Garden State loses 1,800 net jobs but unemployment rate falls slightly

In yet another sign that the unemployment rate is a totally meaningless statistic in the real world, New Jersey's unemployment rate fell slightly in October to 9.7 percent from September's 9.8 percent.

The interesting thing about this is that both employment and unemployment fell. The state shed 4,400 private sector jobs and gained 2,600 government jobs. Maybe my arithmetic skills are falling off with old age, but according to my calculations that adds up to a net loss of 1,800 jobs.

So how can the unemployment rate fall? There are several possible explanations, one of which is more likely than the others.

1. The population declined. I strongly doubt that this is the case. If anything, New Jersey's population would be expected to rise in times like these as kids move home to good ol' Jersey from their expensive digs in Manhattan and return from Vegas adventures gone bust. (Plenty of New Jerseyans moved to Vegas back in the boom days.)
2. A lot of people got new jobs in New York or Pennsylvania. This seems highly unlikely. New York and Pennsylvania are experiencing their own problems.
3. A ton of people stopped looking for work. You're not counted as unemployed when you become a "discouraged worker." Unfortunately, being a discouraged worker doesn't pay the bills as well as an unemployment check or a job.

Those are pretty much the choices in explaining how both unemployment and employment can fall in a state. I'm going to engage in a bit of wild speculation and say that the most likely reason is the third one.