Photo: Flickr via Stu Seeger
A quick note from Deutsche Bank:While some market participants have focused on potential fiscal drag from federal government budget cuts and tax increases next year, improvement in municipal finances has been largely overlooked. This could have broader positive implications for the labour market, as the trend in state and local hiring has begun to show signs of stabilizing. Indeed, it is possible this sector could start to contribute positively to nonfarm payroll growth at some point soon. Over the past four years, state and local payrolls have declined by 668k and municipal payrolls now stand at the lowest level (19.14M) since Jan 2006 (19.12M).
We think there’s something to this, and we think it could be a game changer.
Remember, a couple weeks ago Chris Christie started talking about tax cuts and hiring more teachers.
If this area turns a corner, that will be huge.
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