Official: April jobless was 19.5%, not 14.7% Unofficial: the truth is even worse, 31.6%

It was there, not quite in plain sight, but buried on page 11 of a 14-page FAQ on the impact of the pandemic on the jobs report, which was referenced in a technical note attached to the end of the mind-numbing statistical dump that the Bureau of Labor Statistics issues once a month....

7.5 million were counted as just absent, not unemployed

Basically, the survey takers classified many millions whose work places had shut down as absent but employed (like for example someone on vacation or ill, whether with or without pay). The Bureau of Labor Statistics admits they should have been classified instead as being on temporary layoff. 

It turns out that people being surveyed for the unemployment report are asked whether they were at work during the reference week (the week that includes the 12th day of the month), and if not whether that was because they were laid off, furloughed, on vacation, ill, etc. or absent for some "other reason." People who say they were furloughed or laid off but expect to be called back to the same job are unemployed. Those absent due to vacation, illness or whatever, including "other reason" are still employed.

Those counted as employed but absent for "another reason" jumped from 620,000 in March to 8.1 million in April. After much explicating and analyzing, adding and subtracting, the FAQ admits these are really virus layoffs.

And thus we come to question 14 of the FAQ:  "What would the unemployment rate be if these misclassified workers were included among the unemployed?" (And, yeah, it was in bold in the original.)

If the workers who were recorded as employed but not at work the entire survey reference week had been classified as “unemployed on temporary layoff,” the overall unemployment rate would have been higher than reported....

 If these 7.5 million people were to be considered unemployed on temporary layoff, the number of unemployed people in April (on a not seasonally adjusted basis) would increase by 7.5 million from 22.5 million to 30.0 million.... The resulting unemployment rate for April would be 19.2 percent (not seasonally adjusted), compared with the official estimate of 14.4 percent (not seasonally adjusted). Repeating this exercise ... with the seasonally adjusted estimates ... yields a similar 4.8 percentage point increase in the unemployment rate for April—or 19.5 percent, compared with the official seasonally adjusted rate of 14.7 percent. [Emphasis added]

How can one possibly justify reporting such a colossally flawed statistic? Well, "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."

But even that correction paints a false picture. The government also keeps track of people who have been looking for a job but not in the previous four weeks (2.3 million so called "discouraged" workers), as well as those who have only been hired to work part time but want full time jobs (10.9 million "underemployed").

Together with the officially unemployed, these are included in another unemployment measure, called "U-6".

The April report pegs it at 22.4% using raw figures and 22.8% with the seasonal adjustment. Adding the 7.5 million "misclassified" (their word) brings it up to 27.3% and 27.7%, assuming the seasonal adjustment would also be 0.4%.

And there's still one more problem.

The number of persons not in the labor force who currently want a job, at 9.9 million, nearly doubled in April. These individuals were not counted as unemployed because they were not actively looking for work during the last 4 weeks or were unavailable to take a job.

It is pure sophistry and bad faith to say that in the middle of a pandemic where the government is ordering people to stay at home, shutting down schools and closing businesses and plants, those five million extra people that just showed up aren't obviously people who lost their jobs due to the pandemic.

Especially when the rate of labor force participation and the percentage of the population that has a job both plunged to levels not seen since Richard Nixon was President, as the report itself explains. That pretty much proves that what you've just done is disappeared millions of people from the statistics.

I leave aside the cynicism of saying that people who don't have a job, want one and are wuilling to take one but don't fit the government's definition of "looking for a job" should not count as unemployed.

So here is what we have: 22.5 million officially unemployed in the monthly report. Add to that 7.5 million misclassified, 2.3 million discouraged, 10.9 million underemployed and 9.9 million who want a job but don't count. That's 53.1 million, and works out to 31.6%.