You can be losing fat while gaining muscle. Net lbs stay the same, but the circumference of your arms/legs/stomach/hips will be shrinking, and the fat % (if you

You can be losing fat while gaining muscle. Net lbs stay the same, but the circumference of your arms/legs/stomach/hips will be shrinking, and the fat % (if you have a scale that reports that) will be reporting a noisy-but-changing value.