The reported unemployment rate measures the ratio of unemployed workers seeking work relative to the size of the workforce. So what happens when the size of the workforce shrinks to historic lows? You get a small dip in the unemployment rate.

As this chart (via Zero Hedge) demonstrates, America’s workforce continues shrink as unemployed workers give up on finding jobs:

This one chart explains dip in unemployment rate

Does today’s dip in the unemployment rate mean our economy is on the right track? That’s the argument President Obama and his campaign are sure to make. But the labor force participation rate – which has fallen precipitously from 66.1 percent in 2008 to 63.5 percent today – tells a different story.

The median family income in America has dropped 8% since Obama took office.

The nation’s real unemployment rate remains near 11%.

The percentage of college graduates who can’t find work now exceeds 50%.

The U.S. birthrate has even declined as young Americans struggle to get established.

The number of workers settling for part-time work rose 7.5% last month to 8.6 million.

Clearly, the unemployment rate is not telling the whole story.

To add insult to injury, the United States added 114,000 jobs in September. Cause for celebration? Hardly: With just 1/10th of the population of the United States, Canada added 52,000 jobs last month. If the United States economy created jobs at a rate on par with Canada’s economy, we would’ve created about 480,000 jobs last month, not 114,000.

If this is what moving “forward” looks like in America nowadays, we’re in serious trouble.