Goldman Sachs economists have released a report saying actual unemployment in the U.S. is higher than the 3.8% reported for March by the Department of Labor. The Goldman economists say the actual rate is about 3.9%, which reflects a difference of up to 400,000 workers.
Blamed for the error is the Census Bureau’s estimate that the US population grew by 0.5% in 2023, while the Congressional Budget Office — considered the more correct figure — projects that it jumped by much more: 0.9%. According to the CBO figure, the US labor force is about 1.1 million larger than that assumed by the Labor Department.
The Labor Department’s monthly employment report is based on two surveys: (1) data from about 122,000 businesses and government agencies used to calculate how many jobs the US adds each month and (2) monthly interviews of about 60,000 households used to determine the unemployment rate.
It is the latter that relies on the Census estimate, which Goldman says “failed to capture the recent immigration surge” because it used an estimate based on the 2022 American Community Survey. Goldman says the problem should be resolved with the 2023 American Community Survey, to be released next January. Since a healthy employment rate will be less important to the administration once the 2024 election is over, maybe so. Because, should the Dems win, they will no longer care how high it is.
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