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The effort to develop unemployment estimates for subnational areas began during World War II under the War Manpower Commission, with the aim of identifying areas where a labor market imbalance had been created due to inadequate labor supply, material shortages, or transportation difficulties. After the war, emphasis was placed on identifying areas of labor surplus, and a program of classifying areas in accordance with severity of unemployment was established.
In 1950, the Department of Labor's Bureau of Employment Security (now the Employment and Training Administration) published a handbook, Techniques for Estimating Unemployment, so that comparable estimates of the unemployment rate could be produced for all states. This led to the formulation of the "Handbook method" in the late 1950s. The Handbook method is a series of computational steps designed to produce local employment and unemployment estimates, using available data at a much lower cost than a direct survey.
In 1972, BLS assumed technical responsibility for the program and began to refine the concepts and methods used to estimate the labor force, employment, and unemployment at the subnational level. In 1973, a new system for developing labor force estimates was introduced, combining the Handbook method with the concepts, definitions, and estimation controls from the Current Population Survey (CPS).
Beginning in 1978, the monthly CPS data were used for official statewide labor force estimates for 10 large states—California, Florida, Illinois, Massachusetts, Michigan, New Jersey, New York, Ohio, Pennsylvania, and Texas—and for 2 substate areas—Los Angeles County and New York City. (North Carolina was added in 1985.) These states and areas were referred to as "direct-use" areas, because they used the CPS data without any mathematical or statistical adjustments. Official monthly estimates for the remaining "non-direct-use" states were based on the Handbook method adjusted to CPS controls.
In 1985, a state-based design for the CPS was fully implemented for the first time, to incorporate 1980 Census information and to improve reliability for each of the 50 states and the District of Columbia.
Beginning in 1989, Handbook estimation for the 39 non-direct-use states and the District of Columbia was discontinued in favor of time-series statistical modeling. The models were developed by BLS and tested by state workforce agencies. (Estimates for most substate areas continue to be based on the Handbook method.)
In 1994, in conjunction with a major redesign of the CPS, a second generation of time-series models was introduced, based on a "signal-plus-noise" approach.
In 1996, the number of households in the CPS sample was temporarily reduced, resulting in the elimination of direct use of the CPS for monthly estimation in the 11 large states, the Los Angeles-Long Beach Metropolitan Area, and New York City. Beginning with January 1996, labor force estimates for these subnational areas have been based on the time-series modeling approach used in the other 39 states and the District of Columbia.
In 2005, improved third-generation time-series estimates for modeled areas were introduced, along with real-time benchmarking of state estimates to the national CPS estimates. Also introduced were new time-series models for five metropolitan areas and the respective balances of their states, as well as improved substate estimation in the Handbook method.
In 2011, seasonal adjustment was introduced for nonmodeled metropolitan areas and metropolitan divisions.
In 2015, LAUS updated its state and modeled substate area estimation methodologies by introducing the fourth generation of LAUS models, which included improvements to the model structure, real-time benchmarking, the treatment of outliers, and trend-cycle filters, which improve seasonal adjustment. In addition, updates were made to the Handbook method, including the incorporation of data from the Census Bureau’s American Community Survey (ACS) into the substate estimation procedure.
Last Modified Date: January 09, 2018