Private employers in the world’s largest economy reached an important milestone in March: they have made up all the jobs lost as a result of the recession, and then some.
The CHART OF THE DAY shows payrolls excluding government agencies climbed to 116.1 million, surpassing the prior peak of 116 million in January 2008. Winning industries include mining and logging, education and health care, and professional services. Manufacturing and construction have lagged behind.
“Private-sector employment has popped its head out of the hole, and finally replaced the headcount lost due to the recession,” said Ward McCarthy, chief financial economist at Jefferies LLC in New York. “The labor market is the heartbeat of the economy, so when it finally gets to the point where it’s growing again, good things happen.”
The recovery in private payrolls signals better times ahead for Americans still looking for work and lays the ground for a gradual pickup in wages and consumer spending, according to McCarthy. Steady progress also will probably prompt Federal Reserve policy makers to continue trimming stimulus while keeping interest rates low.
For government entities, the road to recovery is longer. Federal, state and local governments still need to add more than half a million jobs to return to the pre-recession peak. Overall payrolls rose 192,000 in March after a 197,000 gain in February that was larger than first estimated, the Labor Department reported today.
The jump in hiring in health care reflects an industry that is “growing like a weed,” and the catch-up in professional and business employment can be traced to the U.S. being “primarily a service economy” that is expanding, McCarthy said.