We’re still down 4.6 M private sector jobs from the employment peak in January 2008, compared to down 407,000 government jobs. For every net lost government job since employment peaked in January 2008, the U.S. economy has lost more than eleven private sector jobs.
That’s the opposite story from the one told by the President. While the U.S. economy has been slowly creating private sector jobs over the past 2 1/4 years, the hole left to fill is overwhelmingly one caused by the destruction of private sector jobs.
The President is right that the public sector is not creating net new jobs because of local layoffs. But by focusing on recent trends and ignoring the nearly nine million private jobs lost before his measurement window began, he is leading us to the wrong conclusion. Even if government job growth were to resume, our economy needs to create millions more private sector jobs to be restored to full health.
Oh, and Paul Krugman is just as wrong as President Obama. Full Keith Hennessey post worth reading.