Pan-dammit, the employment numbers for March were truly shocking!
That doesn’t understate what can be said about the employment report for last month that was released by the Labor Department Friday morning.
It was so shocking, in fact, that it’ll make the experts reconsider how bad the job numbers are going to get in the weeks and months ahead. And the pros were already expecting the worst.
Here are some basics from the report that caused the stock market to decline on Friday and made people’s stomachs sink.
For March, the government announced that 701,000 jobs were lost, primarily because the coronavirus caused almost the entire US economy to shut down. And the unemployment rate soared to 4.4 percent from a wonderful 3.5 percent in February.
The job losses were the worst since March 2009, when 800,000 jobs were swallowed up by the Great Recession.
Here’s the part that’ll really churn your innards.
Buried in a footnote to the report, the Labor Department said the jobless rate should have been a lot worse. Should have been — not could have. Why? Because the survey takers made a mistake when asking the questions.
If you can get through the government lingo, here’s the explanation in the footnote about the mistake:
The Labor Department said: “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 March) had been classified as unemployed or temporary layoff, the overall unemployment rate would have been almost 1 percentage point higher than reported.”
“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,” the Labor Department added.
In other words, the Labor Department spotted the error in the unemployment numbers and didn’t correct it as the survey was going on. The government referred to this error as a “misclassification.”
So, if the number of unemployed people had been picked up correctly, the jobless rate in March would have been an even more shocking 5.4 percent.
Just so you understand, I’m not saying that anything naughty went on with these numbers. All I’m saying is this data, along with all the other economic figures that will be coming out, should be viewed suspiciously.
The government numbers crunchers and data gatherers are dealing with an unprecedented situation and they are — to put it in mild vernacular — winging it.
There is no question that the economic data, including the figures on jobs, is going to get worse in the days, weeks and months ahead. A lot worse.
You can tell that from the 10 million people who filed for jobless benefits these past two weeks.
All of those suddenly jobless Americans will soon show up in the monthly statistics released by the Labor Department. These newly unemployed shouldn’t have shown up in such large numbers in the March figures.
The experts were expecting only 100,000 lost jobs for last month.
Why were they expecting so “few”?
Because the Labor Department takes its survey of companies in the middle of the month. And companies didn’t get to the really serious layoffs until after the survey was completed.
So, if March was already shockingly bad, the bulk of the layoffs and temporary furloughing of workers won’t show up until the next few months.
Here’s one of the other disturbing facts that was in the March report: The government had an extremely difficult time reaching the companies that it usually surveys.
The Labor Department said, for instance, that only 66 percent of the companies it usually collects data from on jobs responded this month. That was 9 percent below average for this survey.
“Although the collection rate was adversely affected by pandemic-related issues, BLS was still able to obtain estimates that met our standards for accuracy and reliability,” the Labor Department said.
Maybe. But chances are that all those companies couldn’t be reached because they had closed and laid off workers. And if they had been reached, that 701,000 figure for job losses would have been higher.
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