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Economic News Release
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State Employment and Unemployment Technical Note

Technical Note

   This news release presents civilian labor force and unemployment data for states and selected substate
   areas from the Local Area Unemployment Statistics (LAUS) program (tables 1 and 2).  Also presented are
   nonfarm payroll employment estimates by state and industry supersector from the Current Employment
   Statistics (CES) program (tables 3 and 4). The LAUS and CES programs are both federal-state cooperative
   endeavors.

Civilian labor force and unemployment--from the LAUS program

   Definitions. The civilian labor force and unemployment data are based on the same concepts and definitions
   as those used for the official national estimates obtained from the Current Population Survey (CPS), a
   sample survey of households that is conducted for the Bureau of Labor Statistics (BLS) by the U.S. Census
   Bureau. The LAUS program measures employed people and unemployed people on a place of-residence basis. The
   universe for each is the civilian noninstitutional population 16 years of age and older. Employed people
   are those who did any work at all for pay or profit in the reference week (typically the week including the  
   12th of the month) or worked 15 hours or more without pay in a family business or farm, plus those not working
   who had a job from which they were temporarily absent, whether or not paid, for such reasons as bad weather,
   labor-management dispute, illness, or vacation.
   
   Unemployed people are those who were not employed during the reference week (based on the definition above),
   had actively looked for a job sometime in the 4-week period ending with the reference week, and were currently
   available for work; people on layoff expecting recall need not be looking for work to be counted as unemployed.
   The civilian labor force is the sum of employed and unemployed people. The unemployment rate is the number of
   unemployed as a percent of the civilian labor force.

   Method of estimation. Estimates for 48 states, the District of Columbia, the Los Angeles-Long Beach-Glendale
   metropolitan division, New York City, and the balances of California and New York State are produced using 
   time-series models. This method, which underwent substantial enhancement at the beginning of 2021, utilizes
   data from several sources, including the CPS, the CES, and state unemployment insurance (UI) programs.
   Estimates for the state of California are derived by summing the estimates for the Los Angeles-Long Beach-
   Glendale metropolitan division and the balance of California. Similarly, estimates for New York State are 
   derived by summing the estimates for New York City and the balance of New York State. Estimates for the five
   additional substate areas contained in this release (the Cleveland-Elyria and Detroit-Warren-Dearborn
   metropolitan areas and the Chicago-Naperville-Arlington Heights, Miami-Miami Beach Kendall, and Seattle-
   Bellevue-Everett metropolitan divisions) and their respective balances of state are produced using a similar
   model-based approach.
   
   Each month, estimates for the nine census divisions first are modeled using inputs from the CPS only and 
   controlled to the national totals. State estimates then are controlled to their respective census division
   totals. Substate and balance-of-state estimates for the five areas noted above also are controlled to their
   respective state totals. This tiered process of controlling model-based estimates to the U.S. totals is called
   real-time benchmarking. Estimates for Puerto Rico are derived from a monthly household survey similar to the
   CPS. A more detailed description of the estimation procedures is available from BLS upon request.

   Annual revisions. Civilian labor force and unemployment data for prior years reflect adjustments made after
   the end of each year. The adjusted estimates reflect updated population data from the U.S. Census Bureau,
   any revisions in the other data sources, and model re-estimation. In most years, historical data for the most
   recent five years are revised near the beginning of each calendar year, prior to the release of January 
   estimates. With the introduction of a new generation of time series models in 2021, historical data were
   re-estimated back to the series beginnings in 1976, 1990, or 1994.

   Seasonal adjustment. The LAUS models decompose the estimates of employed and unemployed people into trend,
   seasonal, and irregular components. The benchmarked signals of employed and unemployed people first are 
   adjusted using an X-11 type of seasonal adjustment filter. The adjusted data then are smoothed using a 
   Reproducing Kernel Hilbert Space (RKHS) filter. The smoothed-seasonally adjusted estimates of employed and
   unemployed people are summed to derive the civilian labor force, and the unemployment rate then is calculated
   as the unemployed percent of the civilian labor force. The resulting smoothed-seasonally adjusted unemployment
   rate estimates are analyzed in this news release and published on the BLS website.
   
   During estimation for the current year, the smoothed-seasonally adjusted estimates for a given month are 
   created using an asymmetric filter that incorporates information from previous observations only. For annual
   revisions, historical data are smoothed using a two-sided filter.

   Area definitions. The substate area data published in this release reflect the delineations that were issued
   by the U.S. Office of Management and Budget on April 10, 2018. A detailed list of the geographic definitions
   is available online at www.bls.gov/lau/lausmsa.htm. 

Employment--from the CES program

   Definitions. Employment data refer to people on establishment payrolls who receive pay for any part of the
   pay period that includes the 12th of the month. People are counted at their place of work rather than at their
   place of residence; those appearing on more than one payroll are counted on each payroll. Industries are 
   classified on the basis of their principal activity in accordance with the 2022 version of the North American
   Industry Classification System. 

   Method of estimation. CES State and Area employment data are produced using several estimation procedures.
   Where possible, these data are produced using a "weighted link relative" estimation technique in which a ratio
   of current month weighted employment to that of the previous-month weighted employment is computed from a
   sample of establishments reporting for both months. The estimates of employment for the current month are then
   obtained by multiplying these ratios by the previous month’s employment estimates. The weighted link relative
   technique is utilized for data series where the sample size meets certain statistical criteria. For some
   employment series, the estimates are produced with a model that uses direct sample estimates (described above)
   combined with other regressors to compensate for smaller sample sizes. 

   Annual revisions. Employment estimates are adjusted annually to a complete count of jobs, called benchmarks,
   derived principally from tax reports that are submitted by employers who are covered under state unemployment
   insurance (UI) laws. The benchmark information is used to adjust the monthly estimates between the new 
   benchmark and the preceding one and to establish the level of employment for the new benchmark month. Thus,
   the benchmarking process establishes the level of employment, and the sample is used to measure the month-to-
   month changes in the level for the subsequent months. Information on recent benchmark revisions is available
   online at www.bls.gov/web/laus/benchmark.htm.

   Seasonal adjustment. Payroll employment data are seasonally adjusted at the statewide expanded supersector 
   level. In some cases, the seasonally adjusted payroll employment total is computed by aggregating the
   independently adjusted supersector series. In other cases, the seasonally adjusted payroll employment total
   is independently adjusted. Revisions to historical data for the most recent five years are made once a year,
   coincident with annual benchmark adjustments.
   
   Payroll employment data are seasonally adjusted concurrently, using all available estimates, including those
   for the current month, to develop sample-based seasonal factors. Concurrent sample-based factors are created
   every month for the current month’s preliminary estimate as well as the previous month’s final estimate. 

   Caution on aggregating state data. State estimation procedures are designed to produce accurate data for each
   individual state. BLS independently develops a national employment series; state estimates are not forced to
   sum to national totals. Each state series is subject to larger relative sampling and nonsampling errors than
   the national series. Summing state estimates cumulates individual state-level errors and can cause significant
   distortions at an aggregate level. Due to these statistical limitations, BLS does not compile a "sum-of-states"
   employment series and cautions users that such a series is subject to a relatively large and volatile error
   structure.

Reliability of the estimates

   The estimates presented in this release are based on sample surveys, administrative data, and modeling and,
   thus, are subject to sampling and other types of errors. Sampling error is a measure of sampling variability--
   that is, variation that occurs by chance because a sample rather than the entire population is surveyed. 
   Survey data also are subject to nonsampling errors, such as those which can be introduced into the data 
   collection and processing operations. Estimates not directly derived from sample surveys are subject to 
   additional errors resulting from the specific estimation processes used.

   Use of error measures. Changes in state unemployment rates and state nonfarm payroll employment are cited in
   the analysis of this release only if they have been determined to be statistically significant at the 90-
   percent confidence level. Furthermore, state unemployment rates for the current month generally are cited 
   only if they have been determined to be significantly different from the U.S. rate at the 90-percent
   confidence level. The underlying model-based standard error measures for unemployment rates and over-the-month
   and over-the-year changes in rates are available at www.bls.gov/lau/lastderr.htm. The underlying standard
   error measures for over-the-month and over-the-year changes in state payroll employment data at the total
   nonfarm and supersector levels are available at www.bls.gov/web/laus/790stderr.htm. Measures of nonsampling
   error are not available.

Additional information

   Estimates of civilian labor force and unemployment from the LAUS program, as well as nonfarm payroll
   employment from the CES program, for metropolitan areas and metropolitan divisions are available in the
   news release Metropolitan Area Employment and Unemployment. Estimates of civilian labor force, employed
   people, unemployed people, and unemployment rates for approximately 7,600 subnational areas are available
   online at www.bls.gov/lau/. Employment data from the CES program for states and metropolitan areas are
   available online at www.bls.gov/sae/. If you are deaf, hard of hearing, or have a speech disability,
   please dial 7-1-1 to access telecommunications relay services.



Last Modified Date: June 25, 2024