The nation's unemployment rate dipped slightly in May, to 9.7 percent from 9.9 percent, but that was not great news because it was driven by a decline in the number of people job-hunting, the Bureau of Labor Statistics said in the monthly jobs account.
"We're in a slow and steady jobs recovery, emphasis on slow," said Harry Griendling, chief executive of DoubleStar Inc., a West Chester employment consultant. "None of this is surprising, and I don't understand why the stock market reacts like it did today. I think it's emotional."
Even though economists had been predicting since the recession's onset in December 2007 that job growth would be slower than usual, some things happened this year to cause people to get ahead of themselves.
Griendling said the foray of the Dow Jones industrial average over 11,000 in April and strong jobs growth that month raised expecations. The Dow fell 323 points Friday to close at 9,931.97 - only its second close below 10,000 since early February.
Another factor for jobs was the unleashing of pent-up demand, particularly in the auto sector this spring, said Hank Smith, chief investment officer at Haverford Trust Co. in Radnor. "That can be unleashed in a period of months and make things look better than they really are," he said.
Despite the uncertainty of the recovery, Smith does not expect the country to slump back into recession, largely because the Federal Reserve will keep doing all it can to prevent it - especially keeping interest rates low, he said.
The May jobs report contained numerous signs of sustained economic growth, including a 3.7 percent gain over the last three months in an index of total hours worked and a fifth consecutive month of job gains in manufacturing and other major sectors, a Wells Fargo Securities analysis said.
But it also showed that the long-term unemployment - counting people without a job for at least 27 weeks - reached an all-time high of 6.76 million. As a percentage of the labor force, long-term unemployment, tracked since 1948, has been at a record for 13 months.
Philadelphia resident Dave Sexton, 30 and out of work for 18 months, is in that category. He had moved to Georgia for a job in a cookie bakery about two years ago but was laid off after four months.
"I wasted my time, wasted my money, so I came back up here," Sexton said Friday at a Center City rally for extended federal unemployment aid. "It's been pretty dry," he said of the job market here. Sexton's last long-term job was at a pharmaceutical company in York. That ended in 2005, after five years.
Economists agree that a long-term recovery depends on small businesses, but Lori Reiner, a partner in the Jenkintown office of Amper, Politziner & Mattia L.L.P., an accounting firm, was cautious.
Reiner said owners of companies that cut back sharply to survive the recession were determined to keep tight reins on their operations. "In retrospect, they felt like they were fat, in terms of the number of employees, discretionary spending," Reiner said.
Even companies whose core businesses were not rocked by the recession are refusing to spend on anything that is not absolutely necessary.
"They need to feel bullish, they need to feel confident," in order for a strong recovery to take hold, Reiner said. "Until they start to do that, it's not going to feel right."
Contact staff writer Harold Brubaker at 215-854-4651