Friday’s employment report was positive for two reasons. The first is that the number of jobs lost fell far short of expert expectations. Now 375,000 jobs is a lot to lose in a month, but the the fact that this was below predictions actually increased the optimism that the back of the recession has been broken. The second reason, paradoxically, was that the unemployment rate rose. Am I nuts? How can an increase in the rate be a good thing? Simple. The unemployment rate is defined as people unemployed but looking for work as a percentage of the total labor force. So….when the economy worsens, folks stop looking for work and the unemployment rate stabilizes. These people are neither part of the numerator nor part of the denominator. But when optimism grows, more people start looking for work–probably unsuccessfully–and the unemployment rate increases. Simple, huh? Well, that’s fractions for you! The point here is that both parts of Friday’s labor report for May are straws in the wind telling us that the recession is ending, and confidence is growing, and those are good things.