Senior Trump economic adviser Kevin Hassett told CNBC that when the head-scratching announcement came out Friday that the U.S. unemployment rate unexpectedly dropped to 13.3 percent after economists predicted the rate would rise to as much as 20 percent, he thought he had to recheck the numbers—twice. “It actually happened to us twice last week when the ADP numbers came out… I said, ‘Geez, that doesn’t make any sense I gotta go back and get my pencil out and figure out what’s going on,” Hassett said, admitting he didn’t initially believe the good fortune amid the coronavirus pandemic that was quickly being celebrated by his boss.
The figure, which came from the Labor Department’s monthly employment report, said the U.S. added 2.5 million jobs due to a “limited resumption of economic activity” following the worst of the pandemic. But experts worry the pandemic may have made it more difficult for statisticians to come up with a reliable figure. Hassett added that “massive fluctuations” should be expected in the economy after what he believes is a misclassification error in the May jobs report that may hide a higher unemployment rate. “For the next few months, we’re going to be making mistakes that are bigger than mistakes we’ve ever made before, because we’re looking at about a 20 Sigma shock to the economy and so therefore there are going to be massive fluctuations of things,” Hassett said.
