Gallup’s Job Creation Index fell from 17 in December to 16 in January, the lowest level in 11 months. The index for nongovernment jobs fell from 20 in December to 18 in January, the lowest reading since February of last year. The index is based on telephone polling of employees who are asked whether their employers are hiring or firing workers.

The largest decline came in federal government employment, which posted an index reading of -10, down from -7 in December. The federal government is the only area that has not posted a positive index reading in the past year. State and local government job creation turned positive in August and has remained in positive territory ever since.

Since August, private sector job creation has slipped from 23 to 18, mirroring the slide in federal job creation. The two sectors combined have offset growth in state and local government hiring, which also declined slightly in January.

Gallup notes:

Several economic factors emerging in 2013 could affect these trends. These include potential drags on the economy from continued debate in the Washington over the budget and the debt ceiling, business uncertainty over the Affordable Care Act, and an apparent slowing of GDP growth in the fourth quarter.

Offsetting these drags on job creation are rising equities markets, increases in consumer spending and a boost in consumers’ economic confidence following the agreement that temporarily dodged the fiscal cliff.

As the March deadline for the automatic sequester approaches, it would not be surprising to see federal and private sector job creation continue to slide. If the sequester is actually enacted, the view could get ugly very quickly.

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