The economy lost 131,000 jobs in July, and most of that came from the federal government slashing 143,000 temporary Census positions. The private sector picked up about half that figure, 71,000 jobs. State and local governments cut 48,000. Those are the numbers. Economix brings the charts.
Hiring by sector gives you a sense of the diverse topography of our jobs picture. The federal jobs picture looks like the Andes. The private sector looks like an upside town plateau, or wide river bed. State and local looks like a savanna.
State and local government jobs have stayed remarkably steady through the recession, mostly due to the Recovery Act, which has sent $140 billion to help states with their entitlement burden, including health care, education and income security measures like unemployment insurance. We've plugged their revenue leak up to now, but Congress doesn't have much appetite for more stimulus spending through 2011. The Census employment inclined has turned into a vertiginous peak, and the private sector isn't ready the catch the hundreds of thousands of people falling off the federal payroll.
This is what a jobless recovery looks like. So why isn't the private sector powering up? I outlined a couple reasons here, including: globalization, executive compensation trends, and the rise of reluctant part-time employment. Businesses are blaming the administration for polluting the air with uncertainty about taxes and regulations, but it's not entirely clear what the White House could do now to make businesses more certain (is there even such a thing as certainty in the world of profit and competition?). The stimulus well has been tapped. The Bush tax cuts are creating fissures in both parties. If there is some magic statement the White House could make that would make America's non-financial companies respond, "Why didn't you say so before! Now we're all set to fill up our new factories with fresh hires," I would, sincerely, like to hear it.