For the weekend after Jobs Day, another reminder that the employment dynamics of this recession have been unusual in that public sector employment keeps falling.
Normally you see relatively little cyclicality in the public sector, which means that the existence of public sector work can cushion a recession. That’s both because some people end up employed by the government who’d otherwise be out of work. But it’s also because government employees serve as customers for other businesses. When a teacher or a bus driver gets laid off, he or she becomes less likely to eat out or pay to get the kitchen remodeled creating secondary drag elsewhere.