The Brookings Institution has issued a report debunking a report from the Department of Labor (DOL) that President Donald Trump has seized on showing a drop in the unemployment rate.
The United States added 2.5 million jobs during the month of May as businesses began to reopen. Additionally, the unemployment rate dropped to 13.3 percent from 14.7 percent in April, according to the report, a phenomenon that can be attributed to many states reopening their economies and sending people back to work, often against the advice from healthcare and policy professionals.
But the report, conducted by the Bureau of Labor Statistics (BLS), is misleading.
“BLS asserts that 20,935,000 Americans were unemployed in May, attributing the decline to employers adding 2,509,000 jobs in May as states allowed ‘a limited resumption of economic activity.’ But it’s not that simple,” Brookings notes. “The unexpected decline in the jobless rate is based on a survey of businesses and households conducted over the week of May 16th, and BLS has also reported that 29,965,415 Americans received unemployment insurance benefits in the same week.”
That means there’s “a gap of 8,980,415 people, enough to raise the May jobless rate 5.7 percentage points to 19.0 percent and much closer to economists’ expectations.”
Brookings credits BLS’s low figure in part to the Payroll Protection Program, which meant BLS “counted anyone who employers say were still being paid as employed ‘even if they were not actually at their jobs.’
“Part of it involves how the BLS treats the many millions of people now on furlough and not being paid. They are considered ‘unemployed on temporary layoff.’ But if BLS expects them to return to their old jobs, based on the survey, they do not count among the unemployed,” Brookings notes.
“Finally, part of the 9 million-person discrepancy may involve how BLS decides whether a person who is not working is still part of the labor force,” the organization continues. “If you are out of work but didn’t look for a job over the previous four weeks, or couldn’t work for family reasons such as caring for children who are no longer in school, BLS says you are out of the labor force. If you’re not in the labor force, you’re not unemployed.”
Nevertheless, the job report has captivated the president, who has spent much of his time online tweeting about it amid criticism about his response to protests against racial injustice and police brutality that were sparked by the killing of George Floyd, a black man in police custody in Minneapolis, and who the president declared was having “a great day” in heaven as soon as DOL’s report was released.
A senior Trump administration official told CNN on Friday that the report’s release could allow Republican leadership to make the case to put more coronavirus relief on hold for now. And earlier this morning, the president assailed “lamestream” media outlets for not focusing on the report.
Alan is a writer, editor, and news junkie based in New York.