A government jobs recession

Date posted: August 22, 2011

We had a very disappointing June employment report for North Carolina. The unemployment rose from 9.7 percent in May to 9.9 percent in June. And over 10,000 jobs were lost. What happened? N.C. State University economist Mike Walden explains.

“Well , a little perspective here: The last couple of years we’ve, we’ve obviously had problems in the job market. And when you look at the numbers, what you saw was private-sector jobs, jobs in companies and businesses in the private sector, going down. And either public sector jobs stayed stable or in some months they actually went up, kind of as a buffer as to what was happening in the private sector.

“Now the roles have completely reversed. The employment report that you mentioned — actually the good news in that report is that private jobs actually rose in North Carolina — but they were totally overwhelmed when you look at the totals by the loss in state and local government jobs in North Carolina.

“So, the nature of the jobs problem in North Carolina and really in the nation has shifted. … Now we’re seeing the big losses really in government jobs — for example, governments do not have those stimulus funds that we had a couple of years ago to keep those jobs up.

“At the same time we have some hope in the private sector, but the private sector’s just not adding jobs at a very, very fast rate. So, this is the kind of economic world and jobs world that we’re looking at. Hopefully, we’re going to get both turned around fairly soon.”

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