Jobs number: What's the real unemployment rate?

A store front window in Miami Beach.
Joe Raedle | Getty Images
A store front window in Miami Beach.

The national unemployment rate remained at 4.9 percent in August, the Labor Department reported Friday. But relying on that one headline number as an indicator of the economy's direction leaves out a lot of important information.

Each month on jobs day, the Bureau of Labor Statistics releases a ton of data, each point of which provides a unique perspective on the nation's employment situation. Most economists look past the official unemployment rate — that 4.9 percent figure, also know as the "U-3" number — to other metrics that provide their own views of the state of jobs.

One of those figures is something called the U-6 rate, which has a broader definition of what unemployment means. That figure remained unchanged in August, at 9.7 percent.

The official unemployment rate is defined as "total unemployed, 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 labor force, 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 in the past few months has returned to the prerecession levels that economists refer to as full employment. The U-6 rate has remained stubbornly above prerecession levels, though it has shown significant improvement in the past few years.

Market observers were watching this month's jobs report especially closely for evidence that would support the Fed to raise interest rates at their September meeting. Fed Chair Janet Yellen suggested last Friday in Jackson Hole, Wyoming, that with sustained improvements in the economy, interest rates would likely go up.

Economists expected 180,000 jobs added in August as evidence of that sustained growth. The report, however, found that the market added 151,000 jobs.

One area of concern in recent months has been the labor force participation rate, which measures what portion of the population is either employed or looking for work. The participation rate has fallen since the recession, largely because of demographic shifts such as baby boomers retiring. Some economists think workers are still feeling discouraged and are not actively seeking work. Others think it's more cyclical factors or changes in the economy.

In August, the participation rate remained unchanged at 62.8 percent.

As the labor market tightens and more people find work, one may expect wages to rise as employers compete with each other to attract the remaining qualified candidates. In recent months, wages have in fact been increasing after a few years of tepid growth. Economists have worried that many of the jobs being added are low-wage, low-skilled positions. A recent study by Harvard economists suggested, however, that such jobs may still be a positive for the economy.

In August, average hourly wages rose to $25.73. Average weekly wages were at $882.54.

The employment situation is bound to be a factor in the presidential election. Democrat Hillary Clinton began laying out her jobs plan in recent weeks, calling for increased spending in infrastructure programs.

Republican Donald Trump has repeatedly criticized the Obama administration, claiming it has allowed American companies to ship jobs overseas and has not done enough to create growth at home.

With the 151,000 jobs added in August, the nation has netted more than 10.5 million jobs since President Barack Obama took office. At this point in his tenure, that's around half the jobs added during Bill Clinton's presidency and a little less than those added under Ronald Reagan.