The Government’s Role In Hiring May Be On The Way Down

The most stinging criticism of the federal government’s unemployment figures is that some of the improvement in recent months is based on hiring for the process of completing the Census. By some estimates, this contribution was a quarter of the April jobless number.

It appears that jobs creation may be moving to the private sector, which means that the jobs are likely to be more permanent than Census jobs and that US businesses have become more optimistic about the course of the economy.

The latest version of the Gallup tracking poll shows total unemployment leveled at 19.1% in late May. Gallup’s numbers include the unemployed as counted by the government,  and those working part-time who are looking for full-time work, and the people who are “unattached” to the work force. Together, Gallup defines this sum as underemployment which it does not match precisely with BLS figures.

One of the things that the research shows is that the unemployed are being replaced by part-time workers. Although this may seem a disappointing sort of progress toward full employment jobs,  at least it is a step in the right direction. It is also a sign that businesses are willing to take very modest risks by bringing on new people.

Job creation also rose to its highest level this year. Companies hiring were 28% of the total survey results. Those letting people go were 21%.

Whether the Gallup poll is a leading indicator of employment the way that the ADP and Challenger Christian numbers are is impossible to tell. The correlation has not been studied. If Gallup’s results are, then May BLS numbers should be good. and the jobs recovery may actually be underway, without too much help from the employment created by the federal government.

Douglas A. McIntyre