More than six years after the Great Recession began, the private sector finally has restored the number of jobs it cut.
The milestone March jobs report, published Friday, said private and nonprofit employers had erased the 8.8 million deficit of jobs shed during the economic downturn and faltering recovery.
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Private-sector payrolls hit 116.1 million last month, surpassing the pre-recession peak by about 13,000 jobs.
But nobody’s lighting celebration candles just yet. The U.S. population has grown by 15 million since 2008, meaning that more jobs may be needed. Also, many of the new jobs are in relatively low-wage service occupations, offer only part-time hours, or are temporary.
“There’s a lot more to do on the jobs front,” said Dan Heckman, national investment consultant at US Bank in Kansas City. “There’s a serious skills gap between available jobs and many of the applicants, and structural changes like technology improvements have reduced the need for workers because of productivity gains.”
The U.S. Bureau of Labor Statistics said the private sector produced a net gain of 192,000 jobs in March, and revised upward the January and February totals by 37,000. But analysts say that population growth requires that number to consistently be at least 90,000 a month higher.
Meanwhile, government employment was flat.
“A shrinking public sector is one of the headwinds slowing the job market recovery,” said Gary Burtless, a Brookings economist, noting that in the 49 months of private-sector employment gains, government payrolls shrank by 627,000.
Typically in a recovery, both public and private employment increase.
The government reported that the national unemployment rate stayed stuck at 6.7 percent last month, partly because about half a million people entered or re-entered the job market to look for work.
Another drag on the economy: Long-term unemployment remains a problem, with more than a third of the nation’s 10.5 million jobless out of work for six months or more. And the overall job market participation rate, at 63.2 percent of the 16-and-older population, stayed near a 35-year low.
“It still feels like a recession to many Americans,” Federal Reserve chairwoman Janet Yellen said earlier this week. “There is also no doubt that the economy and the job market are not back to normal health.”
Indeed, the mixed signals in the government’s monthly jobs report gave investors little direction Friday, and stock indexes closed lower.
The less-than-robust job scene has put scant pressure on employers to raise wage rates.
Average hourly wages, which slipped a penny to $24.30 an hour in March, have grown 2.1 percent over the last 12 months — well under the 3.5 percent-a-year growth typical for a healthy economy.
“We need strong earnings gains to boost household incomes and push consumer spending to a higher growth rate,” said Scott Anderson, chief economist for Bank of the West.
One effort to raise wages was blocked earlier this week by U.S. House Republicans who, on a straight party line vote, rejected a measure that would incrementally raise the federal minimum wage from $7.25 an hour to $10.10 by 2016.
Still, the modest payroll growth in March indicated that the economy withstood a brutal winter that had squashed spending, particularly in construction and retail. The data indicated that new entrants into the job market were landing jobs faster than in recent years.
Various reports indicated that auto sales picked up, factory production increased and service companies received more orders.
On the flip side, homes sales slipped, manufacturing jobs fell for the first time since July and construction lagged.
Some analysts looked at the March jobs numbers to reveal effects of the Affordable Care Act, one of which might be early retirements by workers who no longer needed employment-tied health insurance.
Dean Baker, economist at the Center for Economic and Policy Research, noted that employment of people age 55 and older fell by 133,000 last month after rising by an average of 1.15 million a year over the last four years.
Another possible Obamacare effect, Baker said, is that the number of people who are voluntarily working part time is up 2.2 percent from its year-ago level and stands at its highest level since 2008. The suggestion is that they are able to work part time by choice and buy insurance they couldn’t get before without a full-time job.
March jobs tally
These sectors added jobs:
Professional and business services + 57,000
Food services and drinking places + 30,000
Temporary help services + 29,000
Health care + 19,000
Construction + 19,000
Mining and logging + 7,000
Computer systems design and related service + 6,000
Architectural and engineering services + 5,000
These sectors were basically unchanged:
Government, financial activities, information, manufacturing, wholesale trade, retail trade, transportation and warehousing
Source: U.S. Bureau of Labor Statistics