Unemployment Rate Going Up Could Be Another Sign of Recovery

Even though the number of jobs cut went down to its lowest in months, the unemployment rate has gone up. Chris Isidore in his article “Job Losses slow dramatically” written this morning talks about how economists believe that unemployment rate going up maybe a factor of an improved job market (potential). The reason economists think that it is a great sign of improvement is because they believe that people who weren’t looking for jobs before are now active searching for jobs. These people have been classified as “unemployed” instead of “not in the labor force”, a classification put in place by the Labor Department.

Although the number of jobs cut last month are only 345,000 instead of 520,000, it is still a very high number. But, something to keep in mind is that some improvement is better than no improvement. It doesn’t seem like there will be drastic improvement in the job market for at least another year or until other factors in the economy take a positive turn such as the GDP, imports and exports, companies that are going through bankruptcy currently do a good job at restructuring or which i think might be a very significant factor – growth of small business because they account for almost 80% of new jobs in the United States.

The aforementioned article goes in detail about the numbers and figures related to the job market and how people have started working part-time just to have some cash flow or have had their hours cut. Some of these numbers are an all time high and the number for jobs being cut in the month of May – 345,000 is also the highest figure for number of jobs cut in one month in the last three recession.

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