The April jobs report beat expectations today. U.S. companies added 288,000 nonfarm payrolls, which was much stronger than the 218,000 expected by economists.
The unemployment rate tumbled to 6.3% from 6.7% a month ago.
However, much of the change in the unemployment rate is due to labor force participation rate, which fell to 62.8% in April from 63.2% in March.
Bloomberg reports this matches the lowest level since 1978.
The LFPR has been falling for a number of reasons including an aging workforce consisting of retiring baby boomers.
Here's a historical chart:
Dan Crawford of the Economic Policy Institute notes that if the LFPR were more stable, the unemployment rate would be much higher at closer to 9.9%.
Bottom line, the drop in unemployment rate is not just about job creation; it's also about fewer people looking for work.