In November, the U.S. experienced a notable addition of 199,000 nonfarm payroll jobs, as reported by the Bureau of Labor Statistics (BLS). However, the composition of these newly added jobs was primarily driven by three sectors and was buoyed by government funding, according to the BLS.
The major contributors to job growth in November were the government, health care, and leisure and hospitality sectors, contributing 77,000, 49,000, and 40,000 jobs, respectively. Additionally, the manufacturing sector added 28,000 jobs, but this figure was partly influenced by 30,000 unionized autoworkers returning from a strike, resulting in a net loss of 2,000 jobs for the sector.
Economists note a dichotomy between the private sector economy and the government economy, attributing the hiring surge in the government, health care, and social assistance industries to massive deficit spending. Michael Faulkender, Chief Economist and Senior Advisor for the Center for American Prosperity, emphasized that the government’s expansion, coupled with a disregard for cost, has fueled employment in these sectors.
Under President Joe Biden, the number of public sector jobs is approaching a new record, nearing the peak of 22,996,000 workers in May 2010. The significant rise in government employment is partially reminiscent of the boost in workers during the 2010 census.
However, not all sectors experienced positive growth in November. Retail jobs decreased by 38,000, and transportation and warehousing employment declined by 5,000. Slight growth was observed in social assistance and individual and family services, with 16,000 and 9,000 jobs added, respectively.
The health care sector, a top contributor to November’s job growth, benefits substantially from government funds, particularly health insurance subsidies estimated at $1.8 trillion for 2023. President Biden has actively supported employment growth in health care, announcing a $100 million subsidy to train more nurses in August.
Despite the positive job figures, concerns arise about the sustainability of massive deficits, with the federal deficit reaching close to $2 trillion for fiscal year 2023. Inflation, which has risen by 17.1% since January 2021, poses challenges to hiring in the private sector. The Federal Reserve’s response to inflation, raising the federal funds rate to its highest point in 22 years, adds further strain to businesses and consumers. The White House has not yet provided a response to requests for comment on the matter.
