This is a study of employment cycles in states and local labor market areas. It describes why these areas experience national cycles differently. The report deals with the problem of targeting, suggesting the types of areas that are likely to experience more severe cycles. The authors have provided further documentation of the diversity of area cyclical fluctuations, strengthening the argument for basing countercyclical relief on local rather than national indicators. They have identified certain levers for a long-term effort to reduce area cyclical distress by inducing structural change. These are (1) the industrial composition of the area, (2) its secular unemployment rate, and (3) regional income. A long-term strategy that shifts area industrial composition away from manufacturing toward finance, insurance, real estate, and services, and that reduces secular unemployment and raises income levels in the surrounding region, would reduce the degree of cyclical distress.