You might have heard that the U.S. added 290,000 jobs in April. At the same time, the unemployment rate rose! Bwhat!?
The unemployment rate doesn’t measure how many people are unemployed. It sounds like it should, being that it includes the words “unemployment” and “rate” and all, but it doesn’t. Instead, the unemployment rate measures how many people are looking for jobs. When things are really bad, some people get discouraged and give up, or go to school instead, or stay home to take care of their kids and save day care money.
So the number of jobs and the unemployment rate are not directly correlated. Ezra Klein posted this visual:
It shows unemployment rising as job growth remains negative, leveling off as (perhaps) people drop out of active job seeking, and than actually going up again there at the end in response to two months of solid job growth.
So it turns out that, in this case, a rise in the unemployment rate is good news. It means some people are hopeful again.Lisa Wade, PhD is a Visiting Scholar at Tulane University. She is the author of American Hookup, a book about college sexual culture; a textbook about gender; and a forthcoming Introduction to Sociology text. You can follow her on Twitter, Facebook, and Instagram.