Professionals Should Welcome Move to the Private Sector

LPL’s Chief Economist, Dr. Jeffrey Roach highlights metrics about recessions, international developments, and the premium of government jobs for those without a college degree.

Last Edited by: LPL Research

Last Updated: March 12, 2025

Transcript

Jeffrey Roach (00:03):

Hi. I’m Jeffrey Roach, Chief Economist for LPL Financial, with three key charts to explain the current macro landscape. First, recessions don't last very long. The investment narrative rotated from a growth scare to a recession scare. I don't think that's warranted with the data we have so far, but nonetheless, here are a few insightful recession stats. The average length of a recession since World War II in the U.S. is 10 months, illustrating the tenacity of the U.S. during recovery periods. The average time between recessions is somewhere between five and six years. A major reason we have skirted a recession thus far is from robust post-pandemic disposable income growth, especially for skilled workers. For now, investors must weigh the potential impacts from this “detox” described by Treasury Secretary Scott Bessent. Second, be careful about internationals. We've seen some improvement in international economies, but how widespread is it?

Jeffrey Roach (01:03):

Business leaders in both the services sector and the manufacturing sector seem to have a bit of caution in developed international economies like France and Italy and the U.K. However, businesses reported some improvements in the emerging economies. Given the expected weakness in the U.S. dollar, we could see more opportunities in the emerging economies before we see anything in the developed economies. Something to track in the near term. Third, government jobs pay a premium, but only for some. Given the chatter about DOGE, it's worth level setting about the projected economic impact from any federal job cuts. Here's the data from the Congressional Budget Office about public sector versus private sector pay. Among workers with a professional degree or a doctorate total compensation was 22% lower for federal employees than for similar private sector employees on average. That's the red bar illustrating the discount on total comp. In contrast, among workers with a high school diploma or less education, total comp costs averaged 40% more for federal employees than for their private sector counterparts. That's the green bar showing the premium government workers get. Well, that's all for now. If you want more insights on global market trends, follow us on social media and take care.

Dr. Jeffrey Roach, LPL Research’s Chief Economist, highlights important metrics about recessions, global international developments, and the premium government jobs give to those without a college degree.

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