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Posted Mar 16, 2017, 9:55 am
President Donald Trump’s chief budget officer claimed — without any evidence — that “the Obama administration was manipulating the numbers” to make the nation’s unemployment rate “look smaller.”
Asked for evidence, White House Press Secretary Sean Spicer also offered none. Spicer replied that Mick Mulvaney, the director of the Office of Management and Budget, was “clearly referring to Obamacare.” That’s false.
Mulvaney was clearly talking about employment data when he made his remarks March 12 on CNN’s “State of the Union.” Host Jake Tapper played a video clip from Feb. 9, 2016 in which Trump called the unemployment rate “phony numbers.” At the time, the unemployment rate was 4.9 percent.
“Don’t believe those phony numbers when you hear 4.9 and 5 percent unemployment,” Trump said. “The number is probably 28, 29, as high as 35. In fact, I even heard recently 42 percent.”
(As we pointed out at the time, Trump’s 42 percent figure represented the number of Americans 16 years and older who are not in the labor force — the vast majority of whom did not want a job, such as retirees, students and stay-at-home parents).
Despite candidate Trump’s skepticism of the unemployment rate, President Trump touted the latest jobs figure released on March 10 by BLS. The U.S. added 235,000 jobs in February and the unemployment rate was “little changed” at 4.7 percent, down from 4.8 percent in January, according to a BLS press release.
Spicer, Trump’s top spokesman, joked about the president’s embrace of the jobs data. Asked at a March 10 press briefing about the president’s change of heart, Spicer said, “Yeah, I talked to the president prior to this, and he said to quote him very clearly — ‘They may have been phony in the past, but it’s very real now.'”
On the “State of the Union,” Tapper asked Mulvaney if there were any changes to the methodology used by BLS to calculate the February unemployment rate.
Tapper: So, did anything actually change at the Bureau of Labor Statistics in terms of methodology or who is running the business there?
Mulvaney: What I think changed is, you start to look at some of the underlying numbers. You look at the U6 number. We could talk — I’m already boring your audience. There’s things like U3, U6. And what you should really look at is the number of jobs created.
We’ve thought for a long time, I did, that the Obama administration was manipulating the numbers in terms of the number of people in the work force to make the unemployment rate, that percentage rate, look smaller than it actually was.
And we used to tell people back home, the only thing you should really look at, number of jobs created. And as long as that number is above [250,000], then the economy is doing extraordinarily well. And that was the number we hit last week.
Mulvaney presented no evidence to support his suspicion that “the Obama administration was manipulating the numbers,” even after he was pressed to do so by Tapper.
A day later, Trump’s chief spokesman was asked at a White House briefing (18:38 mark) for evidence of data manipulation, but he also offered none. In fact, Spicer wrongly claimed that Mulvaney was talking about the Affordable Care Act — which was clearly not the case, as the exchange above shows.
Reporter, March 13: Director Mulvaney said yesterday that he felt the Obama administration had been manipulating the unemployment rate. I’m wondering if that’s a view the president shares and what evidence is there of that?
Spicer: I think he was clearly referring to Obamacare with the number of people, but I would refer you back to him and his comments with respect to how he characterized that. I think he can discuss the precise nature of what he meant on that.
As for the Obama administration, Erica Groshen, who was commissioner of the Bureau of Labor Statistics during Obama’s second term, told CNN, “During the four years I served as commissioner, the administration didn’t try to manipulate the numbers at all.”
(The first BLS commissioner to serve under Obama was a holdover from the Bush administration. Keith Hall, a conservative economist, was BLS commissioner until January 2012. Hall is now the director of the nonpartisan Congressional Budget Office — as selected by House Republicans in 2015.)
In the CNN interview, Mulvaney sought to highlight the difference between monthly job gains and the unemployment rate. He said adding 250,000 jobs in a month is a sign that “the economy is doing extraordinarily well.” By that measure, job growth was extraordinary in 20 of the 96 months under Obama. Overall, the nation’s economy has added 11.5 million jobs under Obama, including a record 75 straight months of job growth — which was extended to 76 months in February.
As for the unemployment rate, Mulvaney referred to the U-3 and U-6. Those are two of the six “alternative measures of labor utilization.”
The U-3 is the official unemployment rate; it measures the percentage of unemployed workers who are actively searching for a new job. As we said earlier, it was 4.7 percent in February.
The U-6 is the broadest measure of unemployment and underemployment; it includes not only the total unemployed, but also discouraged workers, the marginally attached, and part-time workers who want more hours, but for economic reasons could only find part-time work. The U-6 rate was 9.2 percent in February, down from 9.4 percent in January. (Last year, when Trump criticized the “phony” unemployment rate, the January 2016 U-6 rate was 9.9 percent.)
As we have written before, there are those who claim U-6 is the “real” unemployment rate. But Mulvaney went beyond that to question the integrity of the employment data.
In an email to us, Jason Furman, chairman of Obama’s Council of Economic Advisers, called Mulvaney’s allegations of data manipulation “dangerous.”
“The claim that the Obama administration manipulated the jobs numbers is deranged, delusional and dangerous,” Furman said. “The numbers are produced by the Bureau of Labor Statistics — an organization with over 2,000 career employees and one highly independent political appointee. They are not manipulable.”
The official and alternative measures of unemployment are based on a monthly household survey of about 60,000 U.S. households that include approximately 110,000 individuals. The Census Bureau launched the month survey series, known as the Current Population Survey, in the 1940s.
“When all of the details are considered, the definitions [of employment] may seem rather complicated. The basic concepts, however, remain little changed since the inception of the CPS in 1940: People with jobs are employed, people who do not have jobs and are looking for jobs are unemployed, and people who meet neither labor market test are not in the labor force,” the BLS said in explaining its methodology.
As Obama’s chief economic adviser, Furman would routinely issue statements on the monthly jobs figures. He said his statements “focused on the number of jobs created (precisely the statistic that OMB Director Mulvaney said was a better measure) and the official unemployment rate, but we also extensively discussed alternative measures of unemployment (U-4, U-5, and U-6), people working part-time for economic reasons, the labor force participation rate, and other measures of labor market performance.”
Asked about critics of the measurement used for the official unemployment rate, Furman said the U-3 — the official unemployment rate — “is very similar to the concept used by other countries and international organizations,” such as the United Nations, World Bank, and the Organisation for Economic Co-operation and Development. He also said that he “would consider shifting to U-4 or U-5” of the official unemployment rate, but it would be “a mistake to shift to U-6.”
Furman said the U-6 “includes people working part-time for economic reasons, they may be ‘underemployed’ but it is a misnomer to call them ‘unemployed.'” The U-6 “counts someone working 30 hours who wants to work 40 hours the same as someone working 0 hours who wants to work 40 hours, which I think is conceptually off,” he said.
Mulvaney is perfectly within his rights to question what measurement best captures the nation’s employment situation. But he went beyond that when he accused the Obama administration of manipulating employment data without providing any evidence.