Well, it only took five and a half years, but we did it. The U.S. economy finally got back all the jobs it lost during the Great Recession. But don't break out the bubbly just yet: With all the population growth there's been between then and now, that still leaves millions of people waiting for the recovery to reach them.
First, though, the good news. The economy added 217,000 jobs in May, and the previous two months' reports were only revised down by 6,000. That was enough to keep the unemployment rate flat at 6.3 percent, which, as Phil Izzo points out, is better news than it sounds like since economists expected it to go back up after a fluky drop last month.
Also, the broad unemployment rate that includes discouraged and part-time workers who want full-time jobs ticked down from 12.3 to 12.2 percent. And, as you can see in the chart below from Calculated Risk, it took two and a half years longer than any other time in the postwar period, but our too-slow-and-steady recovery has now gotten us back to where we were before the recession began.
America's polarized job market
Of course, "us" is a relative term. Unemployment fell from 3.3 to 3.2 percent for people with a bachelor's degree or more, and from 5.7 to 5.5 percent for those with some college. But it actually rose from 6.3 to 6.5 percent for people with only a high school diploma, and from 8.9 to 9.1 percent for those without one.
In other words, our polarized labor market isn't getting any less so. The Cleveland Fed points out that routine jobs disappeared during the Great Recession, and haven't come back during the not-so-great-recovery — which partly explains why our economic upswing, such as it is, has been much less dramatic for the least educated.
Now, take one last look at the chart above. Even though we've gotten out of the hole from the recession, we still haven't gotten out of the hole from our too-weak recovery. That is, there's still a big jobs gap, and it's going to take a long time to fill. Maybe the best way to tell that the labor market isn't anywhere near tight — which, a few months ago, people thought it was — is muted wage inflation. Average hourly earnings barely increased in May from $20.51 to $20.54, and over the last twelve months are only up 2.1 percent. It seems pretty clear that the long-term and shadow unemployed do, as a recent Federal Reserve paper argues, exert downward pressure on wages.
There's still a long way to go before the recovery turns into a full one.