Government jobs are finally starting to come back

October 5, 2012

This month's jobs report showed a few notable upticks in hiring, including for governments at the state level. State governments added 13,000 jobs in September, marking their third straight month of public gains. It's been a slow recovery for state employees, but the numbers have generally been creeping upwards since December 2011, when state government employment was at its lowest level since the beginning of the recession.

Protesters against a government shutdown held signs during a rally at the Minnesota State Capitol in July 2011. (Carlos Gonzalez/Associated Press)

The gains were concentrated in education, which one would expect employment to increase as we head towards the beginning of the school year. But the numbers are seasonally adjusted, meaning they take that annual bump into account. 

The improved hiring makes sense as state budgets are finally starting to recover from the lost revenue and austerity measures they imposed during the recession, particularly after the stimulus money expired. State tax revenues are finally started to come back as business and personal incomes have recovered: State tax collections have risen for the past 10 consecutive quarters, and they're projected to keep rising in 2013, according to the National Conference of State Legislators.  About a third of states also rely on a real-estate transfer tax that's also recovering more money as the housing market has started to come back.

But overall, public-sector jobs still have a long way to come back, given the severity of government budget cutbacks that have been made. Overall, about 600,000 government jobs have been lost since the beginning of the recession. Local government jobs have recovered somewhat since June — when the sector hit its lowest level of employment since the beginning of the recession — but they shed 7,000 jobs between August and September. What's more, the looming sequester could mean cutbacks in 2013 — not just on the federal level but on the state and local level as well, as the nation's mayors have warned.

*Update: Here's even more on government job growth from Brookings' Gary Burtless: "This is the first time since March–May 2010, when the Census Bureau was adding temporary workers for the decennial census, that we have had three successive months in which government employment increased...The latest BLS statistics show that government employment is now adding to rather than subtracting from employment growth."

JPMorgan's chief economist Michael Feroli delves into the same trend. " Government employment increased 10,000 last month, and even more surprising, was revised up significantly over the past two months," he writes. "The big upward revision came from 91,000 extra government jobs, mostly local education."

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