In Spite of a Good Jobs Report, U.S. Unemployment Rate Rises to 9%

Schneider Downs

By Ron Kramer

The U.S. Department of Labor’s April 2011 Jobs Report shows employers added 244,000 jobs in April, the fastest pace in quite some time.  Despite this rosy jobs report, the Nation’s unemployment rate climbed to 9% in April, up from 8.8% in March.

The rise in the April unemployment rate is not all bad news.  In the U.S., the official unemployment rate excludes those workers who have stopped looking for work because they believe no jobs are available.  These workers are referred to as “discouraged workers”.  When these workers stop looking for work, they are dropped from the numbers of the unemployed workforce.  Thus, even in periods of desperate unemployment, if some workers give up looking for jobs, the unemployment rate could actually fall.  Conversely, when the employment picture picks up, the unemployment rate can actually rise temporarily as workers come back into the job-seeking workforce.  In April 2011, many discouraged workers began looking for jobs once again, thus partially accounting for the spike in the April unemployment rate.  Optimistically, we should look at this as a sign that things are looking up!

Although there is optimism to speak of, not all is rosy with the employment picture and prospects. The Department of Labor’s April 2011 Jobs Report still shows that in addition to the Nation’s official unemployment rate of 9%, the total unemployment rate is hovering around 15.9% of the workforce.  This larger statistic includes discouraged workers and under-employed individuals. We still have a long way to go for good economic times.

For further information, please contact Ron Kramer.

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