Financial News

  • 9 June 2014, 8:49

US Recovers 8.7 Million Jobs Lost In Recession

The US economy has now recouped all the 8.7 million jobs that were lost during the recession.

The Labor Department made the announcement as it was confirmed the steady improvement in hiring seen since the end of winter continued in May, with 217,000 net new jobs being created - in line with economists' forecasts.

The jobless rate remained at 6.3%.

Every major sector recruited - with the strongest growth recorded in services.

Despite the slowdown from April's 282,000 gain, May marked a fourth straight month with job gains above 200,000 and an important milestone in returning to pre-recession levels.

The Labor Department said employment had now risen by 8.8 million since hitting a trough in February 2010.

Average hourly earnings, which are being closely watched for signs of how fast labour market slack is easing, rose five cents last month.

The pace of hiring adds to data ranging from automobile sales to services and factory sector activity that has suggested annualised GDP growth this quarter will top 3%.

The economy contracted at a 1% rate in the first quarter, dragged down by unusually harsh winter weather and a slow pace of inventory building by businesses.

Economists expect previously discouraged workers to re-enter the labour force over the course of the year.

Such a move would be welcomed by the Federal Reserve, which has cited low labour force participation as one of the reasons for maintaining an extraordinarily easy monetary policy.

 

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