Today’s employment situation report is a perfect example of the uphill climb the economy faces when it comes to the stubbornly high unemployment rate. Today’s report showed solid job gains in both the employer survey and the household survey, yet unemployment still increased from 9.7 percent to 9.9 percent.
However, when you look at the report on the whole, is very positive overall. The net increase of 290,000 payroll jobs were spread across several sectors, including manufacturing, construction, retail trade, professional and business services, health care and the federal government. Employment among temporary help agencies grew for the seventh consecutive month, but by a smaller margin, suggesting that employers may be transitioning from temporary hires to permanent hires.
There are still some trouble spots. The number of people working part-time for economic reasons increased in April, but people simply may be determined to get their foot in the door. The good news is that employers may be poised to quickly turn these part-timers into full-timers.
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 percent 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.