Sequester Still Not Taking the Predicted Economic Toll
Back in February, President Obama warned that the federal spending reductions included in the sequester would deal a "huge blow to middle-class families and our economy as a whole." A month later, the $85 billion package of budget trims kicked in. But as The Wall Street Journal notes, today's jobs report suggests that, at least so far, the economy hasn't exactly taken a beating as a result:
For months, economists have worried federal budget cutbacks — the "sequester," in Washington lingo — could weigh on the job market and broader economy. Cutbacks kicked off March 1, but furloughs of government workers began in April — and while those furloughs don't mean lost jobs, they could keep government employers from hiring. Beyond government jobs, federal cutbacks mean fewer government contracts for firms in the private-sector like, say, those in the defense industry.
So far, though, the public and private job markets seem to be holding their chins up.
Friday's report showed the unemployment rate falling to 7.5% from 7.6% and the economy adding an encouraging 165,000 jobs. Figures for the previous two months were also revised up by 114,000 jobs. Retailers added 29,000 jobs, while the leisure and hospitality industry (restaurants, for example) added 43,000. There were also 31,000 new temp jobs, a sign that employers may add more workers in the coming months but are straddling the fence, though job growth in construction and manufacturing was snuffed out by bad weather and global economic troubles, respectively.
That's not an over-the-top amazing jobs report. But it's not the worst either, and certainly not the sort of doom-and-gloom the president predicted before sequestration kicked in. No wonder, then, that most Americans aren't particularly worried about its effects.