Today’s jobs report – while including the encouraging statistic that the unemployment rate is down to 7.5 percent, its lowest point in four and a half years – feels a lot like a rerun. Private sector growth was decent, but not great, while the public sector again shed jobs (11,000 this time, including another 1,500 in local education).
However, there was a lot of good news in the revisions to past reports. According to the Bureau of Labor Statistics, the economy created 64,000 more jobs in February and 50,000 more jobs in March than previously estimated. The February total of 332,000 jobs makes it the single best month for job creation since 2005 (excluding the months when the Census was underway).
The timing of that particularly strong month is instructive because, as Steve Benen noted, it "came after January's tax hikes, but before the sequester." To hear Republicans tell it at the time, the Obama administration’s desired tax increase on upper-income earners was going to decimate job creation and small businesses, while spending cuts were the juice needed to move the country out of its economic doldrums.
Instead, it looks like the opposite was true: Increasing taxes on the wealthiest Americans had a negligible effect on job creation, while the slash-and-burn approach to the federal budget is holding the economy back. (Of course, April’s numbers will likely be revised later as well.)
The sequester – when it comes to everyone but air travelers, anyway – is crimping government spending at a moment when such spending should be supporting, not undermining, job creation. "I think this year's slump – and we will get a slump – has a definite cause, which is the sequester," Nariman Behravesh, chief economist at IHS Global Insight, told U.S. News’s Danielle Kurtzleben.
Lawmakers have managed to avoid the very instructive example of Europe, which embraced austerity to the tune of record joblessness and a seemingly endless recession. However, at this point, Europe seems to be changing course. The very intellectual framework that led to the austerity push crumbled due, in part, to an Excel error. But the sequester is still hanging around, needlessly prolonging America’s misery.
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