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Bureau of Labor Statistics: 'Misclassification error' made unemployment rate seem lower than it is

Rate should have been 'about 3 percentage points higher,' department says.

Updated: June 6, 2020 - 3:03pm

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The Bureau of Labor Statistics admitted this week that the unemployment rate for its May jobs report should have been moderately higher than was presented, with the department calculating the rate in such a way to make the number seem slightly lower than it really is. 

The bureau's May report listed an unemployment rate of 13.3%, a drop of 1.4 percentage points from the month before. President Trump on Friday hailed that improvement as "joyous," saying it pointed to an economy in sharp recovery after months of coronavirus lockdowns. 

Yet in a note at the bottom of a press release on the report, BLS stipulated that the real unemployment rate is actually a bit higher than the posted number. 

There were "a large number of workers who were classified as employed but absent from work," the department said. "As was the case in March and April, household survey interviewers were instructed to classify employed persons absent from work due to coronavirus-related business closures as unemployed on temporary layoff. However, it is apparent that not all such workers were so classified."

"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," the bureau continued.

Federal officials "are investigating why this misclassification error continues to occur and are taking additional steps to address the issue," the report said. 

Numerous experts predicted the economy would see a 20% unemployment rate in May, meaning the roughly 16% unemployment rate is still modestly better than many earlier estimates, though still vastly higher than the pre-pandemic rate of 3.5% in February. 

On Saturday, meanwhile, former Obama Acting Labor Secretary Seth Harris defended the bureau over its mistake, telling CNN that he "[didn't] think the folks at BLS are trying to cook the books or make President Trump look good."

"They're career professionals. They take their craft very seriously. They're trying to do the best they possibly can in a very complicated situation," he said. 

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