The unemployment rate has increased, so why do economists say it’s a positive sign?

The unemployment rate increased last month, from 6.9 per cent to 7 per cent, but economists say it’s a positive sign.

How could that be? It’s a statistical artefact.

They say other developments in the economy suggest the economy is recovering, and more positive news is likely in coming months.

Think of it like a football club

Imagine a struggling football club, which has watched its membership dwindle from 20,000 to 5,000 fans.

If 4,000 of those 5,000 remaining members are turning up to the club’s matches every week, the club’s owners might try to put a positive spin on things by boasting that 80 per cent of their members are still attending matches regularly.

But now imagine the club starts winning again, so its membership grows from 5,000…