BLS October Jobs Report: The Shocking Truth I Found About Sequestration
As a business owner, I track job numbers and other economic reports in order to determine where the economy is headed, and one of the most important tools in helping me do this is the monthly jobs report. The report comes out the first Friday of every month, although the October 2013 report was delayed one week due to the government shutdown, and came out Friday, November 8. And while I was upbeat about this morning's report, which shows America added 204,000 jobs in October 2013, I made some startling discoveries about sequestration while doing my research. Sequestration is killing jobs and the economic deck has been stacked to cause the biggest job losses right before the November 2014 elections.
According to the Congressional Budget Office, sequestration will kill up to about 1.6 million jobs between now and 2014. Cancelling sequestration now would add a large quantity of jobs back into the economy — between 300,000 and 1.6 million, with the most likely amount being roughly 900,000 jobs added back, according to the CBO Report.
My initial impression was that those job losses would be spread out over 12 months or more, which would lead to a loss of roughly 133,000 jobs per month. But as I dug deeper in the CBO report I found this excerpt on the true impact of cancelling sequestration:
"Those changes would increase the level of real (inflation-adjusted) gross domestic product (GDP) by 0.7 percent and increase the level of employment by 0.9 million in the third quarter of calendar year 2014 (the end of fiscal year 2014) relative to the levels projected under current law, CBO estimates."
That can be a bit complicated, so I will draw that statement out. By the "third quarter of 2014," the report means July, August, and September. The report claims that by cancelling sequestration, in that quarter alone the economy would add 900,000 jobs, or 300,000 per month. And here's the kicker — Election Day is November 4, 2014.
The bottom line is that in the months leading up to the 2014 elections, government spending will be slashed the most, causing the worst impacts of these spending cuts. This could be enough of a hit to trigger a recession right before the elections.
I was curious to see if anyone was doing anything about this, and I did a little hunting. It turns out that Rep. Chris Van Hollen (D-Md.) put a bill on the table to end the sequestration cuts. It is called HR. 2060: Stop the Sequester Job Loss Now Act Through 2014. You can review it online and see if you prefer this bill to losing up to 1.6 million jobs this year.
In conclusion, what began as a review of a jobs report showing a surprise gain of 204,000 jobs revealed that sequestration has stacked the deck and will tank the economy and job growth right before the elections. Do we keep this policy, which is the current Republican Party line? Or do we choose the party that's doing everything it can to create jobs? What amounts to good governance and the best benefit for the American people? The answer is clear to me.