Ballpark estimates: What you can and can’t conclude from state-level labor force participation rates
Monthly, state-level labor force participation rates from the U.S. Bureau of Labor Statistics are best thought of as “ballpark estimates,” according to the latest District Data Brief from the Federal Reserve Bank of Cleveland.
The figures provide timely information on an issue that has attracted a lot of attention since the COVID-19 pandemic pushed down the national labor force participation rate. But those figures have several limitations, according to Cleveland Fed researchers Joel Elvery, Isabel Brizuela and Jayme V. Gerring.
For instance, data from January 2023 suggests that Pennsylvania’s labor force participation rate increased by 0.8 percent over the prior 12 months – growing four times faster than the national rate. But the margin of error on that figure is so large that one can’t say with confidence that the state’s actual rate increased at all during that time.
Though less timely, labor force participation rates from the U.S. Census Bureau’s American Community Survey tend to be more precise.
“While the ACS state-level estimates of the LFPR are less frequent and less timely, their increased precision makes them the authors’ preferred source for looking at year-to-year changes,” the authors write.
Read the District Data Brief, which includes data for Ohio, Pennsylvania, Kentucky and West Virginia: A Guide to State-Level Estimates of Labor Force Participation Rates
Federal Reserve Bank of Cleveland
The Federal Reserve Bank of Cleveland is one of 12 regional Reserve Banks that along with the Board of Governors in Washington DC comprise the Federal Reserve System. Part of the US central bank, the Cleveland Fed participates in the formulation of our nation’s monetary policy, supervises banking organizations, provides payment and other services to financial institutions and to the US Treasury, and performs many activities that support Federal Reserve operations System-wide. In addition, the Bank supports the well-being of communities across the Fourth Federal Reserve District through a wide array of research, outreach, and educational activities.
The Cleveland Fed, with branches in Cincinnati and Pittsburgh, serves an area that comprises Ohio, western Pennsylvania, eastern Kentucky, and the northern panhandle of West Virginia.
Doug Campbell, firstname.lastname@example.org, 513.455.4479