What They Didn't Tell You In Friday's Job Numbers Report

Great news on the unemployment numbers last week? That was the message from many politicians and the popular media on Friday. But let's take our usual closer look…

The Bureau of Labor Statistics reported on Friday that the U.S. created 243,000 jobs in January 2012, causing the unemployment rate to fall to a level not seen since February 2009: 8.3%.

The job numbers came in better than estimates; the best one-month showing since April 2011.

The important part was that private sector job numbers jumped 257,000-this is where the job numbers need to come from for an economy to truly recover and grow. Government payrolls fell by 14,000 (more on that in my personal notes section today).

And the job numbers for the previous two months were revised higher, adding an additional 60,000 jobs to the U.S. economy…more good news.

In an economy that will take every bit of good news it can get, Friday's job numbers report was obviously welcome. But-and there is always a “but”-we may not like what we see if we look closer at the job numbers.

Sure, job creation has helped the unemployment rate drop to 8.3%, but the drop is aided significantly by the fact that many Americans have simply given up looking for work. Those who have stopped looking for work are removed from the job numbers-and that's 1.1 million people in January alone!

“U6,” as reported by the Bureau of Labor Statistics, is a broader measure of the unemployment rate, because it takes into account discouraged people as well as those working part-time who want full-time work. The U6, also more commonly known as the “underemployment rate” stands at 15.1%, about the same as December.

My point, dear reader-and my reason not to cheer the new job numbers with my fellow economists-is that they are looking at the wrong job number. The official unemployment rate in this country is now 8.3%, as I said earlier, the lowest rate since February 2009.

But the job numbers are skewed big-time and I don't want my readers fooled by them. If you add back the people that have given up looking for work in America, a huge 1.1 million people, and the people working mediocre part-time jobs who really want full-time jobs to support their families, the unemployment rate really didn't change in January. It's a crazy 15.1%!

It is important to note that those workers who have both not found a job and exceeded the 99-week unemployment program are also removed from the job numbers above, and even from U6, making the job numbers even worse.

I'm not going to bash the Obama Administration. The way the unemployment rate.