Monday, May 9, 2011

Hype and Reality

Since first publishing a monthly graphic (in December of 2009) based on the Bureau of Labor Statistics’ release of the employment change data, I have not shown the details underlying the single number that always makes the news. This month I’ve decided to do so. The reason for that, apart of the utility, sometimes, of seeing more details, was the current administration’s pronouncements about the April results. President Obama appeared on TV and talked about a gain of 268,000 jobs—whereas the number I reported, echoing the BLS, was 244,000. This startled me, at first—hence I went to look. Turns out that the President was concentrating on gains in private jobs and never mentioning that fact that these gains were balanced by a loss of 24,000 government jobs. They break down as follows: the federal government lost 2,000, the state governments 8,000, and local governments 14,000 jobs. These losses, needless to say, are due to failure of our elected officials to raise taxes in order to cover the services that they provide. Here is the graphic on details:

The top line, total nonfarm jobs gained, is the net of private gains and public losses. The second line is what the President was emphasizing.

Now there is no harm in emphasizing the positive, to be sure. But overstating actual gains by ignoring a sector of the economy, which suffered losses, does not raise my confidence. Rather the opposite. Aside from that, these data show some interesting trends. The big gains have come in the services providing sectors (209,000 jobs), much smaller gains in the basic sectors, the goods producing. In that category I include mining, construction, and manufacturing (a gain of 35,000 jobs). The leading gainer was retailing; it restored more jobs than our basic industries combined. When looking at the substantial gain in education and health services, we must keep in mind that virtually all actual teachers are classified as government—where job losses were shown in April. If we look at government jobs, we notice that the largest public sector occupation is elementary school teachers (as documented here). I consider them to be part of a basic industry as well.

The source data for the graphic may be found here.

1 comment:

  1. That's a good graph in terms of explaining why budget cuts can act as an anchor on the economic recovery. A job recovery still needs to be first and foremost in terms of current economic policy because that's what will ultimately drive economic growth.