The unemployment rate has always been the standard we have used.
In the past decade four people in my family have moved out of the labor participation force. This has nothing to do with the economy, and everything to do with age. My parents and my in-laws didn't "quit looking for work", they retired.
The truth is the labor participation rate has been declining for some time now, and will continue to decline:
Bureau of Labor Statistics, November 2006: Every year after 2000, the rate declined gradually, from 66.8 percent in 2001 to 66.0 percent in 2004 and 2005. According to the BLS projections, the overall participation rate will continue its gradual decrease each decade and reach 60.4 percent in 2050.
(
factcheck.org)
Again, nothing to do with the economy, and everything to do with the general age of our citizens. The truth is this is nothing more than finding a stat that looks bad and saying "here is proof our economy is crappy". The GOP has even given up on saying the economy is bad; While the economy can "always be better", it's not bad right now.
The labor participation rate will continue to decline no matter what happens with the economy in the next four, ten, or twenty years. This is because our population is getting older, and living longer:
Between 2012 and 2050, the United States will experience considerable growth in its older population (see Figure 1).2 In 2050, the population aged 65 and over is projected to be 83.7 million, almost double its estimated population of 43.1 million in 2012. The baby boomers are largely responsible for this increase in the older population, as they began turning 65 in 2011.3 By 2050, the surviving baby boomers will be over the age of 85.
(
census.gov)
I'm sorry, but the labor participation rate has little to do with the economy - which is doing fine.