The job growth that accompanied President George W. Bush's successful re-election campaign was fueled in part by state and local government, which hired a quarter of the workers added to U.S. payrolls since June.
"The turnaround in state and local government budgets has made a difference" in the U.S. job market, said John Silvia, chief economist at Wachovia Corp. in Charlotte, North Carolina. "It's real job growth. It's a sign of strength."
Economic gains, especially in the South, and the resulting higher tax revenue allowed local officials to hire more teachers and police officers after a 15-month slump following the 2001 recession. Some of the hiring was driven by federal requirements, such as the No Child Left Behind education initiative. States and cities added 198,000 workers in the four months through October, twice the increase over the past decade, according to government statistics.