The good news is that U.S. payroll employment is estimated to have grown by 117 thousand in July while the unemployment rate fell slightly from 9.2 percent to 9.1 percent. The bad news is that this good news is not really good at all. To be simply treading water, the rate of job growth must keep up with the rate of growth of the working-age population. Job growth of 117 thousand per month comes close to doing this, but we also need sustained job growth in the several hundreds of thousands per month to get back the net job losses since the start of the recession.
As for the unemployment rate, it can simply be a poor indicator of how well the labor market is recovering because it can fall when things are worsening and rise when they are getting better: The unemployment rate falls when people giving up looking for work and rises when people are drawn into the labor force looking for work. In fact, on a seasonally adjusted basis, the number of people who were employed in July fell by about 38 thousand while the number of people in the labor force (either working or looking for work) fell by 193,000.* In other words, the net decline of 156 thousand in the number of people unemployed was due entirely to people leaving the labor force.
A better measure of the state of the recovery, which accounts for population growth and the movements in and out of the labor force, is the employment/population ratio. This measure simply takes the number of people employed and divides by the working-age population. As you can see from the chart below, this ratio has been languishing, and even falling, since the recovery began, indicating that job growth has not been keeping up with population growth. In other words, we have not even been treading water during this alleged recovery. Furthermore, even if we regain all of the jobs lost during the recession, the employment/population ratio would still not be back to the pre-recession level. This is because, as mentioned above, the working-age population has continued to grow. Therefore, full recovery means a higher level of payroll employment than we had prior to the recession.
* Note that this measure of employment differs from payroll employment because they are from different surveys and measure slightly different things.