U.S. May unemployment rate falls to 13.3%. Payrolls rise 2.5M, Estimated -7.5M

[still_one]

Is this accurate?

It says the jobs are recovering. It sure doesn't seem to add up to what appears out there

[Bettie]

1. They have to be cooking the books somehow

not buying it. At. All.

[still_one]

4. It sure is contrary to what seems to be happening. The proof I think will be

evidenced by the consumer

It sure doesn't match the continuing unemployment claims occurring

[DrToast]

7. One thing about Unemployment Claims

There's a lot of turmoil in the system these days. It's possible that a lot of the claims are people filling more than once because they haven't been paid. The metric is supposed to be new claims, but with the chaos going on that may not be happening.

Still though, this number is very unexpected. The ADP number on Wednesday was better than expected, but it still did show a loss of jobs.

[still_one]

8. All those closed restaurants, businesses, etc., I am skeptical they have been included

in these numbers

[Laura PourMeADrink]

22. So you're thought is that the #s were inflated before?

with multiple requests? And it has since corrected itself?

[DrToast]

33. Not taking a position, but presenting possibilities

But it’s possible the UE claims are still inflated with multiple requests. Remember that the monthly jobs data don’t use unemployment claims data to compile its stats. They are derived from two surveys: one of businesses and one of households.

If, again IF, the data for “new” unemployment claims aren’t truly all “new” and many are duplicates, that wouldn’t have an impact on how the monthly jobs data are calculated. It could, however, make things appear to be much worse than they actually were if you were only using the unemployment claims data to gauge the strength of the labor market.

But it’s also possible there are issues with the monthly jobs data. Not because the BLS has been corrupted, but just because measuring employment is very challenging in (mostly) real-time. It’s likely even more difficult in such a chaotic period in the economy.

If these numbers are accurate, they should be confirmed by other metrics going forward. Let’s see what happens.

All that being said, the unemployment rate is still a disaster and we’ll need to continue to make progress on it going forward.

[empedocles]

2. 'Rush hour' traffic in NOVA clearly increasing.

[spanone]

3. on mourning joe...Rattner and others say it makes no sense.

says survey is taken in the middle of the month when people were still being laid off.

[former9thward]

5. The Labor Department takes these surveys throughout the month.

Always have. These are the same thousands of career professionals who did it for Obama, Bush, Clinton. They know what the numbers are. If they were changed in any way we would know about it instantly. Enough with the silly CTs.

[spanone]

6. Not what Rattner said.

[Laura PourMeADrink]

23. Not what Mikey just said either. Said survey mid-may

[former9thward]

49. Fine, provide the proof these are fake numbers.

[spanone]

50. What's your problem? I told you what someone else said.

I never called them fake.

[NewJeffCT]

11. they put a 3 point "COVID-19 adjustment" in the footnotes

so, the real rate is really 16.3% per a friend of mine who reads these things for a living.

Look for the April & May numbers to be adjusted upwards when they release June numbers as well.

[honest.abe]

21. That is incredibly misleading and simply wrong.

These numbers are meant to reflect the actual unemployment rate regardless of the causes.

Serious data manipulation for political purposes.

[Laura PourMeADrink]

24. How is that explained? Why would you add? Because COVID

Makes the numbers "temporary" in nature?

[uponit7771]

31. Yes, looks like they'll be adjusting the numbers later on. They said the surveyors made same mistake

... in May that they made in April

That's BULL SHIT!!

https://www.bls.gov/news.release/pdf/empsit.pdf

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

[spanone]

25. Yes! Rattner came back on and explained the 3% Covid adjustment.

[DrToast]

34. It's actually the opposite.

The COVID adjustment is what gets you to 16.3%. The normal methodologies is what gets you 13.3%

It’s a bit complicated, but the unemployment rate is based of a survey of household data. The BLS is following all normal procedures, but they’re saying that the normal procedures may not be accurately reflect things because of how people are reporting their employment status.

Thus, in order to maintain integrity of data with history, they’re taking survey answers at face value. But they’re footnoting that they think people may be reporting their status incorrectly. This also happened last month.

[uponit7771]

40. No, the continuing claims went up by 650k and so did the LFPR. Those numbers are cooked because of

... the 3rd month the "mistake" is made by the BLS.

[uponit7771]

19. BULL FUCKIN SHIT !!! There was a CV19 "adjustment" put in the numbers

[DrToast]

36. No. The opposite. The COVID adjustment makes it higher, not lower.

The normal figure is 13.3%.

[uponit7771]

41. I know that, the BLS numbers are cooked because the "continuing claims" numbers is up by 650k

... and the LFPR is up but the UE rate is down because of the 3 month long "mistake" the BLS is making in their collection data.

[DrToast]

42. People can be employed and still be collecting unemployment

If you return to reduced hours, you are employed but still eligible to receive unemployment benefits.

[uponit7771]

44. That's always a very small number, we know that. Its the way the BLS is counting UE rate that's

... big problem right now.

its ... RARE ... for continuing UE claims to go up by hundreds of thousands but the UE rate to go down without LFPR.

[PRETZEL]

9. Maybe I'm looking at this wrong,

but to me it sounds like those small businesses that PPP loans, those staff weren't included since, technically, they're still employed.

[Laura PourMeADrink]

27. Good point. Meaning once those "PPP-paid payrolls'

Run out, those people may become unemployed?

[PRETZEL]

28. That's how I would look at it. nt

[fishwax]

10. 13.3% is still very very high ... it makes sense that unemployment would fall with reopening

I'm not saying they couldn't be cooking the numbers, but forecasts aside this doesn't seem like a huge surprise to me. Trump will try to take credit and overreact, of course, but unemployment is still horribly high, and there are other ramifications of 2.5 months of historical and unprecedented unemployment that will soon hit (overdue bills, evictions, etc.), so we are nowhere near out of the darkness economically speaking. And, of course, the resurgences in Covid that are just starting to show up from the re-openings a month ago and will likely only get worse in the next month as a result of memorial day and massive protests will likely result in more aftershocks to come.

[still_one]

12. I don't believe they are "cooking the numbers" either, but I believe that a lot of

businesses which are devastated are not being factored in

[fishwax]

15. perhaps ... although again, 13.3% is higher than any time since before WW2

It's massively and historically high. It reflects the devastation of a LOT of businesses.

At the peak of the Reagan recession, unemployment was 10.8%.

[still_one]

16. no doubt. Thanks

[uponit7771]

26. In the footnotes it says there's a 3% CV19 "adjustment" to the numbers. The numbers are cooked

[fishwax]

32. so 3% are recorded as employed but absent who ought to be recorded as unemployed

Yeesh. Why am I not surprised.

Of course, since that was true the last few months as well, that still means that the number appears to have dropped, which is "good" news--though, as someone noted elsewhere in the thread, the numbers are really nothing to celebrate.

edited to add link: https://www.bls.gov/news.release/pdf/empsit.pdf

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

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). 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.

[uponit7771]

35. Its worse, the last part is what screws up everything. Surveyors made the same "mistake" in May that

... they made in April ?

Really?!

Also, ... CONTINUING UE claims went up !!

https://www.cnbc.com/2020/06/04/weekly-jobless-claims.html

Continuing claims, which provide a clearer picture of how many Americans remain unemployed, totaled 21.5 million, a gain of 649,000 over the past week, also worse than Wall Street expected.

[fishwax]

43. yeah, that's in the labor report too

2.5 million payrolls added in May, according to Labor, but 2.7 million people returning from temporary layoffs. The return from temporary layoffs is obviously good news. But more than offset by other continuing complications (including the long-term unemployed).

[DrToast]

39. " no ad hoc actions are taken to reclassify survey responses"

The normal procedure gets you 13.3%.

There is no COVID adjustment to make the numbers look lower. The COVID adjustment makes the numbers higher.

[DrToast]

38. No, other way around

The normal procedure leads to 13.3%. If you make a C19 adjustment, you get a higher number.

[Laura PourMeADrink]

47. So did they add the adjustment or just footnote that

In reality it should be higher?

[DrToast]

48. They added a footnote

If they included it in the main number, they would be changing their normal methodology in how the figures are calculated. That’s problematic. And it’s not a certainty that the higher number is correct either. They just think it’s possible.

[Laura PourMeADrink]

51. Was the same footnote in April?

[DrToast]

52. It was. The last two months actually

[link:https://www.bls.gov/news.release/archives/empsit_04032020.htm

[link:https://www.bls.gov/news.release/archives/empsit_05082020.htm

[Laura PourMeADrink]

53. Thanks for looking those links up. Funny how this

subject has faded. Heard one economist say it was because businesses hired back to use PPP $ for salary. Not sure because it assumes all those people went in unemployment prior to PPP.

You know they extended the payback period. Not sure if on round one and two - to end of year. ( Convenient for election). But, round one payroll loans, when made, were shorter duration payback so companies probably adjusted salaries to match. If you're talking eoy, you'd borrow more $$ and unemployment would go down.

[Amishman]

13. PPP loans kicking in, business have to maintain payroll to qualify for forgiveness

I know one business in my county that is paying employees to sit at home since they cannot be open right now, as PPP requires them to use 75% of the loan for payroll. Probably are others like them or are paying employees but are under utilized due to lack of work.

[still_one]

14. good point. Would that have that much of an effect on the numbers?

[Amishman]

20. yes, a lot of businesses shut down while waiting on loans to be approved and funded

look at the numbers

~500 billion in PPP loans issued. 75% to payroll. 375 billion in payroll is being funded for that program. PPP is supposed to cover one quarter's worth, so that is 1.5 trillion in payroll on an annualized basis. With the amount of money being funnelled into payroll from that program it could easily swing several million jobs being reactivated.

Add that to the rapid lifting of business restrictions. Even my governor caved to pressure and is moving counties to lesser restrictions rapidly even though the supposed conditions for those changes have not been remotely met.

[still_one]

29. +++

[Laura PourMeADrink]

30. But that wouldn't account for new jobs added... Unless

The people were on unemployment for a while before being rehired when PPP $ approved

[Amishman]

46. doesn't have to be for a while, even a single week on unemployment would have them count

and that does fit the data. The reduction in recently unemployed and the increase in payroll are pretty close. Longer term unemployment and permanent job loss both rose.

The number of unemployed persons who were on temporary layoff decreased by 2.7 million
in May to 15.3 million, following a sharp increase of 16.2 million in April. Among
those not on temporary layoff, the number of permanent job losers continued to rise,
increasing by 295,000 in May to 2.3 million. (See table A-11.)

In May, the number of unemployed persons who were jobless less than 5 weeks decreased
by 10.4 million to 3.9 million.

https://www.bls.gov/news.release/empsit.htm

[kentuck]

17. Looks like shit....smells like shit...tastes like shit....

...and those other drunks stepped in it.

It may be good news but it is nothing to brag about.

[still_one]

18. I think your last sentence encapsulates things perfectly

[marmar]

37. Expect a dramatic revision to quietly be inserted into next month's numbers.

[Demsrule86]

45. It is bullshit...the numbers did not go down.