Interpreting Unemployment Rate
Ok, I call time out. From what I gathered last week, 2 things happened. Oil went back up to all-time highs and unemployment numbers were really high. Here's the caveat: in many ways, unemployment numbers are fud. First of all, unemployment is measured in 6 month time windows of people who are looking for jobs.
So if someone is looking for a job for 7 months, and then get it after 7 months, they are no longer part of the 'unemployment rate'. And the unemployment rate won't decrease if they do find a job.
Also, and more importantly, summer months are the slowest for hiring people. That is a fact, and something that I observed first-hand when I interned at a recruiting firm in 2004. Summer hirings crawl to a hault categorically, even in a "healthy" economy.
Now, combine this understanding of unemployment with the fact that financial woes (like increased gas prices & inflation) may cause people that have not worked for years, like houswives, to start looking for a new job, and thus fit the 'unemployed' category.
So it's not necesserily that someone was fired and is looking for a job, but simply that people are looking for jobs who may not have worked in years.
Certainly inflation/high gas prices/mortgage problems would cause more people to enter the market who did not have a need to work in the past.
Pair this up with a seasonality of slow hiring, which may be compounded by slower economic growth, and you get a very bad looking number. However, it may not be as bad as it looks on paper. And such a high number doesn't necessarily indicate that there's less job creation. Technically, you can have more people enter the job market & have higher unemployment rate at the same time.