There was good news and bad news in today’s jobs report, and both came from what the report did not show. The did not show either the warning or hopeful signs that many economists anticipated.

The good news: Despite the U.S. economy shrinking in the first quarter–its first quarterly contraction in three years–job growth remained healthy. Employers added 217,000 jobs and the unemployment held steady at 6.3 percent. Job growth occurred in many sectors with the fastest growth in the professional and business services (+55,000) and healthcare and social assistance (+55,000) sectors. And wages rose modestly.

Taken together, the labor market shows no signs of heading into a recession. This makes it more likely the Q1 GDP report represented an aberration, not a harbinger of worse to come.

The bad news: Labor force participation flat-lined, despite expectations among economists this rate would increase. Participation in the labor force had fallen almost half a percentage point in April. To put this in perspective, participation rates have not been lower since the Carter administration – when far fewer women worked outside the home.

Many economists thought this represented statistical noise and participation would bounce back in May. If this had occurred, unemployment might have increased, since only those looking for work count as unemployed, and may have indicated a strengthening labor market since more people were looking for jobs. But that too did not happen. The headline unemployment rate has fallen primarily because millions of Americans have stopped looking for work.

The May jobs report shows a Goldilocks’ economy: not that cold but not that hot. Adding 200,000 jobs a month would be good news if unemployment and labor force participation stood at normal levels. Unfortunately they do not.

All told, the U.S. economy does not appear headed for another recession, but is not healing quickly either.