State Employment and Unemployment (Monthly)

For release 10:00 a.m. (ET) Tuesday, January 26, 2021

USDL-21-0124

Technical information:

Employment: [e-mail] • www.bls.gov/sae

Unemployment: [e-mail] • www.bls.gov/lau

Media contact:

[phone] • [e-mail]

STATE EMPLOYMENT AND UNEMPLOYMENT - DECEMBER 2020

Unemployment rates were lower in December in 19 states, higher in 12 states and the District of Columbia, and stable in 19 states, the U.S. Bureau of Labor Statistics reported today. Forty-five states and the District had jobless rate increases from a year earlier, one state had a decrease, and four states had little or no change. The national unemployment rate, 6.7 percent, was unchanged over the month but was 3.1 percentage points higher than in December 2019.

In December 2020, nonfarm payroll employment increased in 15 states, decreased in 11 states, and was essentially unchanged in 24 states and the District of Columbia. Over the year, nonfarm payroll employment decreased in 48 states and the District and was essentially unchanged in 2 states.

This news release presents statistics from two monthly programs. The civilian labor force and unemployment data are modeled based largely on a survey of households. These data pertain to individuals by where they reside. The employment data are from an establishment survey that measures nonfarm employment, hours, and earnings by industry. These data pertain to jobs on payrolls defined by where the establishments are located. For more information about the concepts and statistical methodologies used by these two programs, see the Technical Note.

Unemployment

Hawaii and Nevada had the highest unemployment rates in December, 9.3 percent and 9.2 percent, respectively. Nebraska and South Dakota had the lowest rates, 3.0 percent each. In total, 25 states had jobless rates lower than the U.S. figure of 6.7 percent, 10 states and the District of Columbia had higher rates, and 15 states had rates that were not appreciably different from that of the nation. (See tables A and 1 and map 1.)

In December, the largest unemployment rate decreases occurred in New Jersey (-2.6 percentage points) and Arkansas (-2.1 points). Rates declined over the month by more than a full percentage point in an additional four states: Kansas and Louisiana (-1.3 points each), Nevada (-1.2 points), and Hawaii (-1.1 points). The largest over-the-month jobless rate increase occurred in Colorado (+2.0 percentage points). Rate increases in excess of 1.0 percentage point also occurred in Washington (+1.4 points), Missouri (+1.3 points), and Tennessee (+1.2 points). Nineteen states had December jobless rates that were not

notably different from those of a month earlier, though some had changes that were at least as large numerically as the significant changes. (See table B.)

The largest unemployment rate increase from December 2019 occurred in Hawaii (+6.6 percentage points). The next largest over-the-year rate increases were in Colorado (+5.9 percentage points), Nevada (+5.5 points), and California (+5.1 points). The only jobless rate decrease over the year was in South Dakota (-0.4 percentage point). (See table C.)

Nonfarm Payroll Employment

Nonfarm payroll employment increased in 15 states, decreased in 11 states, and was essentially unchanged in 24 states and the District of Columbia in December 2020. The largest job gains occurred in Texas (+64,200), Georgia (+44,700), and North Carolina (+33,600). The largest percentage increases occurred in Hawaii (+2.0 percent), Georgia (+1.0 percent), and Utah (+0.9 percent). The largest employment decreases occurred in Michigan (-64,400), California (-52,200), and Minnesota (-49,800). The largest percentage decreases in employment occurred in Minnesota (-1.8 percent), Michigan (-1.6 percent), and Oregon (-1.4 percent). (See tables D and 3.)

Over the year, nonfarm payroll employment decreased in 48 states and the District of Columbia and was essentially unchanged in 2 states. The largest job declines occurred in California (-1,410,000), New York (-1,020,700), and Michigan (-486,800). The largest percentage declines occurred in Hawaii (-13.8 percent), Michigan (-10.9 percent), and New York (-10.4 percent). (See table E and map 2.)

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The Metropolitan Area Employment and Unemployment news release for December 2020 is scheduled to be released on Wednesday, February 3, 2021, at 10:00 a.m. (ET). The Regional and State Unemployment 2020 Annual Averages news release is scheduled to be released on Wednesday, March 3, 2021, at 10:00 a.m. (ET). The State Employment and Unemployment news release for January 2021 is scheduled to be released on Monday, March 15, 2021, at 10:00 a.m. (ET).

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Coronavirus (COVID-19) Pandemic Impact on December 2020

Establishment and Household Survey Data

BLS has continued to review all estimation and methodological procedures for the establishment survey, which included the review of data, estimation processes, the application of the birth-death model, and seasonal adjustment. Business births and deaths cannot be adequately captured by the establishment survey as they occur. Therefore, the Current Employment Statistics (CES) program uses a model to account for the relatively stable net employment change generated by business births and deaths. Due to the impact of COVID-19, the relationship between business births and deaths is no longer stable. Typically, reports with zero employment are not included in estimation. For the November final and December preliminary estimates, CES included a portion of these reports in the estimates and made modifications to the birth-death model. In addition for both months, the establishment survey included a portion of the reports that returned to reporting positive employment from reporting zero employment. For more information, see www.bls.gov/web/empsit/cesbd.htm.

In the establishment survey, workers who are paid by their employer for all or any part of the pay period including the 12th of the month are counted as employed, even if they were not actually at their jobs. Workers who are temporarily or permanently absent from their jobs and are not being paid are not counted as employed, even if they are continuing to receive benefits. The length of the reference period does vary across the respondents in the establishment survey; one-third of businesses have a weekly pay period, slightly over 40 percent a bi-weekly, about 20 percent semi-monthly, and a small amount monthly.

For the December 2020 estimates of household employment and unemployment from the Local Area Unemployment Statistics (LAUS) program, BLS continued to implement level-shift outliers in the employment and/or unemployment inputs to the models, based on statistical evaluation of movements in each area's inputs. Both the Current Population Survey inputs, which serve as the primary inputs to the LAUS models, and the nonfarm payroll employment and unemployment insurance claims covariates were examined for outliers. The resulting implementation of level shifts preserved movements in the published estimates that the models otherwise would have discounted, without requiring changes to how the models create estimates at other points in the time series.

To mitigate distortions due to the complex relationships between level shifts in the household survey and covariate inputs to the state models, BLS retained the same modifications to the LAUS seasonal adjustment and smoothing procedures that had been introduced during the May 2020 cycle. Specifically, level shifts were isolated from the estimation of seasonal factors, and the Reproducing Kernel Hilbert Space filter was not used to smooth the seasonally adjusted estimates.

The "Frequently asked questions" document at www.bls.gov/covid19/employment-situation-covid19-faq-december-2020.htm extensively discusses the impact of a misclassification in the household survey on the national estimates for December 2020. Despite the considerable decline in its degree relative to prior months, this misclassification continued to be widespread geographically, with BLS analysis indicating that most states again were affected to at least some extent. However, according to usual practice, the data from the household survey are accepted as recorded. To maintain data integrity, no ad hoc actions are taken to reclassify survey responses. Hence, the household survey estimates of employed and unemployed people that serve as the primary inputs to the state models were affected to varying degrees by the misclassification, which in turn affected the official LAUS estimates for December 2020.

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Household data for Puerto Rico are not modeled, but rather are derived from a monthly household survey similar to the Current Population Survey. Due to the effects of the pandemic and efforts to contain the virus, Puerto Rico had not been able to conduct its household survey for March or April 2020. Since data collection resumed effective May 2020, the Puerto Rico Department of Labor has reported a misclassification in its household survey similar in nature to the misclassification in the Current Population Survey.

Upcoming Changes to Local Area Unemployment Statistics Data

Effective with the release of Regional and State Unemployment 2020 Annual Averages on March 3, 2021, the civilian labor force and unemployment data for states, the District of Columbia, and the modeled substate areas presented in tables 1 and 2 of this news release will be replaced with data produced using a new generation of time-series models. Data will be re-estimated back to January 1976 for census regions, census divisions, states, the District of Columbia, the Los Angeles-Long Beach- Glendale metropolitan division, New York City, and the balances of California and New York states. Data for the five remaining modeled substate and balance-of-state areas will be re-estimated back to their series beginnings in January 1990 or 1994. Both seasonally adjusted and not seasonally adjusted data will be affected. More information is available in the "Questions and Answers on Upcoming Changes to Model-Based Estimation" on the BLS website at www.bls.gov/lau/gen-5-changes-in- 2021.htm.

The revisions to model-based data at the state level and below for 2019 and 2020 also will incorporate updated covariate inputs, while the revisions for all model-based data from April 2010 forward also will reflect new population controls from the U.S. Census Bureau.

Upcoming Changes to Current Employment Statistics Data

Effective with the release of January 2021 estimates on March 15, 2021, all nonfarm payroll employment estimates for states and areas presented in tables 3 and 4 of this news release will be adjusted to 2020 benchmark levels. Not seasonally adjusted data beginning with April 2019 and seasonally adjusted data beginning with January 2016 are subject to revision. Some not seasonally adjusted and seasonally adjusted series may be revised as far back as 1990.

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