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Copyright 1998 by the Wyoming Department of Employment, Research & Planning

Seasonal Adjustment of Mining Employment

by: Gregg Detweiler

Wyoming's Mining industry includes four sub industries: metal mining, coal mining, oil & gas extraction and mining & quarrying of nonmetallic metals. The Figure compares the actual employment time series to the seasonal adjusted. The analysis of the Figure illustrates a seasonal peak of employment between July and August and that the Mining industry has declined from the past. However, to get a more thorough understanding of how Wyoming's Mining industry is performing, look at the Table. The Table shows the percent change in annual growth for both nonagricultural and seasonal adjusted employment along with an eight-month average. The Current Employment Statistics (CES) unit of Research & Planning (R&P) produces current monthly estimates on the number of jobs in various industries . These data are considered measures of economic well-being and their movements are related to the business cycle. However, total nonagricultural employment data are highly seasonal; therefore, it is difficult to decide exactly how each industry is faring over time.

Seasonal events are those events that tend to occur at the same time each year. If a time series, like the CES, is affected by seasonal events, then that series is said to exhibit seasonality. Seasonal adjustment is a statistical tool that attempts to remove, or filter out, the seasonal fluctuations (peaks and troughs) in a time series. Once the seasonal fluctuations have been removed, the underlying trend or true direction can be more easily observed.

The eight-month average (cumulative total) is another statistical tool which can help to analyze a specific point in time. This article will try to determine how well August 1998's employment level is performing. The average through August shows a 5.9 percent increase in employment from a year ago. Taking a cumulative average is another way to remove the seasonal events. For example, in Wyoming's mining & quarrying of nonmetallic metals industry where rock and gravel are mined for use in repairing roads and highways, the weather was more suitable in 1998 (March) than 1997 (April) because of an earlier spring.

Keep this copy of Trends, in order to refer back to it to help understand seasonal adjustment. Trends will be publishing the other nine major industries and their contrasting seasonality in upcoming issues.

Gregg Detweiler is a Senior Economist, specializing in Current Employment Statistics (CES) with Research & Planning.

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