Payrolls pushed past their U.S. pre-recession peak for the first time in May, a milestone that’s been five years in the making.
The 217,000 advance in hiring followed a 282,000 gain in April, figures from the Labor Department showed Friday. It marked the fourth consecutive month employment increased by more than 200,000, the first time that’s happened since early 2000.
The jobless rate unexpectedly held at an almost six-year low of 6.3 percent.
“We’re seeing the continuation of solid payrolls gains, which is an accomplishment for the economy,” said Laura Rosner, U.S. economist at BNP Paribas in New York, which forecast a 215,000 gain in payrolls. “We’re slowly moving in the direction of stronger earnings growth, which is really what we need to see for the recovery to continue.”
The broad-based gain in employment points to an improvement in business confidence that raises the odds head counts will continue to grow. The report also showed incomes climbed, the ranks of the long-term unemployed decreased and businesses took on more full-time help, evidence of the type of economic progress that will keep the Federal Reserve paring record monetary stimulus.
Economists projected the jobless rate would rise to 6.4 percent as more people entered the labor force. The workforce did climb by 192,000, and almost as many found jobs. It had plunged by 806,000 in April, which helped reduce joblessness by 0.4 percentage point.
The so-called participation rate, which indicates the share of working-age people in the labor force, held at 62.8 percent, matching the lowest since March 1978.
“To the extent that there is a surprise in this data release, it is the steady unemployment and participation rates,” Ward McCarthy, chief financial economist at Jefferies LLC in New York, said in a research note. Movements in participation have been erratic and confusing, making forecasting the jobless rate difficult, he said.
The survey of households, from which the jobless and participation rates are derived, also showed the number of discouraged workers – those who are no longer looking for a job because they think none is available – dropped to 697,000 last month compared with 780,000 in May 2013.
The number of people unemployed for 27 weeks or longer as a share of the total jobless dropped to 34.6 percent in May, the lowest since August 2009, from 35.3 percent in April, the report also showed. Those working part time because the economy wasn’t strong enough for them to find a full-time job declined by 196,000 to 7.27 million.
The underemployment rate – which includes part-time workers who’d prefer a full-time position and people who want to work but have given up looking – fell to 12.2 percent, the lowest since October 2008, from 12.3 percent.
Employment in health services climbed by the most in nine months, while payrolls at factories, business services and retailers increased as well.
Hagie Manufacturing Co., a farm equipment producer in Clarion, Iowa, is hiring engineers and people to service machines.
“There’s not the desperation there was” among job applicants, said Dave Maxheimer, director of human resources at the company of 509 employees. “Most of the people are employed, which really impresses me. They have jobs, they’re looking to better themselves at a company with room for growth.”
The increase in payrolls put total employment beyond its peak of 138.4 million reached in January 2008, one month after the start of the deepest recession since World War II. The economic slump ended and recovery began in June 2009.
“It’s taken an extremely long period of time to gain back all of those jobs, much longer than any other cycle,” said Tom Porcelli, chief U.S. economist at RBC Capital Markets LLC.