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Look Ahead: Light Economic Day, Articles on Government Employment


There are two minor economic indicators scheduled for release tomorrow.

• The Mortgage Bankers Association (MBA) will release the mortgage aplications index.

• At 10:00 AM, Monthly Wholesale Trade: Sales and Inventories for March will be released.

Last Friday I discussed the significant decline in government jobs over the last few years, and posted a graph comparing public sector job gains (and losses) for President George W. Bush’s first term (following the stock market bust), and for President Obama’s current term (following the housing bust and financial crisis). The Bush term was added for comparison purposes only, and there are many differences between the two periods.

Public Sector JobsA big difference between Mr. Bush’s first term and Mr. Obama’s presidency has been public sector employment. The public sector grew during Mr. Bush’s term (up 900,000 jobs), but the public sector has declined since Obama took office (down 607,000 jobs). These job losses are at the state and local level, although the Federal government has been losing jobs over the last year. These job losses have been a significant drag on overall employment.

It appears the state and local public sector job losses are slowing, and it is likely that the decline in state and local public payrolls will end mid-year 2012. However the Federal government jobs losses will probably continue.

Here are two interesting posts on government workers:

• From the FT Alphaville: Fact of the day, US government workers edition

Government workers account for 9.1% of the working age population, equaling the lowest share on record. When this government employment share of the population was last witnessed in 1984, it was alleviated in part by a massive surge in government spending, with yearly real federal spending topping out at 10.6% in 1985. Yet such an offset seems unlikely in the quarters ahead, as major government spending increases in the current political climate are verboten.

That’s via Moody’s Analytics, and this is mostly a state and local government story, with federal government jobs staying roughly flat since the end of the recession when excluding temporary census hiring.

The only silver lining is that the decline might have bottomed …

• From the WSJ: Unemployment Rate Without Government Cuts: 7.1%

The unemployment rate would be far lower if it hadn’t been for those [government] cuts: If there were as many people working in government as there were in December 2008, the unemployment rate in April would have been 7.1%, not 8.1%.

For the monthly economic question contest, here are two question for later this week (Thursday and Friday):

Calculated Risk

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