US firms add jobs but 6.3% jobless rate remains
Print Edition
US employers added 217,000 jobs in May, a substantial gain for a fourth straight month, fueling hopes that the economy will accelerate after a grim start to the year.
Monthly job growth has now averaged 234,000 for the past three months, up sharply from 150,000 in the previous three. The jobless rate, which is calculated from a separate survey, remained 6.3 percent in May.
The report yesterday from the Labor Department signaled that the US economy is steadily strengthening and outpacing struggling countries in Europe and Asia. Consumers are showing more confidence. Auto sales have surged. Manufacturers are expanding solidly. US service companies are growing more quickly.
And the job market has now reached a significant milestone: Nearly five years after the Great Recession ended, the economy has finally regained all the jobs lost in the downturn.
More job growth is needed, though, because the US population has grown nearly 7 percent since then. Economists at the liberal Economic Policy Institute have estimated that 7 million more jobs would have been needed to keep up with population growth.
In addition, pay growth remains below levels typical of a healthy economy.
Average wages have grown roughly 2 percent a year since the recession ended, well below the long-run average annual growth rate of about 3.5 percent.
In May, average hourly pay rose 5 cents to US$24.38. That’s up 2.1 percent from 12 months ago and barely ahead of inflation, which was 2 percent over the same period.
One reason for the weak pay growth: Many of the jobs added since the recession ended in June 2009 have been in lower-paying industries. A similar pattern was evident in May: Hotels, restaurants and entertainment companies added 39,000 jobs. Retailers gained 12,500. Manufacturers added 10,000 jobs, construction firms 6,000.
Still, the US has now added over 200,000 jobs for four months in a row — the first time that’s happened since 1999.
“There’s no doubt the rate of job creation has accelerated,” said Dan Greenhaus, chief global strategist at BTIG LLC. “But there remains a fair bit of slack in the labor market.”
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