fbpx US unemployment rate falls again but still little progress for people who have not been temporarily furloughed from their jobs - Jason Furman | Harvard Kennedy School

HKS Affiliated Authors


August 7, 2020, Opinion, "The official unemployment rate continued to fall in July from 11.1 in June to 10.2, a slowdown from the improvement in May and June. As in prior months of the pandemic, the official unemployment rate continues to understate the unemployment rate from a historically-comparable perspective because it counts an extra 1.4 million people who were "not at work for other reasons" as employed (the so-called "misclassification error") and also because 4.7 million people have left the labor force since February, more than would be expected even given this large increase in unemployment. Adjusting for these factors our "realistic unemployment rate" was 12.0 percent in July, falling slightly faster than the official unemployment rate. The small reduction in this gap reflects continued improvement in reducing the misclassification error that was partially offset by a slight fall in labor force participation, a potentially worrying sign this early in the recovery." Read on the Peterson Institute of International Economics