That’s what happened in May. We saw solid job growth in payroll employment (+280,000 jobs). At the same time, we saw a solid increase in the civilian labor force—nearly 400,000 more people in the labor force in May. It’s not surprising then that the unemployment rate (by definition, the number of unemployed people divided by the labor force) increased slightly (though not significantly, statistically speaking). Regardless, this “rise” is actually a positive sign.

The weak labor market has sidelined millions of “missing workers,” or potential workers who, because of weak job opportunities, are neither employed nor actively seeking a job. In other words, these are people who would be either working or looking for work if job opportunities were significantly stronger. An increase in optimism about the labor market leads to more people actively seeking employment. As expected, a rise in the labor force in May corresponded with a decline in the estimated number of missing workers.

Given that the unemployment rate can provide a murky picture of trends in labor market health in this recovery, it can be more useful to examine the employment-to-population ratio (or EPOP) of “prime-age” workers (workers age 25–54). The EPOP is simply the share of the population with a job, so this measure entirely sidesteps the issue of whether or not potential workers are in the labor force. Restricting our attention to prime-age workers serves the important purpose of avoiding confounding changes in employment that are not due to labor market conditions, but that are instead due to longer-running structural factors, such as baby boomers hitting retirement age.

It appears that prime-age EPOPs have been fairly flat in recent months, holding steady at 77.2 percent since March. It’s clear from the figure below that the economy still has a long way to go before we return to pre-recession labor market health.