Government hiring creates mirage of strong labor market

The latest jobs report from the Labor Department has left analysts and investors scratching their heads, as the U.S. economy added a surprising 272,000 jobs in May, again defying expectations of a softening market.  A closer look at the data reveals that a significant portion of the hiring was done by the public sector, which added 43,000 jobs in May. 

Government employers have been on a hiring spree, averaging 52,000 new jobs per month over the last year, even as private employers have started to slow down their hiring. Critics argue that the growth in government jobs is masking the lackluster performance of the rest of the economy.

The resurgence in public-sector hiring has not gone unnoticed by conservatives, who contend that these jobs provide a false indication of labor market and economic strength during an election year. As the Biden administration works to spread the good news through initiatives like the "Good Jobs Summer" tour, it remains to be seen whether the strong jobs report will be enough to turn around American voters' gloomy view of the economy, especially as the Federal Reserve continues its battle against inflation.