What the government is doing is -- reducing the job universe in that there are fewer jobs, therefore the percentage of unemployed drop. For instance, when a company down sizes they eliminate positions that they do not plan on keeping. This reduces the number of jobs people can compete for.
In addition, the government doesn't count people "not looking for work" and they don't count people that have just lost their unemployment benefits. And they do not count people working part time that are attempting to find a full time job. So, if you are mowing lawns and have a paper route you are employed in the eyes of the government.
As far as the job universe is considered lets say there are 10 jobs and 10 people looking for a job. That equals 100 percent unemployment. Now the government comes out and says there now only 8 jobs available (perhaps a company shut down operations). The effective unemployment rate then drops to 80 percent unemployment because there are 10 people looking but only 8 jobs available.