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Kimberly Amadeo

Why Both Jobs and Unemployment Are Growing

By May 9, 2010

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The employment report shows 290,000 jobs were created in April. Even once the 66,000 temporary Census jobs are taken out, it is still more than the 150,000 increase  needed to keep the economy growing.

So why did the unemployment rate also increase, to 9.9%?  First, tecause the number of unemployed rose, from 15 to 15.3 million. Second, the number of people in the labor force grew by 805,000. The unemployment rate increased because the number of unemployed grew faster than the labor force itself.

So, the rise in unemployment was actually a bit of a good thing. It showed a bit of optimism in that 195,000 of the unemployed have come back into the labor force. That's not to say all is peaches and cream. The number of people who have been unemployed for over six months also rose to 6.7 million - twice as many as last year. For a history of unemployment reports since March 2007, see Unemployment Statistics History.

Overall, the employment situation is improving. True, there are 1.3 million fewer jobs than April of last year. That's a bad thing. BUT the good part is that it's better than July, when there were 6.8 million fewer jobs year-over-year. To see the trend, review my calculations on Jobs Google Spreadsheet.

The trend in manufacturing jobs, a leading indicator, also improved as 44,000 jobs were added in April. This is still 428,000 fewer jobs than the year before, but it's better than June 2009, when manufacturing was down 1.6 million jobs.

Manufacturing is a leading indicator because it produces the big-ticket items consumers put off buying in a recession. Once the economy starts to improve, these orders are the first to come back. In the last recession, manufacturing jobs started to improve before the overall job market. For the data, see Google Spreadsheet Manufacturing Jobs. (Source: BLS, Employment Situation Summary)

What This Means for You

There were 26,000 temporary jobs added in April. Over 313,000 temp jobs were added since September 2009. In the expansionary phase of a business cycle, employers add temporary workers before hiring full-time works.

There were 9.2  million Part-time workers who would prefer full-time work. The increase in part-time and temporary workers reflects a shift towards the Freelance Economy.

Employment will be down year-over-year until July 2011, based on the experience of the 2001 recession, which lasted 8 months, and had 29 months of year-over-year job losses. To find out more, see When Will Job Opportunities Improve? For a history of employment reports since March 2007, read Employment Statistics History.

Articles from Alison Doyle, About.com Guide to Job Searching

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May 11, 2010 at 3:28 pm
(1) Barry W. Shook says:

While the government is patting themselves on the back about the 9.9% unemployment rate, there are many of us who consider the “true unemployment rate” as a better measure of how our economy is doing. True unemployment in the USA is currently at 17.3% and rising. 17.3% of unemployed American adults who reside in the USA and are ready, able, and willing to work cannot find employment.

May 11, 2010 at 10:45 pm
(2) Rande says:

Worse than that, our country is still bringing 125,000 legal visa immigrants. Add another 120,000 illegal immigrants who are competing for our jobs and social programs every month.

Our government lies to us and says the costs are offset by the revenue they pay in taxes. We all ready know that these “new immigrants” take about $4 in for every $1 they pay in taxes, to the tune of $338 billion dollars annually.

How long will our country survive until total economic collapse, then the race riots start?

May 12, 2010 at 11:30 am
(3) Kimberly Amadeo says:

@ Barry – the 17% “true” unemployed figure counts part-time workers who wish they were full-time. I wouldn’t say they were unemployed, as they have some work. See What Is the True Unemployment Rate.
@ Rande – Thanks for the reminder that I have never written any articles about the economic impact of illegal immigration. It is a gap in my coverage, and an important one.


May 12, 2010 at 1:37 pm
(4) Fred Kesinger says:

Whetther 17.3 or 9.9 percent, the bottom line is that large numbers of Americans are out of work. Until we put these 15 million people back to work, the U.S. is going to be in a long, hard and difficult slog.

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