Today’s uptick in unemployment from 9.7% to 9.9% is not good news.
It always amazes me, though, how politicians and pundits will try to launder the bad news into good news.
“Today, I’m happy to report we’ve recieved some very encouraging news,” President Obama said this morning. “We’ve now seen job growth for four months in a row.”
“The unemployment rate rose for the right reason,” writes Rick Newman of U.S. News and World Report. “Instead of shedding jobs, employers added 290,000 jobs in April, the strongest showing since 2007.”
Newman writes some of the best, most clearly written columns on economics. I usually agree with his take. Click here to read why Newman thinks 9.9% unemployment is good news.
John Challenger, CEO of Chicago-based outplacement firm Challenger, Gray & Christmas, put the bad news this way:
“While some might view the uptick in unemployment as a negative, it is actually a sign that the job market is improving. The April increase to 9.9% was due largely to people jumping back into the labor pool after sitting on the sidelines from frustration. Of the 255,000 people who joined the ranks of the unemployed in April, 135,000 or more than half were reentrants. Another 78,000 were new entrants or people who left their jobs voluntarily. These individuals are gaining confidence in their ability to find a job and are now throwing their hats into the ring.”
Now, me? I never take a glass-half-empty view. I say the glass was knocked over, and its contents completely spilled before it plunged from the counter top onto the kitchen floor and shattered into pieces.
To me, today’s unemployment news means that the job market was so bad that a lot of people gave up looking for work. So they weren’t counted in the official unemployment rate. This means the actual unemployment rate has been much higher than officially reported. This means we may even have a longer way to go than Obama and others want to admit.
Why count discouraged potential workers coming back into the job market as optimistic? Maybe they are optimistic, or maybe they are just getting really HUNGRY!
The net increase of 290,000 jobs included 66,000 temporary government jobs. The rest may be a sign that some employers are finally realizing they may have cut too far to get their numbers up and now they need people to actually do something.
Meantime, nobody expects unemployment to fall below 9% by November, 15.3 million people were out of work in April, and the so- called good unemployment news is hardly helping Wall Street today as it continues to struggle with Europe’s debt crisis.
But look at the bright side: All that debt the government took on to backstop the economy has resulted in at least some improvements.