On Friday the Bureau of Labor Statistics reported 2.5 million jobs were added in May, following by a rousing stock market, and a gloating President.
Unfortunately, after delving into the footnotes of the numbers, it now looks like the jobs report has been inaccurate for the last two months. BLS has admitted that government household survey takers mistakenly counted about 4.9 million people as employed, although they were unemployed.
If the mistake had been corrected in April, the unemployment rate would have been more than 19.5% instead of the reported 14.7%. In May, the unemployment rate would have risen to 16.1%.
The official response? The government doesn’t correct its mistakes for fear of the appearance of political manipulation. The Labor Department was aware of the mistake for the last two months, but did not say anything.
“It’s going to be a problem of credibility now with the BLS,” said Mike Wolford, Director of Customer Success at Claro Workforce Analytics. “[BLS] looks incompetent or political. Twenty million people didn’t finish unemployment in the last 30 days. I would have thought lag time was an explanation because it’s a lot to count actually, but to find out they made a five-million-person error, knew about it, didn’t correct it for the sake of ‘data integrity’ when they literally update things all the time. That is suspicious and, at least, merits investigation,” Wolford added.
There are also some issues glossed over with regards to the forgiveable loans that were part of the $3 trillion stimulus. If companies retained their employees for a specified period of time, the loans would be forgiveable. That leads experts to believe that those employees may be let go as soon as that obligation has been met.
A recent analysis from the Becker Friedman Institute at the University of Chicago estimated that 42% of people furloughed will never get their old jobs back, and only 30% of those laid off will land new jobs later this year. Some companies have already acknowledged that they will layoff workers once they meet their obligation.
You can read the complete story at Forbes.
