Not how the government derives economic data.

Photographer: Juan Mabromata/afp/getty images

Trump Finds Cooking in the Unemployment Numbers

Barry Ritholtz is a Bloomberg View columnist. He founded Ritholtz Wealth Management and was chief executive and director of equity research at FusionIQ, a quantitative research firm. He blogs at the Big Picture and is the author of “Bailout Nation: How Greed and Easy Money Corrupted Wall Street and Shook the World Economy.”
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By now, we have become almost used to a steady stream of inaccurate statements from the presumptive Republican presidential nominee. Most are not worth correcting. However, Donald Trump's recent comments on the federal government's unemployment data, so reminiscent of those made a few years ago by former General Electric chief Jack Welch, deserve a rejoinder. (He called today's report that employers added just 38,000 jobs "terrible" -- but only if you ignore the 35,000 striking Verizon workers. Still, 73,000 new jobs is pretty meh.)

The New York Post’s John Crudele last week interviewed Trump, who said he thinks the jobless rate is close to 20 percent and not the roughly 5 percent reported by the Labor Department. And, of course, Crudele reported, anyone who buys the 5 percent figure is a “dummy,” according to Trump.  

This, in a nutshell, is typical of the usual economic conspiracy theories we have discussed in the past; it is obvious political bias corrupting economic analysis. It plays upon people’s recent post-traumatic stress from the financial crisis first and exploits their anxiety about the future. It also reveals deep ignorance about how employment data is assembled.

Like much demagoguery, it oversimplifies. This much is true: The employment data is complex. The average layperson with little or no economic background is likely to find it confusing. 

It is true that many people have been unhappy with this recovery. While there are lots of boom towns and growth is strong in many industries, they are not evenly distributed throughout the country. That is the nature of slow recoveries from credit crises.

But Trump ignores these facts and goes down the path of several thoroughly debunked conspiracy theories.  A populist message giving people what they want to hear -- it’s not your fault or bad luck, it's this terrible economy -- is going to attract those who are disenchanted with or been left behind by this recovery. That’s why claims of 20 percent unemployment -- and that the guvmint is making up the numbers -- have the ring of truth to some people.

The funny thing is that the Bureau of Labor Statistics actually does exactly what Trump wants it to do: It reports the real unemployment rate, including all the people he thinks are not being counted.

The BLS provides at least six measures of unemployment, but most of the time, the one that gets all the headline attention is known as U3, or the total number of people unemployed as a percent of the civilian labor force. Check this link to the BLS table showing the multiple measures of labor utilization.

So sorry, conspiracy theorists: The real data isn't hidden -- it's released each and every month, a simple click away.

As for the broadest measure of unemployment, known as U6, it's 9.7 percent -- about double the widely reported U3 rate, which fell to 4.7 percent in May. U6 includes all of the U3 unemployed, “plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force.” It even measures discouraged workers who have given up looking for work, and those who “have had to settle for a part-time schedule” but want to work full time.

So much for cooking the employment data books.

In 2008, I made a “Modest proposal.” I suggested that to be more accurate and complete when describing conditions in the labor market, we give equal weight to the U3 and U6 measures of unemployment. To their credit, many news outlets do report both as of late. 

And yet now we have a candidate who, if elected president, will investigate the veracity of U.S. economic statistics produced by Washington. Only the data is already there and is widely reported. He could, as someone once said, look it up.

Taking a complex data set and purposefully spinning it in the most misleading way possible might be effective on the campaign trail, but isn't the right way to do employment data analysis.   

Trump was, and may still be, a Barack Obama birther -- one who doubts the president was born in the U.S.  and is therefore ineligible to hold the nation's highest office. It shouldn’t surprise us that he is now a BLS truther, too.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

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Barry Ritholtz at

To contact the editor responsible for this story:
James Greiff at