The Bureau of Labor Statistics (BLS) reported that there were 263,000 jobs created in November, which was stronger than expectations of 200,000 job gains. Revisions to the data from September and October cut 23,000 jobs in those months combined. The unemployment rate held steady at 3.7%.

What’s the bottom line? While the headline job growth number appears strong, this figure is not what it seems.

There are two reports within the Jobs Report and there is a fundamental difference between them. The Business Survey is where the headline job number comes from and it's based predominately on modeling. The Household Survey, where the Unemployment Rate comes from, is done by actual phone calls to 60,000 homes.

The Household Survey also has a job loss or creation component, and it showed there were 138,000 job losses, which is a pretty big disparity from the headline number of 263,000 job gains. The Household Survey also showed that the labor force decreased by 186,000. As a result, the unemployment rate remained the same – but for the wrong reasons. It was not due to strong job growth, but rather more people leaving the labor force than job losses.