Always read the fine print

05 June 2020, 11:23 PM

quote:
When the U.S. government's official jobs report for May came out on Friday, it included a note at the bottom saying there had been a major "error" and the unemployment rate likely should be higher than the widely report 13.3 percent rate.

The special note said that if this misclassification error had not occurred, the "overall unemployment rate would have been about 3 percentage points higher than reported," meaning the unemployment rate would be about 16.3 percent for May.

The Bureau of Labor Statistics, the agency that puts out the monthly jobs reports, said it was working to fix the problem.

BLS and the Census Bureau are investigating why this misclassification error continues to occur and are taking additional steps to address the issue," said a note at the bottom of the Bureau of Labor Statistics report.

https://www.stamfordadvocate.c...n-error-15320999.php

06 June 2020, 10:25 AM

pianojuggler

Ever since I-1 started spouting off that the "Black unemployment rate" was the lowest ever in history, I wondered if they hadn't changed the rubric. "Lies, damn lies, and statistics" and all that. Stop counting people in various categories, and viola! the number of unemployed magically goes way down.

Not my area of expertise, but I hear on the market report on the radio* that they stop counting people who stop looking for work.

Of course the BLS under I-1 would never admit to such a thing.

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*It just occurred to me that I don't get my hour of npr every morning since I pretty much roll out of bed, walk downstairs and get to work. I don't listen to the radio in the shower or on my commute as I used to. So I don't hear the morning market report every day.

06 June 2020, 11:58 AM

Daniel

Well, I didn't believe it when I heard it.

06 June 2020, 03:53 PM

Nina

I would be shocked to find that the BLS report is being manipulated by Trump's minions. First, they were able to "get away with" reporting the error. Second, calculating unemployment rates is a gigantic pain in the butt and always an estimate that's only as good as the classification the BLS data collectors put onto it. There are four different methods for calculating unemployment (that I know of), and the field research method that was used here is the best one. So go figure.

The explanation for the error in the article doesn't seem outlandish to me. There was a massive increase in UI claims due to COVID-19, and it's also not surprising that the information from BLS was impacted. If I'm an employee on temporary furlough due to COVID, and I'm getting "special" COVID unemployment, and I'm not actively looking for another job, how do I answer the BLS questions?

To be honest, I'm not sure as I've never seen the full gauntlet of questions. But the complete freakout disaster regarding state unemployment that I've seen here leads me to believe that national numbers may have been incorrect without attributing nefarious reasons.