Art Laffer, former economic adviser to Ronald Reagan, responded to the latest unemployment report this morning and weighed in on Gallup CEO Jim Clifton's argument that the Obama administration's unemployment figures are a "big lie."

Just this morning, the Labor Department released the January jobs numbers, with 257,000 jobs added and a slight uptick in the unemployment rate to 5.7%. 

In an article this week, Clifton called the claims of a steadily declining unemployment rate "extremely misleading."

He wrote:

Right now, we're hearing much celebrating from the media, the White House and Wall Street about how unemployment is "down" to 5.6%. The cheerleading for this number is deafening. The media loves a comeback story, the White House wants to score political points and Wall Street would like you to stay in the market.

None of them will tell you this: If you, a family member or anyone is unemployed and has subsequently given up on finding a job -- if you are so hopelessly out of work that you've stopped looking over the past four weeks -- the Department of Labor doesn't count you as unemployed. That's right. While you are as unemployed as one can possibly be, and tragically may never find work again, you are not counted in the figure we see relentlessly in the news -- currently 5.6%. Right now, as many as 30 million Americans are either out of work or severely underemployed. Trust me, the vast majority of them aren't throwing parties to toast "falling" unemployment.

There's another reason why the official rate is misleading. Say you're an out-of-work engineer or healthcare worker or construction worker or retail manager: If you perform a minimum of one hour of work in a week and are paid at least $20 -- maybe someone pays you to mow their lawn -- you're not officially counted as unemployed in the much-reported 5.6%. Few Americans know this.

Clifton said that Gallup found the number of Americans who work 30+ hours a week and have a regular paycheck is now down to only 44%. 

Laffer said he disagrees with Clifton using the word "lie" because it turns the conversation into a battle. 

But he said Clifton is absolutely correct that Americans need to understand how the employment figures are actually being calculated by the Labor Department. 

The real unemployment rate, which factors in those who have stopped looking for work, is at 11.3%.

Laffer said the jobs numbers are "improving," but they still represent a "tragic non-recovery" for the U.S. economy.

"When we were in office in the 80s, we were creating way more jobs than this guy is creating. It was much better for the economy," he said.

Laffer agreed with Clifton that at least 10 million new jobs are needed to restore the American middle class.

Watch his analysis above and Clifton's discussion with Bill Hemmer below.