Did the Government Really Hire that Many People?

Posted by: Michael Mandel on November 03

Is the unemployment rate really 4.4%? I’ve got some doubts.

A big reason why the unemployment rate has been dropping is an apparent hiring spree by government bureaucrats. The number of people reporting that they had public sector jobs rose by 147,000 in October and 169,000 in September.

Since last March, public sector employment has risen by a very solid 430,000. Without this increase, the unemployment rate would still be stuck at 4.7%, just what it was in March.

However, these numbers come from the household survey, which is based on responses from individuals. The payroll survey, which is based on data from unemployment insurance records, shows a much slower growth of government jobs…only 183,000 since March.

430K vs 183K—that’s a big difference. It says something when we can’t even figure out how many people are being hired by our public servants.

Which number should we believe? If the lower number is true, then the unemployment rate is closer to 4.6% than 4.4%. I tend to lean that way.

However, to be fair, there are some reasons why the higher number might be more accurate. One possibility is that there’s massive hiring by the Federal government in intelligence agencies like the CIA, the National Security Agency and the like, which aren’t included in the payroll survey. Another possibility is that small school districts have been hiring like mad. They would have been missed on the initial survey, but that will be picked up as the statisticians revise their data.


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Reader Comments

Brandon W

November 3, 2006 12:15 PM

There's a smell of rancid fish coming from Washington D.C. Very fishy. Very rancid.

Thyui

November 4, 2006 07:56 PM

Which number should we believe? If the lower number is true, then the unemployment rate is closer to 4.6% than 4.4%. I tend to lean that way.

Well not including illegal immigrants and such

Frank Drake

November 7, 2006 12:48 AM

Some people can complain about a sunny day because of Global Warming. While others complain that someone got a Job. Is it that it's a Government job or that this job will have a guaranteed pension after 20 years?
I really don't care.
If you can't be successful in America, well you missed one of life's trade secrets. Unfortunately, you have to wait until next week for the answer.

Oppps,...there's an election tomorrow.
I guess that's why it will remain a secret.
Someone's always getting cheated. Were you ever really entitled to anything other than life, liberty and the pursuit of happiness in America?
Where do you rank in Maslow’s hierarchy? 4.4% or 4.6%

Kevin

November 8, 2006 08:43 AM

** Since last March, public sector employment has risen by a very solid 430,000. Without this increase, the unemployment rate would still be stuck at 4.7% **

Not a true statement. You're so one-dimensional Dr. Mike. You're neglecting the competition among the hiring markets. Without the government increase, there would've been a private increase instead. If you're smart enough to get hired by the CIA (and yes, they've been running radio and TV commercials for that, for the first time in my life AFAIK) you can get hired elsewhere. In fact the CIA is probably hiring the very type of people my company has been unsuccessfully trying to find.

We advertise open positions in several public venues including the net, and get almost no responses at all. No surprise to me the unemployment rate is low.

drbrightside

November 18, 2006 05:04 PM

I am as frustrated as anyone with the lack of accuracy of our government provided employment figures. Let's see..... we've had two large upward revisions in both the August and September jobs numbers. And the payroll survey recently found another 800k jobs to match more closely with the household survey for the last year. Intuitively our economy and job growth is based on entrepeneurs, self employed, and fledgling start up companies that would not be counted in the payroll survey (i.e. youtube). So I would tend to believe the household survey.

Mitch the Biatch

March 14, 2008 02:09 AM

All I know it's a huge figure. Here in California government employee retirement packages will consume around 60% of the States GDP. In 10 years it will be 100% and they will be forced to tax us nearly 100% to survive. The problem is who will work for nothing?

This my friends will be the end of our civilization and the begining of anarchy. We can see it already on our streets and it's getting worse daily.

This year was the first time in US history that we had to import wheat. We are currently undergoing a huge spike in Beef availablity as the ranchers are forced to sell their beef now because they cannot afford the corn based feed due to the scam of ethanol subsidy. Gold $1000/once should tell you everything you need to know.

The collapse is coming, be prepared is my suggestion.

Thank you for your interest. This blog is no longer active.

 

About

Michael Mandel, BW's award-winning chief economist, provides his unique perspective on the hot economic issues of the day. From globalization to the future of work to the ups and downs of the financial markets, Mandel-named 2006 economic journalist of the year by the World Leadership Forum-offers cutting edge analysis and commentary.

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