The number of people in the workforce shrank by 291,000.
How this impacts the numbers is explained by the genius at Political Math:
Let’s say we have 20 people in the workforce and 2 of them fit the technical definition for unemployed, which means that they’re actively looking for work. That gives us an unemployment rate of 10%.
Now, let’s say one of the unemployed people got tired of being unemployed and decided to go back to school. She has now removed herself from the labor force, so we don’t count her when we count unemployed people. Let’s also say that one of the employed people lost his job and instead of looking for a new one, he decided to simply retire.
As you can see we haven’t added any jobs… in fact we have fewer jobs than we did before. But we took a higher percentage of people out of the “unemployed” group than we did out of the “employed” group. It’s now 1 person unemployed and 17 people employed. We’ve “slashed” the unemployment rate to 5.5%.