- If the pace of job creation holds, the US will finish its employment recovery in July.
- The country added 390,000 payrolls in May, only slowing slightly from prior months.
- The recovery is also running three times as fast as the rebound from the 2008 financial crisis.
Job creation through May was the weakest in a year, but that's not stopping the labor market recovery from charging toward the finish line.
Data out Friday morning showed the US economy adding 390,000 nonfarm payrolls last month, slowing from the 436,000-job gain in April but still surpassing the forecast for 325,000 new jobs. The print extends a long slowdown in the pace of nationwide job growth. Yet it also brings the country within spitting distance of a full jobs recovery. The economy has now recouped more than 96% of the jobs it lost at the start of the coronavirus crisis.
That puts the US on pace to complete the labor market recovery by the end of July, according to Insider calculations. The country boasted 152.5 million payrolls in February 2020, just before lockdown measures led to a record plunge in employment. As long as the average pace of job creation doesn't slow dramatically, the economy will return to exactly that level in just a couple of months.
The amount of progress left to be made is so small — just 820,000 jobs — that a stunning surprise to the upside in June could put the US back to that threshold by the end of the month. The economy added 714,000 in February, and while new dynamics have weighed on job creation, such a surprise isn't completely out of the picture, especially if an influx of Americans come off the labor market's sidelines in search of work.
To be sure, returning to the pre-pandemic payroll count only sets the labor market back to where it stood two years ago. Without the pandemic and resulting economic downturn, the economy was on pace to keep adding jobs at a healthy clip of about 200,000 per month. That leaves more than 6 million jobs left to be created if the labor market is to make up for its lost growth. Still, with how quickly the economy is still adding jobs, that goal could be reached by the end of 2022 or early 2023.
Even if the recovery slows further, the current rebound stands alone when compared to other downturns of modern history. The coronavirus recession saw the deepest decline in employment early on, yet the recovery is running faster than those seen after the 1990, 2001, and 2008 slumps.
Employment currently sits just 0.5% below the pre-pandemic high. It took nearly three times as long for the US to achieve the same rebound after the 2008 financial crisis.
The May slowdown, then, is a mild easing in an otherwise superlative rebound.