Deutsche Bank are bullish on the U.S. job market, and confident unemployment is about to dip 0.2%. Part of the reason why is that the bank believes we’re at an end of the big state and local job cut period.
From Deutsche Bank (emphasis ours):
State governments have so far cut 39k employees since the August 2008 peak, while local governments have cut 368k over the same period. Almost half of those cuts have been local teachers (208k), which account for over 55% of total local employment. These cuts are the largest since the early 1980s recession when state and local governments reduced payrolls by 417k.
Based on the improvement in state revenues, we may be near a trough in state and local hiring. At minimum, the improvement in revenues strongly suggests we are through the worst of the job cuts and that any further reductions would be substantially less than what has occurred to this point.
The revenue improvement Deutsche Bank mention is in state taxes, which they claim, have bottomed out.
From Deutsche Bank:
Photo: Deutsche Bank
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