The stock market has recovered its losses since hitting bottom three years ago today. But despite gains in employment during that same stretch, America is still down six million jobs, data shows.
The economy added 227,000 jobs in February, more than the 204,000 economists expected, the Labor Department reported this morning. The unemployment rate remained unchanged at 8.3% from last month. But while the economy has added more than 200,000 jobs for three straight months, the damage to employment done by the Great Recession is still far from repaired.
Between December 2007, when the recession officially started, and February 2010, when the Labor Department’s reports show employment hit bottom, the economy lost more than eight million jobs. Between then and now, we’ve added back more than two million jobs. With that big of a gap yet to fill, it’s extremely unlikely the unemployment rate will fall to a more “normal,” pre-crisis level of 6% by the end of this year, says Robert Johnson, the associate director of economic analysis at Morningstar. A rate below 8% — last seen in January 2009 — is possible by the end of the year, however, Johnson says.
The struggling housing market is part of the problem. Much of the job growth that happened in the recovery that began in 2002 came from construction and related industries, Johnson says. More than two million of the eight million jobs we’ve lost in this recession were in construction, representing a huge hit to the industry. “We lost about 26% of the construction jobs in this country,” Johnson says, and almost none of those jobs have come back. Employment growth in the industry “is a rounding error,” he says. This month, construction employment fell slightly, losing 14,000 jobs after two months of gains. At the height of the boom, this country was building more than two million new homes a year; as of the Census Bureau’s latest report, that rate is now below 700,000 new homes. “We’re not going back to 2.2 million housing starts in my lifetime,” Johnson says, but in the next 12 to 18 months we could be back to building more than a million new homes a year, which should add about a million new jobs in construction.
Of course, that’s still several million jobs short of pre-recession employment levels. But other sectors, such as health care and manufacturing, have been growing strongly in this recovery, Johnson says. “There’s a few categories of jobs where you can write your own ticket [like engineers and accountants], and there’s other categories where I don’t think people are ever getting their jobs back,” Johnson says.