WASHINGTON: California’s unemployment rate rose to 5.4 percent in June from 5.2 percent in May, its first increase in almost six years, the Employment Development Department reported Friday. The department called it “a stark departure from prevailing trend in that it was the state’s first unemployment increase since September 2010 … when the economy was only just emerging from the recession.” Economists cautioned that one month does not make a trend, and that the unemployment rate is based on a small sample of roughly 5,500 California households and is frequently revised.
Furthermore, the unemployment rate can rise when people lose jobs (a bad thing) or join the labor force (a good sign). The rate is the number of people actively seeking a job (the unemployed) divided by the number of people working or seeking work (the labor force). Often, when the economy is near full employment, people who had postponed or given up looking for a job enter the labor force and the unemployment rate goes up, even if the number working also goes up. The U.S. unemployment rate last month rose to 4.9 percent from 4.7 percent in May, partly because of people re-entering the job market.
