The new jobs report shows a faster-than-expected slowdown in the pace of job losses—247,000 were shed in July, when economists had expected 325,000—and an increase in hourly wages. So there is definitely good news to be had. But the New York Times' David Leonhardt points out that the topline number that is getting the most attention—the first decrease in unemployment since last April—is a statistical chimera hiding an actual increase in the total number of people without jobs:
The one thing that doesn't deserve much excitement is what will probably garner many of the headlines: the drop in the unemployment rate. It happened only because more people stopped looking for work and were thus ineligible to be counted as officially unemployed. The share of adults with jobs actually fell: to 59.4 percent, from 59.5 percent.
Those people who are conveniently "ineligible to be counted as officially unemployed" are also officially ineligible for unemployment benefits, which are beginning to run out across the nation as time runs out on the extensions included in the stimulus package. So we've managed to goose the employment numbers by cutting off benefits to people who don't have jobs and then denying that they exist. It's kind of like saying the cancer rate is dropping because once people die of cancer, they no longer count as having cancer.