Saturday, May 5, 2012

Yesterday's Employment Report

---is not good.  Not horrible, unemployment down a bit, but for the wrong reasons.

Here's what Jared Bernstein said about it:


It doesn’t work here, it doesn’t work in Europe, it doesn’t work for state and local governments.  I’m tempted to ask how many data points we need to recognize this crucial economic truth, but I’m afraid data points don’t have much to do with it.

Another weak jobs report for April, with only 115,000 jobs added—130,000 in the private sector—and a lower-labor-force-induced tick down in unemployment, from 8.2% to 8.1%."

This is the third month in a row in which the number of jobs added is smaller than the month before.  Not yet a truly established trend, but not a report that will bring people into the streets to dance with glee, either.

Bernstein also has the usual graph showing the overall non-farm monthly employment gains over time.  But to support some of my prior comments I wanted to separate out public from private employment, because for most of the last few years public employment with the government has been declining.  Last month, for example, private non-farm employment increased by 130,000 jobs, but government employment declined by 15,000 jobs.  So I spent an hour downloading the historic data from the BLS and reorganizing it in Excel so that I could produce this graph:

The really tall red bar showing a big increase in government employment around May of 2010 was census hiring: the Constitution requires it every ten years.  Those employees were shed fairly quickly over the next few months as the census was completed.

But the thing to notice is that, apart from the census hiring most months since 2009 the red bars representing the change in government employment are below the zero line: government has been shrinking through most of the current recession.  That's just the opposite of what should have been happening: to restore prosperity in a recession the government should grow, not shrink.

And, of course, according to the American Society of Civil Engineers says we have $2.2 trillion of work to do just to repair our existing infrastructure, so there's plenty of work for government hires to do.

Just saying.


Addendum, two hours later: the graph I like to look at as an indicator of where we really are in the recovery.  This is a graph of the number of people working part time "for economic reasons", meaning working part time when they would really like to work full time.  These people are counted as employed in the employment data above.   Numbers in thousands, of course.

You can easily see the recessions in early 1980s, 1990s and 2000s.  The recession that began in 2007 is clearly a lot steeper and a lot higher.  Even now we haven't returned to the levels we experienced at the peaks of those prior recessions.  But our direction is right, in general.  But even that figure ticked up in this last employment report.


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  2. This is brilliant. Regan's legacy will haunt us for decades to come.