What's New — December 2000

SITE OF THE MONTH: BLS Economy at a Glance

You want a basic, current bit of data, like the latest unemployment rate for a particular state, or you need to see a ten-year time trend of construction employment for a particular metropolitan area. Go straight to November's Site of the Month, the Bureau of Labor Statistics' Economy at a Glance page. Here you'll find the most current state and metro employment statistics. Data users tell us they rate BLS highest on the timeliness of data availability. Using the Economy at a Glance Page, you can quickly check the latest data, and also download the last ten years of monthly employment data for all 50 states and most metro areas.

Monthly data appear with only a little over a one month lag (the latest data at press time were current through October, 2000). So, when it has to be quick, and it has to be current, go here:
http://www.bls.gov/eag/eag.map.htm

NEW LINKS ADDED

We've recently added a number of new links to the site, including:

-State tax collections, with detailed data on personal and corporate income and sales tax collections by state--contained in the State Revenue Report, a quarterly publication report prepared by the Nelson A. Rockefeller Institute of Government of the State University of New York.
http://www.rockinst.org/publications/pubs_and_reports.html#revenue

-Estimated NAFTA-related job losses. The Economic Policy Insitute has prepared estimates of net job losses associated with increased imports from Mexico and Canada as a result of the North American Free Trade Agreement. Data are listed by state, for the period 1993 to 1998.
http://www.epinet.org/briefingpapers/nafta99/nafta99.html

-State Higher Education Performance. In its December 2000 report, "Grading the States", the Chronicle of Higher Education offers letter grades for higher education performance in 50 states. The report card covers preparation, participation, affordability, completion and benefits.
http://chronicle.com/free/stats/ 
And you'll find the detailed information from which the letter grades were prepared by consulting "Measuring Up 2000, the State-by-State Report Card," prepared by the National Center for Public Policy and Higher Education, at: 
http://measuringup2000.highereducation.org/

-Two guides to geocoded data. The Geography Network, a service of the Environmental Systems Research Institute, facilitates the sharing of geographic information between data providers, service providers, and users around the world. Through the Geography Network, you can access many types of geographic content, including live maps, downloadable data intended for use with GIS software tools, and more advanced services. 
http://www.geographynetwork.com/ 

The EROS Center, maintained by the U.S. Geological Survey, provides access to a large number of downloadable maps and FTP data files intended for use with these maps. 
http://edcwww.cr.usgs.gov/doc/edchome/ndcdb/ndcdb.html

NEW, IMPROVED BLS WEBSITE

The Bureau of Labor Statistics, one of our federal "Big Three" data agencies, (along with Census and BEA), has made some dramatic new improvements to its site. You'll find a completely overhauled point and click data-finding interface that allows you to quickly drill-down to find just the data you need. Very useful for getting a complete time series. Make a few selections, and you're presented with a table of data with years in rows and months in columns which you can easily cut and paste into your favorite spreadsheet.

The new interface requires a java-enabled browser. To explore this new system, which allows access to Current Employment Statistics, Local Area Unemployment Statistics, the Consumer Price Index, and the National Compensation Survey, click on http://stats.bls.gov/sahome.html and select any of the series labeled "public data query."

ECONDATA.NET WINS DIGITAL LIBRARIAN AWARD

The Argus Clearinghouse, recognized EconData.Net with their Digital Librarian's for the month of October 2000. The award is made monthly by the Argus Clearinghouse to the guide that stands out as an exceptional resource. Award winners are distinguished by their superlative application of organizational schemes, level of resource description and evaluation, and guide design.
http://www.clearinghouse.net/dla.html

IN DEPTH: NAICS CHANGE ON AUXILIARIES POSES CHALLENGE FOR ANALYSTS
New system moves 2.5 million workers to a new "corporate headquarters" category

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From time to time, EconData.Net will highlight data issues of importance to analysts. This month, we offer our take on how changes introduced by the new industry classification system will affect our ability to analyze industry concentrations.
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For some time, we have been calling the new NAICS industry classification system "The Mother of All Series Breaks" and have been directing EconData.Net Users to the first products using NAICS data, including the 1997 Economic Census and 1998 County Business Patterns.

Our own analysis has shown an important change that all analysts should be aware of when using NAICS data. A new category for "headquarters establishments" fundamentally changes the way some employment is counted, and may cause the apparent shrinkage of some economic sectors.

An important, but little noticed, change in the tabulation of economic statistics took place with the adoption of the new North American Industry Classification System (NAICS). Economic data is tabulated by establishment, each separate physical location of an enterprise, or business firm. Under the old Standard Industry Classification (SIC) system, each establishment was generally classified by the primary product or service of its parent firm.

However, under NAICS, each establishment is classified according to its own function. This change in approach has dramatic consequences for the counting of "auxiliaries"-supporting locations within multi-establishment firms, such as corporate headquarters, research and development centers, and distribution facilities that are part of a manufacturing firm. Under the old SIC code, these auxiliaries were classified by the principal SIC code of their firm. (This explains why sometimes one can find a mining establishment in the middle of a central business district). Under the NAICS system, many auxiliaries are now reported only in a separate new category--"NAICS 551114 Corporate, Subsidiary, and Regional Managing Offices." This industry comprises establishments primarily engaged in administering, overseeing, and managing other establishments of the company or enterprise. Nationally, more than 35,000 establishments with more nearly 2.5 million employees are included in this category and not counted in any other industry. If you want to know how many headquarters firms are in your state, visit the Economic Census website at:
http://www.census.gov/epcd/ec97/us/US000_55.HTM

The change in classification can have dramatic results. For instance, in 1997, Massachusetts had 455,951 manufacturing jobs in 10,076 establishments, according to County Business Patterns (using the SIC code). But the 1998 County Business Patterns (using the NAICS code) shows only 409,938 jobs in 9,541 establishments, ten percent below the 1997 figure. However, the Bureau of Labor Statistics' Current Employment Statistics series (using the SIC code throughout) shows Massachusetts manufacturing employment rising from 443,900 in March 1997 to 452,100 in March 1998 (March being the month for which County Business Patterns counts jobs). The 1998 County Business Patterns shows 69,760 jobs in 821 headquarters operations-all these jobs were counted in other industries in prior years. There is no way of knowing exactly how many of these headquarters are part of manufacturing firms, or in which sectors they are classified.

As a result of this change in approach to auxiliary classification, times series comparisons from years using SIC to years using NAICS will be difficult even when the broad industry definition is the same (e.g., manufacturing). Also difficult in the near term will be comparison of data from different sources for the same year will be difficult if one source is based on SIC (e.g., the CES series) and one source on NAICS. (All agencies will move all series to NAICS in the next few years.)

This reclassification of corporate headquarters also can play havoc with location quotients. For instance, the state of Michigan has a large number of corporate headquarters jobs in manufacturing (think of Ford, GM, and Chrysler). As a result, the number of manufacturing jobs in the state counted in County Business Patterns fell from 968,905 in 1997 to 828,751 in 1998, a 15 percent drop and a far greater change that for the nation as a whole (down 9 percent). As a result, Michigan's location quotient for manufacturing fell from 1.42 to 1.35, understating its specialization in manufacturing. In contrast, the count of manufacturing jobs for Mississippi, which has many branch plants and few headquarters, fell only 2 percent. That state's location quotient jumped from 1.47 to 1.57, overstating its specialization in manufacturing. In general, the reclassification will interfere with regional analysts ability to discern regional specializations in particular industries. As a result, you'll want to be especially careful in interpreting location quotient analyses using these data. Watch for this issue as BLS and the Bureau of Economic Analysis change to the NAICS system in the coming years.

There are a number of web-resources for tracking this issue. The NAICS implementation schedule can be found at:
http://www.naics.com/info.htm#Implementation.
For further discussion on the topic of auxiliary classification, see http://www.naics.com/info.htm#Auxiliary.
General information on NAICS can be found at
http://www.census.gov/epcd/www/naics.html.

NAICS is being regularly revised (changes for 2002 were proposed in April 2000). With public support, it may be possible to create subcategories within the headquarters category that classifies by type of industry.

We think this is an important issue for many data users. We invite you to send your comments and questions to: info@econdata.net.