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One chart that explains how far we are from a full labor market recovery

The unemployment rate slipped from 5.8 to 5.6 percent in December. That's the lowest since June 2008, but it's not falling just because people are finding work. It has fallen in part becuase people are dropping out of the labor force — the big mass of Americans who are either working or looking for a job.

And because the headline unemployment rate only includes people in the labor force, lurking behind that much-recovered unemployment rate is a big group of people who want work but aren't looking for it. As of December, there were 6.4 million of these people — roughly 2 million more than pre-recession.

Labor force want job

These are people who aren't even included in that unemployment figure that keeps slipping downward. And this number of people who want work but aren't looking for it isn't really trending downward at the moment. That signals one troubling fact, first of all — that many people still may see he healing job market and think that there's just not enough work out there to bother looking just yet.

But this also means that as the job market recovers, there will be this huge backlog of people who will also need to find jobs, above and beyond all those people included in that 5.6 percent jobless rate. Not only that, but this much slack in the labor market means low wages. Only when this big mass of jobless Americans better works its way back into jobs will those wages start climbing meaningfully.