Labor Department says ‘misclassification error’ is making unemployment rate look lower than it really is

Buried at the bottom of the Bureau of Labor Statistics’ May jobs report—which President Donald Trump and Republican lawmakers touted Friday as evidence that the U.S. economy is rebounding from the Covid-19 crisis at an extraordinary clip—is a note conceding that a “misclassification error” during the agency’s data-collection process made the unemployment rate look significantly lower than it really is.

BLS, a Labor Department agency staffed with more than 2,000 career officials, admitted at the end of its report that “a large number of workers… were classified as employed but absent from work.” Those workers, the agency explained, should have been classified as “unemployed on temporary layoff” by household survey interviewers but were not.

If those workers had been categorized correctly, the agency said, the “overall [May] unemployment rate would have been about 3 percentage points higher than reported.” Continue reading.