To make the feature more enhanced gmail only displays the frequently used labels and hides the other labels behind a “more” dropdown.The list of labels is now customizable: you can hide built-in labels and some of your labels, while changing their order. If you rarely check the “spam” label or you don’t save drafts, you can hide the system labels from the settings page.

Damian Gajda, from Google says “You now have control over which of your labels show. We’ve done our best to get you started by automatically showing the labels you use most and hiding the rest. Label hiding is my favorite new feature, since it saves me from having to look through labels I rarely use. If I ever need to reach any of my old labels, I just click the “more” link,”

Google wants to make labels more visible. If you didn’t create labels, Gmail will add four labels for you: Personal, Receipts, Travel and Work. “When I joined the Gmail team, I was surprised to learn that only 29% of Gmail users had created any labels. We realized that if you didn’t know about labels, it would be easy to assume Gmail had no way to organize your mail. Not only were “labels” unfamiliar, they were kind of hidden,” explains Michael Leggett