Every month, attention focuses on released unemployment rate data as a hopeful signal of economic recovery. Unfortunately, this data is consistently misleading. Nobody should have any illusion that it measures objective reality about jobs, income or immediate signs of recovery.

A recent announcement by the U.S. Department of Labor that America's jobless rate was 10 percent is a case in point.  While some took comfort that the rate dipped from 10.1 percent, the decline was not because of a new economic boom. It was because 2 million Americans totally gave up and dropped out of the work force over the past several months.  If those unemployed who are no longer searching for jobs had remained in the work force, the announced unemployment rate would have exceeded 11 percent.

Basically, America now has a worker reserve. Even if recovery takes hold, those now in the reserve could suddenly seek employment, and the unemployment rate would remain high.

Dissecting the numbers, one finds disturbing results.  Combining those relegated to part-time with those who gave up looking for work, the jobless rate zooms to 17.3 percent.  This is even more stark for the young.  The unemployment rate for those of age 20-24 is 15.6 percent and the rate for teen-agers is 27.1 percent.  The share of jobless Americans out of work over six months is a record 39.8 percent.   

There are business-related reasons why economic recovery does not immediately translate into employment.  Employers are working off unsold inventory, and for niche shortages, overtime is used to avoid obligations incurred by the hiring of new employees.  Part-time or temporary workers are also used for that purpose.

In addition, the overall economy has suffered a massive drop in purchasing due to an average of over 60,000 jobs lost each month during 2009.  People are cutting corners, stretching dollars, and not buying new goods due to income shrinkage.  Many firms do not believe that economy recovery will occur and are simply hunkering down in a survival mode or relying on reselling imported stuff.

As I have noted previously, the meaning of unemployment can also be subject to misinterpretation.  Basically, a job is counted as a job, even if a worker who lost a union job with benefits picked up a part-time job at minimum wage.  Obviously, this creates two quite different incomes and two different impacts on the economy.  Since jobs in West Virginia are migrating toward part-time and/or minimum wage work at the expense of manufacturing and mining, the economy is sliding downward, even though this is not reflected in the unemployment rate.  Many cannot live on their meager incomes even when employed.

The bankruptcy surge is also worth noting.  According to a recent Associated Press story, "bankruptcy filings in West Virginia rose 27 percent in 2009."  The rate in the northern part of the state, with more heavy industry, was 40 percent.  People emerging from bankruptcy are not likely to be prime candidates for increased spending.

As we know, the administration has invested borrowed dollars and extensive political capital in the economic recovery effort.  Entities that received recovery dollars must submit quarterly reports on expenditures and employment directly to FederalReporting.gov, which generates public press releases about created jobs.  

The question remains whether stimulus funds will, in fact, be a catalyst to jump-start economic activity or whether the funds will cause a bubble, then further economic shock after usage is depleted.  The latter seems to be a concern in West Virginia, as stimulus funds are currently used to backfill the government budget.  Sizeable shortfalls are predicted for 2012 when those funds are no longer available.

The process of economic recovery is fundamentally simple.  People need to make what others want and need.  People need to have income to purchase what they want and need.  Real unemployment rates that are at record levels and existing jobs that generate less income contribute to reduced demand for domestically produced goods and services.  Creating more demand under these circumstances is a challenge that must be addressed.

David, a WVU-Tech professor, is a Gazette contributing columnist.