Friday, August 6, 2010

The July Jobs Numbers: Shrinking Government Employees

The real way to look at the July job numbers report is to understand that governments don't like to lay off people---local, state or the federal governments. That this number shows government layoffs (beyond the layoffs of temporary census workers) is really an indication of how tight government budgets are and the difficulty local and state governments are having in finding methods to maintain revenues to keep payrolls at current levels.

Overall payroll jobs in July declined 131,000 after falling a revised 221,000 in June.

Layoffs of temporary Census workers was part of the picture in the government sector, but the 202,000 drop in government jobs in July, followed a 252,000 fall the month before. Of the July government jobs decline, only 143,000 came from a drop in Census Bureau payrolls.

Local and state governments are feeling the squeeze. This is not the time to own municipal securities, unless you know the municipality very well and know they are not in any financial trouble.

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