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Unemployment fell in February, but a more realistic rate remains much higher

The national unemployment rate fell to 4.7 percent in February, the Labor Department reported Friday. But relying on that one headline number as an indicator for the economy as a whole ignores important information just below the surface.

Each month on "Jobs Friday," the Bureau of Labor Statistics puts out a trove of economic data, each of which provides its own perspective on the labor market and the employment situation. Economists look past the official unemployment rate — that 4.7 percent figure, also known as the "U-3" — to other metrics that give their own view of jobs in the country.

One of those figures is called the U-6 rate, which has a broader definition of unemployment than does the U-3. In February, that number fell two-tenths of a percent to 9.2 percent.

The official unemployment rate is defined as "total employed, as a percent of the civilian labor force," but doesn't include a number of employment situations in which workers may find themselves. The U-6 rate is defined as all unemployed, plus "persons marginally attached to the workforce, plus total employed part time for economic reasons, as a percent of the labor force."

In other words: the unemployed, the underemployed and the discouraged.

The U-3 rate has in the past few months returned to the prerecession levels that economists consider full employment. The U-6 has seen significant growth in that time, but still remains higher than before the recession.

Nonfarm payrolls increased by 235,000 jobs in February, beating consensus estimates of 190,000. Expectations for a solid month of job growth rose after private payroll firm ADP reported robust gains on Wednesday.

A rising unemployment rate isn't always a bad thing. For one, it can mean that more workers are coming off the sidelines because they feel more hopeful about the job market. That U-3 rate only measures people who are actively looking for work, not people who have given up looking.

That's why economists rely on the labor force participation rate, which measures the portion of the population that's either employed or looking for work.

The participation rate has fallen significantly since its high around the year 2000, likely due to demographic shifts like baby boomers retiring. But those demographics shifts don't account for all of the change, which has led some economists to think it's more to do with fundamental shifts in the economy.

In February, the labor force participation rate remained largely unchanged at 63 percent.

As more Americans find work and the labor market tightens, you can expect wages to rise because of the competition among employers to attract the remaining qualified job candidates. In recent months, wages have again gained ground after years of tepid growth. But some economists have worried that many of the jobs being added are low-wage, low-skill positions.

In February, average hourly wages were up to $26.09. Average weekly wages rose to $897.50.

One of the bright spots in the ADP report Wednesday was a shift away from the service-sector jobs that have dominated in recent hiring trends. On Friday, Labor reported that jobs in construction were up by 58,000, likely due to mild weather in February. Manufacturing added 28,000 jobs and health care jobs added 27,000.