Employment: Less Bad is Good

The April employment report showed that the rate of job loss is tapering off.

That's why investors celebrated the fact that "only" over a half million people lost their jobs in April and the unemployment rate was just 8.9 percent. It's like the doctor coming in and telling you: "Good news, you don't need a heart transplant -- just a quadruple bypass!"

While we're no longer staring at the employment abyss, things are still pretty tough if you are looking for a job. Why? When you add up all of the discouraged and involuntary part-time workers in the labor pool, it amounts to a lot of people looking for work. With those folks in the mix, the effective unemployment rate jumps to 15.8 percent.

The other problem is that even after the economy really does turn, companies are likely to take their time before adding to their payrolls. The term "jobless recovery" came into vogue after the last two recessions, when it took a full year after the official end of the recession to see more hiring.

To help workers upgrade their skills, President Obama introduced plans to allow for unemployed workers to go back to school, without losing their unemployment benefits. States will have to buy into the idea, but even if they do, the short-term impact will be limited.

Over the long term, it helps to upgrade the workforce, because college educated workers maintain an unemployment rate about half the the national average. Still, recent college grades flooding into the economy are having a tough time.

What's the good news? As a self-described cock-eyed optimist, I'm here to tell you that we are going to get out of this economic mess. Some of the most amazing innovation and entrepreneurship is born out of terrible times.

Here's a clip in which I discussed all this on the CBS Evening News a few days ago (forward to about 1:50):