One weakness of the unemployment rate is that if people drop out of the
labor force they cannot be counted as an unemployed person and the
unemployment rate goes down. They are no longer actively seeking work
and it might be because they are discouraged workers. The lower
unemployment rate can be misleading in this case. People dropping out of
the labor force might indicate a weak labor market.
We could look at the employment to population ratio instead, since that includes those not in the labor force. But that includes everyone over 16 and that means that senior citizens are in the group but many of them have retired. The more that retire, the lower this ratio would be and that might be misleading. It would not necessarily mean the labor market is weak.
But we have this ratio for people age 25-54 (which also eliminates many college age people who might not be looking for work)
The percentage of 25-54 year olds employed was 77.1% in May. It was 76.9% in April. It was 80.5% in Jan. 2020 and 69.6% in April 2020. Click here to see the BLS data. The unemployment rate was 5.8% in May. Click here to go to that data. The % of those 16 and older employed went from 57.90% to 58.05%.
Here is a good graph from the St. Louis Fed. It shows that there are 126,077,000 people in the 25-54 year old group. So since we are 3.4 percentage points below the 80.5% of Jan. 2020 (the high point since the previous recession), that is still 4,286,618 fewer jobs (Hat tip: Vance Ginn of the Texas Public Policy Foundation).
Also, we are up 7.5 percentage points since April 2020 (77.1 - 69.6). That is 68.8% of what we lost from Jan. 2020 to April 2020 (10.5 percentage points or 80.5 - 69.6). Then 7.5/10.9 = .688. So we have gotten about two-thirds of the jobs back. Good, but a significant amount of ground has still has to be made up.
Here is the timeline graph of the percentage of 25-54 year olds employed since 2011.
Here it is going all the way back to 1948.