As Becket reported this morning, the U.S. unemployment rate fell to 6.7% in December after employers added just 74,000 jobs. Added jobs, falling unemployment? Sounds great, right?

Not so fast.

The Federalist’s Sean Davis explains how we have labor force dropouts to thank:

Yes, the unemployment rate has fallen significantly from its high of 10 percent in October of 2009. But it turns out the unemployment rate has been falling for a pretty depressing reason: people dropping out of the labor force. Last month, 347,000 workers dropped out, effectively sending the message that it wasn’t even worth looking for work anymore.

Here’s what the unemployment rate would look like if the labor force participation rate — basically the number of people in the economy working or looking for work — had remained constant since June of 2009:

The falling unemployment rate explained in one handy chart