The Bureau of Labor Statistics (BLS) put out its most updated report on the unemployment situation recently. I’ve long had a problem with the numbers this government agency publishes. Over the years they have been brazenly manipulated and much of the data it purports to show isn’t much more than a glorified guess. The report is made up of at least two elements; first the household survey from which it gets the official unemployment rate at 5.2% in August 2021 (-0.2%) and second a so-called establishment survey.

The first is just what it sounds like, an in person or telephone survey of US households compiled to figure out what proportion of workers are employed. By contrast the establishment survey is a combination survey and guesstimate. The first element surveys about 144,000 business establishments and government agencies compared to the about 32,500,000 businesses that used to be estimated to exist in the US; collecting data on numbers of workers at each firm, their hours worked and earnings. The second element is essentially a fancy formula used to guess at the number of new business establishments created or destroyed in the unsurveyed segment of the economy. (Note: It is likely the number of surveyed firms has also declined with the downturn.) From here the BLS comes up with an average number of jobs created or destroyed with all of these firms, giving us by far the biggest part of this figure in this survey (+235,000 in August).

According to the latter segment of this “survey” the economy saw increases in employment in professional and business services (+74,000), transportation and warehousing (+53,000) private and public education (+13.000), manufacturing (37,000), other services (37,000), information technology (17,000), financial activities (16,000) and mining (6,000).

But these numbers don’t capture the whole picture. The BLS’ methodology and the size of their data sets bring much of this information into question. First because the unemployment rate from the household survey only takes into account workers considered in the labor force. This means workers who have been out of work for a period considered too long by the government and whose unemployment benefits have run out are no longer counted in this figure, affecting the laborforce participation rate at 61.7% in August (unchanged).

Clerical errors have also abounded since the start of the pandemic. “As in previous months, some workers affected by the pandemic who should have been classified as unemployed on temporary layoff were instead misclassified as employed but not at work. However, the share of responses that may have been misclassified was highest in the early months of the pandemic and has been considerably lower in recent months. Since March 2020, BLS has published an estimate of what the unemployment rate might have been had misclassified workers been included among the unemployed. Repeating this same approach, the seasonally adjusted unemployment rate for August 2021 would have been 0.3 percentage point higher than reported. However, this represents the upper bound of our estimate of misclassification and probably overstates the size of the misclassification error.” (Employment Situation for August 2021 p. 5)