale trade ....................................... 37.9 37.6 .3

 Retail trade................................................. 31.3 29.9 1.4

Transportation and warehousing...... 38.1 36.0

 Utilities........................................................ 40.9 42.1 –1.2

 Information.................................................. 36.5 36.6 –.1

Financial activities..................................... 36.6 36.1 

Professional and business services..... 35.0 34.7 

Education and health services.............. 33.0 32.3 

 Leisure and hospitality ............................ 25.6 24.8 .8

Other services............................................. 31.6 30.5 1

Average overtime hours

Manufacturing.............................................. 2.3 2.9 –.6

Durable goods.......................................... 2.1 2.7

Nondurable goods.................................. 2.6 3.2

Table 2.
Monthly Labor Review • March 2010  37

 Chart 1. Average weekly hours of all employees and production and nonsupervisory employees in the 

goods-producing industry, March 2006–February 2010, seasonally adjusted

41.5

41.0

40.5

40.0

39.5

39.0

38.5

38.0

37.5

37.0

Hours

March September March September March September March September

2006 2007 2008 2009

Production and nonsupervisory

employee hours

All employee hours

41.5

41.0

40.5

40.0

39.5

39.0

38.5

38.0

37.5

37.0

 Chart 2. Average weekly hours of all employees and production and nonsupervisory employees in the private 

service-providing industry, March 2006–February 2010, seasonally adjusted

34.0

33.5

33.0

32.5

32.0

31.5

31.0

Hours

Production and nonsupervisory

employee hours

All employee hours

34.0

33.5

33.0

32.5

32.0

31.5

31.0

March September March September March September March September

2006 2007 2008 2009

Hours

Hours
38  Monthly Labor Review • March 2010

Program Report

ceeded those for production employees 

by 0.8 hour. Transportation and warehousing had the largest positive difference in the workweeks between all 

employees and production employees, 

1.4 hours. The percentage of employees who usually work part time in each 

industry helps explain the differences 

in average weekly hours between industries. According to 2009 data from 

the Current Population Survey, for example, only 3.2 percent of mining employees usually worked part time, while 

40.4 percent of leisure and hospitality 

employees usually worked part time. 5

Average hourly earnings

Average hourly earnings for all employees were 19.3 percent higher than 

earnings for production and nonsupervisory employees in 2009. (See table 3.) 

Given the overlap in employment, both 

earnings series also show similar trends. 

(See chart 3.) Since March 2006, the 

first month of the all employee earnings series, hourly earnings have grown 

by 11.9 percent, compared with 14.4 

percent for hourly earnings of production employees. 

Of the major industry sectors, 

utilities had the highest average hourly 

earnings levels for all employees, as well 

as for production and nonsupervisory 

employees, in 2009. Leisure and 

hospitality had the lowest hourly 

earnings, followed by retail trade. 

The largest spread between average 

hourly earnings for all employees 

and those for production and nonsupervisory employees occurred in 

financial activities. Hourly earnings 

for all employees in that industry 

were 27.1 percent higher than those 

for nonsupervisory employees; the 

difference ($5.65) was also the largest 

in absolute terms. Transportation and 

warehousing had the smallest gap, 

with earnings for all employees just 

8.9 percent (or $1.67) higher than 

production employees. 

Whether an industry is goods-producing or service-providing does not 

necessarily determine if it has aboveor below-average hourly earnings. For 

example, mining and logging had the 

fourth-highest earnings in 2009, while 

nondurable goods manufacturing had 

the fifth-lowest earnings. Similarly, 

information had the second-highest 

earnings, while leisure and hospitality 

had the lowest overall. 

Derivative series

BLS derives several series from hours 

and earnings series. (See table 4.) 

Average weekly earnings are simply the product of average weekly 

hours and average hourly earnings. 

In 2009, weekly earnings for all employees were 22.0 percent greater 

than weekly earnings for production 

and nonsupervisory employees. Real 

hourly and weekly earnings for all 

employees are derived by deflating 

regular earnings by the consumer 

price index for all urban consumers (CPI-U), base year 1982–84. The 

deflator for earnings of all employees 

differs from the deflator for production employees, which uses the consumer price index for urban wage 

earners and clerical workers (CPI-W), 

base year 1982–84.

Because they cover all employees 

in private nonfarm businesses, the 

new hours and earnings data provide improved input for other major 

economic indicators, such as labor 

productivity and personal income. 

Aggregate weekly hours, the product 

of employment and average weekly 

hours, are used for calculating estimates of industrial production and 

output per hour.6 BLS indexes aggregate weekly hours to 2007 annual 

averages of aggregate hours. Aggregate weekly payrolls, the product of 

aggregate weekly hours and average 

hourly earnings, are inputs into estimates of personal income for the 

National Income and Product Accounts.7 BLS also indexes aggregate 

weekly payrolls to 2007 annual aver-

 Average hourly earnings, 2009 annual averages

Industry

All 

employees

Production and 

nonsupervisory 

employees

Percent 

difference

Total Private.............................................. $22.21 $18.62 19.3

Goods-producing................................... 23.77 19.90 19.4

Mining and logging............................. 27.30 23.29 17

Construction .......................................... 24.84 22.67 9

Manufacturing....................................... 23.03 18.23 26

Durable goods..................................... 24.51 19.35 

Nondurable goods............................. 20.64 16.56 

Private service-providing .................... 21.83 18.35 19.0

Trade, transportation, and utilities.. 19.34 16.50 17

 Wholesale trade .................................. 25.42 20.85 21.9

 Retail trade............................................ 15.40 13.02 18.3

Transportation and warehousing.. 20.47 18.80

 Utilities................................................... 32.95 29.56 11.5

 Information............................................. 29.38 25.45 15.4

Financial activities................................ 26.48 20.83 27

Professional and businessservices.. 27.02 22.35 20

Education and health services......... 22.41 19.49 15

 Leisure and hospitality ....................... 12.96 11.11 16.7

Other services........................................ 19.52 16.59 17

Table 3.
Monthly Labor Review • March 2010  39

 Chart 3. Average hourly earnings of all employees and production and nonsupervisory employees in the total 

private industry, March 2006–February 2010, seasonally adjusted

Earnings

25.0

24.0

23.0

22.0

21.0

20.0

19.0

18.0

17.0

16.0

15.0

Earnings

March September March September March September March September

2006 2007 2008 2009

25.0

24.0

23.0

22.0

21.0

20.0

19.0

18.0

17.0

16.0

15.0

ages. The aggregate hours and earnings for all employees are not strictly 

comparable to those for production 

and nonsupervisory employees, since 

the indexes for production employees 

are indexed to 2002 annual averages.

Average hourly earnings excluding overtime are produced for all 

Derivative series, 2009 annual averages

Industry All employees

Production and 

nonsupervisory 

employees

Total private industry

Average weekly earnings................................................... $753.02 $6

Average hourly earnings, 1982–1984 dollars.............. $10.59 

Average weekly earnings, 1982–1984 dollars............. $359.21 $2

Index of aggregate weekly hours.............................................. 92.1

Index of aggregate weekly payrolls................................ 97.5 

Manufacturing

Average hourly earnings, excluding overtime ........... $22.37 $

Table 4.

employees in manufacturing only. 

These are the only industries surveyed that report overtime. BLS assumes that overtime hours are paid 

at time and one half per hour; this 

assumption is the same as earnings 

measures for production employees 

in manufacturing.

Notes

1 For more details on data collected 

from respondents, see the definitions on CES 

collection forms, on the Internet at www.bls.

gov/ces/idcfcesforms.htm (visited March 5, 

2010). 2 The difference link is represented by the 

change in sampled average weekly hours (or 

average hourly earnings) with the prior month 

subtracted from the current month. The taper 

is a weighted average of the prior month’s 

estimated average weekly hours (or average 

hourly earnings) and the prior month’s sample 

average of the same data type. The current 

month’s estimate is the sum of the difference 

link and the taper. For more information, see 

Chapter 2 in the BLS Handbook of Methods, 

on the Internet at www.bls.gov/opub/hom/

homch2_a.htm (visited March 30, 2010).

3 The X-12 ARIMA software is available 

on the U.S. Census Bureau Web site on the 

Internet at www.census.gov/srd/www/x12a/ 

(visited March 5, 2010).

4 For more information on seasonally 

adjusting CES data, see “Adjusting for 

Calendar Related Fluctuations in Average 

Weekly Hours and Average Hourly Earnings 

Series” and “Seasonal Adjustment in the 

Current Employment Statistics Program” on 

the Internet at www.bls.gov/ces/cesseasadj.

htm (visited March 5, 2010). 

Production and nonsupervisory

employee earnings

All employee earnings
40  Monthly Labor Review • March 2010

Program Report

5 The Current Population Survey (CPS), 

also known as the household survey, produces 

employment estimates by full- and part-time 

status. These data can be accessed on the 

Internet at www.bls.gov/cps/lfcharacteristics.

htm#fullpart (visited March 5, 2010). 

6 Industrial production is estimated by the 

Federal Reserve Board, while labor productivity 

is produced by BLS.

7 The Bureau of Economic Analysis produces data for the National Income and Product 

Accounts.