Do The January Jobless Numbers Tell The Whole Story?

The January unemployment numbers are out and at first look the fall in the 'official' unemployment rate – 9.7% - appears to be a signal that things may be getting better. But the fly in the ointment is the loss of an additional 20,000 jobs.

So how is it that even though more jobs have been lost, the unemployment rate has fallen? Businesses haven't been hiring, so it isn't that the unemployed have necessarily found new jobs (though 11,000 new jobs were reported). Could some of the reason for the fall in the jobless rate be because a number of unemployed have stopped looking for work that isn't there, dropping off the unemployment rolls? They are no longer counted but they're still unemployed. Others have taken part-time or temporary jobs outside their usual professions, further distorting the numbers.

Some tout the lower unemployment rate as proof the economy is improving, but there are others saying the numbers aren't reflecting the real job situation.

John Silvia, chief economist at Wells Fargo, said the drop in the unemployment rate wasn't a result of a shrinking labor force, which has held the rate down in previous months.

"It simply was, people found jobs," he said. The report is "consistent with continued improvement in the labor market."

But Paul Ashworth, an economist at Capital Economics, noted that the economy has been growing for six months, yet company payrolls are still shrinking.

"Based on what we've seen so far, we think it is fair to characterize this as another jobless recovery," Ashworth said.

Left behind are people like Aimee Brittain, 31, who said she can't get employers to return her calls. She's hunting for work as a secretary after being laid off from a commercial real estate firm near her home in suburban Atlanta.

"I'm fighting against people with master's degrees for receptionist jobs," Brittain said. "I can't compete."

How many of the 11,000 new jobs were taken by people in the same position as Brittain? How many will be relegated to jobs outside their areas of expertise, with wages well below what they made before? Unless those questions are answered then the state of the economy will not be accurately reflected by the unemployment rate.