Unemployment Rate To Be 7.8 Percent, But Sequester Spending Cuts Affect 750,000 Jobs
The unemployment rate is projected to drop to 7.8 percent for February, 2013, with some models showing an unemployment rate between 7.2 and 7.4 percent by September. But the potentially improving economy is threatened by the $85 billion in sequester spending cuts, with the non-partisan Congressional Budget Office is estimating 750,000 jobs lost by the end of the 2013 year.
As previously reported by The Inquisitr, the United States national unemployment rate for January of 2013 was 7.9 percent. The sequester, or automatic spending cuts, started taking effect on March 1 and will slowly see implementation over the years. The way in which the potential effects of the sequester were advertised by President Obama has led to some calling it sequester scare tactics, or fear mongering.
Brookings has posted the monthly update of the Barnichon-Nekarda model which predicts a 7.8 percent unemployment rate assuming the sequester is managed properly:
“The unemployment numbers for January were in line with last month’s forecast: The labor market keeps improving, and the January uptick only reflected the inertial dynamics of unemployment. With a slow but steady improvement in hiring, I project a slow but steady decline in the unemployment rate over the next six months, with a jobless rate of 7.8% in February going down to 7.4% by September 2013. The caveat on the projection is that there be no additional damage to the labor market (e.g., from large arbitrary spending cuts).”
According to Patch.com, even unemployment benefits will be effected by the sequester since “the United States Department of Labor said the extended benefits needed to be reduced by 10.7 percent, effective beginning the week of March 31.” For example, if someone receiving unemployment benefits is struggling to live on $800 per month then they will have to work with approximately $85 less.
The 750,000 jobs lost from the sequester spending cuts are supposedly only if the spending cuts are implemented in an arbitrary, across the board, manner. House Republicans previously attempted to give President Obama more authority to decide how spending cuts will take place, but Obama would not accept any agreement that did not include more tax increases.
What do you think should be done about the sequester spending cuts in order to keep the unemployment rate from rising?