Amprobe ACD-45PQ Power-Quality-Clamp - Manual (Page 13)

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power factor, is no longer the only component constituting the overall
power factor. Harmonics do increase apparent power and thus decrease
the overall power factor.
That is the Total Power Factor is actually affected by both phase-shift
angle and harmonics, and is given by the expression:
Total Power Factor (PF) = Real Power (W) / Apparent Power (VA)
In order to improve overall system power factor, nowadays power-system
engineer needs to address both phase-shift and harmonics problems.
Practically, harmonics should be dealt with (e.g. filtering out) before
phase-shift to be corrected (e.g. installing capacitors in parallel with
inductive loads).