– January 22, 2015

One of our readers recently suggested that “One may find that Republicans tend to create private sector jobs and Democrats tend to create public sector jobs.”

This seems to be conventional wisdom. We did some quick analysis to check the veracity of this wisdom. As it turns out, the exact opposite tends to be true during the last 70 years:  Private sector jobs tended to increase at a faster clip under Democratic presidents, and public sector jobs increased at a faster rate under Republican presidents.

The table below looks at private versus public sector employment at the beginning and end of recent presidential runs (in thousands of jobs as of December of each year):

 

Even armed with such information, one must consider it with a grain, or two, or three, of salt. As my colleague, Polina Vlasenko, has noted, politics and the president’s party is only one of many factors influencing employment changes.

Even if someone believes policy changes enacted by one president has an impact on job growth, that effect is not likely to be immediate, she noted: “So, even if, say, it is true that Bush-I enacted something that spurred private job growth, the effect of that something is likely to take some time to materialize, and so the jobs that result from it might appear when Clinton is already in office.”

Luke F. Delorme

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Luke F. Delorme is Director of Financial Planning for American Investment Services. Articles do not constitute personal investment advice. Please seek the advice of a professional before implementing any financial decision. Luke can be reached at [email protected].

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