So why is a drop in the jobless rate not always a good thing?

Or why is an increase in the jobless rate not always a bad thing? A lot depends on the number of people entering and leaving the job market. If you stop looking for work out of frustration, you're not included in the jobless count, even though you still don't have work. Chapman University economist Esmael Adibi explains the math to the OC Register:

"Let's assume we have 100 people in the labor force with 91 employed and 9 unemployed. Your unemployment rate will obviously be 9%. If one of the unemployed becomes discouraged and leaves the labor force, then the numerator will become 8 and the denominator will become 99. As a result, the unemployment rate goes down to 8.1%. So the subtraction is done on both numerator and denominator, not just denominator."

L.A. County's unemployment rate increased to 13 percent in December, but that could be due to additional folks looking for work. Or not. This is one reason why a single number can be so misleading in judging where the economy is headed.