The president of these United States should be careful what he does with numbers, especially concerning the unemployment numbers. The well-respected The Brookings Institution (Brookings) just released a report that shot an arrow right through the Department of Labor’s (DOL) unemployment figures.
In a wildly inappropriate comment, Donald Trump bragged about the man who was slow-motion murdered by Minneapolis police on tape, George Floyd. POTUS said that the man was looking down from Heaven to applaud the president’s drop in unemployment numbers. The commander-in-chief pointed to a 14.7 percent drop to 13.3 percent. He spoke to reporters in the Rose Garden saying:
‘This is a great day for him (Floyd) his is a great day for everybody.’
A top White House officials spoke to CNN, noting that the upcoming report would let the Republicans press their case to avoid additional coronavirus relief, putting it on hold. Trump went after the “lamestream” media in an early morning tweet. He blames the media for his bad numbers.
The president’s offensive comments led to greater skepticism about his ability to govern the country. The Brookings report’s analysis indicated that there was a nearly nine million unemployed people discrepancy in the jobless rate. That brought the unemployment number much closer to “the economists’ expectations:”
‘”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. 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’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.'”
This included part of the Payroll Protection Program (PPP), which involves loan-forgivably. In order for the PPP to be forgiven, business recipients of these loans must complete the appropriate paperwork and hire the same number of employees as it had when it applied for the loan:
‘Part of it is the Payroll Protection Program: The 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.’
The Becker Friedman Institute at the University of Chicago’s latest analysis showed unemployment at a consistent 19.0 percent, not Trump’s 13.3 percent:
‘recent analysis from the Becker Friedman Institute at the University of Chicago estimated that 42 percent of people furloughed by the COVID-19 crisis will never get their old jobs back, and only 30 percent of those laid off will land new jobs later this year. With 30 million people receiving unemployment benefits, that analysis is more consistent with unemployment at 19.0 percent today than 13.3 percent. BLS itself acknowledges in its May report that counting those on furlough as unemployed would raise its official rate to 16.3 percent.’
There was a nine million-person discrepancy that could have been attributed to the interpretation of the definition of who counts as a member of the unemployed ranks:
‘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. 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.’
The report indicated that millions lost their jobs due to the coronavirus pandemic mandatory shutdown and a slow recovery. There was a “two-thirds of the nine million-person gap between those receiving unemployment benefits and those counted as unemployed:’
‘Again, it is BLS’s judgment call—and BLS clearly has decided that millions of people who lost their jobs because of COVID-19 shutdowns do not count as unemployed. In May 2019, BLS reported that 96,207,000 working-age Americans were not in the labor force; today, BLS reported that a year later, that number had jumped by 5,865,000 to 102,072,000. For reference, the BLS found that 95,636,000 working-age Americans were not in the labor force in 2019, down 80,000 from 2018. Those 5,865,000 people could explain nearly two-thirds of the 9 million-person gap between those receiving unemployment benefits and those counted as unemployed.’
Brookings continued, indicating “a jobless report that served Donald Trump’s needs and desires” just to please the boss would be “unprecedented:”
The US Geological Survey could use the mandated National Climate Assessment. It would be unprecedented for the White House to pressure the Labor Department to produce a jobless report that serves Donald Trump’s needs and desires. But unlike the May unemployment report, it would not surprise anyone.’
Featured image is a screenshot via YouTube.
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