US watchdog finds flaws in key unemployment data

Washington, United States Updated: Dec 01, 2020, 10:26 AM(IST)

Unemployment (file photo) Photograph:( Reuters )

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'This record should be corrected so that future analyses of the effects of expanded UI benefits rely on accurate information,' the watchdog said

A US government watchdog said Monday that a key measure of unemployment is based on flawed data, making assessing the impact of the coronavirus pandemic on jobs more difficult.

Since Covid-19 struck the United States in March, weekly data on applications for unemployment benefits have become a critical piece of real-time information to track job losses amid business shutdowns.

But the Labor Department "has reported flawed estimates of the number of individuals receiving benefits each week throughout the pandemic," the independent General Accountability Office (GAO) said in a report.

"This record should be corrected so that future analyses of the effects of expanded UI benefits rely on accurate information," the report said.

The Labor Department uses state data on new jobless benefit applications, but because those offices were overwhelmed with claims, the backlog distorted the national figure.

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The GAO, which works for Congress, called on the department to retroactively fix the figures, and clarify in the weekly report that data on the number of weeks of benefits paid no longer offers an accurate count of the number of people receiving benefits.

The Labor Department did not respond to a request for comment from AFP, but GAO said the department agreed to provide the warning in the news release although it pushed back on correcting the figures.

"Without an accurate accounting of the number of individuals who are relying on these benefits in as close to real time as possible, policymakers may be challenged to respond to the crisis at hand," the report said. 

In the week ended November 21, 778,000 new jobless claims were filed, a 30,000 increase from the prior week. Nearly 20.5 million people were receiving some form of unemployment aid as of the week ended November 7.

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