Tony Clark’s Post

Government hiring is inflating jobs numbers. Private sector jobs growth as % of total payroll growth fell to 38% in July, the lowest since the 2020 pandemic. Historically, every time the private payroll growth share fell below 40%, the US economy was in a recession. This also means that most of the employment growth over the last few months has come from government jobs. Over the last 1.5 years alone, the government created nearly 1 million jobs, the most since the 1990s. Meanwhile, the private sector hiring rate fell to 3.7%, the lowest level since April 2020. Credit to https://lnkd.in/g_-MMpWX

📉 Government Hiring Inflating Jobs Numbers 📉 1. Private sector job growth as a percentage of total payroll growth fell to 38% in July, the lowest since the 2020 pandemic. 2. Historically, when private payroll growth falls below 40%, the US economy enters a recession. 3. Most recent employment growth has been driven by government jobs, with nearly 1 million created in the last 1.5 years, the highest since the 1990s. 4. Private sector hiring rate dropped to 3.7%, the lowest since April 2020. This trend is truly concerning. #Employment #EconomicTrends #GovernmentJobs #PrivateSector #Recession

Government hiring is inflating jobs numbers. Private sector jobs growth as % of total payroll growth fell to 38% in July, the lowest since the 2020 pandemic. Historically, every time the private payroll growth share fell below 40%, the US economy was in a recession. This also means that most of the employment growth over the last few months has come from government jobs. Over the last 1.5 years alone, the government created nearly 1 million jobs, the most since the 1990s. Meanwhile, the private sector hiring rate fell to 3.7%, the lowest level since April 2020.

U.S. businesses added a higher-than-expected 143,000 new jobs in September, paycheck company ADP said. Yet it was the sixth straight month in which employment gains totaled less than 200,000 in a sign the labor market has cooled off considerably. Yearly pay increases for people who switch jobs slowed to 6.6% in September from 7.3% in the prior month. Just a few years ago, job switchers earned up to a 16% pay hike when companies were scrambling to hire amid the worst labor shortage in modern times, “Job stayers” earned an average 4.7% annual increase. Read more 👇👉 https://lnkd.in/emyEzhUv

Job growth totals 114,000 in July In July, the US economy added fewer jobs than predicted and the unemployment rate reached its highest level in over three years. BLS data released Friday revealed 114,000 nonfarm payroll job additions in July, below economists' expectations of 175,000. Health care created 55,000 jobs in July, matching the 12-month average of 63,000. Creative Financial Staffing (CFS)

The average pace of U.S. hiring has accelerated over the last three months after slowing late last year. Private employers added 192,000 jobs in April. Year-over-year pay gains for job-stayers were little changed, while pay gains for job-changers slowed to 9.3 percent. The ADP® National Employment Report is available at https://lnkd.in/eYazcQx4. #economy #NFP

"Government hiring is inflating jobs numbers. Private sector jobs growth as % of total payroll growth fell to 38% in July, the lowest since the 2020 pandemic. Historically, every time the private payroll growth share fell below 40%, the US economy was in a recession. This also means that most of the employment growth over the last few months has come from government jobs. Over the last 1.5 years alone, the government created nearly 1 million jobs, the most since the 1990s. Meanwhile, the private sector hiring rate fell to 3.7%, the lowest level since April 2020. Truly concerning." https://lnkd.in/gFnW6Dpj

📉 April's Employment Update: Is it still possible for rate cuts in 2024? Last month's employment report showed signs of a slowing labor market. Employment growth has cooled, and the unemployment rate inched up to 3.9%. With average hourly earnings growth also dipping. Yields on the 2's/10's are down ~2%, sitting at 4.768% and 4.487% respectively. Notably, the health sector added 86,000 jobs, but overall gains were modest elsewhere. What does this mean for our economy? Share your thoughts!

GOVERNMENT IS KEEPING EMPLOYMENT HIGH As we reviewed employment in different sectors, we could not find any numbers that explained why overall employment remains relatively high. This was until we paid closer attention to the numbers for Government (both federal and local). If we look at the last release from the Bureau of Labor Statistics, we can see the total count of Government employees remaining stable around 21.5M From May to August 2024. But in September (last month), it jumped to 22.216M. That's a full 3.7% gain in a single month! In comparison, Private Industries gained 0.10% in the same period. In other words, gains in the Government sector alone lifted total employment by a full 0.5% in a single month. Clearly, this kind of gain can easily make a bad number look good, until you realize that it does not come from the productive economy. At first, we assumed that such a gain was customary before a presidential election, but numbers in 2016 and 2020 did not look anything like that. What we saw is significant historical month-to-month volatility though, which will require further analysis. But one thing is for certain: if you liked recent employment numbers, you might want to temper your enthusiasm, for they're nowhere near as good as they seem at first glance.