Remember all the talk about how sequestration was going to lead to endless numbers of firings and endless cuts in government services? Surprise! It did not really happen anywhere as much as they were worried about. You have to remember that sequestration was simply a cut in the growth of government spending rather than true cost cuts. Today’s unemployment and payrolls report from the Labor Department shows that on many levels the state and local governments are back to hiring again.
There is a slight discrepancy between the raw numbers and the seasonally adjusted numbers, but the seasonally adjusted numbers are the main focus because that is what economists’ long-term forecasting is based on. On a seasonally adjusted basis, the total government workforce lost only 3,000 jobs in the month of May to 21.848 million jobs.
Federal jobs were down by 14,000 in total, but that was only a loss of 9,400 if you back out the Postal Service employees. The state government jobs fell by 2,000, but the education jobs at the state level added 4,300 jobs. The big change seen is that the local governments are hiring at the city and county levels as these payrolls grew by 13,000 on a seasonally adjusted basis. If you use raw data and do not adjust for the seasonality, the local government payrolls grew by 110,000 from April to May.
Again, the education sector accounted for the bulk of the hiring, even at the local level. Education jobs grew by 7,200 and outside of education the local government jobs were up 5,700.
There may be an obvious point here. Increased property tax and lower households falling off the tax rolls has to be one of the key driving forces here. Sequestration is a federal government issue, but remember that much of the federal monies trickle down to the state and local levels.