Here's the real unemployment rate

  • The official unemployment rate dropped to 4.4 percent, its lowest level since May 2007.
  • But the 'U-6' rate declined slightly to just 8.6 percent.

The national unemployment rate fell to 4.4 percent in April, the Labor Department said 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 4.4 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 April, that number fell three-tenths of a point to 8.6 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 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 improvement in that time, but still remains higher than before the recession.

Nonfarm payrolls increased by 211,000 jobs in April, beating estimates of 185,000. Hopes were high for a month of solid gains after the nation added just 79,000 jobs in March, a figure that was revised down on Friday. Economists attributed that anemic number to warmer than average weather in January and February, which moved up hiring plans for some industries.

Unemployment rates aren't the only useful measure of the job situation. For one thing, those numbers can seem artificially low if fewer Americans are working or trying to find a job. 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 demographic 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 April, the participation rate edged down to 62.9 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.

Average hourly wages rose to $26.19 in April. That's a 2.5 percent increase from a year ago, but some economists expect that to get to 3 percent by the end of the year. Average weekly wages rose more than $5 to $900.94.

According to a private-sector report released Wednesday, service industries drove growth in April. The ADP report, a sort of preview to the official jobs report, showed that job growth in goods-producing industries had fallen somewhat after three months of strong gains.

Leisure and hospitality gained 55,000 jobs, the highest among industries according to the Friday report. Education and health services, professional services and finance also posted solid gains. The nation added 6,000 manufacturing jobs and 5,000 in construction.