The key thing to remember unemployment rate is calculated as the number of people unemployed as a fraction of the labor force, which includes both employed people and those who are looking for work. In April, the labor force surged by 805,000 which suggests that some people who had given up on looking for work were drawn back into the labor market. This is reflected in an increase in the labor force participation rate, to 65.2%.
Labor Force Participation Rate
According to the household survey (from which the unemployment and labor force participation rates are calculated), the number of people employed rose by 550,000, and the employment-population ratio increased to 58.8%.Employment-Population Ratio
The establishment survey yielded an increase in employment of 290,000. Some of that is government hiring for the census, but private payrolls were up 231,000.Overall, the April numbers suggest things are moving in the right direction. Because so many people had left the labor force during the downturn, the unemployment rate has been understating how bad things are. The increase serves to remind us - and our policymakers - how deep the hole is.
Also, it may be worth noting seasonal adjustment contributed to the change - the unadjusted unemployment rate was 10.2% in March and 9.5% in April (that is, the BLS tries to remove the 'normal' month-to-month changes that occur within every year, including a significant improvement that occurs every April).
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