Labor Market Picks Up

On Friday, the Bureau of Labor Statistics announced that the economy added 217,000 jobs to the payrolls in May, which actually brings the number of jobs to levels not seen since before the recession in 2007.

The chart below shows just how long it took it took to get back all of the jobs that were lost – a staggering six and a half years.


The chart demonstrates that the last five recessions were not nearly as deep or as lengthy the recession that we experienced beginning in 2008.

While it is satisfying to know that all of the jobs lost have been regained, the labor market is still relatively weak.  The economy would need to create twice as many jobs as it has to fully accommodate the growth in the working-age population, even amid the low labor force participation rate.


It’s clear that the labor market is still weak, with the unemployment rate at 6.3 percent still above the 5.8 percent long-term average.

Furthermore, the quality of jobs isn’t particularly high right now.  Two-thirds of the new jobs created coming out of the most recession have been in business/professional services, education/healthcare and leisure/hospitality.

While the first to segments are considered high quality, the leisure/hospitality sector is one of the lowest paying job sectors.  Jobs in manufacturing, construction and government are still well short of what they were heading into the crisis.

To be sure, there is much work to be done still, but it is reassuring to see that we’re on the right track.