248,000 Jobs Added In May

Unemployment Rate Remains Unchanged

U.S. businesses hired hundreds of thousands of additional workers last month, the Labor Department reported yesterday, a pace of job growth that if sustained would erase all the job losses of the recession by the end of the year.

The brightening labor market drew an additional hundreds of thousands of job seekers to look for work last month. Because the number of new hires roughly matched the additional number looking, the unemployment rate remained at 5.6 percent in May -- unchanged from April, but down from the recent peak of 6.3 percent last June.

Employers added 248,000 jobs in May across a variety of industries, and the department raised its previous estimates of job growth for March and April by a combined 74,000. That meant an average gain of more than 315,000 jobs in each of the past three months -- a booming pace after six weaker months.

That left the economy with 1.3 million fewer jobs in May than it had when the recession began in March 2001 -- a gap that could be made up if employers added an average of 200,000 jobs a month for the rest of the year. Some analysts said that is a good possibility given the strength of the economy, while others warned that the pace might taper off if high oil prices and terror fears cause businesses to pull back.

Continued strong job growth would deliver President Bush from the danger of being labeled the first president since Herbert Hoover to end his term with fewer jobs on the nation's payrolls than when he started -- a threat his Democratic critics have repeated until recently.

"I think this is something that can be sustained," William G. Cheney, chief economist at MFC Global Investment Management, said of the pace of job creation.

The figures showed that the once-halting recovery has given way to a self-sustaining expansion, analysts said, as job growth drives up incomes, which fuels more spending, which begets more hiring, he said. "You create that many jobs and people go out and spend the money and it feeds on itself," Cheney said.

The White House hailed the job figures as evidence that the president's tax cuts succeeded in stimulating both consumer spending and business investment.

"Today's jobs report shows that the American economy is strong and it's getting stronger," President Bush said during a visit to Rome. "It shows that the economy is vital and growing."

Democrats responded by noting that 8.2 million Americans remained unemployed last month, and more than one-fifth of them have been jobless more than six months.