This revelation is really interesting. In the years I have been a radio talk show host I cannot remember a time where a state reported their unemployment figures as wrong and as long as the state of Michigan has been for the entire year.
The Michigan Department of Technology, Management and Budget (DTMB) reported that the federal government had to correct Michigan’s unemployment rate upward by 1.7% points, from 4.6% in September to 6.3%. Corrections to the unemployment figures are routine but never to the magnitude as this one.
Governor Whitmer has been underreporting Michigan’s unemployment rate by 37% since January of 2021. Michigan is now considerably above the national unemployment rate of 4.6%.
The AP reported the problem occurred due to “inputs into a model for the Detroit-Warren-Dearborn metropolitan area for January”. These inputs produced “some distortions” in benchmarking factors used for the state of Michigan.
Back in January of 2021 Michigan’s unemployment rate had dropped considerably. The unemployment rate in December of 2020 was reported as 8.2% which then dropped to 5.7% for January of 2021, a number at the time that was far below the national average and Governor Whitmer touted that number every time she could.
According to the U.S. Bureau of Labor Statistics, Michigan officials said they notified the agency of the issue in May of 2021. If they notified them in May of such a large difference and a reporting problem associated with it why did it take to November to inform the world?
Bruce Weaver, an economic manager with the state Department of Technology, Management and Budget stated:
“What we noticed in the first couple of months of 2021 is that the estimates we were getting from the BLS model, the published data that everyone sees, was not tracking with the raw data from the household survey…In May, we contacted BLS in writing and pointed that out. They started looking into it and eventually identified the specific problem that they’re adjusting for this month.”
Scott Powell, director of the state’s Bureau of Labor Market Information and Strategic Initiatives, said it was a
“red flag...The Michigan estimate was lower than what was basically appropriate,”
That is quite a “red flag”. The question is how did this occur and what have they put in place to stop this from occurring in the future?