At turning points in the U.S. business cycle, changes in employment and unemployment don't always match up. After the official end of the 1980, 1982, and 2001 recessions, there were months where both employment and unemployment rose. In January 2010, more jobs were lost in the United States, yet the unemployment rate fell. How could such a paradox exist? This report explores the factors in a recovery that drive the employment level and the unemployment rate. It offers an analysis of where the U.S. labor market stands and where it may be headed.