'Misclassification Error' Leads To Inaccurate May Jobs Report

The unemployment rate in May was likely three points higher than what was initially reported.

'Misclassification Error' Leads To Inaccurate May Jobs Report
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After months of disappointing unemployment news, the May jobs report felt too good to be true. It turns out it might have been. 

A note at the bottom of the report pointed out an error indicating the unemployment rate rose to 16.3% — a few points higher than the widely reported 13.3%, though still lower than the expected 20% range economists had predicted. 

The Bureau of Labor Statistics and the Census Bureau say they’re investigating why the mistake occurred. But there’s some idea as to what happened. 

The BLS say that some people who should have been classified as “temporarily unemployed” were misclassified as “employed” but “absent” for “other reasons.” Typically, “other reasons” mean leaving work for jury duty or vacation. In the latest jobs report, that category included people who were unemployed and waiting to get their jobs back because of COVID-19. 

But this wasn’t unique to May’s data. The BLS first noticed this trend in March, meaning the unemployment rate in both March and April were likely higher than what was originally reported.