U.S. jobs recovery is near - hold your applause

The labor market reached a milestone last month. Private-sector employment crept past its all-time high in January 2008 when the Great Recession was a month old.

But economists weren't celebrating after the Labor Department released its March employment report Friday, which showed businesses added 192,000 jobs and the unemployment rate was unchanged at 6.7%.

"I think the fact that it took five years (since the recovery began in June 2009) to get back to where we started really speaks to how drawn-out this recovery has been," says economist Paul Edelstein of IHS Global Insight.

Total employment remains 437,000 jobs short of its peak because federal, state and local governments employ in excess of half a million fewer workers than in January 2008. The economy will likely erase that deficit in the next two to three months, Edelstein says.

That doesn't mean the job market has regained its former vigor. Unemployment remains high largely because the working-age population has grown by nearly 15 million since January 2008. Had the recession not happened, total employment would be upwards of 151 million today, not last month's 138 million, estimates economist Sophia Koropeckyj of Moody's Analytics.

Part of the problem is employers have hired cautiously and instead are squeezing more out of each worker, Edelstein says. Koropeckyj predicts an accelerating housing recovery and the unleashing of pent-up consumer demand will drive up job gains to an average 271,000 a month from about 180,000 the past few years.

Yet by the end of 2016, total payrolls will likely still fall about 12 million short of where they might have been absent the recession, Koropeckyj says. Some of the recession's effects can't be undone — the economy's growth has been stunted for years as many Americans, including the unemployed, have reduced spending and others temporarily or permanently dropped out of the labor force.

March's healthy job growth was propelled by milder weather after a brutal winter that held down gains. Also, payroll additions for January and February were revised up by a total 37,000, meaning a winter of weak advances was not as feeble as the government first estimated.

The unemployment rate stayed at 6.7% despite a surge in job growth because there were about 500,000 more unemployed people looking for jobs. Better job prospects drew discouraged workers back into the hunt.

Strong hiring in professional and business services and health and education fueled last month's employment gains. Public-sector payrolls were unchanged.

Some other labor market indicators were also positive. The average workweek rose to 34.5 hours from 34.3 hours amid the better weather.

But a broader measure of joblessness that includes part-time employees who prefer full-time jobs and those who've given up looking for work, as well as the unemployed — ticked up to 12.7% from 12.6%.