It’s a real sign of how bad things have been that 345,000 lost jobs in May counts as a kind of good news, since it’s better than the 600,000+ job loss months we’d been having recently. The theory is that with the rate of deterioration declining, we might have a month one of these days where the job number is actually positive.
But I think the really salient thing to keep in mind is that based on what we know from recent recessions, even under fairly optimistic assumptions about GDP growth we can expect the labor market to continue to be bad for a very long time. The country needs to add over 100,000 jobs per month to keep pace with the rate of growth in the labor force. So for labor conditions to actually improve, you need not just fewer losses, but a rate of job gains that exceeds the rate of labor force growth by enough to start mopping up the excess supply of non-employed people built up over the past 18 months. Since the labor force has been growing all this time that the number of employed people have been shrinking, we now have a huge overhang of people not working, over and above the people who’ve actually lost their jobs.