First the good news: According to the U.S. Department of Labor Statistics, the November jobless rate fell to 10%, a 0.2% improvement over October, when unemployment hit its highest level since 1983. Better yet, according to the Kronos Retail Labor Index, 3.87% percent of job applications currently lead to a hiring. This is the highest percentage in over a year.

The trouble is, those numbers translate into an economy in which 1 in 10 people is still out of work and 96.13% of job applications end up in the trash. What's more, even the healthy economic bounce that Kronos is reporting is likely the result of the roughly 600,000 seasonal jobs that The Wall Street Journal has predicted for this year. The retail sector has shed 850,000 jobs since 2007, which means that this temporary jump still represents a net loss of a quarter million paychecks.
And here's the kicker: Many seasonal retail jobs are being filled by people who previously worked in higher-paying sectors.

On the bright side, the influx of former bankers, brokers, mid-level managers and other skilled professionals means that retail stores will be able to fill their staff positions with massively overqualified employees. Thus, instead of a bored teenager behind the counter at Bed, Bath and Beyond (BBBY), customers may be able to get advice from a former interior decorator; and Home Depot customers (HD) may be able to talk to a real contractor.

However, while a boon for consumers, the intense competition for holiday jobs draws a larger problem into stark relief. As horrible as the unemployment crisis may be, there's a larger, potentially more threatening crisis: underemployment.

The U.S. Bureau of Labor Statistics refers to underemployment as "U-6," and has been keeping track of the statistic since 1994. Basically, U-6 combines the official unemployment numbers, or "U-3," with "discouraged workers" who are no longer looking for jobs, "marginally attached workers" who want more formal employment, and part-time workers who are in search of full-time employment.

While the government's U-3 statistics are dire, the U-6 measure indicates a job market that is artificially inflated. While U-3 is currently at 10%, U-6 is at 17.5%, the highest number in its history. Ultimately, however, even this statistic might be optimistic: U-6 addresses job security and number of hours worked, but it doesn't account for the thousands of workers who have grabbed jobs that are far below their education level or degree of expertise. Unfortunately, there doesn't seem to be a way to accurately measure the massive brain drain from the country's economy, specifically its manufacturing, construction, and service sectors, none of which are likely to recover anytime soon.

Beyond this, the massive underemployment numbers point to a shift in the types of jobs that are available. Although the latest unemployment statistics suggest that the crisis may be easing, they -- much like the seasonal hirings -- largely represent a fresh influx of temp jobs. On the bright side, this means that a lot of formerly-unemployed people are no longer drawing unemployment benefits; on the downside, their move from large, steady paychecks with lots of disposable income to small, insecure paychecks means that they aren't putting much money back into the economy.

This is particularly clear in manufacturing, which seems to be in free-fall. According to the St. Louis Fed, the number of people employed in manufacturing today is roughly the same as in 1940. While part of this is due to the overall decline of manufacturing in the United States, its worth noting that, following the 2001 recession, manufacturing jobs continued to decline. After previous recessions, there was a boost in manufacturing, which translated into a net increase for the sector.

As my colleague Dan Burrows recently pointed out, this has led to some dire scenarios, including a peak unemployment of 13% in 2011; even the brightest scenarios don't have us returning to our normal 5% unemployment until 2020.