Practice English Speaking&Listening with: The May jobs report ‘misclassification error’ explained

>> Sreenivasan: NEW NUMBERS FROM

THE LABOR DEPARTMENT YESTERDAY

SURPRISED ECONOMISTS WHEN THE

JOBLESS RATE DROPPED FROM 14.7%

IN APRIL TO 13.3% IN MAY.

STOCKS ROSE, AND PRESIDENT TRUMP

CALLED REPORTERS TO THE ROSE

GARDEN TO ANNOUNCE THE

UNEXPECTED GOOD NEWS, EVEN

THOUGH TENS OF MILLIONS OF

AMERICANS ARE STILL OUT OF WORK.

BUT THERE WAS A NOTE ON THE

OFFICIAL REPORT, POINTING OUT A

"MISCLASSIFICATION ERROR," AN

ERROR THAT MAKES LAST MONTH'S

UNEMPLOYMENT RATE AS MUCH AS

THREE POINTS HIGHER.

THE "WALL STREET JOURNAL'S"

CHIEF ECONOMICS COMMENTATOR,

GREG IP, EXPLAINED WHAT WAS

WRONG WITH THE NUMBERS.

HOW PEOPLE ARE CLASSIFIED, ON

WHETHER THEY'RE ABSENT FROM

WORK, WHETHER THEY'RE LAID OFF,

WHETHER THEY'RE-- THEY'VE LOST

THEIR JOB COMPLETELY, HOW DOES

THAT ALL MATTER WHEN IT COMES TO

WHEN WE MAKE ECONOMIC POLICY?

>> SO, THE NUMBERS ARE A LITTLE

BIT DISTORTED BECAUSE OF THE

UNUSUAL CIRCUMSTANCES OF THE

PANDEMIC.

PEOPLE WHO ARE ON TEMPORARY

LAYOFF ARE SUPPOSED TO BE

CLASSIFIED AS "UNEMPLOYED."

FOR REASONS THAT WE'RE NOT

REALLY SURE, A LOT OF THOSE

PEOPLE WERE, IN FACT, CLASSIFIED

AS "EMPLOYED."

NOW, THE BUREAU OF LABOR

STATISTICS IS AWARE OF THAT

PROBLEM.

THEY TOLD US THAT IF YOU ADJUST

FOR THAT ERROR, THEN THE

UNEMPLOYMENT RATE IS ACTUALLY

HIGHER.

HOW MUCH HIGHER?

WELL, THE MONTH OF MAY, IT WOULD

HAVE BEEN THREE PERCENTAGE

POINTS HIGHER, BUT, IN THE MONTH

OF APRIL, IT WOULD'VE BEEN FIVE

PERCENTAGE POINTS HIGHER.

SO, WHAT DO WE TAKE FROM THAT?

WELL, UNEMPLOYMENT ROSE A LOT

MORE IN APRIL THAN WE THOUGHT,

BUT IT ALSO FELL MORE IN MAY

THAN WE THOUGHT.

>> Sreenivasan: AND, PUT THIS IN

PERSPECTIVE FOR US-- WHEN WE

TALK ABOUT NUMBERS LIKE 13% OR

16%, COMPARE THAT TO WHERE WE

WERE JUST SIX MONTHS AGO.

>> I KNOW AROUND, YOU KNOW,

JANUARY, FEBRUARY, WE WERE DOWN

IN THE 3% AREA.

NOW, WE'RE DEALING WITH

UNEMPLOYMENT RATES THAT ARE THE

HIGHEST SINCE THE GREAT

DEPRESSION.

HOWEVER, LET'S PUT THAT IN

CONTEXT.

WE HAD 20% UNEMPLOYMENT RATES

FOR YEARS BACK IN THE 1930s.

WE'VE ONLY HAD THESE DOUBLE-

DIGIT UNEMPLOYMENT RATES FOR A

FEW MONTHS.

I HAVE TO EMPHASIZE, WE DO NOT

HAVE GOOD MODELS FOR

UNDERSTANDING WHERE THE ECONOMY

IS GOING AT A TIME LIKE THIS.

IT'S JUST TOO SOON TO SAY HOW

LONG WE'LL BE DEALING WITH THIS

HISTORIC LEVEL OF UNEMPLOYMENT.

>> Sreenivasan: ALL RIGHT, GREG

IP, CHIEF ECONOMICS COMMENTATOR

FOR THE "WALL STREET JOURNAL."

THANKS SO MUCH.

>> ALL RIGHT, BYE.