Tuesday, July 8, 2014

Too much excitement about the June jobs report


I'm seeing lots of people waxing enthusiastic about the job gains of recent months. But as I see it—in the chart above—there's nothing unusual afoot. The private sector, which is the only one that really counts, has been growing jobs at about a 2% pace for the past several years, and that's about the same pace we've seen year to date. (The chart tracks the 6-mo. annualized growth rate of private sector jobs.)


As the chart above shows, the public sector now appears to be adding jobs for the first time since the Great Recession ended. This is not cause for cheer in my book. Our public sector is a bloated bureaucratic mess that is suffocating the private sector. See Glenn Reynolds' excellent op-ed in today's USA Today to understand why.


The one thing that does look encouraging in the jobs market is the jump in Job Openings (see chart above, showing data released today) in recent months.

8 comments:

Benjamin Cohen said...

"As the chart above shows, the public sector now appears to be adding jobs for the first time since the Great Recession ended. This is not cause for cheer in my book. Our public sector is a bloated bureaucratic mess that is suffocating the private sector."--Scott Grannis.

I agree!

But there is a secret about the federal government, and it is not PC to talk about it right-wing circles.

See federal employment figures below:


Federal Employment By Agency

Defense (civilian) 772,601
Defense (uniformed) 1, 429,995
Defense (reserves) 850,880
VA 304,665
VA (receiving monthly disability, but NOT injured in battle) 3,500,000
Homeland Security 183,455
Justice 117,916
Treasury 110,099
USDA 106,867
Interior 70,231
H&HS 69,839
Transportation 57,972
Commerce 56,856
State 39,016
Labor 17,592
HUD 9585
Education 4452

As you can see, the federal government is mostly a "national security" bureaucracy.

I added in VA "disability" as such mostly payments now average more than an ex-federal soldier would make working at minimum wage. It pays to be "disabled" and these former federal employees are not the ones injured in battle. But they are being paid not to work.

This is all very un-PC to point out, unless you happen to having lunch with Ron Paul, a Pat Buchanan or David Stockman. The Cato Institute has called for cutting national defense outlays in half.

Federal employees are paid from your income and capital gains taxes. Indeed, most of your non-FICA taxes are eaten up by "national security," as is obvious by the above charts.

The huge and onerous Social Security and Medicare programs are funded by FICA taxes, and the ballooning SSDI is unemployment levies.

So the next time you hear someone saying income taxes are too high, or that capital gains taxes should be eliminated--remind them, that's how we pay for "national security."

I am fine with reducing federal payrolls. But it will take some serious conversations that a lot of politically influential groups people do not want to have.

Vets groups are invincible, btw, organized by Congressional district.



William said...

From WSJ: Foreign Currency Reserves Swell in Asia

Foreign-exchange reserves at Asian central banks are rising fast as policy makers buy dollars and other currencies in an effort to fend off the impact of a wave of cheap global capital.

http://online.wsj.com/articles/currency-reserves-swell-in-asia-1404836140?mod=WSJ_hp_LEFTWhatsNewsCollection

Benjamin Cohen said...

Why would want to fend off cheap capital?

William said...

More expensive currency. Inflation

PD Dennison said...
This comment has been removed by the author.
PD Dennison said...

Wow, that Glenn Reynold's article nailed it!!

This is why Europe is becoming Japan and the US is becoming Europe...all on the way to the old Soviet Union!

Jodi W. Brown said...

(The chart tracks the 6-mo. annualized growth rate of private sector jobs.)Executive Employers Review

Cindy Dy said...

This is really an interesting topic. I had a great time surfing and found some important tips and information from your blog. Keep it up.

Bob
www.gofastek.com