The employment report shows that the labor market has turned a corner. The bump in the unemployment rate up to 9.9 percent is caused by workers streaming back into the labor market. Almost 70 percent of these new entrants into the labor market were adult men seeking work. The unemployment rate could continue to climb, because there are still many workers still sitting out the job market. (As these workers return, the unemployment rate will climb if the amount of job creation does not increase.)
The private non-farm sector added 231,000 jobs, while the government added 59,000 jobs — full-time government positions declined but were offset by the hiring of 66,000 temporary census workers. Hours of work climbed, but are still well below the pre-recession levels. Wage increases and a slight slowdown in productivity growth auger well for continued growth in future reports.
This is a good report, and hopefully future reports will be even better. If the next few reports are as strong, then there will no longer be any fear of a double-dip recession, and the unemployment rate will slowly begin to fall.
– Rea Hederman is assistant director of the Center for Data Analysis and senior policy analyst at the Heritage Foundation.