What to Watch on Jobs Day: Public Sector Job Growth

In last month’s jobs report, virtually every indicator demonstrated that, more than four years since the official end of the Great Recession, we have not yet entered a robust jobs recovery. That main point will not change when the August numbers are released on Friday; we will very likely see a continuation of these troubling labor market trends that persist due to weak hiring.

Additional Indicator to Watch: It is possible that the public sector will have added jobs in August. If so, this would be the second month in a row of gains (in July, the public sector added 1,000 jobs). This would represent an important step in the right direction—jobs losses in the public sector have been an enormous drain on the recovery. However, it’s useful to keep in mind just how large a public-sector jobs hole in the economy faces. Since the recovery began in June 2009, the public sector has lost 733,000 jobs. Public sector employment should naturally grow as the population grows. To keep up with population growth over this period, public sector employment should have increased by around 680,000.

All told, the total gap in public sector employment today is around 1.4 million jobs. This is a useful benchmark to keep in mind Friday when assessing August public sector jobs gains (or losses).