The monthly change in employment figures continue to show growth in total employment, although at rates that remain too low for a reasonable recovery. Total non-farm employment, both private sector and government, grew by 120,000 in November, based on the Establishment Survey conducted by the Bureau of Labor Statistics. This total of 120,000 reflected an increase of 140,000 in private employment, offset by a decline in 20,000 in government employment (primarily state and local governments, which account for 87% of government employment in the US).
The 120,000 figure is too low. Based on employment growth seen during recent periods of growth in the US, the figure would need to be roughly 200 to 250,000 per month for a sustained period for unemployment to decline on a sustainable basis.
The decline in government employment is hurting this. If government employment were growing at a more historically normal rate of 20,000 per month rather than falling by 20,000 per month, total employment would growth in November would have been 160,000 by this direct effect alone. That would by itself have accounted for about half the increase one would need to get to the lower end of the 200 to 250,000 band one needs (160,000 is half way between 120,000 and 200,000). Furthermore, once one recognizes that there will be multiplier effects as well from such increased direct government employment in this economy (with its still very high unemployment), then with a multiplier of only just one (i.e. one additional private job for every additional government job, due to the resulting demand for goods and services from the new government workers), one would have gotten all the way to the 200 to 250,000 band. And with a not unreasonable multiplier of two, one would be at 240,000, near the top end of this band. That is, a major reason for the sluggish growth in employment in the US is the cut-backs being forced by conservative politicians on our government. And they say they are forcing these cut-backs in the interest of “job creation”.
It is also of interest to look at the monthly employment figures in the longer term context. Obama is being repeatedly blamed by Republican politicians for the high unemployment in the US, but the graph above clearly shows the turn-around that began precisely at his inauguration in January 2009. At that point, the economy was in free-fall. This first decelerated, and then, from the summer of 2009, the economy started to grow. The turnaround and subsequent growth was a result of a large number of government programs rapidly put in place (including, to be fair, programs put in place at the end of the Bush Administration, such as TARP). Note that the bump in government employment in the spring of 2010 was due to temporary workers hired for the decennial population census, where these jobs then were finished a few months later. Indeed, the figures do not show a significant number of net new government jobs created in 2009 or since as a result of the stimulus package of Obama. Government employment has in fact declined since Obama took office. At most, the stimulus programs reduced the number of government job losses that might otherwise have taken place.
In sum, employment turned around dramatically in January 2009, when Obama took office, and there has been positive overall job growth since early 2010. But job growth needs to be higher for unemployment to decline to acceptable levels, and it has proven difficult to do this in the face of a contracting government sector.
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