The biggest mistake in American job prospect history … happened for this reason

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Source: Dubai – Mr. Muhammad

The US jobs data came last May to show a lot of contradiction with the expectations of analysts, which was indicating the persistence of high unemployment rates during the past month due to the Corona pandemic, which did not happen, as the report of the US Department of Labor indicated that unemployment fell last month and an increase in employment rates .

The Bloomberg Agency said in a report that the error made by analysts ‘expectations is the biggest mistake in the history of forecasts since it began tracking data in 1996, as analysts’ expectations indicated an increase in unemployment rates of about 20%, which is the worst expected rate since the Great Depression that struck the American economy. In the thirties of the last century.

But the US Department of Labor data indicated that unemployment rates fell to 13.3% last May, compared to 14.7% in April, in addition to the increase in non-agricultural sectors by 2.5 million jobs after a record loss estimated at 20.6 million jobs a month before last while they were Expectations are for the loss of about 7.5 million jobs in May.

Analysts told Bloomberg that the main reason for the expectations error is due to an “overflow of jobless claims” in addition to a misleading model followed by analysts that did not track the stimulus packages that were pumped by the US government and which allowed some institutions to keep their employees or even return those who were laid off Temporary by the pandemic.

The data of the US Labor Department indicates that the sectors that witnessed a strong return to employment last month are the entertainment sector, which added about 1.2 million jobs, the construction sector, which added about 464,000 jobs, and the retail sector, which succeeded in adding more than 368,000 jobs.

However, some analysts considered that the US job data does not reflect an explicit recovery of the labor market in the largest economy in the world with the situation given that this data includes employees who have been reduced their salaries or receive the minimum requirements for their job.

“The lesson from May’s job data is that it is more difficult to have more control over hiring than layoffs, especially when layoffs are done on a temporary basis,” Betsy Stevenson, the University of Michigan economic analyst, told the agency.

Before that incident, February 2003 was the month that recorded the biggest mistake of analysts’ expectations regarding employment, with a total of 318,000 jobs added at the time.





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