This Great Graphic was posted by Phil Izzo on Wall Street Journal’s economics blog. Department of Labor data shows that the government (federal, state and local) have cut 750k jobs since the middle of 2009, according to the establishment survey.
Izzo notes that the household survey finds that 950k few people are employed by the government. It is form the household survey that the unemployment rate is calculated. If these people had not lost those government jobs, the unemployment rate would be 7.1% rather than 7.7% reported for February.
This is another way to look at the same data we previously presented here. A key take away from this is that one of the ways in which the current recovery has distinguished itself from other recoveries is that the government sector is an important drag rather than support for the economy. The partisanship in Washington and the large deficits and debt have obscured for many an important underlying development: the discretionary part of the government is shrinking.
This piece is cross-posted from Marc to Market with permission.