Is The Unemployment Rate As Bad As It Looks?

In his monthly newsletter, Jim Paulsen of Wells Capital Management has a point about the rising unemployment rate that doesn't get made very often:

even though the unemployment rate rose by 1 percent to 9.5 percent in the second quarter, about 55 percent of this rise was due, not to job losses, but rather from new entrants to the labor force. Of the 1.568 million rise in the unemployed roles during the second quarter, 878 thousand came from new searchers which is often a good sign the labor market is returning to health.

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