President Reagan yesterday told a group of schoolchildren in the suburbs of Chicago that unemployment fell last month, rather than rising, as the government's Bureau of Labor Statistics has reported.
The president said in answer to a pupil's question about Reaganomics, "The statisticians in Washington have funny ways of counting . . . . There were in March actually 88,000 fewer people unemployed than there were in February."
The BLS, by contrast, said in its report two weeks ago that "The nation's unemployment rate rose in March from 8.8 to 9.0 percent."
That basic unemployment number, published by the bureau every month, was seasonally adjusted, meaning altered to filter out the fairly regular seasonal fluctuations in employment in the economy. Economists say these adjusted numbers are a better measure of what is happening in the labor market than are the raw figures the bureau collects each month.
Those raw numbers did show a decline in unemployment from February to March, and it was these, it turned out, to which Reagan was referring.
The president's remarks came on a day when Treasury Secretary Donald T. Regan described the economy as "dead in the water." High interest rates "have brought this economy to its knees," Regan said on television, adding, "We're in a very steep recession at this point . . . . The economy . . . is not going anywhere."
In further evidence of this, the Federal Reserve Board reported yesterday that industrial production fell 0.8 percent in March. Details, Page D8
The president has been attacked for inaccurate statements on economic and other issues in the past, and referred to this yesterday on the plane back from Chicago, making a point of explaining to reporters what he had meant by his unemployment remarks. "I just thought I saw you all perk up, and I thought ah-ha! They think he's done it again," he said.
The BLS said unemployment rose on an adjusted basis in March because the seasonal decline in joblessness was less than normal. The way Reagan described this was: "It seems that the Bureau of Labor Statistics computes the unemployment figures on a five-year basis, making projections ahead . . . . When the decrease in unemployment wasn't as big as their projections, even though it decreased, well they call that an increase in unemployment."
However, Janet Norwood, BLS commissioner, said yesterday, "Clearly when one is looking at underlying economic trends one wants to look at the seasonally adjusted data."
Although these were not perfect, the BLS does a "pretty good job" of calculating how much the unadjusted numbers are affected by seasonal movements in the numbers in and out of work, for example because of the weather, Norwood said. She added that it was "perfectly proper" to look at both the adjusted and the unadjusted numbers. "It depends on what you describe."
Seasonally adjusted, the BLS said unemployment rose by 280,000 in March, even as in raw terms it declined by the 88,000 to which Reagan referred. Only one other time since World War II has unemployment been as high as 9 percent after seasonal adjustment, and Commerce Department economist Robert Ortner said yesterday that it was likely that it will rise even further this year.
Economist Allen Sinai yesterday commented that whichever figures for unemployment are used, "It seems to be true that the unemployment problem is the most serious it's been in the postwar period."
Otto Eckstein, of Data Resources Inc., said, "It looks like the economy went on falling in March . . . . What's disturbing is that April seems even lower."