Reactions to the latest jobs report focused on the unexpectedly large increase in total employment. There was a large increase in private employment over the past month. This is good news. The ratio of Federal to private employees also declined last month. This relative decline in Federal employment is good news, public agencies are bloated, overstaffed (as seen in the next graph).
The bad news is that reductions in Federal workforce have almost come to a halt.
The second Trump administration achieved historic cuts in Federal jobs. President Trump reversed decades of slow buildup of excess Federal employment in just a year. The Trump administration has enacted the sharpest decline in Federal employment- setting aside spikes in Federal jobs due to census-taking. Yet, it appears that progress in cutting government waste has come to a halt.
Technically speaking, the decline in the relative size of Federal employment over the past couple of months does represent a shift from public to private uses of resources. This can be interpreted as progress. But we should remember that there are entire Federal agencies which have failed at their stated missions, yet remain in operation. We should not allow efficient increases in private employment to distract us from the need for further cuts in wasteful public employment.
