The official unemployment rate is a lie. Again!

The markets are soaring and Trump is crowing, all because of an employment report that the Bureau of Labor Statistics openly admits in the report that it's hopelessly flawed.


In May, a large number of persons were classified as unemployed on temporary layoff. However, there was also a large number of workers who were classified as employed but absent from work. 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. BLS and the Census Bureau are investigating why this misclassification error continues to occur and are taking additional steps to address the issue.

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 (on a not seasonally adjusted basis).

However, according to usual practice, the data from the household survey are accepted as recorded. To maintain data integrity, no ad hoc actions are taken to reclassify survey responses.

So instead of the unemployment rate falling 1%, it actually rose 2%.
That's a massive difference.

Not only that, this undercount happened last month too.
Which explains why the BLS is already revising those past employment reports.

The change in total nonfarm payroll employment for March was revised down by 492,000, from -881,000 to -1.4 million, and the change for April was revised down by 150,000, from -20.5 million to -20.7 million. With these revisions, employment in March and April combined was 642,000 lower than previously reported.

You can bet that this won't be the last revision down.
And then there is the fictional Birth/Death model.

Business births and deaths cannot be adequately captured by the establishment survey as they occur. Therefore, the establishment survey estimates use a model to account for the relatively stable net employment change generated by business births and deaths. Due to the impact of the COVID-19 pandemic, the relationship between the two was no longer stable in April.

birth death may 2020.jpg
According to the BLS's Birth/Death model, a record 345K new jobs were created due to new businesses opening in a month when the US economy was largely closed!
Exactly how likely is that?

21 users have voted.


Lily O Lady's picture

propaganda is.

13 users have voted.

"The object of persecution is persecution. The object of torture is torture. The object of power is power. Now do you begin to understand me?" ~Orwell, "1984"

ggersh's picture

4% unemployed before the shit went down is 6mil people, since the non response by our fearless bunker leader, another 43 mil have applied, god only knows how many haven't been able to, but taken as the truth 43mil plus 6mil = 49mil outta of roughly 156 mil comes to 31.8%.

so yes this will only get worse when the jobs don't return, food stamps run out, can't get
healthcare, etc.etc.etc

tptb are in full daNile about this

17 users have voted.

“Awesome! I always wondered what it was like to live during the times of the Civil War, Spanish Flu, Great Depression, Civil Rights Movement, Watergate, & the Dust Bowl. Not all at once mind you, but ya know, ‘beggars/choosers” and all.”

@ggersh link

During relatively normal economic times, it is reasonable to consider a person not working is not in the labor force if she or he has not actively sought employment during the last four weeks. But these are hardly normal times.

Millions of people who are ready, willing, and able to work are afraid of exposing themselves to the pandemic. And millions of others have not been actively seeking work because they have little hope of of actually finding a satisfactory job. And then too, millions more are receiving as much – or even more – in unemployment benefits than they could earn at a new job.

The folks running the BLS are well aware of these arguments. But just imagine the political reaction if that agency changed the criteria for classifying people not actively seeking work as “unemployed.” More than ten million people – instead of not being counted in the labor force – would now be classified as unemployed. This would push up the unemployment rate by at least seven percentage points.
Here’s my own very rough estimate of the May unemployment rate. There were almost 40 million unemployment insurance benefits claims filed between mid-March and mid-May. At least another 10 million unemployed people were ineligible, did not bother to apply, or were unable to file. There were also 5.7 million people who had been unemployed before mid-March.

That’s a total of close to 60 million out of work in mid-May. How many of them should actually be counted as “unemployed”? Let’s assume that about 5 million either were called back to work or found new jobs between mid-April and mid-May. And that an additional 10 million were not really interested in going back to work.

So that leaves us with about 45 million unemployed in mid-May. If 115 million people are working, then our labor force totals 160 million.

We can now calculate the unemployment rate in May:

Unemployment rate = Unemployed/Labor Force = 45,000,000/160,000,000 = 28.1%

15 users have voted.
OzoneTom's picture


10 users have voted.
gulfgal98's picture

@gjohnsit to the real rate of unemployment. The Dept of Labor has been fudging on figures for years based upon who they define as unemployed. But this has to take it to a new low for the Dept. and a new all time high for the country. The highest unemployment during the Great Depression was a little over 24%. If we are at or near 31%, that would be in keeping with what the St. Louis Fed predicted of 32%. And I read some where that nearly 50% of blacks are unemployed so that community has gotten hit even harder.

Even though some jobs are coming back with re-opening, up to 40% of jobs lost may end up being permanent. We are not headed for a depression. We are firmly in one. And honestly, I believe that the protests in great part are due to the economic situation in this country.

Meanwhile, I believe Congress is headed for another recess. Every one of these people should be voted out. They are totally worthless when it comes to looking out for the American people.

(edited twice for typos)

13 users have voted.

"I don't want to run the empire, I want to bring it down!" ~ Dr. Cornel West

“Those who make peaceful revolution impossible will make violent revolution inevitable." ~ President John F. Kennedy

Dow surges nearly 1,000 points after jobs report ...

demonstrates that they are really dumb compared to protestors that recognize the strategically placed pallets of bricks as a PTB scam.

13 users have voted.
gulfgal98's picture

@Marie because the Fed is keeping it propped up. I hope gjohnsit will write something on how the Fed does this, but I believe it has to do with the Fed buying up toxic assets.

9 users have voted.

"I don't want to run the empire, I want to bring it down!" ~ Dr. Cornel West

“Those who make peaceful revolution impossible will make violent revolution inevitable." ~ President John F. Kennedy

snoopydawg's picture


in the evening blues from Wall Street on parade and even I can follow it. I think it has archived articles going back awhile.

12 users have voted.

"It seems to me that the problem is that group party interests, in this case, are placed above the interests of the entire society and the interests of people,"

Our CIC (conman in chief) presents his rosy false vision to those who will profit from his theater.

Will November be able to stop this? IDK.

9 users have voted.


Bollox Ref's picture

George Floyd would be happy about these numbers.

So there's that.

9 users have voted.

from a reasonably stable genius.