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Putting Today's Unemployment Data In Context

The BLS unemployment data released today showed a glimmer of hope. However, drilling into the report some interesting facts jump out. Payrolls rose by 162,000 which is something of a relief compared to the 500k loss per month devastation that was taking place this time last year.

However, out of those 162,000 new jobs, 39,000 were directly attributable to the census hiring binge and another 80,000 were government jobs. Taking away those major components of the report, probably only 40,000 net new private sector jobs were created and it is those jobs that pave the way to recovery. Voters understand this, which explains why the President's job approval numbers continues to deteriorate.

As a side note, Michael Barone wrote a piece recently that speaks indirectly to the importance of private sector jobs versus government jobs and how it relates to rise of the Tea Party movement.

Over the past 14 months, our political debate has been transformed into an argument between the heirs of two fundamental schools of political thought, the Founders and the Progressives. The Founders stood for the expansion of liberty and the Progressives for the expansion of government.

It's an argument that has been going on for a century but was largely dormant over the quarter-century of low-inflation economic growth that followed the Ronald Reagan tax cuts. It's been raised again by the expand-government policies of the Obama administration and Democratic congressional leaders.

I think much of the heat that has surrounded the current political debate is the result two things that Barone mentions. First, the constituency that embraces the Founder's beliefs inherently distrusts the rise of government affluence and influence. Second, there is a large and loud constituency today that is the product of the Reagan revolution that saw the impact of the Reagan tax cuts (particularly on employment) and has first hand experience with the inimical effects of high marginal tax rates and intrusive government influence in the private sector. In that context, today's unemployment report simply tells us the patient may have stopped bleeding, not that recovery is imminent.


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Comments (4)

40k new jobs is nice. But ... (Below threshold)
GarandFan:

40k new jobs is nice. But the economy needs to create above 120k new jobs each month just to take in those who've reached 18 and are going out on their own. With over 8 MILLION "formerly employed", 40k translates to a "recovery" that will never occur.

Barry talked about spending our way to prosperity, perhaps he's now working on 'government hiring' our way to full employment.

80,000 new government leech... (Below threshold)
TexBob:

80,000 new government leeches?

Just wonderful. Government workers produce nothing. Who is going to pay the taxes for their wages and benefits?

It should be noted that gov... (Below threshold)
Speller:

It should be noted that government sector jobs are probably not subject to payroll taxes and prohibitive new healthcare plan taxes that private sector jobs are subject to.

This bodes well for increased government employment if the goal is communism for the economy as a whole which includes the government takeover of each sector of the economy as payroll and healthcare taxes erode private sector ability to exist let alone compete with what the government will be offering as one by one each sector fails due to punitive taxation and legislated compulsory enrollment.

If things keep going as the government agenda plans, people will eventually be getting their hair cut at Barack's Barber Shop and Student Bookstore Kiosk.

Look for the federal government passing regulations for childcare which will lead to a nationally funded childcare program, stay-at-home fun-employed parents excepted, which will provide cradle-to-the-grave indoctrination in Marxism and a warning to children that if Daddy or Mommy displines you then call 911 to report their abuse.

Eventually the government will be the only employer and the current socialism enabling Unions will rue the day when their Unions are broken up by an unsympathetic government Czar whose only interest will be to keep costs down and wages + working conditions within budgeted parameters, in that day, strikes will become impossible because alternative employment and government welfare handouts will no longer exist.

It's only a Brave New World if you're too stupid to see the next load of dross hurtling down the pipe.

"In that context, today's unemployment report simply tells us the patient may have stopped bleeding, not that recovery is imminent."

If we can suspend our disbelief.

Me, I can't do that considering all the lies this government has been telling.
I don't beieve the patient has stopped bleeding, the blood is just not visible anymore because of the judicious application of leeches.
I think the patient is being turned into Soylent Green and fed back to any willing buyer while the government uses Cash for Clunkers as a universal business model for America.


It should be no... (Below threshold)
It should be noted that government sector jobs are probably not subject to payroll taxes and prohibitive new healthcare plan taxes that private sector jobs are subject to.
My government-employed family members pay FICA and Medicare payroll taxes just like I do -- in addition to premiums for their own health insurance plans just like I do.



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