The jobs numbers released this morning contain good news almost across the board: nonfarm payroll employment rose by 227,000 jobs, above the 210,000 predicted by economists. Recent jobs numbers were also revised upwards: the Bureau of Labor Statistics says 284,000 jobs were added in January, not the initial estimate of 244,000. December actually saw 223,000 jobs added, not 203,000. This makes the three best months of hiring since the recession began.
The hiring came in nearly all-categories—both high-paying and low-paying sectors added workers. The service industry, mining, and professional services all added jobs. The manufacturing sector added 31,000 jobs, which is good news and a great news hook for President Obama’s visit to Virginia today, where he will announce a new manufacturing innovation initiative.
There are many reasons for the uptick, from businesses having reached productivity limits, thus requiring the addition of new workers to keep up with increasing demand, to auto manufacturing kicking back into gear after being disrupted by the earthquake in Japan one year ago today.
But the employment situation is getting better for another crucial reason: public sector jobs are no longer being savaged. Over 570,000 public sector jobs have been lost since the recession began, decreasing steadily every month—even though the private sector has been adding jobs since mid-2009. In 2011, the public sector was losing an average of 22,000 jobs per month, but in February only (“only”) 6,000 jobs were lost.
People often talk of outside factors that could derail the fragile economic recovery, from gasoline price shocks, to economic instability in Europe, to another bank failure on Wall Street. These are worrisome yet mostly uncontrollable events.
But a return to slashing austerity cuts at the federal and state level would also retard the recovery—and this is not only a completely controllable policy choice, but one many people in Washington are actively trying to make.
The bipartisan debt ceiling deal in August mandated hard spending caps for the next ten years, and they get steeper beginning in the upcoming fiscal year 2013. This automatically increasing austerity will inevitably harm not only federal workers, but also slow down aid to states struggling to retain employees. Even worse, House Budget chairman Representative Paul Ryan is going to release his blueprint for the federal budget in the coming weeks—and he’s reportedly pushing for federal spending below even these caps.