Government job losses boost unemployment numbers
Continuing high unemployment numbers reflect an economy still struggling to recover from the 2008 financial crisis. But unemployment would be far lower if not for government job cuts, particularly at the state and local level, according to the Wall Street Journal. Without those cuts, unemployment in April would have been a full point lower – 7.1 percent, instead of 8.1 percent.
The difference, according to the Journal, is because of sharp cuts in government spending and the resulting layoffs. And, an analysis by the newspaper suggests that the carnage may be even worse than is widely thought.
In one measurement, the household survey that the Labor Department uses to set the unemployment rate, there were 442,000 fewer people working in government in April than in March. That is the largest decline on record going back to 1948.
Those figures contrast with results of the Labor Department’s payroll survey of employers. It showed 15,000 fewer government jobs in April than in March.
Both surveys show significant government job losses, and sorting out the difference can be tricky. The much larger losses in the household survey, according to the Journal, may be because it is “better at picking up shifts in the makeup of the job market.” The household survey may also reflect private jobs lost because of government spending cuts, such as a school bus driver cut by a company providing contract services for a school district.
Other numbers also show government cutbacks’ drag on the economy. The Commerce Department reported in April that the gross domestic product, the broadest measure of the nation’s economy, grew at a tepid 2.2 percent annual rate in the first quarter of 2012. That was primarily due to a drop in government spending, including a 1.2 percent decline by state and local governments.