Solid recovery continues in US firms

US employers kept up a solid pace of hiring in May, returning employment to its pre-recession level and offering confirmation the economy has snapped back from a winter slump.

Non-farm payrolls increased 217,000 last month, the Labour Department said yesterday, in line with market expectations. Data for March and April was revised to show 6,000 fewer jobs created than previously reported.

“That suggests the first quarter was an anomaly in terms of what the economy was and we are back to a decent pace of job creation. Overall it’s a pretty solid report,” said John Canally, an economist at LPL Financial in Boston.

May marked a fourth straight month of job gains above 200,000 even though there were fewer gains than the 282,000 seen in April when hiring was still bouncing back from a winter lull.

The nation finally recouped the 8.7 million jobs lost during the recession, with 8.8 million more people in work now than at the trough in February 2010. The working age population has risen 10.6 million since then, though, and 12.8 million people have left the labour force.

“The trajectory of this recovery is still slower than all other ones,” said Sam Bullard, senior economist at Wells Fargo Securities in Charlotte, North Carolina. “That’s not going to change and it’s not fast enough to bring back a lot of the workers who stopped looking anytime soon.”

US stock prices opened up modestly, while yields on US Treasury debt were little changed. The dollar was also steady against the yen and euro.

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

The unemployment rate held steady at a five and a half year low of 6.3% in May, even as some Americans who had given up the search for work resumed the hunt. Economists expect more previously discouraged workers to re-enter the labour force over the year.

- Reuters