Why Private Job Creation Is Even Slower Than It Looks
By Jeff Cox, CNBC.com Senior Writer
NEW YORK (CNBC) -- Private-sector job growth relied on to fuel the employment recovery is even weaker than it looks, according to one economic expert who says government subsidies distort the true picture.
The Bureau of Labor Statistics on Friday put non-government nonfarm job creation in July at a much better-than-expected 172,000, which helped lift investor sentiment even though the total headline unemployment rate rose to 8.3%. (The total nonfarm payrolls gain was 163,000 as government lost 9,000 jobs.)
But Alan Tonelson, research fellow at the U.S. Business and Advisory Council, said the number isn't as good as it looks because the heavily subsidized health services industry generated 38,000 jobs, or more than 22% of the total."It's certainly weaker than it appears if we believe that the recovery and the entire U.S. economy should be propelled overwhelmingly by the private sector, by private capital, by private markets, by market forces," Tonelson said in an interview.
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