Jobs vs GDP: Which economy is it?

Economy growing, but not gangbusters: Pro
Economy growing, but not gangbusters: Pro

A look at recent headlines may have some scratching their heads about the state of the economy.

April saw a better-than-expected jump in new jobs and a surprising dip in the unemployment rate, yet a high number of people dropped out of the labor force. The economy also barely grew in the first quarter, with gross domestic product expanding only 0.1 percent.

So what does the mixed news mean for the economy?

To "smooth out the noise," GDP should be looked at year over year, which was 2.3 percent, Jared Bernstein, former chief economist to Vice President Joe Biden, said Friday on CNBC's "Street Signs."

Read MoreAbout that jobs report...maybe it wasn't so great

Around 230,000 jobs per month were added if you look at the average of the past few months, and there are still some problems on the labor demand side, said Bernstein, a CNBC contributor and a senior fellow at the Center on Budget and Policy Priorities.

"When you put it all together you have an economy that is growing, but is not growing gangbusters," he said.

Getty Images

The U.S. added 288,000 new jobs in April, while the unemployment rate dropped to 6.3 percent. However, 806,000 people dropped out of the labor force. Economists had been expecting 210,000 new jobs and a 6.6 percent unemployment rate.

The first-quarter GDP report released earlier this week showed the economy grew only 0.1 percent, the slowest since the fourth quarter of 2012. Economists had expected growth to slow to a 1.2 percent rate.

Read MoreUS economy stalls in Q1, inventories and trade weigh

To find job growth, Rosemark Capital's Chris Kuenne, also appearing on "Street Signs," said to look at young companies that have 50-500 employees.

"Between 1992 and 2008, 50 percent of all new job creation came from those companies, yet they were only 21 percent of all companies. So there is a sweet spot for employment growth," he said.

However, for those young companies to survive they need a "very tight, vibrant job market," Bernstein said. So while there has been entrepreneurship, it hasn't had the right economic climate to "take off."

Read MoreThink you have the worst job? Check the list

Bernstein also sees slow growth ahead.

"Most economists would agree that the labor force is going to grow considerably more slowly."

—By CNBC's Michelle Fox. Reuters contributed to this report.