The Corner

Economy & Business

But What’s the Real Unemployment Rate?

(iStock/Getty Images Plus)

Whenever there’s an economic downturn, there’s a debate about the limits of the much-watched unemployment rate: People who give up looking for work are considered out of the labor force rather than unemployed; those who have to take part-time work when they’d rather be full-time are still considered employed; etc. Such points are made especially fervently by the party out of power.

But this is 2020, so the debate has to be crazier and weirder this time around. Yesterday, upon hearing the news that the unemployment rate actually declined in May, Paul Krugman half-seriously floated the theory that the administration was manipulating the statistics and later apologized. Now the Washington Post is out with a story titled “A ‘misclassification error’ made the May unemployment rate look better than it is.  Here’s what happened.

The story itself takes the shock out of the headline. Nothing went wrong with the May unemployment rate in particular. There’s just an ongoing, and incredibly boring, technical difficulty stemming from the pandemic.

Basically, the unemployment rate is calculated from surveys the government conducts; people are classified as employed, unemployed, or out of the labor force depending on the answers they give to a slew of questions. But these questions were not written with a pandemic in mind. For instance, if someone is not working because their business was idled, are they considered temporarily laid off (and thus unemployed), or are they employed but not working, like someone who’s on leave?

These workers are supposed to be counted as unemployed, but they’re not always getting entered into the system that way:

The BLS instructed surveyors to try to figure out if someone was absent because of the pandemic and, if so, to classify them as on “temporary layoff,” meaning they would count in the unemployment data. But some people continued to insist they were just “absent” from work during the pandemic, and the BLS has a policy of not changing people’s answers once they are recorded. It’s how the BLS protects again[st] bias or data manipulation.

How does this affect the numbers? Basically, it just makes the official unemployment rate a little lower during this period. After adjusting for the sudden rise of “absent” workers, the March, April, and May unemployment rates are about 5.4 percent, 19.7 percent, and 16.3 percent, respectively, instead of the official figures of 4.4 percent, 14.7 percent, and 13.3 percent. The unemployment rate still fell a bit in May when everyone expected it to rise, and it’s still good news.

Hey, I warned you it was boring.

Most Popular

Another Pollster Sees a Trump Win

The Trafalgar Group’s Robert Cahaly is an outlier among pollsters in that he thinks President Trump will carry Michigan, Pennsylvania, or both, and hence be reelected with roughly 280 electoral votes. (I explained his thinking here.) Last week another pollster, Jim Lee of Susquehanna Polling and Research, ... Read More

Another Pollster Sees a Trump Win

The Trafalgar Group’s Robert Cahaly is an outlier among pollsters in that he thinks President Trump will carry Michigan, Pennsylvania, or both, and hence be reelected with roughly 280 electoral votes. (I explained his thinking here.) Last week another pollster, Jim Lee of Susquehanna Polling and Research, ... Read More
Media

About That ‘Uncoverable’ Biden Story

Journalists claim they can’t cover the New York Post’s Hunter Biden email scoop because the underlying evidence has yet to been verified. Also, they won’t look for any verifying evidence because there isn’t enough evidence. It’s quite the conundrum. Because other than the now-corroborated emails, ... Read More
Media

About That ‘Uncoverable’ Biden Story

Journalists claim they can’t cover the New York Post’s Hunter Biden email scoop because the underlying evidence has yet to been verified. Also, they won’t look for any verifying evidence because there isn’t enough evidence. It’s quite the conundrum. Because other than the now-corroborated emails, ... Read More

Hunter Biden on Tape?

In a newly released recording, a man purported to be Hunter Biden is heard rambling about (a) his legal representation of Patrick Ho, a convicted former Hong Kong official he refers to as “the f***ing spy chief of China”; (b) his business dealings with Ye Jianming, the corrupt Chinese high roller, whom Hunter ... Read More

Hunter Biden on Tape?

In a newly released recording, a man purported to be Hunter Biden is heard rambling about (a) his legal representation of Patrick Ho, a convicted former Hong Kong official he refers to as “the f***ing spy chief of China”; (b) his business dealings with Ye Jianming, the corrupt Chinese high roller, whom Hunter ... Read More
Elections

Hell, No

Editor’s Note: If you would like to read more pros and cons on voting for President Trump, further essays on the subject, each from a different perspective, can be found here, here, and here. These articles, and the one below, reflect the views of the individual authors, not of the National Review editorial ... Read More
Elections

Hell, No

Editor’s Note: If you would like to read more pros and cons on voting for President Trump, further essays on the subject, each from a different perspective, can be found here, here, and here. These articles, and the one below, reflect the views of the individual authors, not of the National Review editorial ... Read More
White House

Hell, Yes

Editor’s Note: If you would like to read more pros and cons on voting for President Trump, further essays on the subject, each from a different perspective, can be found here, here, here, here, and here. These articles, and the one below, reflect the views of the individual authors, not of the National ... Read More
White House

Hell, Yes

Editor’s Note: If you would like to read more pros and cons on voting for President Trump, further essays on the subject, each from a different perspective, can be found here, here, here, here, and here. These articles, and the one below, reflect the views of the individual authors, not of the National ... Read More
Elections

Vote Your Conscience

At the 2016 Republican convention, Senator Ted Cruz spoke a controversial phrase: “vote your conscience.” I think about this phrase, this idea, fairly often. I’m not one to give advice on voting (or much else). But when asked for advice, I usually say, “Vote your conscience.” Sweet conscience! One of ... Read More
Elections

Vote Your Conscience

At the 2016 Republican convention, Senator Ted Cruz spoke a controversial phrase: “vote your conscience.” I think about this phrase, this idea, fairly often. I’m not one to give advice on voting (or much else). But when asked for advice, I usually say, “Vote your conscience.” Sweet conscience! One of ... Read More
Music

Stevie Nicks, Like Springsteen, Preaches and Preens

In the 1970s, Stevie Nicks and Bruce Springsteen made impressions on pop-music culture with romantic rock landmarks, Fleetwood Mac’s Rumours album and Springsteen’s Born to Run. But their new 2020 releases, Nicks’s single “Show Them the Way” and Springsteen’s Letter to You film and album, make the ... Read More
Music

Stevie Nicks, Like Springsteen, Preaches and Preens

In the 1970s, Stevie Nicks and Bruce Springsteen made impressions on pop-music culture with romantic rock landmarks, Fleetwood Mac’s Rumours album and Springsteen’s Born to Run. But their new 2020 releases, Nicks’s single “Show Them the Way” and Springsteen’s Letter to You film and album, make the ... Read More