TECHNICAL NOTES FOR LABOR FORCE AND UNEMPLOYMENT

 ESTIMATING PROCEDURES

 

Labor force is the sum of employment and unemployment. The unemployment rate is calculated by dividing unemployment by the labor force.

Labor force data for the State of New Jersey, Metropolitan Statistical Areas (MSAs) counties and municipalities are estimated by procedures developed by the U.S. Bureau of Labor Statistics (BLS). The procedures use a combination of monthly unemployment insurance (U.I.) claims, monthly employer survey data from the Current Employment Statistics survey and Current Population Survey (CPS) data.

 

Changes to New Jersey Labor Force/Unemployment Estimating Procedure:  Beginning with the publication of January 2005 data the US Bureau of Labor Statistics (BLS) introduced changes to the methodology for estimating monthly labor force and unemployment statistics for all states.

 

Benefits of the new state model over the existing state model include:

 

¨      State estimates are controlled monthly or in “real time” to the (CPS). As a result, the sum of state model estimates will equal national CPS totals.

¨     The model uses real time benchmarking to ensure that shocks to the economy (e.g., turns in the business cycle, terrorist attacks) are captured sooner.

¨      Real-time benchmarking improves over-the-year analysis of estimates. 

¨      End-of-year revisions will be smaller.

¨      Monthly and over-the-year error measures will be available.

 

Estimates in New Jersey state total unemployment and resident employment estimates have been revised monthly back to 2000.

 

Data users needing additional information on the methodology should go to the BLS website at http://www.bls.gov/lau/lausredesignqa.htm.\

 

Changes to Metropolitan Area Labor Force Estimation:  Beginning with the release of data for January 2005, two major changes occurred in the method of producing metropolitan area employment and unemployment estimates.  The first change relates to estimates of “resident” employment.  The primary sources of employment data are reports from employers, which result in estimates of jobs by place-of-work rather than by residence.  These place-of-work estimates are adjusted to account for residency prior to use in employment estimation.  This methodology has been changed to account for commuting to multiple neighboring areas with significantly different rates of employment growth.

 

The second major change in sub-state estimation relates to unemployed entrants to the labor force.  The former method of estimation, which has been in place since 1983, substantially underestimated unemployed entrants.  The new model for estimating sub-state unemployed entrants incorporates monthly statewide data from the CPS for new and reentrants to ensure that unemployed entrants maintain their proper share of total unemployment.  Distribution of the statewide data will be dependent on area population of youth 16-19 available for and likely to enter the labor force as well as the area population 20 and over to estimate the number of experienced unemployed who may reenter the labor force.

 

Estimates for metropolitan areas/divisions have been revised back to 2000

 

More information on the methodology is available from the U.S. Bureau of Labor Statistics website at http://www.bls.gov/lau/lauschanges2005.htm.

 

 

ESTIMATION PROCEDURES FOR ANNUAL MUNICIPALITY ESTIMATES FROM 1990 - 1999

 

The estimates are developed by determining each municipality's share of its county's unemployment and employment from the 1990 Census. The ratio for each municipality is then applied to county unemployment and employment estimates.

 

Because the use of 1990 U.S. Census ratios assumes that the given relationships have remained constant between April 1990 (the date of the U.S. Census) and the period since the Census, estimates for a municipality might be biased to the extent that unusual labor force conditions existed either at the time of the U.S. Census or during the period since that time, or that labor force conditions have changed relative to the county share since the 1990 U.S. Census.

 

 

ANNUAL AVERAGE ESTIMATES FOR MUNICIPALITIES FROM 2000-2004

 

The files for these data are revised. Estimates for municipalities of 25,000 or more population, on a monthly basis, are currently available from the US Bureau of Labor Statistics (BLS) at http://data.bls.gov. Annual average estimates for municipalities of 25,000 or more population and municipalities under 25,000 in population are now available and have been posted. All municipalities have been disaggregated using 2000 census share ratios without the group quarters population.

 

ANNUAL AVERAGE ESTIMATES FOR MUNICIPALITIES FOR 2005-2009

 

Starting with January 2005, a combination of population and unemployment insurance claims (UI) was used to disaggregate employment and unemployment from the county for municipalities of 25,000 or more in population. This change in methodology can cause significant changes in the estimate levels from previous years.  Estimates for under 25,000 in population were developed by using 2000 census-share ratios (without group quarters) applied to the balance of the county. Monthly estimates for municipalities for 25,000 or more population are available from the US Bureau of Labor Statistics (BLS) at http://data.bls.gov.  Users also can contact BLS at 202-691-5200 for more information.

 

ANNUAL AVERAGE ESTIMATES FOR MUNICIPALITIES (UNDER 25,000 IN POPULATION) FOR 2010 FORWARD

 

Estimates for municipalities under 25,000 in population were developed by using ACS 5-year census-share ratios applied to the county labor force data.

 

FOR MORE INFORMATION

Users of these data needing further clarification of these procedures should contact Roseanne Elcenko 609.777.2193.

Roseanne.Elcenko@dol.state.nj.us

New Jersey Department of Labor and Workforce Development

Office of Research and Information

Economic and Demographic Research

Local Area Unemployment Statistics

 

 

For this and related demographic information visit the Office of Research and Information homepage at htto://lwd.dol.state.nj.us/labor/lpa/LMI_index.html