Montana Labor Market Information
Every year, MT DLI produces an updated set of short-term and long-term employment projections to provide an estimate of future industry and occupation growth. The short-term projections span two years, while long term projections forecast ten years into the future. To create the forecast, DLI economists forecast industry growth in Montana and use expected occupational mix to estimate future occupational demand. The forecasts serve as estimates of future demand and are not anticipated to be exactly correct. Instead, the relative size of forecasts should be used to measure relative demand, with larger growth implying larger demand, and vice versa.
Metropolitan and Micropolitan Statistical Areas (MSAs) are official urban regions designated the federal government and used by statistical agencies. A metropolitan area has an urban core with a population of at least 50,000 people, while a micropolitan area has a population between 10,000 and 50,000 people. MSAs refer to the core urban area, plus the counties containing the core urban area and any adjacent counties that have a high level of social and economic integration with the urban core. In Montana, there are currently three metropolitan areas: Billings, Great Falls, and Missoula. There are four micropolitan areas: Bozeman, Butte, Helena, and Kalispell. Only the Billings MSA includes more than one county in the official MSA geography. These areas are updated periodically, and may be revised with changes in Montana’s population.
The LAUS program has undergone a redesign as a result of a multi-year, multi-project initiative to improve labor force estimates for states and substate areas developed by the LAUS program. In addition to these methodological changes, the LAUS program also implemented the 2010 Census-based federal statistical area delineations issued by the Office of Management and Budget effective with the publication of the January 2015 labor force estimates. As of April 2015, all statewide and substate LAUS estimates have been updated using the new LAUS model with the incorporation of the 2010 Census data. Additional information regarding the changes to the LAUS program can be found at: http://www.bls.gov/lau/lauschanges2015.htm
The Montana unemployment rate is published at the 90 percent confidence interval with an error range of plus or minus .5 percentage points. Given that the reported changes to the unemployment rate are often only .1 or .2 percentage points, this is a fairly large error range. Unemployment statistics are designed primarily to track changes in the economy, rather than being precise on the level of unemployment. In other words, the statistical model used to calculate the unemployment rate is designed to determine whether unemployment is increasing or decreasing, but it is less accurate in whether the change is large or small. For these reasons, it is important to view the unemployment rate as a part of a historic trend.
The Research and Analysis Bureau's set of labor force statistics differ from the Bureau of Indian Affairs (BIA) estimates in a number of ways. First, the Research and Analysis Bureau estimates include anyone who lives on a reservation, while the BIA estimates only look at American Indians. Second, the Research and Analysis Bureau defines the labor force as the civilian non-institutional population 16 years old and older that is either employed or unemployed. The BIA defines the labor force as the number of tribal members that are available for work, not disabled or incarcerated, and between the ages of 16 and 64 years old. Third, the Research and Analysis Bureau defines employment as someone who did any work as a paid employee, or worked in their own business, or worked 15 hours or more as an unpaid worker in the a family owned enterprise. The BIA defines employment as any tribal member that is working for money. The inclusion of only tribal members and more restrictive employment criteria means that the BIA's unemployment rate estimates will be higher than the Research and Analysis Bureau's estimates, and in many instances the estimates will be significantly higher. The use of the full population of tribal members who are between the ages of 16 and 64 compared to only those looking for work explains the majority of the difference between the rates published by the BIA and the Research and Analysis Bureau. In a sense, the labor underutilization rate published by the BIA combines two different concepts – labor market participation and unemployment – into one measure. The unemployment rate measures how difficult it is for an individual to find work if they are looking. The labor market participation rate measures what percentage of the population that is working or looking for work. Although there are a number reasons why individuals may not be seeking work, such as taking care of family, improving their education or training, or a disability, labor force participation increases during a good economy and decreases with poor economic conditions. Areas with persistently low labor force participation, like some of Montana's American Indian reservations, are often areas that are dealing with severe economic problems that persist regardless of business cycles. Montana's labor force participation rate was about 64.4% in 2010, roughly the same as the U.S. participation rate of 64.7%. Although the BLS does not publish official annual labor force participation estimates specifically for American Indians, data from the Current Population Survey indicate that American Indians have a lower labor force participation rate than the white population. Labor force participation nationally in 2010 was about 58% for American Indians or about 60% including workers who are part American Indian and part another race. The BIA formerly published their measure of labor underutilization every two years, but the last estimate was published in 2005. The 2005 estimate indicated that Montana's American Indians living on or near Montana's reservations experienced a labor underutilization rate of 65%. Without understanding the methodology differences and the lower rates of labor force participation, this rate would be shockingly high. Using comparable statistics, Montana's reservation areas have unemployment rates that ranged from 9.3% on the Fort Peck Reservation up to 18.3% on the Rocky Boy's Reservation in 2010, compared to 7.2% for all of Montana.
Under the method developed by the Bureau of Labor Statistics, Montana's county level employment and unemployment estimates are generated through a method of disaggregating Montana's Current Employment Statistics estimates and Unemployment Insurance claims. However, this method does not allow for the development of reservation labor force statistics, as the CES and Unemployment Insurance claims data sources do not indicate if the data originated on a reservation. Due to this lack of data, the U.S. Bureau of Labor Statistics does not develop official labor force estimates for reservations. In order to develop a set of reservation labor force estimates, the Research and Analysis Bureau uses a census share method to develop its own set of estimates. The census share method uses Census employment and unemployment estimates to develop each reservation's share of total employment and unemployment for each reservation county. When estimated, the ratios are multiplied with the annual Local Area Unemployment Statistics estimates for each of the reservation counties. After each of the counties estimates are developed for a specific reservation, the employment and unemployment estimates are summed to provide a reservation wide estimate.
Yes. The Montana unemployment rate estimate considers all unemployed people when generating the rate, not just those receiving unemployment insurance (UI) benefits. Not everyone who loses a job applies for UI benefits, and not everyone qualifies even after applying. For example, independent contractors and the self-employed don't pay into the UI system, and therefore do not qualify for benefits. In fact, only about a third of Montana's unemployed workers receive UI benefits. But the number of UI claims increase when unemployment increases, so the number of claims remains a good indicator of what is going on in the Montana economy. To account for people who lose their jobs but don't file UI claims, the Bureau of Labor Statistics and the Montana Department of Labor and Industry consider other information when calculating the unemployment rate. The unemployment rate is calculated from a statistical model that combines data from three different sources. One of these sources is the number of claims for that month, which increases when overall unemployment increases. The second source is a survey of businesses called the Current Employment Statistics, which tracks hiring, firing, and employment in Montana businesses. The third source is the Current Population Survey (CPS), which is a national survey that calls American households and asks them about their employment status. About 800 Montana homes are called each month, which provides information on the employment status of self-employed workers and others that don't make UI claims. Although it sounds complicated, the unemployment rates generated do a pretty good job of tracking the number of people in Montana that can't find work. The unemployment rates are checked against other data sources annually to make sure the model remains accurate. Surveying a greater number of Montana households or other changes to the methodology would likely increase the accuracy of the unemployment rate, but these improvements would come with greater cost.
Yes and no. There are six unemployment rates calculated, and each one includes different types of workers. The unemployment rate that receives the most attention in the media and is published monthly by the BLS and the Montana Department of Labor and industry is called the U-3, or the "headline" rate. The U-3 is equal to the number of unemployed workers divided by those in the "labor force," or those who are employed or currently looking for work. If a worker is "discouraged" and stops looking for work, they are not included in this headline unemployment rate. However, the five other unemployment rates have different definitions of the labor force, and three of the six rates include discouraged workers. For example, the U-4 includes discouraged workers, along with those currently seeking employment and those working, in the labor force. The U-5 adds marginally-attached workers, while the U-6 adds in part-time workers. So why is the U-3, or the headline rate (because it's in the headlines) the only rate published in newspapers? First, while the U-3 is available monthly for Montana, the other rates are only available quarterly. Second, the other rates track very closely with the U-3. When the U-3 unemployment rate moves up, so do the other rates. Therefore, additional rates become rather confusing and repetitive. Third, the U-3 is the unemployment rate that has been produced for the longest amount of time. In order to compare today's unemployment rates with those in the 1970's, the U-3 must be used.
There is no difference between the statistics. The Bureau of Labor Statistics (BLS) contracts with the Montana Department of Labor and Industry (DLI) to collect and produce labor market statistics for our state. The Research and Analysis Bureau is the part of DLI that collects, produces, and disseminates the labor market information. The BLS provides the models and methodology that are used to generate the numbers, and the DLI must use the standard methodology. At times, there may be some disparity between the numbers published on the Montana DLI website and those published by BLS; this disparity is often because DLI updates the data and website more frequently.
Montana labor statistics data are published monthly at the same time as all other states. The data are published for the prior month, so that July's estimates are released in August. Generally, the unemployment rate is released on a Friday during the third week of the month, although the schedule changes in some months due to the national release schedule. February's release, which includes labor statistics for the month of January, is delayed until March. In July, September, and November, the data are released on a Tuesday. The full release schedule can be found on the Bureau of Labor Statistics website at http://www.bls.gov/schedule/news_release.
Industry employment and wage data is collected through the Quarterly Census of Employment and Wages (QCEW) program. The primary source for the QCEW are the reports submitted by employers to the Montana Unemployment Insurance program. Employment data represents the number of workers on the payroll during the pay period including the 12th day of the month. Total wages include gross wages and salaries, bonuses, profit sharing, commissions, severance pay, and limited tips. Total wages are reported in quarter paid and not earned.
Census of Fatal Occupational Injuries (CFOI) gathers information on the fatal occupational accidents that occur in Montana, on a calendar year basis. The program provides the most complete count of fatal work injuries available because it uses diverse state and federal data sources to identify, verify, and profile fatal work injuries. Data is available by industry, gender, event of exposure, occupation, location, employee work status, and age.
The Survey of Occupational Injuries and Illnesses (SOII) provides annual estimates of the frequency (incidence rates) and number of occupational injuries and illnesses based on logs kept by private industry employers. Montana employers are surveyed each year about their employment average, hours worked for the year, and information on recordable occupational injuries or illnesses. From this data, incidence rates are set to reflect the number of injuries and illnesses per 100 full time workers.
The Occupational Employment and Wage Statistics (OEWS) program produces employment and wage estimates annually for over 800 occupations. These estimates are available for the nation as a whole, for individual states, and for metropolitan and nonmetropolitan areas; national occupational estimates for specific industries are also available.
The OEWS survey is a semi-annual mail survey for all full-time and part-time wage and salary workers in nonfarm industries covered by unemployment insurance. Forms are mailed to business establishments to collect data for the payroll period including the 12th of May or November. The survey does not cover the self-employed, owners and partners in unincorporated firms, household workers, or unpaid family workers. The wage rates published here are considered “informational,” meaning they cannot be used for Montana Prevailing Wage or Foreign Labor Certification purposes.
Seasonal adjustment is a statistical technique that attempts to measure and remove the influences of predictable seasonal patterns to reveal how employment and unemployment change from month to month. Over the course of a year, the size of the labor force, the levels of employment and unemployment, and other measures of labor market activity undergo fluctuations due to seasonal events including changes in weather, harvests, major holidays, and school schedules. Because these seasonal events follow a more or less regular pattern each year, their influence on statistical trends can be eliminated by seasonally adjusting the statistics from month to month. These seasonal adjustments make it easier to observe the cyclical, underlying trend, and other nonseasonal movements in the series. As a general rule, 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.
Each year thousands of people write contracts with escalation clauses that are tied to the Consumer Price Index (CPI). Escalation contracts call for an increase in some type of payment in the event of an increase in prices. The Bureau of Labor Statistics (BLS) Beyond the Numbers publication has a comprehensive article that can help those who use the CPI to write escalation clauses to create a more comprehensive contract. Here is a link to their article Writing an escalation contract using the Consumer Price Index http://www.bls.gov/opub/btn/volume-1/writing-an-escalation-contract-using-the-consumer-price-index.htm
The Consumer Price Index (CPI) is a measure of the average change in the prices paid by urban consumers for a fixed basket of goods and services. Through the Consumer Expenditure Survey, the U.S. Department of Labor surveys consumers to find out what consumers buy and what share of consumer incomes are spent on each item. This survey is used to create a basket of goods purchased by the average consumer. The price of the basket of goods becomes the base period cost. The U.S. Department of Labor then surveys stores to determine the price and quantity of goods sold to consumers. The monthly CPI indicates the increase in the price of the basket of goods since the base period. The price is indexed to make it easier to understand by setting the price in the base period equal to 100. Any price increases are represented as a percentage increase since the base period. A 3% price increase since the base period would result in an index of 103. There are different types of CPIs published. The most commonly used index is the Consumer Price Index for All Urban Consumers, or the CPI-U. The CPI-U represents about 87 percent of the total U.S. population, but excludes consumers in rural areas, in the armed forces, and those living in institutions (such as prisons or mental institutions). The CPI-U can be broken down into the Energy Index, the Food Index, and the All Items Less Food and Energy Index (also referred to as core inflation). Each of these categories can be disaggregated further to more specific products. The Department of Labor also publishes another index that only includes consumers who are wage earners and clerical workers, called the Consumer Price Index for Urban Wage Earners and Clerical workers (the CPI-W). Consumers that are earning a wage often purchase different items than consumers who are retired or earning a degree, so the CPI-W is slightly different than the CPI-U. The CPI-W represents about 32 percent of the U.S. population. The third price index published is the Chained Consumer Price Index for All Urban Consumers (C-CPI-U). The C-CPI-U is exactly the same as the CPI-U, but it uses different mathematical techniques that better represent changes in what consumers buy, rather than measuring prices in the same basket of goods. More information on the Consumer Price Index can be found on the Bureau of Labor Statistics website at http://www.bls.gov/cpi/.
The Current Employment Statistics (CES) program provides a monthly count of persons on non-farm establishments payrolls (including employees on paid sick leave, paid holiday, or paid vacation) who work or receive pay for any part of the week that includes the 12th of the month. It is a count of jobs by place of work, not people. Individuals could be counted multiple times if they hold more than one job. Self-employed, unpaid volunteer or family workers, domestic workers in households, military personnel, and persons who are laid off, on leave without pay, or even on strike for the entire reference period are not included in the data.
The Local Area Unemployment Statistics (LAUS) program provides a monthly estimate of an area's labor force, employment , unemployment, and unemployment rate. Data is taken from surveys and unemployment claims recorded during the monthly reference week, which is usually the week including the 12th day of each month. Statistics are an estimate of persons by place of residence, not jobs or where a person works. In order to be considered unemployed an individual must have had no employment during the reference week, been available for work, and have made an effort to find employment for four weeks leading up to the reference week.
For Labor Market and Career Information
Phone: (406) 444-2840
Location
1315 East Lockey Ave. Helena, MT 59601
Mailing List
Economy at a Glance Subscribe
© 2015 Montana Department of Labor and Industry