About the BLS Statement on the May Jobs Report

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Unemployment rates About the BLS Statement on the May Jobs Report

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Many observers have made much of an unusual item included in the May jobs report.[1] The Bureau of Labor Statistics (BLS) called this a “misclassification.” The key paragraph is below. But the phrase everyone has focused on is, “…the overall unemployment rate would have been about 3 percentage points higher than reported…” This article is about the BLS statement on the May ;jobs report,

As is our usual practice, no ad hoc actions were taken to reassign survey responses; the data were accepted as recorded. If the workers who were recorded as employed but absent from work due to “other reasons” (over and above the number absent for other reasons in a typical May) had been classified as unemployed on temporary layoff, the overall unemployment rate would have been about 3 percentage points higher than reported (on a not seasonally adjusted basis). Additional information is available online at www.bls.gov/cps/employment-situation-covid19-faq-may-2020.pdf.

“Aha,” the pundits say. “The actual unemployment rate for May was 16.1 percent, not the reported 13.0 percent.”

This is why you should ask an economist before making silly statements like this. In their haste to score gotcha points on the Trump administration, the pundits have made fools of themselves. In fact, the BLS issued lengthy FAQs about this issue for March, April, and May.[2],[3],[4] The relevant points are 12 and 13. The three endnotes will take you to each page. Scroll to the end of 13 for the key data.

The table bel9ow and chart at the top of this article shows the reported unemployment rate and the unemployment rate adjusted by the BLS. The reported unemployment rate fell by 1.7 percentage points between April and May. The adjusted rate fell by 3.4 percentage points.

Unemployment Rates table About the BLS Statement on the May Jobs Report

(click for larger image)

The moral is simple: ask an economist before you end up looking like an idiot.

(Thanks to Ben Casselman @BenCasselman for giving me this idea.  The complete thread of his thoughts is available by clicking this sentence.)

  1. This is officially called the BLS Commissioner’s Statement. Beach, William W. (June 5, 2020) Bureau of Labor Statistics. “Commissioner’s Statement.” Available at https://www.bls.gov/news.release/jec.nr0.htm . Accessed June 6, 2020.
  2. Bureau of Labor Statistics (April 4, 2020). “Frequently asked questions: The impact of the coronavirus (COVID-19) pandemic on The Employment Situation for March 2020.” Available at https://www.bls.gov/cps/employment-situation-covid19-faq-march-2020.pdf\ . Accessed June 6, 2020.
  3. Bureau of Labor Statistics (May 9, 2020). “Frequently asked questions: The impact of the coronavirus (COVID-19) pandemic on The Employment Situation for May 2020.” Available at https://www.bls.gov/bls/employment-situation-covid19-faq-april-2020.htm . Accessed June 6, 2020.
  4. Bureau of Labor Statistics (June 5, 2020). “Frequently asked questions: The impact of the coronavirus (COVID-19) pandemic on The Employment Situation for May 2020.” Available at https://www.bls.gov/cps/employment-situation-covid19-faq-may-2020.pdf . Accessed June 6, 2020.

 

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About Tony Lima

Retired after teaching economics at California State Univ., East Bay (Hayward, CA). Ph.D., economics, Stanford. Also taught MBA finance at the California University of Management and Technology. Occasionally take on a consulting project if it's interesting. Other interests include wine and technology.