The Bureau of Labor Sta­tis­tics today released a report sum­ma­riz­ing the state of the econ­o­my for the just end­ed month of Novem­ber. Turns out our nation’s unem­ploy­ment rate has gone down. Here’s Bloomberg with more details:

Job gains in the U.S. picked up last month and the unem­ploy­ment rate unex­pect­ed­ly fell to the low­est lev­el since March 2009, a decline aug­ment­ed by the depar­ture of Amer­i­cans from the labor force.

Pay­rolls climbed 120,000, after a revised 100,000 increase in Octo­ber, with more than half the hir­ing com­ing from retail­ers and tem­po­rary help agen­cies, Labor Depart­ment fig­ures showed today in Wash­ing­ton. The medi­an esti­mate in a Bloomberg News sur­vey called for a 125,000 gain. The job­less rate declined to 8.6 per­cent from 9 percent.

At a media event in the Dis­trict of Colum­bia with his pre­de­ces­sor Bill Clin­ton, Pres­i­dent Barack Oba­ma cheered the report.

“This morn­ing we learned that our econ­o­my added anoth­er 140,000 pri­vate sec­tor jobs in Novem­ber,” the Pres­i­dent said. “The unem­ploy­ment rate went down. And despite some strong head­winds this year, the Amer­i­can econ­o­my has now cre­at­ed in the pri­vate sec­tor jobs for the past twen­ty-one months in a row; that’s near­ly three mil­lion new jobs in all, and more than half a mil­lion over the last four months.”

“The poli­cies this admin­is­tra­tion has pur­sued are adding jobs back into the econ­o­my, and our recov­ery is pick­ing up steam,” added Oba­ma’s Sec­re­tary of Labor, Hil­da Solis. “In Novem­ber, Amer­i­can com­pa­nies increased hir­ing across vir­tu­al­ly all regions and all sec­tors to keep pace with grow­ing con­sumer con­sump­tion and demand. Last week we saw peo­ple talk with their wallets.”

“One week after soar­ing Black Fri­day spend­ing, we are see­ing job growth firm­ly in the black head­ing into the holidays.”

On the sur­face, it would seem that the Pres­i­dent and his team are cor­rect that this is very good news we should all be heart­ened by. But a clos­er look at the report sug­gests the employ­ment sit­u­a­tion may not be as rosy as it seems.

Respect­ed Uni­ver­si­ty of Ore­gon econ­o­mist Mark Thoma, who writes the wide­ly read (and Pacif­ic NW Por­tal syn­di­cat­ed) blog Econ­o­mist’s View, has pub­lished a more com­pre­hen­sive reac­tion to the report.

Here’s an excerpt from his analy­sis, which we rec­om­mend read­ing in full:

First, note that depend­ing upon which esti­mates you look at, it takes from 90,000–125,000 jobs just to keep up with the growth in the pop­u­la­tion. Thus, the 120,000 jobs that were cre­at­ed in Novem­ber is enough to keep the unem­ploy­ment rate from going up, but it is not enough by itself to absorb all the new work­ers enter­ing the labor force and at the same time reduce the frac­tion of peo­ple that are cur­rent­ly unem­ployed. So the fall in the unem­ploy­ment rate can­not be attrib­uted to robust job growth.

Sec­ond, the report shows a decline in the labor force of 315,000 for Novem­ber, and about half of the decline is attrib­uted to dis­cour­aged work­ers giv­ing up the search for a job. This exit of work­ers rather than job cre­ation is the main source of the fall in the unem­ploy­ment rate, and since so much of it is from dis­cour­aged work­ers this is not an encour­ag­ing devel­op­ment. Note, how­ev­er, that there is a lot of month to month vari­abil­i­ty in the labor force par­tic­i­pa­tion num­bers, and some of this may sim­ply be month to month noise in the measurement.

These are both impor­tant points, par­tic­u­lar­ly the sec­ond one. Many (if not most) Amer­i­cans are unaware that peo­ple who would like a job — but have giv­en up on the job search for the time being — are not count­ed in the unem­ploy­ment rate. (These are the dis­cour­aged work­ers Thoma is refer­ring to.)

Also not count­ed are under­em­ployed work­ers: those who would like to find full-time jobs but can’t, so they are stuck work­ing part-time jobs.

So it’s prob­a­ble that the unem­ploy­ment rate is under­stat­ing the true lev­el of unem­ploy­ment. Now, that said, there are some pos­i­tive trends in the Bureau of Labor Sta­tis­tics’ report — for instance, the num­ber of peo­ple work­ing in con­struc­tion increased, and employ­ment in the man­u­fac­tur­ing sec­tor held steady. We can cer­tain­ly be hap­py about that. But we’re hard­ly out of the woods yet, as one ana­lyst stressed to Bloomberg Businessweek.

“It’s good news, not great news,” said Nari­man Behravesh, chief econ­o­mist at IHS Inc. in Lex­ing­ton, Mass­a­chu­setts, whose fore­cast matched the sur­vey medi­an. “The labor mar­ket is grad­u­al­ly healing.”

That seems like a pret­ty accu­rate assess­ment of where we’re at.

Let’s hope that dur­ing this hol­i­day sea­son, doors begin to open up for as many of those dis­cour­aged work­ers as pos­si­ble, so they can rejoin the labor force and help bol­ster Amer­i­ca’s eco­nom­ic security.

POSTSCRIPT: Dean Bak­er has more analy­sis at CEPR’s site. And Robert Reich has some thoughts that are worth read­ing as well.