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Friday, May 06, 2011

Unemployment Rises But Government Jobs Shrink As Private Sector Jobs Grow

While the unemployment rate rose from 8.8 percent to 9 percent, good news is found within the unemployment report this month.

CNBC has an article on the topic but one line caught my eye.

The private sector created 268,000 new jobs, the most since February 2006, while government payrolls shrank.

Simple point here to the above referenced line- When Government jobs explode it is the taxpayer money that pay those paychecks. When private sector jobs grow it the employers, business owners or corporations that pay the payroll, then government taxes those wages and creates revenue.

Hence, smaller government is better for the economy as a whole because the private sector grows.

The United states Department of Labor, Bureau of Labor Statistics, Economic News Release on the Employment Situation summary states:

The number of unemployed persons, at 13.7 million, changed little in April. The unemployment rate edged up from 8.8 to 9.0 percent over the month but was 0.8 percentage point lower than in November. The labor force also was little changed in April.

As is explained further down into the release, that 13.7 million unemployed number is actually quite higher, by 2.5 million, making the 9 percent figure much higher if those additional numbers were totaled in.

In April, 2.5 million persons were marginally attached to the labor force, about the same as a year earlier. (These data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. (See table A-16.)

Emphasis mine.

Areas still above the official national average for unemployment are:

Alabama- 9.2%
Arizona- 9.5%
California- 12.0%
Colorado- 9.2%
Connecticut- 9.1%
Florida- 11.1%
Georgia- 10.0%
Idaho- 9.7%
Kentucky- 10.2%
Michigan- 10.3%
Mississippi- 10.2%
Missouri- 9.1%
Nevada- 13.2%
New Jersey- 9.3%
North Carolina- 9.7%
Oregon- 10.0%
Rhode Island- 11.0%
South Carolina- 9.9%
Tennessee- 9.5%
Washington- 9.2%
West Virginia- 9.1%

Data obtained from Bureau of Labor Statistics on the Local Area Unemployment Statistics page. (Right side)

Jennifer Rubin (Wapo) asks an economist what the numbers mean in terms of recovery, so head over and see the answers.

More on the actual unemployment totals, which add in those 2.5 million "marginally attached to the labor force," that "wanted and were available for work", but were "not counted" in the official tallies, here and here.