July's Happy Job Numbers
July saw a real slowing of job losses. In June, non-farm payrolls -- jobs, in other words -- dropped by 467,000. July saw a drop of 247,000. That's not only less than June, but less than June by more than economists had expected. It's weird to celebrate the loss of 247,000 jobs, but it's really a good sign, as you can see on the graph at right. Moreover, this is the sort of news that can help convince businesses that the economy is rebounding and thus they should begin increasing their spending, which in turn actually helps the economy rebound. It's not just good news, in other words, but news with the possibility to do good.
On a related note, I recently heard David Leonhardt make an interesting point on the likely path of the unemployment rate. The unemployment rate, remember, only captures people who are actively looking for jobs. But in a long recession, many people give up, at least for a period of time. It's not so much that they don't want to work as that they simply can't find work and so stop searching. As the jobs picture brightens, however, these people rush back into the labor market, which can temporarily increase the unemployment rate even as it's a sign of real progress.
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