Discouraged workers add to the cloud over the labor market.

The fall in the unemployment rate by nearly a full percentage point in July might seem to be unalloyed good news, a sign job seekers may soon be able to find a position.

Dig a little deeper and the picture isn’t so bright.

The Labor Department’s U-6 measure, which includes discouraged workers who have given up the search for work as well as those who are in part-time jobs because they can’t find full-time positions, stands at 16.5 percent, seasonally adjusted.

The U-6 figure has come down from 22.8 percent in April. Still, the U-6 is among a series of data points that underscore just how difficult the labor market remains for those out of work.

Even as employers added 1.8 million jobs last month, the Labor Department reported Thursday that nearly 1.2 million workers filed initial claims for state unemployment benefits. It was the 20th week in a row that the figure topped one million.

“The rate of churn in the labor market remains incredibly high,” concluded Morgan Stanley’s economics team. In plain English, that means millions of workers are finding a job only to be fired soon afterward, or being let go permanently after assuming a layoff was temporary.

“I think the U-6 is a better indicator of the job market than the 10 percent unemployment rate,” said Beth Ann Bovino, chief U.S. economist at S&P Global. “The traditional unemployment rate doesn’t capture what’s happening on the ground.”

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