There are several options:
- Peter could have been skipped
- Peter's name could be written so badly it cannot be read
- Peter might have been enumerated under another name--a variant of which I have not heard.
- Peter might have lived elsewhere-somewhere I have not thought to look.
Peter was (is) the object of 1940 census search contest.
I have a few more individuals whom I can't find in 1940 in Illinois. I will have to look for them now at FamilySearch.