Labor Market Information FAQs - LMI Data Definitions, Assumptions, and Methodologies
- Civilian Labor Force includes persons aged 16 and older who were not institutionalized or on active military duty and were either employed or unemployed.
- Employment includes those who: did any work as paid employees, worked in their own business or farm, or worked 15 hours or more as unpaid workers in a family business during the reference week (normally the week including the 12th of the month). It also includes those who had a job but did not work due to a temporary absence. Each employed person is counted only once, even if they had more than one job.
- Unemployment includes those who did not have a job during the reference week, were available for work, and made specific efforts to find a job sometime during the 4 weeks prior to the reference week.
- Unemployment Rate is the percent of the civilian labor force that was unemployed.
The EDD Labor Market Information Division uses several methods to estimate statistics for civilian labor force, employment, unemployment, and unemployment rates. These methods were developed in cooperation with the U.S. Department of Labor, Bureau of Labor Statistics (BLS). For further information about the Labor Force and Unemployment rate methodology, visit the About the Labor Force data, and Labor Force Data Methodology FAQ pages.
A Benchmark is an annual revision process in which monthly Labor Force and payroll Employment by Industry estimates are updated. Throughout the year, employment by industry data is estimated based on sample data. On an annual basis, when updated information becomes available from detailed tax records, the employment by industry estimates is revised. Tax record data are used through March; therefore, the revision is referred to as the March Benchmark.
The labor force data series is also revised. The labor force statistics are calculated based on a number of data sources including the employment by industry data, Unemployment Insurance claims filed, and at the State level, data from the Current Population Survey (CPS), a survey of households. As these industry employment and CPS data are updated, so are the labor force statistics.
Because this review and update process is so extensive, and affects historical as well as current year data, the information is released in stages early each year. For more information on benchmarking visit the U.S. Bureau of Labor Statistics.
Seasonal adjustment is a process whereby normal seasonal changes are removed or discounted from monthly data. Taking employment as an example, we know that some industries show large fluctuations in employment because they need more or less employees at certain times of the year. Ski resorts, for instance, hire far more employees in the winter months to accommodate snow skiing season. Employment in education fluctuates greatly at the beginning and the ending of the school year. Retail businesses typically hire more employees during the holiday season late in the year.
By seasonally adjusting employment, statisticians attempt to adjust the influences of predictable seasonal patterns to reveal how employment and unemployment change from month to month. The adjustment consists of either raising or lowering the actual employment reported by a certain percentage to reflect the normal seasonal increases or decreases that historically occur.
This explains why you often see two sets of employment figures, seasonally adjusted and non-seasonally adjusted.
Typically, the monthly employment and unemployment numbers reported in the news are seasonally adjusted data. Seasonally adjusted data are useful when comparing several months of data. Annual average estimates are calculated from the not seasonally adjusted data series.
The EDD Labor Market Information Division releases data about jobs every month. But the number of jobs we report for Civilian Employment differs from the number of jobs reported for Total Industry Employment (also known as Wage and Salary Employment). The reason for the difference in the two numbers is that they are measuring different types of employment. Total Industry Employment counts the number of jobs by the place of work. This does not include business owners, the self-employed, unpaid family workers, or private household workers. If someone holds more than one job, they may be counted more than once.
Civilian Employment counts the number of working people by where they live. This includes business owners, the self-employed, unpaid family workers, private household workers, and wage and salary workers. An individual with more than one job is only counted once.
The EDD Labor Market Information Division generates industry employment estimates using a nationally recognized monthly employment reporting system. Employment by industry data reflects jobs by "place of work.” That is, jobs located in the county or the Metropolitan Statistical Area (MSA) that pay wages and salaries are counted although workers may live outside the area. Jobs are counted regardless of the number of hours worked. Multiple jobholders (i.e., individuals who hold more than one job) may be counted more than once. Self-employed, unpaid family workers and private household employees are not included. For further information about the methodology for generating Industry Employment data, visit the Industry Employment Data FAQ page.
Occupational Employment Projections estimate the changes in occupational employment over time resulting from industry growth, technological changes, and other factors. Industry growth exists when the demand for goods and services increases, resulting in an increased demand for workers to produce these goods and services. Technological changes can raise the demand for some skills while eliminating the demand for others.
The State and sub-state area Long-Term projections are for a 10-year period. The projections are revised every two years to incorporate economic changes that occur in the State and local areas. Statewide Short-Term projections are for a two-year period and are revised annually. For further information visit the Occupational Employment Projections Methodology FAQ page.
Industry Employment Projections estimate changes within an industry over time. The projections are based on the State or local area's past industry employment trends and are refined by a review of current economic developments that affect employment within each industry. Base year data, the date for the beginning year of the projection period, are a "snap-shot" of employment at a point in time. Preliminary employment projections are produced using various economic models. The methods and economic models are provided to all state Labor Market Information programs to insure consistent methodology and outcomes across the nation. Using these methods, analysts review preliminary industry employment projection numbers and make adjustments based on local area and State economic developments that may occur during the projection period. For further information about the methodology for generating occupational employment projections data, visit the Industry Employment Projections Methodology page.