Don't Get Too Excited About the New Jobs Report

The U.S. economy has now recovered the jobs lost during the recession. But there is still a long way to go.

Construction workers at the Cooper-Hewitt National Design Museum work under the sun on July 19, 2013 in New York. (National Journal)

The economy hit a milestone on Friday after the latest jobs report shows that the U.S. recovered all the jobs lost during the Great Recession. But people shouldn't celebrate too much just yet.

On Friday, the Bureau of Labor Statistics said the U.S. economy added 217,000 jobs in May, with the unemployment rate unchanged at 6.3 percent. The economy needed to add 113,000 to pass the prerecession peak number of jobs from January 2008. The United States lost 8.7 million jobs in the recession. But this overlooks the simple fact that there are more working-age people in the U.S. now than there were six years ago.

Here's one way of looking at that. There were 7.6 million unemployed people in the U.S. in January 2008, and the unemployment rate was 4.9 percent. Today, there are 9.8 million unemployed Americans, well over 2 million more than before the recession, and the unemployment rate is much higher.

So, while on its face it looks like the U.S. regained all the jobs lost over the past six years, that perspective doesn't take into account the number of new people in the labor force or address the labor market gap created by those new people. Heidi Shierholz of the left-leaning Economic Policy Institute notes that, as of last month, there was a 7.1 million-job gap from prerecession levels.

What this jobs report does show, though, is that the U.S. is on a positive, albeit slow and steady, trend toward economic recovery. The average monthly job growth for this year so far, factoring in revisions, is 215,600, compared with 194,000 in 2013, 186,000 in 2012, and 174,000 in 2011. This shows that the economy is gradually adding jobs.

And for some more positive news, as economist Justin Wolfers writes for The Upshot, Friday's job report marks the 51st consecutive month of private-sector jobs gains, matching an all-time record. The recovery's path may be slow, but it is now record-breaking in its consistency.

The U.S. economy, though, still has a long ways to close that employment gap and build up its workforce.