This morning’s jobs report show payroll employment increased by 217,000, passing the pre-recession peak. This might sound like good news, but it is important to remember that return to the pre-recession level of employment does not mean we are back to health in the labor market.

The  economy is healing, but far from healed. Almost six-and-a-half years have passed since the start of the recession, and in that time the working-age population grew by 14.5 million. That means we needed to have added millions more jobs than we have. More precisely, we now need 7 million jobs to get back to health in the labor market given growth in the potential labor force since the start of the recession. At the current pace of job growth, it will take nearly four more years to fill in that gap.

There was no progress in the key numbers in the household survey – the unemployment rate, the labor force participation rate, and the employment-to-population ratio were all unchanged from April. Workers are losing ground as wage growth was below recent inflation trends. Average hourly wages grew by 5 cents in May, bringing the annualized three-month growth rate to 1.5%, below recent inflation trends.