The US economy finally has regained all the jobs lost in the last recession as hiring continued to expand at a solid pace, the Labor Department reported Friday.
Employers added 217,000 jobs in May, pushing total employment to 138.4 million, slightly above the previous peak reached in January 2008 as the recession got underway, the Labor Department said. The six-plus years it took to recover the jobs represent the longest employment slump since World War II.
The long, difficult slog for the labor market underscores the severity of the last downturn, which became known as the Great Recession, and the weakness of recovery that followed. Even as the US economy at last appears to be accelerating, analysts cautioned that the job market has yet to completely regain its health.
The unemployment rate, which held steady at 6.3 percent in May, remains well above the 4 to 5 percent levels that preceded the recession, a sign that the economy has not generated jobs quickly enough to keep up with population growth. Long-term unemployment remains historically high, economists noted, while many jobs added in the past few years have been lower-paying temporary and part-time jobs.
“We see conditions gradually improving,” said Mark Vitner, a senior economist at Wells Fargo & Co., in Charlotte, N.C. “[But] we still have a great deal of underemployment.”
Vitner, however, noted that in recent months the nation has not only added more jobs but also better ones. May’s gains were led by two sectors that include well-paying occupations: professional and business services, which include technology, research, and consulting firms; and education and health services, which include hospitals and universities.
Many economists see signs that the economy is at last gaining steam, shaking off a long, cold winter that hampered economic activity in the first few months of 2014.
May was the fourth consecutive month in which employers added more than 200,000 jobs, while the unemployment rate held steady even as more people entered the workforce.
On Wall Street, another month of solid job gains helped drive stocks to new highs. The Dow Jones industrial average rose 88 points to close at a record 16,924.
The broader S&P 500 index also had a record close, rising 9 points to 1,949. The technology heavy Nasdaq Composite gained 25 points to close at 4,321.
Other recent data have added to the optimism, with manufacturing activity expanding and retail sales increasing. First-time claims for unemployment benefits have declined; last week, the four-week average for first-time claims reached a nearly seven-year low.
“Business output has picked up in the second quarter, and it looks like we’re going to have above-average growth,” said Alan Clayton-Matthews, an economist at Northeastern University.
Donna Fitzgerald, chief executive of Contemporaries, a Boston staffing agency, said 70 percent of the temporary employees her company places are being offered permanent jobs. Two years ago, she said, fewer than half of employers expressed interest in bringing on temps full time.
“We’ve definitely seen solid growth,” Fitzgerald said.
May’s job gains were broad-based, with nearly all the major sectors adding positions. Health and education services added 63,000 jobs, professional and business services added 55,000 jobs, and retail added more than 12,000 jobs.
Manufacturers increased payrolls by 10,000 jobs, and construction companies by 6,000 jobs.
Construction and manufacturing, among the hardest-hit industries during the last recession, have rebounded in the past year, together adding almost 300,000 jobs. The unemployment rate for construction workers has dropped by more than half from its peak in 2010, and private construction spending is increasing, said Ken Simonson, chief economist at Associated General Contractors of America, a trade group in Arlington, Va.
He added that some contractors are having trouble filling skilled positions.
“Clearly, a huge number of experienced people are no longer sitting at home, waiting for a contractor to call them back to work,” Simonson said.Jack Newsham can be reached at firstname.lastname@example.org. Follow him on Twitter @TheNewsHam.