US weekly unemployment claims data flawed

WASHINGTON: The US Labor Department is inaccurately estimating the number of people filing weekly claims for unemployment benefits during the pandemic, which could make it difficult for policymakers to respond to the crisis, a government watchdog said on Monday.

The Government Accountability Office (GAO) in its latest report highlighted backlogs in processing a record volume of applications among issues behind the flawed data.

In response to the economic shock from COVID-19, the government rolled out three federally funded temporary programs for unemployment insurance (UI), expanding benefit eligibility to people who did not qualify for the regular state UI and enhancing benefits.

The Labor Department's weekly jobless claims publishes the number of weeks of unemployment benefits claimed by individuals in each state during the period and reports the total as the number of people claiming benefits nationwide.

"DOL officials told GAO that they have traditionally used this number as a proxy for the number of individuals claiming benefits because they were closely related," the GAO said.

"However, the number of claims has not been an accurate estimate of the number of individuals claiming benefits during the pandemic because of backlogs in processing a historic volume of claims, among other data issues."

Economists have complained about the accuracy of the data. In August, the Labor Department changed the methodology it uses to address seasonal fluctuations in the claims data.

The GAO recommended that the Labor Department revise its weekly news releases to "clarify that in the current unemployment environment, the numbers it reports for weeks of unemployment claimed do not accurately estimate the number of unique individuals claiming benefits."

It also said the department should "pursue options to report the actual number of distinct individuals claiming benefits, such as by collecting these already available data from states from January 2020."

The GAO said the department had partially agreed with the recommendations. It did not agree with the retroactive reporting of the data as this could pose challenges to state UI programs in implementing any new reporting requirements, especially retroactively.

"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 GAO said.

Two government-funded UI programs will expire in December, affecting at least 13.6 million Americans.