New Jersey is on pace to create more jobs in 2012 than in any year since 2000, but the state's unemployment rate is still near 10%. How does this make sense?

One economist says nobody can answer that question.

The State Department of Labor and Workforce Development's latest unemployment figures released last week show the rate rose in July from 9.6% to 9.8%. This marks the 38th consecutive month that the Garden State's jobless rate has been at or above 9%. The last time the rate was higher than it is now was April of 1977 when it was 9.9%.

"The unemployment rate behaves in a funny fashion," says Rutgers economist Jim Hughes. "Sometimes it goes against the payroll employment data and sometimes it's consistent with it. We've had the comeback in jobs, but the unemployment rate still remains high."

The same thing is happening in New York City which is seeing a stronger job comeback than New Jersey, but its unemployment rate is in double digits.

Hughes says New Yorkers are ranting about the statistics and why is the unemployment rate so different from the basic job data.

Hughes admits, "Nobody has the answer."

"We've had a saw tooth pattern this year (in New Jersey)," explains Hughes. "We added 7,400 hundred jobs in February and then in March we lost 7,300. You have to use a lot of caution in making month-to-month individual short-term comparisons. It's better to use either over the year or what has happened so far this year……You get some strange months mixed in so, it's never a smooth even trajectory."

Put simply, the unemployment rate is the number of people looking for work divided by the total number of people in the labor force. Using available information, jobless estimates are revised monthly and yearly.

Calculating the jobless rate is not an exact science. There's no differentiation between full-time and part-time jobs. People who are underemployed are not taken into account. People working in jobs for which they are overqualified because they can't find a good job are also not factored in. The unemployment rate can't tell how many people have become discouraged in their job search so they've given up hope of finding a job.

Hughes says the best data source on the direction of the state's economy is the monthly payroll employment data which are job reports done by employers. He says the unemployment numbers aren't as reliable.