Under the government’s definitions, people only count as unemployed when they’re actively looking for work. So when the unemployment rate drops, it could mean that unemployed people found jobs, or it could mean that they gave up looking for work. The employment-population ratio, which measures how many people are actually working, is harder to fool.
Today’s jobs report carries good news on both fronts. The unemployment rate fell, and the employment-population ratio rose. That means the improvement in the labor market is real — people actually found jobs.