It's probably true that the one tenth of one percentage point drop in the unemployment rate reflects people giving up on the job search altogether, but the number could not be better, from the perspective of the White House.
Officially, the economy lost 75,000 fewer jobs that had been projected. Wages are up slightly, the average workweek is a bit longer, and some sectors, adjusted for the things that need adjusting, actually added jobs.
Not only does the White House have another "turning the corner" talking point for the August recess, they can also predict with confidence that the magical (wholly artificial) 10.0 threshold won't be crossed in the middle of the health care debate in September.
Keeping up the confidence of wavering Democrats is critical, from their perspective, because the underperforming economy and the sluggish recovery is directly linked to President Obama's job performance ratings, which itself is directly linked to his success in framing the health care debate.
Remember, in almost all debates about the economy, perception drives reality, not the other way round.