Now that us non-economists are finally getting used to the monthly Jobs Report from the Bureau of Labor Statistics as a major political event, it’s about to become more impenetrable than ever. Why? Well, the workers furloughed during the government shutdown will be treated simultaneously as unemployed and employed in different parts of the report. Here’s now the New York Times‘ Catherine Rampall explains it:
The jobs report is based on two different surveys — one of households, and one of employers — and it turns out that furloughed federal government workers will be treated as unemployed in the first survey but employed in the second. In other words, the temporary layoff of federal workers will probably increase the unemployment rate, but not (at least directly) depress the payroll job growth numbers.
The key reason that furloughed federal workers affect the results of one survey but not the other has to do with the different ways the two surveys categorize workers who ultimately receive back pay.
In the survey of households, workers who were furloughed during the entire week of Oct. 6-12 (the week that the survey asks respondents about) and therefore did not work at all will be classified as “unemployed, on temporary layoff.”
According to an e-mail from a Bureau of Labor Statistics economist, for the purposes of the household survey, “workers on temporary layoff need not be actively looking for work to be counted as unemployed, and they are so classified regardless of whether or not they are, or expect to be, paid for the time they are on temporary layoff.”
Got that? Even if you get back pay, if you didn’t spend any time working, you’re still considered unemployed by the household survey.
That is not true in the establishment survey (which surveys nonfarm payroll employers).
In the establishment survey, people who did not work during the reference week (the pay period that includes the 12th of the month) would normally not be counted as employed — unless they receive back pay. If they receive pay for the time they were on furlough, they’re counted as employed, even though they didn’t actually spend any hours working.
So it seems we may need to take the October numbers with more than a few grains of salt when they come out on November 8. But then they will also set an artificial baseline against which the November numbers will be compared, and we’re off on a trip to the funhouse to look at ourselves in the mirror!
Maybe we should just ignore the October report and concentrate on eating the rest of our leftover Halloween candy that whole week. If all else fails, we can obsess about the the status of healthcare.gov, whose fate we will be wildly conjecturing about for the immediate future.