Raymond Richman - Jesse Richman - Howard Richman
Richmans' Trade and Taxes Blog
Is the U.S. Bureau of Labor Statisics "Lying" About Unemployment Claims?
The U.S. Department of Labor is headed by a political appointee, Hilda Solis. It is natural that she would want the President who appointed her to look good. Not that she would order the employment data to be doctored in any way. However, she could ask the Bureau of Labor Statistics to present the data in a way that emphasizes “good” news, if possible. Whether or not any such request was made by the Secretary, the fact is that employment data that was released last week tends to emphasize the data most favorable to the President.
On Friday, July 15, 2011, the BLS reported the number of new unemployment claims filed during the week ending July 2nd, increased by 15,000 compared with the previous week. The first paragraph reported, “The advance number for seasonally adjusted insured unemployment during the week ending July 2 was 3,727,000, an increase of 15,000 from the preceding week's revised level of 3,712,000.” And that is what all the media reported. But that was not the actual number of claims filed. The actual numbers were reported in the second paragraph.
The BLS report of unemployment insurance claims for the week ending July 9, unadjusted, totaled 470,671, an increase of 45,031 from the previous week, not 15,000. The media reported only the data in the leading paragraph.
We see no reason for the Department of Labor to report the seasonally adusted figures at all. If the Bureau wants to put a more favorable light on the data, it ought to say that some of the increase may have been due to a seasonable increase in unemployment. The truth is it does not know whether the increase was the result of seasonal factors or not. All it knows is that in the past there were seasonal layoffs in July. We are even skekptical about that! We suspect that the bulk of the increased layoffs had little to do with seasonal factors. What seasonal factors are at play? Surely not in education; that affected the June data. These are not ordinary times. The trade deficit increased in May. American manufacturers were affected adversely because imports grew faster than exports. The Bureau of Economic Analysis of the Department of Commerce made no “seasonal adjustment” in reporting the May data.
The figure that the BLS gave of 405,000 claims is non-existent; it is an adjustment of the actual number of claims, 470,671, which was the number actually filed. It may well be that some of those who lost their jobs during the week of July 2 to July 9 were in what the BLS considers seasonal employment. What seasonal adjustment occurs in July? We believe the BLS seasonal adjustment is merely a guess. The BLS did not report what years were used to determine the seasonal adjustments. The public should be skeptical of any “adjustment” when the actual number is known.
Comment by M, 7/21/2011:
To be fair to the Obama administration, they have championed extended benefits for unemployed workers. This has allowed a more accurate picture of the actual unemployment rate to be revealed. Usually, all administrations allow benefits to expire, and thus the "official" unemployment rate is decreased. That the actualy rate of unemployed and under employed people is higher than the official rate, is not exceptional.
Comment by George, 8/7/2011:
Unfortunately, the BLS has become a political tool to validate numbers in a best scenario collection of samples (data). The BEA (Bureau of Economic Assessment) does the same. The statistics produce by these agencies have become worthless. If you attempt to validate BLS numbers from other sources with different mathematical methods the numbers just do no add up.
Comment by Scott Walker, 2/4/2012:
A wise man once said--there are lies, d**n lies, and statistics. As we move into the general election campaign season, we can unfortunately expect greater use of slanted statistics from both sides of the aisle. The American voter will need to be constantly checking the sources of data used to illustrate Obama's track record as President.
Real Estate Taxation
Journal of Economic Literature:
Atlantic Economic Journal: