“Labor Market Had Best Month in Three Years”by Tim Manni
The economy added 290,000 jobs in April, marking the fourth-straight monthly increase in employment. While the job market has experienced nearly 8.5 million layoffs in the last two years, according to the Wall Street Journal, this month’s jobs report points to several signs of a firming market — including the fact that the unemployment rate increased from 9.7% to 9.9%.
How is that possible? “Based on how the two figures are calculated, the increase in the unemployment rate means that more people expressed an interest in finding work,” said HSH VP Keith Gumbinger.
The “two figures” Keith is referring to are the unemployment figure and the unemployment rate. Both figures are calculated via the results of telephone surveys. The unemployment number is determined by surveying employers, while the unemployment rate is determined by a survey of American households.
Households that report that they are out of work and looking for work are used in calculating the unemployment rate. Households that report they are out of work and are not looking for work are excluded from the survey.
Another signal of a firming job market includes the fact that the last several monthly reports were revised upward; January and February both initially reported negative growth, yet were revised to the positive side of the ledger.
So while demand for work is picking up — highlighted by an increase in temporary hiring and the growing interest by the unemployed to get back to work — let’s not get ahead of ourselves. “We need to consistently add in excess of 250,000 — 300,000 jobs each month before the unemployment rate will show any true signs of improvement,” said HSH VP Keith Gumbinger. This month’s report appears to be a small step in the right direction (unless April’s figure is subsequently revised downward).
How do jobs impact housing? Click here to find out.
(title courtesy of Economy.com)