Dissecting the Employment Numbers

by Elliott Morss


In earlier pieces, I have focused on the monthly “New Jobs Created” total reported from the Bureau of Labor Statistics. My rule of thumb has been and remains “wait until the private sector has generated 200,000 new jobs monthly for at least four straight months before considering austerity measures.”

But in addition to reporting employment aggregates, the Bureau also reports employment numbers by industry. These numbers are worth examining, and I do so below.

Government and the Private Sector

Aggregate employment numbers for the private and public sectors are presented in Table 1.

Several points stand out from this data:

  • The job losses of more than 8 million from 2007 to 2009 exceeded job gains in the entire 2001-2007 period.
  • In 2011, government employment is about 17% of the total.
  • While private sector employment fell 7.6% in the 2007-2009 period, overall government employment gained a small amount.
  • Perhaps most significant is what happening to government employment now. Since 2009, state and local government revenues are down, forcing them to lay off workers.

The state/local government revenues will not recover quickly. That is why I believe a Federal stimulus in the form of grants to these governments would be a most efficient employment generator.

The Labor Department also breaks out jobs by “goods-producing” and “service-providing”. Goods-producing jobs have only increased by 241,000 since 2009. Private service-providing jobs have grown by 1.9 million while government service jobs have fallen by 421,000.


Since 2001, employment in durable goods manufacturing has fallen (see my article on the reasons for this decline).

However, since 2009, there has been a 4% increase that has generated 298,000 new jobs. The only lagging sector is furniture, a sector dependent on the real estate industry.

Other Industries

Table 3 provides employment data on several other important industries.

In construction, 1.8 million jobs were lost between 2007 and 2009. And another 134,000 jobs were lost since 2009. Note that the job losses were housing related. There have been job gains in civil engineering, possibly related to the first Obama stimulus program.  Both wholesale and retail trade have added jobs since 2009. One has to wonder whether the increased use of the Internet for purchases might curb retail employment going forward. Professional service and health care also appear to be rebounding. Health care: what recession?


8.8 million US jobs were lost in the global recession. Since then, the private sector has added 2.1 million jobs. But housing remains problematic with the consequence that construction continues to shed jobs. Falling state and local revenues has led to significant worker layoffs.

Republicans rail against tax increases, claiming they would be just the wrong medicine for a weak economy. They appear oblivious to the fact that the government expenditure cuts they insist on will slow growth by even more. Bernanke is aware just how fragile the recovery is. He is prepared to take further action. But a fiscal policy stimulus would be far more effective than anything he could do to strengthen the recovery.

Related Articles

Austerity Rather than Stimulus? Wait a Minute! by Elliott Morss

Is Ignorance Bliss?  A Look at U.S. Income Inequality by Elliott Morss

From Stimulus to Austerity – What Role for Taxes? by ElliottMorss

May 2011 JOLTS:  Poor Jobs Growth Coming? by Steven Hansen

Employment Growth All From Small & Medium Business Since 2000 by Steven Hansen

June 2011 Jobs Report Shows No Sign of Impending Recession by Steven Hansen

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