This morning’s jobs report shows that the economy’s subsidized private sector (industries like health care services that receive big government subsidies) is back as a major source of new hiring.
If a stronger but sustainable U.S. recovery depends on reinvigorating industries not heavily dependent on government largesse, then this hiring out-performance by the subsidized private sector is a bearish indicator.
As Tonelson figures it, the subsidized private sector created 65,000 net new jobs in December, nearly 40% of total private-sector job growth, about the same as throughout the recovery. But is that a lot or a little?
One easy way to tell if an economist is shallow is to see how they analyze the role of government in the economy. In this case, the assertion is that the government was responsible for about 40% of new net job creation. But, I wonder, how much net job destruction the government was responsible for.