- If strong job growth continues, the US labor market will reach its pre-crisis payroll count in July.
- Such a rebound would be about three times as fast as the recovery from the Great Recession.
- The US could even see a full jobs recovery by the end of June if hiring only slightly accelerates.
The US jobs recovery is in its final stretch. If the current pace holds, the labor market will be fully healed before summer is over.
Data out Friday morning showed the economy continuing to add jobs at an extraordinary pace. The US created 428,000 nonfarm payrolls through April, matching the gains seen in March and handily exceeding the 391,000-job projection from economists. Despite high inflation, the labor shortage, and the Federal Reserve's pullback of pandemic support, the country is still adding jobs at roughly double the pre-pandemic pace.
The latest print also keeps the job-growth trend at a blistering pace. Average monthly job creation over the previous three months reached 523,000 in April, Insider calculated. Unless job growth slows dramatically in the months ahead, the economy is on track to reach its pre-crisis payroll count by July.
Recovery could come even sooner if the next two reports surprise to the upside. The current pace would place total nonfarm payrolls at 152.4 million in June, just a hair below the 152.5 million seen in February 2020. It would only take one better-than-expected month of job growth for a complete rebound to arrive in June.
Payroll creation could also slow as the country gets closer to completing its jobs recovery. Recent months have shown a moderate deceleration from the massive gains seen earlier in the pandemic, and as the economy transitions into its new normal, it's unlikely to feature such blowout hiring numbers.
"What we're starting to see, not full force yet, but eventually, we're gonna see a transition to regular market conditions. That's going to happen," Secretary of Labor Marty Walsh told Insider.
To be sure, a complete rebound only brings the labor market back to where it stood before the pandemic. The economy was adding about 200,000 jobs every month up to the lockdowns of 2020, meaning there are another 6.3 million jobs that would've been created had the pandemic not happened, Elise Gould, a senior economist at the Economic Policy Institute, said in a tweet. If job growth continues at its current rate, however, those payrolls could be recouped by the end of 2022, she added.
The Friday jobs report further emphasizes just how transcendent the economic recovery has been. In just 26 months since the pandemic recession began, the US has recouped about 95% of the jobs it lost. By comparison, it took the same amount of time just for the jobs recovery to start after the 2008 financial crisis. Where the jobs recovery from the Great Recession took about six years, the current rebound is set to take just over two.
It's not just the prior recovery that the US is outpacing. The pandemic rebound is on track to surpass the recoveries from the early 1990s and early 2000s as well. Considering the record-breaking employment slump seen in early 2020, today's recovery is in a league of its own.
A payrolls recovery is only one way to track the labor market's progress, and other measures reflect a much slower climb to full health. While April job creation beat forecasts, the unemployment rate held at 3.6%, still stuck just above the record lows seen before the health crisis.
The rebound in labor force participation has been even bleaker. The rate, which tracks the share of people either working or actively looking for work, remains well below pre-pandemic levels as millions of Americans remain on the labor market's sidelines. The rate turned lower in April as female participation weakened, signaling there's much more to be done to attract Americans back to the workforce.
Still, the slow recovery in participation has yielded some benefits for working Americans. The imbalance between worker supply and demand, informally referred to as the labor shortage, has pressured businesses to raise wages at the fastest pace in decades in hopes of attracting job applicants.
The gap between available workers and job openings hit a record in March, signaling the labor shortage is going strong and still giving job-seekers extraordinary bargaining power. They seem to be taking advantage of it, too, as quits rose to a record 4.5 million in March.
There's no guarantee the labor market will reach its pre-crisis job count in July, or even by the end of the summer. Payroll growth could slow dramatically as the economy edges closer to a full rebound, and the labor shortage could start to crimp hiring.
Yet the April jobs report showed job gains continuing to beat estimates and maintain a historically strong pace. Americans might just have one more thing to celebrate this July 4 holiday.