The unemployment rate rose — here’s why that’s a good thing – New York Post

The unemployment rate rose in March. Yippee!

Call it counterintuitive or ass-backward, but the fact that the nation's jobless rate went from 4.9 percent in February to 5.0 percent in March is — in a perverse way — a bit of good news.

Oh yeah, there were also 215,000 new jobs created in March, which was considerably below the revised 245,000 jobs that popped up in February, but higher than the 200,000 that Wall Street was expecting.

March's gain was helped modestly by a guess by the Labor Department that 64,000 jobs were created by newly formed companies. Keep in mind: The government uses a mathematical model to guess and can't prove the existence of those 64,000 jobs.

Job growth in March was probably held down by the fact that the weather in February was better than normal. Many fair-weather companies may have pushed up hiring a month, or even into January.

And there is some highly questionable data in this report. With retail stores getting smacked around, why would they have hired 48,000 more workers in March, as the Labor Department claims?

But let's focus on the rise in the unemployment rate and why it could be considered a good thing.

The rate is calculated from data provided by the Census Bureau. The Labor Department calls this its Household Survey; Census calls it the Current Population Survey.

The perversion in those surveys comes from the fact that people aren't counted as unemployed if they haven't looked for work in more than a year. They are just "out of the workforce" and as far as the Labor Department is concerned they don't exist.

So the jobless rate can go down if people have become discouraged and have stopped looking for work. That, of course, is really not a good thing. But the declining jobless rate that phenomenon produces looks good in newspaper headlines and sounds good coming out of politicians' mouths.

Conversely, a rising jobless rate is sometimes good news because it means that people who were discouraged start looking for work again and show up in the Census surveys as unemployed.

In this case, being considered unemployed is better than being considered out of the workforce after giving up looking.

That's partly what happened in March. Some 2.5 million people re-entered the workforce — meaning they are looking again for a job — in March, according to numbers I got from the Labor Department. That pushed up the so-called labor participation rate to 63 percent from 62.9 percent.

That means that 63 percent of the population over age 16 either had a job or was actively looking for one. And that was better than 62.9 percent in February.

That's the "yippee" part — people may be more encouraged by the job market and not think it a waste of time looking for work.

But before you get too excited consider this: Back in the good ol' pre-Great Recession days, more than 66 percent of the current population was regularly employed or looking for work.

So March's tiny jump, while welcome, isn't such a big deal. And the rise in the unemployment rate isn't really bathed in brightness.

But if you are looking for good news, latch onto the bit I just gave you. Everyone else will.