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BLS Admits “Survey Error” Continues, Resulting In Artificially Lower Unemployment Rate

Courtesy of ZeroHedge View original post here.

Last month we reported that in a report full of statistical glitches and outright errors, the BLS itself admitted that a "misclassification error" led to the May unemployment rate being as much as 3% higher than reported. Well, guess what: despite knowing it was openly misrepresenting what is the most important US economic data, the BLS continued reporting numbers that contained a "misclassification error."

Here is what the BLS said about adjustments to the household survey as a result of the Coronavirus shutdowns in June:

As was the case in March, April, and May, household survey interviewers were instructed to classify employed persons absent from work due to temporary, coronavirus-related business closures as unemployed on temporary layoff. BLS and Census Bureau analyses of the underlying data suggest that this group still included some workers affected by the pandemic who should have been classified as unemployed on temporary layoff. 

So the "misclassification" goes on.

However there was some good news: the June error was smaller than the May error:

The degree of misclassification declined considerably in June. BLS and Census Bureau staff have been reviewing survey responses that might have been misclassified. The misclassification hinges on a question about the main reason people were absent from their jobs. If people who were absent due to temporary, pandemic-related closures were recorded as absent due to "other reasons," they could have been misclassified. When interviewers record a response of "other reason," they also add a few words describing that other reason. The review of these brief descriptions found that the share of responses that may have been misclassified was much smaller in June than in prior months.

Yet the error is there, and result in an unemployment rate that is "about" 1% higher than reported, which however is a drop from the 3% error in May:

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 June) had been classified as unemployed on temporary layoff, the overall unemployment rate would have been about 1 percentage point higher than reported.

So the BLS knows there is an error and is hoping to fix it…

"BLS and the Census Bureau are continuing to investigate the  misclassification and are taking additional steps to address the issue."

… but not yet:

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.       

One can only imagine what other "survey errors" were made but not fixed for the sake of "data integrity."


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