There has been a lot of excellent analysis written on the employment report today.  Of course, as always, much of the best quick-turn around analysis has appeared on the "Wonkblog" by Ezra Klein and his colleagues:

The young are leaving the Labor Force and the Old are flocking to it: 

Discouraged workers are NOT why unemployment rates fell 

And.. how to read a jobs report: 

Krugman has a great chart that shows the Employment/Population Ratio for Age 25 to 54 year olds, and argues that it is better to remove the younger people (age 16-24) and older people (age 55+) because it creates "noise" due to demographic shifts, and that for reasons I also described earlier, the unemployment rate itself is a bad indicator but the employment/population ration is a better indicator and less noisy.  Note that his chart shows that this E/P ratio dropped like a rock as the Great Recession started and stopped dropping when the Great Recession officially ended in mid 2009. And for this age group E/P has not recovered since.