COMP NEWS – Private job growth slowed last month, even as public sector hiring rose.

U.S. states and cities added about 65,000 jobs last month, pushing their combined payrolls far above pre-pandemic levels in a trend that contrasts with a slowing private-sector market.

 

States and localities now employ almost 20.4 million people, more than 300,000 above the level on the eve of the pandemic. The outbreak triggered an abrupt shutdown of schools and other government activities and led local officials to slash more than a million jobs. It also fueled a massive labor shortage that left localities struggling to attract workers.

 

“Early on, after the pandemic, the public sector could not compete with private-sector wages,” said Dante DeAntonio, a senior director and economist at Moody’s Analytics. “Now that private-sector hiring has started to slow, the governments are able to step up and fill that hole.”

Although U.S. hiring has slowed, job growth has surpassed expectations in the past year.

U.S. hiring slowed last month and the unemployment rate rose to the highest since 2021, bolstering bets that the Federal Reserve will lower borrowing costs this year. Overall, U.S. employers added 206,000 nonfarm jobs and prior months saw steep downward revisions.

 

For localities, surpassing pre-pandemic job levels is a good sign, but probably not enough given the governments’ expanding needs and population growth, said Elise Gould, senior economist at the Economic Policy Institute, which studies policies for low- and middle-income workers.

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