The Bureau of Labor Statistics (BLS) reported this morning that the economy added 217,000 nonfarm payroll jobs and 216,000 private sector payroll jobs during May. The unemployment rate remained at 6.3% with the labor force participation stuck at 62.8% and the employment-to-population unchanged at 58.9%. Total nonfarm payrolls surpassed their January 2008 peak for the first time during the recovery.
Despite the gain of 216,000 jobs in the private sector, the private sector jobs gap, measured from the end of the recession, compared to the average of other post-1960 recoveries actually widened during May, rising to 5.8 million. When compared to the strong Reagan recovery of the 1980s the gap is a whopping 11.2 million.
Eliminating the 5.8 million private sector jobs gap by the end of 2016 would require the economy to add an average of 371,000 private sector jobs over the next 31 months. The highest gain of the recovery was 364,000 posted in January 2012; only one other time, April 2011, has the recovery added more than 300,000 private sector jobs in a month.
The unemployment rate held steady at 6.3% during the month, but as we have pointed out in the past, absent the decline in labor force participation since January 2009 levels, the unemployment rate would stand at 10.4%.
The employment-to-population ratio, or percentage of Americans age 16 and older, remained at 58.9%, or four full percentage points below its January 2008 level and 0.5 percentage point below its end of recession level.
The decline in labor force participation remains a major concern. While about half of the recent decline can be attributed to demographic changes, participation among all age groups EXCEPT those 60 and older, is lower than December 2007 levels.