Tuesday, January 23, 2018
Business

Jobs make a comeback from Great Recession but still short of what's needed

WASHINGTON — The U.S. economy has reached a milestone: It has finally regained all the private-sector jobs it lost during the Great Recession.

Yet it took a painfully slow six years, and unemployment remains stubbornly high at 6.7 percent.

The comeback figures were contained in a government report Friday that showed a solid if unspectacular month of job growth in March.

Businesses and nonprofits shed 8.8 million jobs during the 2007-09 recession; they have since hired 8.9 million. But because the population has grown since the big downturn, the economy is still millions of jobs short of where it should be by now.

As a result, most analysts were hardly celebrating the milestone.

Heidi Shierholz, an economist at the liberal Economic Policy Institute, called it a "pretty meaningless benchmark economically."

"The potential labor force is growing all the time, so the private sector should have added millions of jobs over the last six-plus years," she said.

U.S. employers did add a seasonally adjusted 192,000 jobs in March, just below February's 197,000, which was revised higher. March's figure nearly matched last year's average monthly gain, suggesting that the economy has recovered from the hiring slowdown caused by severe weather in December and January.

The March figures did signal that stronger gains could lie ahead: More Americans without jobs are starting to look for one, and paychecks are growing.

Most economists expect job growth to pick up a bit to a monthly pace of 225,000 or more. One reason: Americans have reduced their debts and benefited from rising home prices and a rising stock market. Better household finances should translate into more spending.

And a major drag on growth — federal spending cuts and tax increases — will fade this year, most likely boosting the economy. Budget battles and government shutdowns that have eroded business and consumer confidence since the recession ended are unlikely this year.

"Enough repair has happened in damaged sectors and there's enough calm … so we can have a real recovery," said Ethan Harris, global economist at Bank of America Merrill Lynch.

The U.S. unemployment rate has been stuck at 6.7 percent since December, but that partly reflects a positive trend: More Americans, particularly younger people, are either working or looking for work.

So far this year, about 1.3 million people have started looking for jobs, and most have found them. Last year, by contrast, the number of people either working or looking for work had shrunk by roughly 500,000.

That's a welcome change from the pattern that had prevailed since the recession: The proportion of Americans working or looking for work fell to a 35-year low in December. Many of the unemployed had become discouraged and stopped hunting for jobs.

Another positive sign in the report: Americans worked more hours last month. The average work week rose to 34.5 hours last month, up from 34.3 in February.

Still, for individual workers, average hourly pay slipped a penny to $24.30. Average hourly wages have risen 2.1 percent in the past year, faster than the 1.1 percent inflation rate. But in a healthy economy, hourly wages typically grow about 3.5 percent a year.

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