Major win
Businesses hire while Washington slims down
Since January 2025, private payrolls have grown by about a million jobs while the federal payroll has shrunk to its smallest size since 1966.
Where new jobs come from tells you whether an economy is paying its own way.
Thinning the row: private jobs grow as the federal payroll shrinks
Private employers added 1,006,000 jobs from January 2025 through September 2026, by the Bureau of Labor Statistics' current count. Federal employment fell 328,000, to 2.68 million.
Why you should care
A job at a business is paid for by customers who chose to buy something. A job on the federal payroll is paid for by taxpayers, and that includes you. Both can be honest, useful work, and plenty of federal employees do it well. But an economy that grows through businesses is building its own tax base instead of drawing on yours, and a federal workforce that is a third of a million people smaller is a payroll you are no longer covering.
Between January 2025 and September 2026, private employers added 1,006,000 jobs, according to the Bureau of Labor Statistics. Over the same stretch, the federal government's payroll shrank by 328,000.
The hardest job in a carrot patch comes a few weeks after planting. The row comes up thick, and you have to pull out good seedlings with your own fingers so the ones that remain have room to grow. It feels like going backward. A month later you see why it wasn't.
Washington has been thinning its own row. The federal workforce stood at 3.01 million in January 2025. By September 2026 it was 2.68 million, down 10.9% and the smallest since 1966. Federal workers are now about 1.7% of all payroll jobs, the lowest share in BLS records that go back to 1939.
Meanwhile the private row kept growing. Every net new job since January 2025 came from private businesses: total payrolls rose by 776,000, while government payrolls, federal, state and local together, fell by 230,000.
Reading the whole garden
The whole garden, though, is growing slowly. September's report showed just 29,000 new jobs, July and August were revised down by 60,000 combined, and unemployment ticked up to 4.2%. Pay is not keeping pace either: average hourly earnings rose 3.0% over the year, below the 3.7% inflation rate, and real weekly earnings fell 0.5% in September. In the year before January 2025, total payrolls grew by about 103,000 a month; over the twenty months since, the average has been under 40,000.
A correction is coming, too. In August, BLS estimated that its count of private jobs as of March 2026 was about 178,000 too high. When that fix is folded in next February, the million-job mark will likely slip to something nearer 830,000.
Now notice what the correction does not change: the shape. Private payrolls would still be up by hundreds of thousands, and the federal payroll would still be at 1966 levels. Part of the slow total is simple arithmetic: every federal job that goes away is one more job the private side has to replace before the headline number rises at all.
Thinning a row always looks like a loss the week you do it. Judge it at harvest. BLS publishes the corrected count with the January jobs report in February 2027; that is the number to check.
Sources and footnotes
- Bureau of Labor Statistics: The Employment Situation, September 2026 (Oct. 2, 2026)
- Bureau of Labor Statistics: Current Employment Statistics Preliminary Benchmark (National), 2026 (Aug. 28, 2026)
- Fox Business: US economy added 29,000 jobs in September, a slower pace than expected (Oct. 2, 2026)
- White House: Made in America: Manufacturing, Private Hiring Power Explosive August Jobs Report (Sept. 4, 2026)
- Western Journal: Trump Cuts Federal Labor Force to Lowest Level Since the 1960s as Private Sector Surges (Feb. 11, 2026)
- FRED (BLS data): All Employees, Total Private and All Employees, Federal (updated Oct. 2, 2026)
- Bureau of Labor Statistics: Consumer Price Index, September 2026 (Oct. 14, 2026)