We are likely seeing the beginning of the end of the unprecedented wave of mortgage delinquencies and foreclosures that started with the subprime defaults in early 2007 [and] continued with the meltdown of the California and Florida housing markets due to overbuilding and the weak loan underwriting that supported that overbuilding," Jay Brinkmann, the group's chief economist, said in a statement.
It's good news that signs of improvement are becoming visible. Consumer confidence should begin to rise and take hold as the mole hill of positive economic data becomes a small skill hill. There are still risks out there, but it appears that the worst is behind us.
Businesses are cautiously looking forward to the future. We should see the total number of people employed rise even as the unemployment rate increases.
Why would the unemployment rate increase if the economy is recovering?
The way unemployment is measured, people become so discouraged that they stop looking for work and are no longer counted as being part of the labor force. If one is not considered part of the labor force one cannot be officially unemployed.
As the economy appears to be entering a recovery stage people regain the optimism that there are job opportunities to be had. These formerly discouraged people will then be counted as unemployed because they are looking for a job again. It would not surprise me if the unemployment rate jumped a bit in the coming months. Government hiring for the 2010 census may reduce or prevent the anticipated jump in the unemployment rate.
Unemployment will remain at elevated levels for the short and intermediate term. There are opportunities out there. It is advisable for people to start getting their resume and network in order. As Harvey Mackay would say, dig your well before you're thirsty. Starting preparation today will bring job offers sooner when the right job opportunity arrives. Be ready for that opportunity when it's right in front of you.