The jobs report again today reflected the unprecedented local government layoffs taking place, a trend that economic forecasters seem not to have recognized yet. Initial claims for unemployment benefits continue to hover around half a million per week.
The local government layoffs, along with some from state governments, should begin to fade this month, but they will be replaced by layoffs in retail and big business, many of which were announced last month.
In April and May, I expect to see something of a respite in the jobs data, but it will not last long, as the next round of state government job cuts will hit in June and may extend into September.
