Pethokoukis

The sequester isn’t biting, is it?

060713jobs

I think this headline on a IHS Global Insight report says it all: “Better-Than-Expected Jobs Report Suggests That the Private Sector Is (Still) Not Spooked by the Sequester.”

And from the report itself:

Despite the major headwind of fiscal tightening, the US economy has been able to sustain decent jobs growth in the past six months. Because of the sequester, the increase in payroll jobs will slow a little in the coming months, but should hold up at around 150,000—at least. By the end of the year and in 2014, IHS expects the pace of jobs growth to pick up.

Does this mean sequestration is having no effect on the private labor market? I wouldn’t go that far. But, hey, the Fed counts, too! And the central bank’s bond-buying is likely helping offset continued fiscal austerity, including tax hikes. MKM’s Mike Darda:

During 2013, NFP growth has averaged 189K compared with a 183K average in 2012; private sector job growth has averaged 194K in 2013 compared with 189K in 2012. In other words, despite massive hand-wringing about the effects of the sequester, average job gains this year are actually slightly stronger than the average of 2012, meaning the Fed, unlike the ECB, has likely offset the impact of austerity on NGDP.

 

3 thoughts on “The sequester isn’t biting, is it?

  1. Since most of what government spends has a negative economic return, why would you except a negative effect to less spending?

  2. Someone should explain the difference between capex and expenses to Seattle Sam.

    The good news is that the savings rate is back in the toilet. Consumers see that the stock market is back and that housing is recovering so they spend. One guesses they asked a basic question first: Is my job safe from the idiots in the House? Happily most are.

    • Consumers see that the stock market is back and that housing is recovering so they spend“…

      Really?

      On what planet is that happening on?

      Since all this supposed good news is being paid for with monopoly money (can you say quantitative easing?) can anyone say what’s really happening and what it all is really worth?

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