The April jobs report comes out Friday, and economists expect that employers added a seasonally adjusted 205,000 jobs in the month and the unemployment rate held steady at 5%.

SOMETHING weird is happening in the unemployment statistics. Weird in an unhelpful way.

The unemployment rate used to tell us more than just the percentage of people looking for a job. For a long time you could also rely on it to tell you a consistent story about underemployment — people who do have a job but want more hours.

The relationship used to be simple. Underemployment was a couple of points higher than unemployment. But that seems to have suddenly changed and it sends a frightening message about the economy.

The difference between them is a little hard to spot just by looking so this next graph shows it. For the last decade it hovered round two per cent. Now it has shot up to a record high of 2.6 per cent and stayed there.

This matters because a lot of people use the unemployment rate as a measure of what is really happening in the labour market. If it goes up, they say things are getting worse, if it goes down, they say things are getting better.

But now we know things are bad — lots of people still want more work — but the unemployment rate seems to be just sitting there, even falling a tiny bit and not giving much of a hint about what’s happening. (Unemployment is measured by an international standard that says if you work for at least one hour in the previous week you are counted as being employed.)

What you wouldn’t know if you only followed the unemployment rate is that hours worked in the labour market have had a massive tumble.

While hours worked does sometimes fall, the red section in the graph above is the biggest since the GFC. And because it is sustained over several months we can be pretty sure it is not just a statistical blip.

Now, falling hours can be seen as a good thing in some circumstances. If the organisation you work for has the choice of cutting your hours or sacking you, cutting your hours is probably better. So this is not a bad thing in and of itself. But it is a sign things are not too rosy in the economy.

The final nail in the coffin is wages. They are in a bad way. A year ago the Reserve Bank published a big research paper on the fact wages growth was surprisingly low. Since then it has got worse.

Wages growth is the lowest it has been in years. The Reserve Bank published the chart below last year.

Since they published that chart, unemployment has improved but — so far — wages haven’t. That’s probably because the unemployment rate isn’t showing us the whole story any more.

The lesson of all of this is we now need to focus on more than the unemployment rate. And we should be sceptical of anyone who says a falling unemployment rate means things are going well.

Jason Murphy is an economist. He publishes the blog Thomas The Think Engine. Follow him on Twitter @jasemurphy.