Donald Trump Still Doesn’t Understand the Unemployment Rate
Policy + Politics

Donald Trump Still Doesn’t Understand the Unemployment Rate

© Kevin Lamarque / Reuters

Back when he was still on the campaign trail, President Trump consistently displayed what seemed like a radical disregard for the facts about unemployment in the United States. He repeatedly insisted that the “real” unemployment rate was actually somewhere around 40 percent and that the Bureau of Labor Statistics — widely respected by economists and policymakers across the country — was perpetrating a fraud against the American people.

At the time, most political reporters assumed that Trump was just cynically manipulating the crowds at his rallies — that a self-professed “smart person” who graduated from the Wharton School of Business at the University of Pennsylvania actually possessed at least a basic understanding of how unemployment figures are calculated.

Turns out...not so much.

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At a “CEO Town Hall” hosted by the White House on Tuesday, Trump appeared on stage for a brief question-and-answer session. Sitting in front of a room full of business leaders — people he plainly considers his peers — the president displayed pretty remarkable ignorance of how one of the country’s most watched economic indicators is measured.

“You know, one of the statistics that, to me, is just ridiculous...when you look for a job, you can't find it and you give up. You are now considered statistically employed,” he said.

That is spectacularly wrong. When someone looking for a job gives up, the BLS considers them to have left the workforce. It absolutely does not consider them as employed, though it no longer counts them in the ranks of the unemployed either.

If Trump had stopped there, it might have been glossed over as a slip of the tongue at a live event. But he didn’t. He decided to emphasize his disagreement with BLS, adding, “But I don't consider those people employed,” thus making it certain that he believes discouraged workers are counted as having jobs for purposes of the unemployment rate.

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The comments about discouraged workers came just seconds after Trump let loose another howler in front of the crowd of businesspeople. He was discussing the actual unemployment rate, which came in at 4.6 percent last month, when he replayed one of his hits from the campaign trail.

“We have 100 million people if you look,” he said. “You know, the real number's not 4.6 percent. They told me I had 4.6 percent last month. I'm doing great. I said, ‘Yeah, but what about the hundred million people?’ A lot of those people came out and voted for me. I call them the forgotten man, the forgotten woman. But a lot of those people — a good percentage of them would like to have jobs and they don’t.”

The idea that 100 million people are out of work is also wildly incorrect, and something one would have expected White House economists to brief the president on once he took office. Here’s where Trump appears to be deriving his figure:

The BLS reports that there are about 253 million Americans in what’s known as the civilian noninstitutional population — that is, people 16 years of age or older who are not in the military or in jail, mental hospitals, retirement homes or other facilities. The agency also reports that there are about 150 million Americans currently employed. That leaves roughly 100 million people unaccounted for.

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Trump is treating those 100 million as though all of them are job seekers unable to find work. However, a vast number are high school, college and graduate school students. Others are stay-at-home parents and still others are retirees. A couple of lines down the table that BLS produces every month is the actual number of people the agency believes are looking for a job. It’s not 100 million, but 5.9 million.

It’s hard to imagine that there was a single person invited to attend the event who didn’t realize how laughably uninformed the president — who talks constantly about jobs — was on the actual details of the employment situation in the U.S.

The only one in the room who didn’t know what Trump didn’t know was the man himself.