Unemployment rate is 4.9 percent, but a more realistic rate is higher than that

Troy Harvey | Bloomberg | Getty Images

An Aflac representative, right, shakes hands with a job seeker during an Orange County Choice Career Fair in Santa Ana, California.

The national unemployment rate fell to 4.9 percent in October, the Labor Department said Friday. But relying on that one headline number as an indicator of the economy's direction ignores important information just below the surface.

Every month on "Jobs Friday," the Bureau of Labor Statistics releases a bunch of data, each point of which provides its own unique perspective on an aspect of the nation's employment situation. Economists look past the official unemployment rate — that 4.9 percent figure, also known as the "U-3" rate — to other metrics that give their own nuanced view of jobs in the country.

One of those figure is called the U-6 rate, which has a broader definition of what unemployment means. In October, that figure fell 0.2 of a point, to 9.5 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 a 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. While the U-6 has seen significant gains in the past few years, it remains stubbornly above prerecession levels.

Economists expected nonfarm payroll employment to increase by 175,000, according to Reuters. Reported job gains of 161,000 fell short that forecast, after private employers missed expectations in the ADP report, published Wednesday.

One area of concern in recent years has been 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 since the recession, likely due to demographic shifts like baby boomers retiring.

Some economists also think that workers are feeling discouraged and not actively seeking work. Others think there are more cyclical factors and even changes in the nature of the economy at work.

In October, the participation rate fell slightly, to 62.8 percent.

As more unemployed Americans find work and the labor market tightens, one may expect wages to rise as employers compete with each other to attract the remaining qualified job candidates. In recent months, wages have gained ground after years of tepid growth. But many economists have worried that many of the jobs being added are low-wage, low-skill positions.

In October, average hourly wages rose 10 cents to $25.92. Average weekly wages were up to $891.65.

The state of jobs has been an ongoing factor in the presidential election and this is the last jobs report before voters go to the polls on Tuesday. Both sides have seized on elements of recent jobs reports to support their view of the economy. Friday's report is likely to settle that disagreement, but economists don't expect it to change the dynamics of the race.

Democrat Hillary Clinton laid out a jobs plan focused on increasing spending for infrastructure and clean energy, as well as shoring up manufacturing. Republican Donald Trump as been less specific about jobs initiatives he would pursue. He has repeatedly criticized the Obama administration, claiming that it has allowed American companies to ship jobs overseas and has not done enough to create jobs at home.

With the 161,000 jobs added in October, the nation has netted nearly 10.9 million jobs since Obama took office. At this point in his tenure, that's around half the jobs added under Bill Clinton and a little less than those added during Ronald Reagan's presidency.