A Terrifying Increase in Unemployment

The April 5, 2008 Idaho Statesman reports this terrifying news:

the largest one-month increase since March 1982, when the nation was in the midst of a 19-month recession.

But don't panic: here's the beginning of the sentence:

Idaho's jobless rate jumped two-tenths of a percentage point to 3 percent in March,

Do you remember the 1970s when pundits were explaining that the changing economy meant that there was no realistic chance that we would ever get unemployment down to 5-6%? It had been doctrine among economists for many decades that a 4% unemployment rate was nearly optimal for a modern economy, since most of that unemployment is what is called "frictional"--people who have lost one job (perhaps even by quitting) but have not yet found a new job. If unemployment rates went too low, the theory went, it would start to drive up inflation, as employers had to increase wages to attract workers away from existing jobs.

If you are part of this population that loses a job, yes, this increase in unemployment rates is a bad situation. But a 3% unemployment rate really means that some workers may need a few weeks to find a new job. This is not a crisis, no matter how much the news media would like it to appear to be one.