I think the reason they excluded those in the military is to allow an apples-to-apples comparison through time. It could be argued that the large number of draftees through the early 1970's forced some otherwise nonemployed into employment.
I think you are right, but I think they are wrong for doing it given the importance of the military in a lot of regions and the military being a known career path for many young males.
As protomyth notes, by your rationale neither does law enforcement, public education or firefighting, but I'll add that the same rationale also argues for exclusion of anyone working for a non-profit (and indeed, at least the public sector ideally creates an environment in which wealth creation can exist, while charity consumes wealth).
Given that these are employment figures, it's odd to segregate one career from all the others.
The government owes $118 trillion total (adding unfunded liabilities). When it can balance its budget than maybe we can have this discussion.
Otherwise, anyone can steal $18 trillion from the masses under the pretense of using it for the public good - when really all (yes, 100%) it does is pay debt interest according to the government's own report on how tax money is spent - and "create" several jobs for you as well.
So no, those shouldn't count unless you want to keep on living on fantasy land, believe government's inflation numbers (and close your eyes when you go grocery shopping), and ignore the fact those government "jobs" do not make us more competitive to other countries. You don't win in the global economy by giving everyone jobs, but by allowing people to create real jobs that compete with other countries so that we as a population become wealthier.
