Did unemployment finally decline again in April, or did it increase for the first time since October? We'll know tomorrow when the government reports the official unemployment rate. As usual, we invite readers to weigh in and provide their predictions for tomorrow's number. Vote at the bottom of this post!
In March, we saw some legitimate job growth. The 162,000 additional jobs were the most in three years. Employment likely continued to increase in April. Yesterday, the ADP and Challenger reports both provided more reason to be optimistic about the labor market. Today, we also learn that jobless claims fell last week for the third straight time. Doesn't this indicate that the national unemployment rate must decline further?
Perhaps, but not necessarily. Even if more jobs were created in April, the unemployment rate could stay constant -- or even increase. Remember, there are a large number of discouraged or "marginally attached" jobless Americans: 2.3 million in March. If they enter the job market again, that could absorb or overshadow the job growth.
Moreover, seasonality could have an effect. The chart below was used in our March unemployment analysis:
If you look at the previous few years above, between March and April the seasonally adjusted and seasonally unadjusted lines cross. So unless we get a huge drop in the number of unemployed, the seasonally adjusted rate will have to rise to meet or exceed the unadjusted rate, which was 10.2% in March.
In short, predicting April's unemployment rate won't be easy, but give it a shot below. Last month, readers did fairly well, as 26% correctly guessed that the rate would remain constant at 9.7%.