This unemployment metric has puzzled some economists

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Amid the recent good news about stronger-than-expected job growth in May, some economists have eyed one labor statistic with a sense of bewilderment.

Specifically, the share of people getting jobless benefits last month exceeded the share of unemployed workers.

On its face, that may seem impossible — how could there be more people collecting unemployment than there are actual unemployed people?

That had never previously occurred since the government began collecting data on the “insured unemployment rate” in the early 1970s.

Economists took to Twitter to express confusion over the anomaly after the Bureau of Labor Statistics released its most recent jobs report on June 5.

Jay Shambaugh, an economist at the Brookings Institution, called it “puzzling.”

But the situation makes sense when accounting for an expansion of unemployment benefits provided by federal relief legislation and differences in how the statistics are determined, according to experts.

 

‘Disconnect’

The unemployment rate — a ratio of the number of unemployed Americans to the total U.S. labor force — was 13.3% in May, according to the Bureau of Labor Statistics.

The insured unemployment rate — the number of people currently receiving unemployment insurance as a percentage of the labor force — averaged 15.2% last month, according to the Labor Department.

These rates typically rise and fall in lockstep with each other, with the official unemployment rate above the insured rate.

There are currently 21 million unemployed Americans but roughly 30 million Americans collecting unemployment benefits.

“Now there’s a disconnect between those two numbers that didn’t exist before,” said Michael Farren, a research fellow at George Mason University.

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