THE NEUTRAL ZONE
Reporters and members of the public are questioning whether May’s federal jobless report was intentionally changed to appear lower than it really was.
According to a note at the bottom of the federal report, a “misclassification error” moved the jobless rate down by three percentage points, to 13.3 percent. The miscalculation was due to how furloughed workers were counted in the report, meaning that April’s unemployment numbers would have also been higher. Leaders with the Bureau of Labor Statistics say the miscalculation was not made in an effort to distort the numbers, but rather as a result of the challenges involved with collecting employment data in real-time.
Even with the three-point increase, the unemployment numbers fell short of economist’s predictions for a 20 percent rate in May. The difference similarly reflects the challenges of forecasting the unprecedented events of the pandemic, economists say.
Surprise unemployment drop sparks debate over how fast the economy will rally – POLITICO – 6/5/2020. The economy gained 2.5 million jobs last month, as states started relaxing stay-at-home orders and opening for business. Markets rallied on the news, with the S&P 500 gaining nearly three percent by mid-day. The Dow Jones Industrial Average was up 3.8 percent.
Wall Street’s latest surge isn’t benefiting many Americans – CNBC – 6/6/2020 “Even with the mild improvement in May, the unemployment rate of all groups is still higher than the highest level the overall unemployment rate hit at the height of the Great Recession, when it reached 10.0% in 2009,” said Elise Gold, senior economist at the Economic Policy Institute.
It’s way too early to declare “mission accomplished” on the economy – Vox – 6/8/2020 In the early stages of a recovery, promising economic signs, like improved employment numbers, could mean the US is on track to return to pre-recession levels of economic activity. Or those signs could just point to a partial recovery, one that stalls out at 70, 80, or even 90 percent — all of which would still indicate serious recession conditions.
Fed says beating pandemic is key, but how will it know things are better? – Reuters – 6/8/2020. The stunning May payrolls data released by the Labor Department on Friday could temper some of the urgency that has accompanied Fed meetings since March.
LiA @LibsInAmerica on Twitter, 6/8/2020: 30 million people are receiving unemployment benefits. Realistically, unemployment would be at 19% today. BLS itself acknowledges in its May report that counting those on furlough as unemployed would raise its official rate to 16.3%.
Popular Resistance @PopResistance on Twitter, 6/8/2020: If furloughed workers had been categorized correctly, according to the Labor Department, the “overall [May] unemployment rate would have been about 3 percentage points higher than reported.” #Recession #GeneralStrike2020
Emily Ramshaw @eramshaw on Twitter, 6/8/2020: The 2.5 million jobs the economy gained in May went to almost everyone except black women
Adweek @Adweek on Twitter, 6/8/2020: The leisure and hospitality industry accounts for more than half of May’s surprising gain of 2.5 million jobs.