It's a government recession

It started out as a construction / financial / manufacturing recession. Now employment in every sector of the economy is stagnant or growing. Only the government is shedding jobs. Here's the net change in employment by sector, July 2010 - July 2011, from the BLS:



Total nonfarm: +1.258 million

Total private: +1.805 million

Mining and logging: +89,000

Construction: +32,000

Manufacturing: +165,000

Trade, Transportation and Utilities: +342,000

Information: -23,000

Financial activities: -15,000

Professional and Business Services: +512,000

Education and Health Services: +405,000

Leisure and hospitality: +212,000

Other services: +86,000

Government: -547,000

Federal: -207,000

State: -90,000

Local: -250,000



Since March 2010, when overall employment started rising, nonfarm payroll employment has increased by an average of 109,000 per month - an anemic rate that is a bit under the level necessary to keep the unemployment rate steady. Hence the unemployment rate has increased a smidge. If government employment had increased by 18,000 per month during that period, the average rate of increase under the Bush administration, the average monthly increase in payroll employment would have been 158,000 - too low but not totally disheartening - and the unemployment rate would be drifting down slowly. Had government employment grown at its Bush-era rate, total employment would be 776,000 greater right now. And that is not taking the multiplier effect of government employment into account.



Faced with these facts, what are policymakers doing? Trying as hard as they can to reduce government employment at the federal, state, and local level. Brilliant!