The fear that a drop in public sector jobs could undermine overall national employment has become a reality. The economy may have added an average of over 100,000 jobs each of the past six months. However, the unemployment rate among federal, state and local workers has risen only modestly. That has started to change, which could color the jobs picture throughout 2012.

A new Gallup polls shows that:

Job creation by the U.S. federal government fell further into negative territory in December 2011 with Gallup’s Job Creation Index at -20, worsening from -15 in November and from -12 in October. While 23% of federal employees in December said their area was hiring, 43% said employees were being let go — by far the most negative conditions Gallup has found since it began tracking federal government job creation in August 2008.

The same research notes a drop in state and local jobs as well.

The layoffs among state and local workers spread throughout the recession as tax receipts fell. Some states have said budget deficit problems are beginning to improve a bit. That improvement is not enough to create jobs growth, though. Moves by some states to push unions of out the public worker negotiating process likely means that another round of layoffs in some is imminent.

Federal government austerity programs should bite sometime this year. How many people that will bleed from the federal job rolls will be hard to know until a budget deficit reduction plan is in place. But there will be cuts. Nearly 2.8 million people are on the federal payroll, and most work outside Washington. Firings will affect employment in most states.

The largest concern about the pace of the jobs recovery has been about whether people hired late last year will keep their jobs if the tax code is changed after March 1 and whether retail jobs added in the fourth quarter will become permanent. Those problems are not the most important ones. Employment in the public sector is.

Methodology: For Gallup Daily Tracking, Gallup interviews approximately 1,000 adults, aged 18 and older, each day. The Gallup Job Creation Index results are based on a random sample of approximately 550 current full-time and part-time employees each day.

Douglas A. McIntyre

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