With a Revival in Housing, do U.S. Government Payrolls Turn Around? - Real Time Insight
13 Septembre 2012 - 12:03PM
Zacks
My discussion topic today is
payrolls of a different kind.
In April 2009, six months after
the collapse of Lehman Brothers, government payrolls in the United
States hit a cyclical peak of 22,675,000 employees. Since
then, with the exception of a spike tied to employees conducting
the U.S. Census, the number of government employees has declined
steadily month-after-month.
In August 2012, U.S. government
payrolls had declined to 21,900,000. That is a loss of
-775,000 jobs in 40 months, or roughly -20,000 employees a month.
But in August 2012, this critical loss of jobs slowed
notably, down to -7,000.
This has been the steady march
of a U.S. version of austerity. And it has made for a
negative feedback loop inhibiting momentum in overall U.S. payroll
numbers.
One must conclude that the tax
base that supported so many jobs in State and Local governments and
at the Federal level had dissipated with the Economy.
At the State and Local level, a
large amount of tax support comes from property taxes.
Now, with the housing market
reviving property values across the country, does this mean this
type of government payroll bloodshed is over?
Or does this government payroll
chart suggest more bloodshed?
The government payroll chart
says that to get back to 2002 levels of government hiring and
spending, U.S. government’s need to shed another 400,000 jobs,
which at the current pace averaging -20,000 a month means 20 months
more of pain?
What do you see in your
community, state, and region?
Are we about to see this
particular drag on overall payrolls and employment
reverse?
And if so, is it also time to
take a look at Municipal bond funds?
A few popular Muni Bond ETFs are
listed below:
SPDR Nuveen S&P VRDO Muni
Bond EFT (VRD) with New York, Texas, and Pennsylvania
exposure.
Powershares VRDO Tax-Free Weekly
(PVI) with New York, New Jersey, and Texas exposure.
Market Vectors CEF Municipal
Income (XMPT)
Finally, is a reversal of
fortune in our government’s payrolls going to be a new source of
strength for overall payrolls and the stock market?
PWRSH-VRDO TAXF (PVI): ETF Research Reports
SPDR-NU SP VRDO (VRD): ETF Research Reports
MKT-VEC CEF MUN (XMPT): ETF Research Reports
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