Source: Flickr user Nicola Jones.

The U.S. economy may aptly be described as a work in progress, but a majority of economic data suggests it's gathering steam.

According to the most recent employment report from the U.S. Labor Department, the U.S. economy added 223,000 jobs in April, pushing the unemployment rate down to 5.4% -- its lowest level since May 2008 and a sharp fall from the 10% unemployment rate where it peaked following the Great Recession. A rebounding economy and record-low lending rates have encouraged businesses to take advantage of loans that can be used to expand their reach and their labor force. Corresponding increases in corporate profits within the S&P 500 imply that the Federal Reserve's strategy is working.

But sometimes you have to dig a bit deeper to get the full story behind economic data.

The Federal Reserve's annual data dump
Earlier this week, the Federal Reserve released its Report on the Economic Well-Being of U.S. Households for 2014, a nearly 100-page, data-filled report on the economic health of Americans. This report examined individuals' housing arrangements, access to credit, saving and spending habits, education and student loans, retirement planning, and overall well-being.

Some of the findings were as expected. Homeowners are again feeling confident about the long-term value of their homes, and a majority of consumers say they either have access to credit or believe they'll have access to credit should they need it.

However, a few of the findings were a bit surprising. Many individuals reported that they aren't planning or saving for retirement. One would hope that the 2007-2009 stock market crash would have encouraged people to save for their retirement, but that doesn't appear to be the case.

The fallacy of our nation's unemployment rate
But the crème de la crème of shocks came in the form of a new question posed to American workers in the latest survey. The question read as follows: "Would you prefer to work more, less, or about the same amount as you currently work at your current wage?"

Respondents were allowed to choose one of three answers -- work more hours, work the same number of hours, or work less -- and were categorized based on their work status. You can see the results below.

Source: Report on the Economic Well-Being of U.S. Households. 

Remarkably, 34% of full-time workers would prefer to work more hours at their current wage. This percentage was even more pronounced among part-timers, where 49% were willing to work more for the same wage. In fact, only retirees with a job demonstrated a marked aversion to increasing their work hours at their current wage.

This data tell us that a significant number of respondents are willing to work more without a wage increase, suggesting that underemployment is still rampant throughout the labor market.

Underemployment is a term used to describe a worker who is qualified for a more skilled and potentially higher-paying job but who, due to some economic circumstances, is unable to land a "better" job. It also refers to individuals who are currently working part-time but would prefer to be working full-time. The implication here is that either there aren't enough opportunities for these underemployed individuals or the risk of seeking a better job or asking for more pay is simply too great.

With 49% of part-time respondents saying they'd like to work more, there's certainly more to the headline 5.4% unemployment figure than meets the eye.

Source: Flickr user Tim.

What's really wrong with the labor force?
One of the biggest "risks" for the underemployed, and the one that could be most responsible for keeping people "stuck" in their jobs, is the lack of real wage growth.

Although average hourly earnings rose 2.2% on a year-over-year basis, real wage growth -- i.e., the actual wage growth workers experience when factoring in inflation -- is minimal. Data from the Pew Research Center between 1964 and 2014 shows that despite a 727% increase in nominal hourly wages, the real wage has increased by just 7.8% over that time. A lack of wage growth can make it tough for workers to get ahead, and it can definitely restrict their ability to switch jobs.

Another point here is that businesses simply don't have any incentive to offer workers a big raise. It's clear from the Federal Reserve's data that workers are willing to work more hours at their current wage, rather than run the risk of seeking a job more commensurate with their skills and/or experience. This plays right into the hands of employers, who can get away with simply raising wages on par with inflation.

Couple the tight wage environment with a workforce that isn't prepared to think about retirement and is struggling to pay off $1.2 trillion in student loan debts, and it's no wonder Americans aren't saving enough. Having little or no emergency savings or retirement savings can minimize a worker's opportunities to make career changes; leaving a steady job could mean eating through what little reserves a worker has.

Source: Federal Reserve Bank of New York via Facebook.

What to watch
If you've been curious about why Fed chairperson Janet Yellen hasn't been quick to begin raising the federal funds target rate, the answer has to do with the intangibles in the unemployment rate that simply can't be calculated by a headline number.

As investors, we all understand the impact the Federal Reserve can have on the stock market and our lives. Rising interest rates will likely curb businesses' desire to borrow and expand, which could reduce job opportunities for the unemployed and the underemployed. Thus the Fed, on one hand, would like to keep lending rates near record lows for as long as reasonable. Of course, keeping rates artificially low could, in effect, lead to an asset bubble or rising levels of inflation, fueled by historically low lending rates.

The Fed must walk a fine line to ensure that the U.S. economy is growing and that employment opportunities are growing with it. While the U.S. economy appears healthy, the U.S. labor force could certainly use some work. Watch this situation carefully, as a lack of improvement in underemployment in future years could spell trouble for investors.