Employers add 271,000 jobs; rate stays at 6.3%
WASHINGTON — U.S. employers added 217,000 jobs in May, notching a substantial gain for a fourth straight month and fueling hopes the economy will accelerate after a grim start to the year.
The figure is down from 282,000 in April, which was revised slightly lower, the Labor Department said today.
But job gains have now averaged 234,000 in the past three months, up from only 150,000 in the previous three. The unemployment rate, which is calculated from a separate survey, remained 6.3 percent.
The job market has reached a significant milestone. Nearly five years after the Great Recession ended, the U.S. has finally regained all the jobs lost in the downturn.
Yet that’s hardly cause for celebration: The population has grown nearly 7 percent since then.
Economists at the liberal Economic Policy Institute estimate that 7 million more jobs would have been needed to keep up with population growth.
Average wage growth is still below the levels that would be typical of a healthy economy. Wages have grown roughly 2 percent a year since the recession ended, below the long-run average annual growth rate of about 3.5 percent.
One reason for the weak pay gains: Many of the jobs added since the recession ended in June 2009 have been in lower-paying industries. Last month saw a similar pattern. Hotels, restaurants and entertainment companies added 39,000 jobs. Retailers gained 12,500.
Construction firms, meanwhile, added just 6,000 jobs, while manufacturers gained 10,000.
Many economists predicted late last year that growth would finally pick up in 2014 from the steady but modest pace that has persisted for the past four years.
But the economy actually contracted in the first three months of this year as a blast of cold weather shut down factories and kept consumers away from shopping malls and car dealerships. The U.S. economy shrank at a 1 percent annual rate in the first quarter, its first contraction in three years.
So far, employers have shrugged off the winter slowdown and have continued to hire. That should help the economy rebound because more jobs mean more paychecks to spend.
Most economists expect annualized growth to reach 3 percent to 3.5 percent in the current second quarter and top 3 percent for the rest of the year.
Recent economic figures suggest that growth is accelerating.
Auto sales surged 11 percent in May to a nine-year high. Some of that increase reflected a pent-up demand after heavy snow during the winter discouraged car buyers. But analysts predict that healthy sales will continue in coming months, bolstered by low auto-loan rates and the rollout of new car models.
Manufacturers are expanding solidly, a private survey showed this week, fueled by gains in production and orders. And a measure of service firms’ business activity reached a nine-month high in May.