As bad as the record job numbers for April are, here are the systemic reasons they don’t reflect even worse reality.
As I’ve been noting, official unemployment numbers have understated the dire situation of joblessness in the country.
There was no intention of deception. Just a data production mechanism designed for more reasonable times.
Today, the Bureau of Labor Statistics released the April 2020 job numbers, and they were brutal. Jobs lost: 20.5 million in one money—a record. The new official unemployment rate is 14.7%—and would have been 19.7% if people who were absent for „other reasons“ in the survey were taken as unemployed on temporary layoff.
As bad as these numbers are, they also understate what the real unemployment rate was then—and now. Here are the four reasons why that happened in April and will continue to for the immediate future.
Because unemployment data comes from surveys, response levels are critical to accuracy. Concerns about disease transmission significantly changed how the government went about its work.
In other months, interviews were done both in-person and by phone. (In-person interviews follow up with those who don’t respond to telephone calls.) The April response rate was 70%—about 13 percentage points lower than usual.
No one ever anticipated a total shutdown of the economy when designing counting mechanisms for unemployment.
