Monday, May 6, 2013 – 11:45 a.m.

Last Friday’s release of the April employment report by the U.S. Department of Labor (DOL) is somewhat curious.

The much followed official unemployment rate (U-3) fell from 7.6% to 7.5%.

A paltry 165,000 jobs were allegedly created. The DOL also revised upward the job creation numbers for February and March. After the announcement, the oceans parted and rainbows filled the sky. No one wanted to talk about the fact that consensus estimate of 143,000 was dramatically lowered the previous week.

But the underlying facts paint a different view of what’s really occurring.

Since 2008, some 9.5 million people have left the workforce. The labor force participation rate is stuck at a very low 63.3%. The main reason the unemployment rate has dropped appears to be due to the DOL routinely adjusting the active workforce number downward.

The troubling issue is the underemployment, or real unemployment rate (U-6). The rate that takes into account discouraged workers, workers who have left the workforce and workers employed part-time, but who are seeking full-time employment.

The underemployment rate (U-6) climbed from 13.8% to 13.9% in April.

As the Affordable Healthcare Act, otherwise known as ObamaCare, forces primarily service businesses to cut workers from full-time to a maximum 28-hour work week, in order to avoid providing benefits and paying penalties for not doing so, expect the U-6 rate to climb, and the U-3 rate to fall modestly.