by Bill McBride on 3/18/2012 10:34:00 AM
Sunday, March 18, 2012
This is a followup to the previous post showing the year-over-year change in private and public sector payroll jobs. With public sector jobs down over the last few years (state and local layoffs), several readers have asked if I could compare public sector hiring / firing to the early '00s.
The following two graphs compare public and private sector job losses (or added) for President George W. Bush's first term (following the stock market bust), and for President Obama's current term (following the housing bust and financial crisis).
Important: There are many differences between the two periods. Both followed the bursting of a bubble (stock and housing), although the housing bust also led to a severe financial crisis. As Reinhart and Rogoff noted, recoveries from financial crisis are usually very sluggish. See: "The Aftermath of Financial Crises".
Click on graph for larger image.
The first graph shows the change in private sector payroll jobs from the beginning of Mr. Bush's first term compared to Mr. Obama's current term.
The employment recovery during Mr. Bush's first term was very sluggish, and private employment was down 913,000 jobs at the end of his first term. The recovery has been sluggish under Mr. Obama's presidency too, and there are still 247,000 fewer payroll jobs than when Mr. Obama's term started (although it appears this will turn positive in a couple of months).
A big difference between Mr. Bush's first term and Mr. Obama's presidency has been public sector employment. The public sector grew during Mr. Bush's term (up 900,000 jobs), but the public sector has declined since Obama took office (down 590,000 jobs). These job losses are at the state and local level, but they are still a significant drag on overall employment.
It appears the public sector jobs losses are slowing, and it looks likely that the decline in public payrolls will probably end mid-year 2012.
• Summary for Week ending March 16th
• Schedule for Week of March 18th