Private Sector Saves Jobs Report

An upside surprise in job creation at private firms offsets government losses.

By Manuel Gutierrez, Consulting Economist to NKBA

The headline employment news of 661,000 new jobs suggested a sharp drop in job creation in September, with the total number of jobs added less than half the previous month’s gains. However, a closer examination of the data tells a different story.

The main contributor to the smaller numbers was government employment, which registered a reduction of 216,000 jobs last month compared to a gain of 467,000 in August. That’s a swing of nearly 700,000. The private sector actually added 877,000 jobs. What makes the picture even brighter is the fact that about 1 in 7 government workers who lost their jobs were part-time employees brought aboard for the Census-counting effort, while gains in the private sector were mostly for full-time positions.

While all three levels of government — federal, state and local — cut workers last month, the majority of losses were at the local level. The only major non-government sector to show losses last month was education, off by 68,000 jobs in September. The losses in education emanated mostly from public schools, which shed 231,000 jobs. Those losses were offset, however, by gains in private education.

Within the K&B industry and related businesses, employment data is collected at different time periods. For September, data is available for major groups including Construction (overall), Building Construction, Residential Building Construction, Non-Residential Construction, Specialty Trades and Real Estate Services.

In other categories related to K&B, data can lag by a month, so information is available only through August. Nevertheless, there are some interesting takeaways when specific job categories are isolated.

For instance, while employment for Designers rose by just 100 jobs, increasing from 45,700 to 45,800, the number of female designers actually rose by 700, while males showed a decline of 600 during the same time frame. While no data is available to explain this unusual pattern, the net gain of 100 doesn’t tell the full story.