Dude, Where's My Recession?: The Series

Another month, another jobs report that shows the economy is sluggish but not in a recession.

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The economy seems to be slowly accelerating, yet the unemployment rate is rising sharply—as evidenced by its biggest jump in 22 years. It rose from 5.0 percent in April to 5.5 percent in May. (BTW: The betting markets still put the odds of recession this year at just 1 in 3.) So what's the deal?

1) This period reminds me of 2003, when the unemployment rate jumped from a low of 5.8 percent to a high of 6.3 percent even as the economy grew 2.5 percent coming out of the recession. Unemployment is a lagging indicator, folks.

2) When we've had a good jobs report in recent years, economic bears would often knock it by pointing out that a rising number of people had left the workforce and thus were no long counted as unemployed. This is the labor force participation rate. Well, one reason the unemployment rate rose so much last month is that the LFP rose sharply to 66.2 percent from 66.0 percent, meaning people are coming back into the job market.

3) Payrolls dropped by 49,000 in May, yet this is still far below the losses of 200,000 to 300,000 typically seen in a recession, which this is not.

4) The econ team at Macroeconomic Advisers has looked at the May jobs report and now thinks the economy will grow at a 1.7 percent rate for the second quarter. The big jump in the unemployment rate didn't cause the team to change its forecast at all. The Un-Recession continues.