Well, it only took 51/2 years, but we did it. The U.S. economy finally got back all the jobs it lost during the Great Recession. But don't break out the bubbly just yet: With all of the population growth there has been between then and now, that still leaves millions of people waiting for the recovery to reach them.
First, though, the good news. The economy added 217,000 jobs in May, and the previous two months' reports were revised down by only 6,000. That was enough to keep the unemployment rate flat at 6.3 percent, which, as Phil Izzo of the Wall Street Journal points out, is better news than it seems to be because economists expected it to go back up after a fluky drop last month.
Also, the broad unemployment rate that includes discouraged and part-time workers who want full-time jobs ticked down from 12.3 to 12.2 percent. It took 21/2 years longer than any other time in the postwar period, but our too-slow-and-steady recovery has gotten us back to where we were before the recession began.
Of course, "us" is a relative term. Unemployment fell from 3.3 to 3.2 percent for people with a bachelor's degree or more, and from 5.7 to 5.5 percent for those with some college. But it actually rose from 6.3 to 6.5 percent for people with only a high school diploma, and from 8.9 to 9.1 percent for those without one.
In other words, our polarized labor market isn't getting any less so. The Cleveland Fed points out that routine jobs disappeared during the Great Recession, and they have not come back during the not-so-great-recovery, which partly explains why our economic upswing, such as it is, has been much less dramatic for the least-educated.
Even though we have gotten out of the hole from the recession, we still have not gotten out of the hole from our too-weak recovery. That is, there is still a big jobs gap, and it is going to take a long time to fill. Maybe the best way to tell that the labor market is not anywhere near tight is muted wage inflation. Average hourly earnings barely increased in May, from $20.51 to $20.54, and over the past twelve months are up only 2.1 percent. It seems clear that the long-term and shadow unemployed do, as a Fed paper argues, exert downward pressure on wages.
There is still a long way to go before the recovery turns into a full one. Washington Post