The number of people applying for state unemployment benefits for the first time has fallen sharply over the past week. In the week ending February 20, a total of 730,000 new applications were made, the Department of Labor reported.

The unemployment rate has also fallen, falling to 6.3% in January.

Signs of improvement in the labor market could give the impression that the economy is gaining strength as vaccinations against Covid-19 increase. However, experts caution that focusing on just one metric – like overall unemployment rate – won’t tell the full story.

“It doesn’t fully tell you what the labor pains are,” said Rebecca Dixon, executive director of the National Employment Law Project. “It only tells you about people who have been actively available and looking for work in the past four weeks.

“They don’t count there for people who have been discouraged and given up,” she said. “And it won’t count the people whose hours have been reduced and who work part-time because that’s all they have at their disposal.”

The Bureau of Labor Statistics also has a history of “misclassification errors” in which workers are mistakenly counted as employed rather than unemployed.

For example, in the May 2020 Labor Report, without this type of error, the unemployment rate would have been closer to 16.3%, a big difference from the reported rate of 13.3%.

Watch the video to find out what happened and how you can look at the data for a more complete picture of US unemployment

Subscribe to CNBC PRO for exclusive insights and analysis as well as live business day programs from around the world.