State & Local Governments have been shedding jobs over the past 36 months while the Private Sector has been adding jobs. Some months, State & Local Governments would shed 30-40k jobs while the private sector was adding 200k jobs. The average addition to payrolls by State & Local Governments over the past 20 years has been about 15k jobs/month so a return to normal growth would be a big boost to the employment situation.
State & Local Employment growth accelerated through the third quarter of 2008 and then collapsed for the next 3 years. An inflection point in total employment was reached in the third quarter of 2011 and a stabilization in the State & Local Government Sector appears imminent.
My optimism that stabilization is right around the quarter is driven by the return to growth of State & Local Government tax receipts. These receipts turned positive back in the summer of 2010 and have grown at modest rates of 3-4% for the past year. Tax receipts tend to lead employment growth by 4-5 quarters, so expect continued improvement in the State & Local Government Employment over the rest of 2012.