It’s counterintuitive, but today’s slight rise in the unemployment rate in the jobs numbers to 5.7% from 5.6% is a really good thing.
Remember, the unemployment rate calculation only counts people who are unemployed and looking for jobs.
If you’re not looking for a job, then you’re not part of the labour force.
So, when the economy is adding jobs, but the unemployment rate rises, that means people who didn’t have a job weren’t looking for work are now returning to the labour force and looking.
The labour force participation rate rose to 62.9% from 62.7% in January. This number comes from the household report, which saw a 759,000 increase in employment but a 1,051,000 surge in the number of folks in the labour force.
Labour force participation has been falling for a long time. That’s partially a demographic trend, from baby boomers retiring, but it was accelerated by the Great Recession and hasn’t yet recovered. This is what it looked like up to and including January’s report: