U.S. Government Efficiency Is At Its Highest In 60 Years By This Jobs Measure - But There's A Catch

Friday’s June jobs report sent mixed signals about the U.S. economy. While thousands of jobs were added last month, many were government jobs.

The Data: The Bureau of Labor Statistics released jobs data for June on Friday.

There were 206,000 nonfarm jobs created last month, 136,000 of them in the private sector and 70,000 in the public sector. The economy created 82,400 jobs in the healthcare and social assistance sector; these are driven by government spending on grants.

While government jobs saw a rise in June, they remain relatively low compared to historical averages. According to data from The Federal Reserve Bank of St. Louis, government employment now constitutes just 15% of the labor force, marking a notable decline from previous decades

Why it Matters: The long-term government employment data could be a sign that the U.S. government has become more efficient. Alternatively, government jobs have become more scarce.

Spending on healthcare (which drives sector job growth) has steadily increased in the 21st century, according to the Fed St. Louis. Studies indicate that government expenditures on healthcare boost income, GDP and productivity. It also alleviates poverty.

President Joe Biden‘s domestic policy agenda has prioritized job growth, as 90% of job gains throughout his presidency can be attributed to the private sector, although public sector job growth has also increased in recent years.

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