Earlier today, the BLS reported that nonfarm payrolls increased 290,000 in April, beating expectations handily. The unemployment rate, however, increased to 9.9%:
From the release:
The reason the unemployment rate increased despite jobs being added is that while 290k jobs were created, more than double that number of people rejoined the labor force. That "shadow inventory" is what I kept a close eye on on the "way down" last year, as an indicator that things were worse than they seemed. Now, this metric means that things are probably a little better than the unemployment rate would suggest, in the long run.
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