Amid lower tax revenue due to the recession, state and local governments have cut 455,000 jobs since the beginning of 2010, almost half of them in education.
Overall, the proportion of government jobs fell to 16.7 percent in October, its lowest level in three years.
The cuts are a victory for those who argue for a leaner public sector, but they have also weighed down the overall job market.
“Things are moving in the right direction, but they’re not moving fast enough,” said Alan Krueger, who was confirmed late Thursday as chairman of the White House Council of Economic Advisers. “The gains in the private sector were fairly broad-based, which was good to see, but we keep seeing government employment contracting, especially at the state and local level.”
The report on the job market showed 80,000 net new jobs were created last month, with the strongest gains in the professional and business services sector, which added 32,000 positions — 15,000 of them at temporary help services. Other gainers included health care and education, which added 28,000 jobs, and leisure and hospitality, which added 22,000.
During the recession of 2008 and 2009, public employers generally held steady, not slashing jobs substantially. But since then, particularly since federal stimulus dollars ran out in 2010, the losses have been persistent.
The other major sector to lose jobs in October was construction, which shed 20,000 positions, and even that may have been due in part to government cutbacks.
“Some of the weakness in construction is due to state and local governments,” said Stuart Hoffman, chief economist at PNC Bank. “Highways, sewers, bridges, prisons, all the buildings state and local governments need, that’s been cut back as well.”
Overall, the latest job figures point to a labor market frozen in place, neither adding enough jobs to put the vast armies of unemployed — 13.9 million people — back to work, nor falling into an outright contraction or shedding jobs. Consistent with other recent economic data, the report at least offers relief from the fear of double-dip recession, pointing instead to slow-and-steady economic growth.
“The last few months give some confidence that the recovery hasn’t stopped,” said Tig Gilliam, chief executive of Adecco Group North America, a large employment services firm. “But companies are not sitting there saying, ‘I see such confidence in the recovery that I need to get ahead of it and hire now.’ They’re waiting until they absolutely have to bring on additional people.”