The employed are defined as persons 16 years old and over in the civilian noninstitutional population who, during the reference week, (a) did any work at all (at least 1 hour) as paid employees; worked in their own business, profession, or on their own farm, or worked 15 hours or more as unpaid workers in an enterprise operated by a member of the family; and (b) were not working but who had jobs or businesses from which they were temporarily absent because of vacation, illness, bad weather, childcare problems, maternity or paternity leave, labor-management dispute, job training, or other family or personal reasons, whether or not they were paid for the time off or were seeking other jobs. Each employed person is counted only once, even if he or she holds more than one job. Excluded are persons whose only activity consisted of work around their own house (painting, repairing, or own home housework) or volunteer work for religious, charitable and other organizations.

The unemployed includes persons 16 years old and older who had no employment during the reference week, were available for work, except for temporary illness, and had made specific efforts to find employment sometime during the 4-week period ending with the reference week. Persons who were waiting to be recalled to a job from which they had been laid off need not have been looking for work to be classified as unemployed.

The monthly statewide employed estimates are prepared using economic models. These models use several factors, including CES data (nonfarm wage and salaried worker estimates), unemployment insurance claims and Current Population
Survey (CPS) data. The CPS is conducted by the U.S. Census Bureau for the U.S. Bureau of Labor Statistics (BLS) and is designed to produce annual national labor force data. The modeling techniques used to produce the state level estimates are based on historical and current relationships found within each state’s economy, as reflected in the different sources of data available for each state—the CPS, the CES data, and the unemployment insurance system. Therefore, the models used are sensitive to economic trends in each state. All state estimates then sum to national estimates.

Substate employed estimates are developed using the "handbook" method, which is a process that estimates the labor force for an area using available information without the expense of a survey like the CPS. The total employment estimate is based on "place-of-work" worker data from several sources. The primary source of worker data for metropolitan areas (Rapid City and Sioux Falls MSA) is the CES survey. The CES is designed to produce estimates of the total number of employees on payrolls in nonfarm industries for states and MSAs. In small labor market areas (MiSAs and counties), the information is primarily obtained from Quarterly Census of Employment and Wages (QCEW) data on workers covered by unemployment insurance. The county inputs also include estimates of presumed not covered wage and salaried workers and are therefore comparable to nonfarm wage and salaried numbers.

These "place-of-work" establishment employment estimates must be adjusted to a place-of-residence basis, as in the CPS. The adjustments are most important in areas where a lot of workers commute to other areas for work. Estimated adjustment factors have been developed using data from the most recent decennial census, which incorporates commuting patterns of workers to multiple nearby labor market areas.

The entrant category includes those who either entered the labor force for the first time or reentered after a period of separation. The only existing source of information is the CPS at the statewide level. Estimates for new entrants and reentrants are derived from econometric models based on current and historical state entrants data from the CPS. These model estimates are then allocated to all small labor market areas based on the age population distribution for each area.

The unemployment rate is calculated by dividing the number of unemployed in an area by the total labor force (employed and unemployed) for that area.

Once each year, statewide labor force estimates are revised to reflect updated input data and new Census Bureau population controls. As part of this procedure, all of the state and substate data are reviewed and revised as necessary. Other substate estimates for previous years are also revised on an annual basis. The updates incorporate any changes in the inputs, such as revisions to establishment-based employment estimates or claims data and updated historical relationships. The revised estimates are then readjusted to the latest statewide estimates of employment and unemployment.