BLS Admits "Survey Error" May Have Reduced Unemployment Rate By Up To 3%

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by Tyler Durden
Friday, Jun 05, 2020 - 10:58 AM

Earlier we pointed out some statistical aberrations that helped explain some of the shocking surprise in today's jobs report. But none other than the BLS itself admitted that a "misclassification error" led to the unemployment rate being as much as 3% higher than reported.

Here is what the BLS said about adjustments to the household survey as a result of the Coronavirus shutdowns:

... 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.

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).

So the BLS knows there is an error and is hoping to fix it...

"BLS and the Census Bureau are investigating why this misclassification error continues to occur and are taking additional steps to address the issue."

... but not yet:

"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."

One can only imagine what other "survey errors" were made but not fixed for the sake of "data integrity."