I never thought I’d see the day when 9.4% unemployment (U3) was considered good news.
Employers throttled back on layoffs in July, cutting just 247,000 jobs, the fewest in a year, and the unemployment rate dipped to 9.4 percent, its first decline in 15 months.
It was a better-than-expected showing that offered a strong signal that the recession is finally ending.
The new snapshot, released by the Labor Department on Friday, also offered other encouraging news: workers’ hours nudged up after sinking to a record low in June, and paychecks grew after having fallen or flat lined in some cases.
Some of the previous months’ numbers were also revised down. The U6 number (unemployed + involuntarily part-time) also dropped from 16.5% to 16.3%. The drop in the unemployment numbers was unexpected because unemployment general lags in a recovery. We’ll have to wait and see if this recovery is sustained.
Bottom line: The economy is still in the dumps but there are some encouraging signs of a turn-around. This recovery will no doubt be slow because of the huge overhang from the housing bubble.