[Federal Register Volume 60, Number 213 (Friday, November 3, 1995)]
[Notices]
[Pages 55855-55856]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-27285]



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DEPARTMENT OF LABOR
Bureau of Labor Statistics


Proposal to Revise Method for Estimation of Monthly Labor Force 
Statistics for Certain Subnational Areas

AGENCY: Bureau of Labor Statistics, Labor.

ACTION: Request for comments on proposed action.

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SUMMARY: The Department of Labor, through the Bureau of Labor 
Statistics, is responsible for the development and publication of local 
area labor force statistics. This program includes the issuance of 
monthly estimates of the labor force, employment, unemployment, and the 
unemployment rate for each State and labor market area in the nation. 
For 11 large States (California, Florida, Illinois, Massachusetts, 
Michigan, New Jersey, New York, North Carolina, Ohio, Pennsylvania, 
Texas) and two large areas (New York City, and the Los Angeles 
Metropolitan Area), the Current Population Survey (CPS) sample is 
sufficiently large to meet the BLS standard for direct use and the 
monthly estimates are taken directly from the survey. Historically, 
concern has been expressed over the volatility of monthly CPS estimates 
in these large States and areas.
    Under anticipated lower funding levels, BLS plans to reduce the 
number of households in the CPS. One result will be that the 11 large 
States and two large areas no longer will be estimated directly from 
the monthly household survey. The BLS proposes to continue publishing 
monthly estimates for these subnational areas based on the time series 
modeling approach currently used in the other 39 States and the 
District of Columbia beginning in January 1996.

DATES: Comments are due by December 1, 1995.

ADDRESSES: Send comments to Sharon P. Brown, Chief, Division of Local 
Area Unemployment Statistics, Bureau of Labor Statistics, Suite 4675, 2 
Massachusetts Ave., NE., Washington, DC 20212.

FOR FURTHER INFORMATION CONTACT:
Sharon P. Brown, Chief, Division of Local Area Unemployment Statistics, 
Bureau of Labor Statistics, telephone 202-606-6390.

SUPPLEMENTARY INFORMATION: The Bureau of Labor Statistics (BLS) has 
been responsible for the Local Area Unemployment Statistics (LAUS) 
program since 1972. In 1978, the BLS broadened the use of data from the 
Current Population Survey (CPS) in the LAUS program by extending the 
annual reliability criterion to monthly data. This action was within 
the context of a budget proposal to expand the CPS to yield monthly 
employment and unemployment data for all States by June 1981. Under the 
expanded criterion, monthly CPS levels were used directly for the 10 
largest States, two sub-State areas, and the respective balance-of-
State areas. The use of annual average CPS data continued for the other 
40 States and the District of Columbia. Ultimately, the budget proposal 
which initiated the direct use of monthly State CPS data was rejected 
as too costly. Based on population ranking, the State of North Carolina 
joined the group of direct-use States in 1985, bringing that group to 
its current total size of 11 States. Also in 1985, sample redesign and 
other efficiencies improved the reliability of CPS data at the State 
level, resulting in the current criterion on monthly and annual average 
data of an 8 percent coefficient of variation on the level of 
unemployment when the unemployment rate is 6 percent.
    Especially in regard to the monthly direct use of State CPS data, 
concern has been expressed as to the volatility of the statistics. In 
the typical direct-use State, a month-to-month change in the 
unemployment rate must exceed 0.7 percentage point to be considered 
statistically significant. Often, States experience consecutive, 
offsetting large movements in the unemployment rate.
    For the other 39 States and the District of Columbia, after 
extensive research and simulation, variable coefficient time series 
models for monthly estimation of State employment and unemployment were 
introduced in 1989. Further improvement was effected with the 
implementation of signal-plus-noise models in 1994. These models rely 
heavily on monthly CPS data, as well as current wage and salary 
employment and unemployment insurance statistics. At the end of each 
year, the monthly model estimates are rebenchmarked so that the annual 
averages for each State match the annual averages derived directly from 
the CPS.
    Because of the budget reductions that the Bureau anticipates, the 
CPS sample may not be of sufficient size to provide monthly data 
directly for the 11 large States, New York City, and the Los Angeles 
Metropolitan Area. Monthly estimates will continue to be produced, 
based on the time series modeling method currently used for the other 
States and the District of Columbia. Data for the current direct-use 
States and 

[[Page 55856]]
areas would no longer be released by the BLS at the same time as the 
monthly national labor force statistics, but would be published about 
four weeks later in the State and Metropolitan Area Employment and 
Unemployment news release. States that are able to do so will have the 
option of releasing these data earlier, perhaps even simultaneously 
with the release of national data. Monthly data for these States also 
will become subject to end-of-year benchmarking.
    The impact of the CPS sample cut on the national statistics would 
be to increase the variability of most national estimates by about 5 
percent. For example, under the reduced sample, a month-to-month change 
of 0.19 percentage points in the national unemployment rate would 
represent a statistically significant change at the 90-percent 
confidence level; the corresponding change under the current design is 
0.18 percent.
    Detailed descriptions of the estimating methods are available at 
the above address.

    Signed at Washington, DC, this 30th day of October, 1995.
Thomas J. Plewes,
Associate Commissioner for Employment and Unemployment Statistics, 
Bureau of Labor Statistics.
[FR Doc. 95-27285 Filed 11-2-95; 8:45 am]
BILLING CODE 4510-24-M