Summary
The ramp-up in the 2010 Census operations this spring will markedly affect several economic indicators. Most notably, the hiring of temporary 2010 Census workers will likely increase the Bureau of Labor Statistics’ (BLS) nonfarm payroll employment estimate by over half a million in May. The 2010 Census hiring may also affect the path of the unemployment rate by several tenths of a percentage point. Finally, the spending associated with the 2010 Census will peak in the second quarter of 2010 and could boost GDP growth in that quarter by about a quarter of a percentage point at an annual rate. There are several reasons why more precise estimates of the effects of the 2010 Census operations cannot be made at this time. One significant reason is that the magnitude and duration of the operations will depend on several factors, including the mail-back response rate.
According to Census Bureau operational plans, the number of hires for temporary 2010 Census jobs is estimated to be about 800,000 during April and May of this year. For several technical reasons, including the very short-term tenure of these jobs, the number of 2010 Census hires will not be fully reflected in either the monthly levels or changes in nonfarm employment reported by the BLS. Based on the experience with the 2000 Census, the BLS figures may show the number of temporary Census jobs peaking at a level closer to 635,000 in May.
2010 Census hiring may alter the path of the unemployment rate by several tenths of a percentage point, but quantifying this effect will be difficult, even after the data are released. This conclusion is derived from the observation that changes in temporary Census employment during the 1990 and 2000 Censuses showed little correlation with monthly changes in the BLS unemployment rates. However, with the unemployment rate expected to be well above those witnessed during previous Censuses, the effect of large changes in temporary 2010 Census employment on the unemployment rate may be more noticeable in 2010.
Another way in which the 2010 Census will affect the economy and economic statistics is through high levels of spending. The Census Bureau is currently projecting that spending will spike in May 2010 before falling off sharply. Annualized nominal and real GDP growth could be boosted by 0.1 percentage point in 2010Q1 and by 0.2 percentage point in 2010Q2. The drop in 2010 Census spending would then reduce GDP growth by similar amounts in Q3 and Q4.