Government Jobs Continue Growth Apace with Economy — Maybe

The U.S. public sector may be staring into a frightening abyss of budgetary woe in the future, but right now its employment numbers are all right — maybe.

If we lump in federal, state and local government with the U.S. Postal Service and education, the public sector added 300,800 jobs between June and July for a growth rate of 1.4 percent, about on pace with the economy as a whole.

That follows the trends of June, which looked better after two consecutive months of shrinkage.
The data comes from the week containing the 12th of the month, which was smack dab in the middle of a national resurgence of COVID-19 cases.

However, those trends come from seasonally adjusted data. And shortly after the U.S. Bureau of Labor Statistics published its report, the National Association of Counties pointed out that seasonal adjustment might be assuming regular fluctuations that aren't happening during the pandemic, creating a picture rosier than reality.

Education drove most of the growth in state and local government, adding about 250,000 of all jobs gained. Outside education, state and local government added about 30,000 jobs.

While the U.S. Postal Service, going through a potentially historically consequential budget crisis, lost 5,400 jobs between June and July, the rest of the federal government added nearly 32,000.
The year-over-year numbers remind us that even though government employment is rising in the short term, it has still taken a dramatic tumble since the pandemic began. Total public-sector employment in July was 4.3 percent lower than in the same month in 2019, with local government bearing the brunt of the blow.

Some of the increased costs of fighting the pandemic have been addressed with federal aid from the CARES Act, but state and local government leaders say that they will need much more if they are to weather the massive financial challenges ahead.

Previous months of analysis: June, May, April