Charts: What's the real unemployment rate?

Visitors walk past a Careers Information display board as they pass job exhibition booths at a job fair
Chris Ratcliffe | Bloomberg | Getty Images
Visitors walk past a Careers Information display board as they pass job exhibition booths at a job fair

The Labor Department said Friday that the unemployment rate rose to 5 percent in March. But does that tell the whole story?

On jobs day, the government puts out a slew of economic and employment data, each of which tell a part of the story on jobs and wages. Most economists look past the official unemployment rate (also know as the "U-3" rate) to other metrics that provide their own nuanced view of the economy.

One of those metrics is the U-6 rate, a figure that includes more of the unemployed population than the U-3.

While the U-3 rate measures all unemployed workers as a percentage of the civilian labor force, the U-6 rate includes more. It's defined as all unemployed as well as "persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force."

That means the unemployed, the underemployed and the discouraged. While the U-6 rate has made substantial gains in the past years, it remains stubbornly at pre-recession levels.

The U-6 rate rose slightly to 9.8 percent in March. In the past few years, it's been more volatile than the U-3 rate. The U-6 is down 110 basis points over the past year, versus a 50 point drop in the U-3.

As unemployment rates have returned to more typical pre-recession levels, economists have focused on other job indicators such as labor participation and wages.

Despite the improvement that government statistics show, some economists think the real employment situation is much more dire. They point to the labor participation rate, which measures the portion of eligible Americans who are counted among the "labor force" in calculating the unemployment rate.

The participation rate fell dramatically since the recession, but economists don't agree on why. Some suggest that demographic shifts like the retiring baby boomers is the main cause while other worry that it's a more cyclical factors. In March, that figure rose a tenth of a percentage point to 63 percent.

The change in average wages is another area economists consider. Until recently, weekly and hourly wages had not seen much growth since the recession. It's hard to know which metric gives the best view of what's actually going on in the job market.

A rising participation rate paired with rising wages is a good sign for the economy. It means workers who were previously on the sidelines are getting back into the marketplace, possibly because they see improvement in the economy.

Increased competition for qualified job candidates out there means employers have to offer more in terms of salary and benefits. Average hourly earnings increased to $25.43 in March; weekly wages were at $874.79.

Market participants are taking special heed of the jobs reports in recent months as the Federal Reserve continues to debate on potential interest rate hikes later this year. Fed chair Janet Yellen has repeatedly said the committee is watching economic data for indications of how the economy could handle further rate increases.

The country added 215,000 jobs in March.