U.s. Gains 217,000 New Jobs In May

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WASHINGTON (MarketWatch) — The number of new U.S. jobs created last month slowed a bit after a big gain in April, but the brisk pace of hiring supports expectations of a spring revival in the economy.

The U.S. created 217,000 nonfarm jobs in May, the Labor Department said Friday, largely in line with Wall Street’s expectations.

Hiring has topped 200,000 for four straight months, the first time that’s happened in almost 15 years. The robust increase in hiring in May follows a slightly revised 282,000 gain in new jobs in April, 203,000 in March and 222,000 in February.

The U.S. has now recovered the 8.7 million jobs lost after the 2007-2009 downturn, but it took more than six years to surpass the nation’s prior peak of 138.25 million workers. Not since the Great Depression in the 1930s has it taken so long to recover all the jobs lost from a recession.

The unemployment rate held steady at 6.3%, following a big drop in April that was the largest one-month decline in 31 years. More people entered the labor market in May in search of work.

The somewhat better-than-expected May employment report helped nudge U.S. stock markets mildly higher in Friday action. Economists polled by MarketWatch had predicted employment would rise by 210,000. See Market Snapshot

“It’s another positive step for the economy,” said JJ Kinahan, chief investment strategist at TD Ameritrade. “What we have is slow but sure growth.”

‘Solid report all around’ — jobs report reactions

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The economy has accelerated sharply in the spring after shrinking by 1% in the first quarter, when the U.S. suffered one of its worst winters in decades. It was the first contraction in growth in three years.

Yet sales of cars and other retails goods have bounced back and businesses are expanding more rapidly, especially in manufacturing.

So far this year, the economy has created an average of 214,000 jobs a month, about 10% faster compared to 2013.

Many economists predict growth will shift into an even faster gear in the summer and fall, but the U.S. has repeatedly hit soft patches since emerging from recession almost five years ago.

Still, the upturn in hiring bodes well, especially if the labor market tightens enough to boost wages. Slow wage growth has been one of the biggest headwinds constraining the recovery.

In May, average hourly wages rose a modest 0.2% to $24.38. While wages have shown some upward movement lately, they’ve increased just 2.1% over the past 12 months, well below what’s necessary to push the economy into overdrive. The annual growth in wages has hovered around 2% since the end of the recession.

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