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According to the newly released Labor Department’s jobs report, the unemployment rate increased for the first time in three months to 9.9 percent in April. In the past three previous months the unemployment rate has held steady at 9.7 percent.
April’s unemployment rate is disappointing to the economists who predicted that the unemployment rate would remain steady. Christina Romer, Obama’s economic adviser, claimed that more discouraged workers returning to the labor force has increased the unemployment rate to 9.9 percent. The Labor Department reports that 195,000 previously discouraged workers reentered the labor force. However, this does not fully explain the .2 increase in the unemployment rate. In fact, the number of discouraged workers increased to 1.2 million from 1 million in April.
Using the Labor Department’s data, more unemployed workers became discouraged and left the labor force than discouraged workers who reentered the labor force. Unfortunately, 15.3 million Americans remain unemployed. The long-term unemployed, jobless for 27 weeks and over, accounts for 45.9 percent of the unemployed and continues to rise. The seemingly good news is that employment increased by 290,000 in April. As the Labor Department points out, 66,000 people were temporary hired by the federal government for the US census. The numbers are inflated since federal government employment is funded by taxpayers and the deficit. Therefore, the hiring of census workers does not create wealth or represent economic recovery.
Today, the White House claimed that the labor market is “healing” and that the “private sector is coming back.” However, the increased unemployment rate, the rise in discouraged workers and the expanded number of long-term unemployed workers in April should not be regarded as positive. The Labor Department report only confirms that the "stimulus" has failed to live up to its promise of keeping unemployment below 8 percent.