Unemployment fell in the past two months, which looks like good news. But economists say the figures are misleading. They don't reflect rising...

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Unemployment fell in the past two months, which looks like good news. But economists say the figures are misleading.

They don’t reflect rising numbers of people who want full-time work but stopped looking, or who settled for part-time jobs because they couldn’t find full-time employment.

These categories are excluded from the headline unemployment rate. In recent months, the gap between the different perspectives has widened.

Economists expect today’s Bureau of Labor Statistics report on the March unemployment rate will rise to 5 percent, from February’s 4.8 percent, which would return the spread to more normal levels.

If discouraged workers, as defined by the government, were included, February unemployment would rise to 5.1 percent.

Adding “marginally attached” workers — discouraged workers and those who stopped job hunting for personal reasons — lifts the rate to 5.8 percent.

Including those who settled for part-time jobs lifts it to 8.9 percent. Merrill Lynch economist David Rosenberg says the part-time metric reflects the true health of the labor market.

The government doesn’t consider “marginally attached” workers “discouraged,” but Global Insight Chief U.S. Economist Nigel Gault says this category shouldn’t be dismissed.

“In the late 1990s, a lot of these people were pulled in because the job market was very strong,” he says.

While the other measures typically exceed the headline unemployment rate, Gault says it’s unusual to see the gap widen at the start of a recession, which he thinks we’re in now.

“What you would expect to see is the actual unemployment rate getting worse, people finding it harder and harder to get work and then eventually giving up,” he says.

In today’s report, he expects the headline rate to catch up.