Key article ahead of Friday's Thursday's non-farm payrolls report
It's jobs week in the US and the consensus for Thursday's (moved because of the holiday) non-farm payrolls report is a decline to 12.5% from 13.3% in the unemployment rate.
It may not unfold that way.
A big issue the Bureau of Labor Statistics is dealing with right now is a surge in people recorded as not being at work for 'other reasons'. The BLS is trying to correct it.
In their mind, there are only three kinds of people in the US
- Employed - they worked at least one hour "for pay or profit" during the past week.
- Unemployed - they did not work but actively looked for work during the past 4 weeks OR they were on temporary layoff and expect to return to work.
- Not in the labor force - everyone else (including students, retirees, those who have given up their job search, and others).
They explain that the virus has people who aren't working saying they're still employed. It's a great explanation and worth a read.
What's clear from reading it is that the BLS isn't happy about all the survey-takers using the 4th category, which is not at work 'other reasons'. These are supposed to be for cases like a business owner who stayed at home that week, not for temporary COVID layoffs.
What's clear from the article is that the BLS is urging test-takers to put these people in the 'unemployed' category, where they technically belong. They outlined a series of calls, training and new questions they've implemented to get them there.
It might not work and the market is savvy to the 5.4 million people in the "other reasons" category so it might not matter anyway, but it will be something to watch when non-farm payrolls are released a day earlier than usual.
