Trickle-Down Government: Jobs Numbers Inflated by Public Sector Hires

Trickle-Down Government: Jobs Numbers Inflated by Public Sector Hires

Cash-strapped state governments and the federal government added thousands of jobs in July, August and September, boosting overall jobs numbers. The U.S. Bureau of Labor Statistics (BLS) announced today that it had revised jobs numbers for July and August upwards, with revised gains coming from public sector jobs.

According to the BLS, government jobs grew 18,000 in July, 45,000 in August, and 10,000 in September, accounting for nearly 17% of total gains. Those government increases reverse the trend of recent years, in which public sector jobs had been cut while the private sector had experienced modest job growth. 

Update: In addition, the revisions meant that instead of shrinking by 28,000 jobs in July and August, as previously reported, state and federal governments grew by 63,000 across the same period–a net shift of 91,000.

The total number of jobs added in September was 114,000, according to the BLS–well below the monthly average in recent years, and far below the July jobs increase, which had been described as good. 

Economists had predicted a rise of 111,000 to 113,000 jobs–but that rise would have meant a rise in the unemployment rate from 8.1% to 8.2% (Update: given long-term labor force trends). 

With the large revisions from the BLS–revising private sector jobs down, and public sector jobs up–the modest rise in September jobs coincided with an unusually dramatic drop in the unemployment rate, causing some experts to greet the new numbers with puzzlement.

Government jobs are an important part of the explanation.


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