Economists explain why May unemployment definitely declined despite error


The consensus among economists was that unemployment would rise in May, potentially coming in at around at 20 percent because of the coronavirus pandemic. So when the Bureau of Labor Statistics reported that a slew of job gains meant unemployment actually dropped from 14.7 percent to 13.3 percent, some people were either left scratching their heads, or, as The Washington Post reports, wondering whether the Trump administration tinkered with the data to give the White House an economic win.
But many experts, including the former top economist for former President Barack Obama, jumped in to explain why that "100 percent" isn't the case. The BLS did indeed acknowledge a "misclassification error" in the report — people who should've been classified as "temporarily unemployed" were instead classified as employed but "absent" from work. Without the mix-up, May's real unemployment figure likely would've been about 3 percentage points higher. But it turns out it's the result of dealing with challenging amounts of data, rather than book cooking.
The bureau has apparently been dealing with the issue for months, which means April's unemployment was also higher than the official figures. So much so, that it makes May's improvement more dramatic.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
Those with a glass half-full perspective will focus on the fact that unemployment declined in May; the half-empty crowd on the fact the numbers remain historically high. The misclassification doesn't change either stance.
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Tim is a staff writer at The Week and has contributed to Bedford and Bowery and The New York Transatlantic. He is a graduate of Occidental College and NYU's journalism school. Tim enjoys writing about baseball, Europe, and extinct megafauna. He lives in New York City.
-
5 hastily redrawn cartoons about redistricting
Cartoons Artists take on Donald Trump's draughtsmanship, the White House ballroom, and more
-
Bonnie Blue: taking clickbait to extremes
Talking Point Channel 4 claims documentary on the adult performer's attention-grabbing sex stunts is opening up a debate
-
Broccoli and lentil salad with curried tahini and dates recipe
The Week Recommends Flavoursome and healthy, this creamy salad is perfect as part of a mezze
-
NFL gets ESPN stake in deal with Disney
Speed Read The deal gives the NFL a 10% stake in Disney's ESPN sports empire and gives ESPN ownership of NFL Network
-
Samsung to make Tesla chips in $16.5B deal
Speed Read Tesla has signed a deal to get its next-generation chips from Samsung
-
FCC greenlights $8B Paramount-Skydance merger
Speed Read The Federal Communications Commission will allow Paramount to merge with the Hollywood studio Skydance
-
Tesla reports plummeting profits
Speed Read The company may soon face more problems with the expiration of federal electric vehicle tax credits
-
Dollar faces historic slump as stocks hit new high
Speed Read While stocks have recovered post-Trump tariffs, the dollar has weakened more than 10% this year
-
Economists fear US inflation data less reliable
speed read The Labor Department is collecting less data for its consumer price index due to staffing shortages
-
Crypto firm Coinbase hacked, faces SEC scrutiny
Speed Read The Securities and Exchange Commission has also been investigating whether Coinbase misstated its user numbers in past disclosures
-
Starbucks baristas strike over dress code
speed read The new uniform 'puts the burden on baristas' to buy new clothes, said a Starbucks Workers United union delegate