In what can only be described as an employment whipsaw, the United States Bureau of Labor Statistics (BLS) claimed the US has had the biggest one-month jobs gain in U.S. history since at least 1939. The BLS is reporting that employment rose by 2.5 million in May, and the jobless rate declined to 13.3%. Economists had predicted the official unemployment rate will climb to 19% in May, a MarketWatch survey showed. The number may not be an accurate reflection of the real picture (see below). Bias persists, with black unemployment rising and Latina unemployment remaining close to 18%.
The stock market is responding positively to the news, with futures rising broadly.
Construction lead the way, with 464,000 hires. Education and health services rose by 424,000, with retail adding 368,000.
While the number appears strong, it hides millions of additional unemployed due to what can only be characterized as fuzzy accounting. Due to what they claimed was an error in their methodology going back to March, the actual number is likely at least 16.3%. A large number of workers were not counted as unemployed due to a murky grey area the BLS calls "employed but absent from work for 'other '". Furloughed employees would likely fall into this category, as an example. A more encompassing unemployment figure that includes discouraged workers and those holding part-time jobs for economic reasons fell to 21.2% from 22.8%, the highest in the series history.
Were this becomes troubling is that the BLS typically corrects errors when they find them. Reached for comment, Mike Wolford, Director Of Customer Success at Claro Workforce Analytics, noted:
"I've been looking at BLS data for years. When they make a mistake they just note it and update it. Here they made an error in March, knew about it and still kept the error in April's numbers, and then didn't disclose until investigatory reporters asked why there was such a gap between 40 million unemployment claims and their 21 million number. It's going to be the next scandal. Was this done on purpose? Leaving 5 million unemployed out of your count for 2 months... looks political."
In addition, there is a 6.4 million discrepancy between as noted by Mike "Mish" Shedlock on TheStreet:
As a political windfall to the President, during an election year, data manipulation at this level will be investigated broadly and will likely trigger Congressional investigations.
Some things to note.
RNN will continue to update this story as it develops.
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