Krueger Says Jobs Growth Tempered by Automatic Budget CutsRoger Runningen
Alan Krueger, chairman of the White House Council of Economic Advisers, said U.S. employment is improving though gains may be limited by budget cuts.
“Today’s numbers show that the recovery is gaining traction,” Krueger said today on Bloomberg Television. “What we should do is do everything we can to continue the recovery.”
Payrolls rose 236,000 in February, more than expected, the Labor Department reported today in Washington. The unemployment rate unexpectedly fell to a four-year low of 7.7 percent, suggesting that U.S. employers were undaunted by the budget impasse between Congress and the White House.
The Obama administration’s chief economist said he was concerned about $85 billion in budget cuts, known as sequestration, which took effect March 1, and the $1.2 trillion more in cuts over the next nine years.
“The sequestration’s going to make some important cuts, which are going to hurt people, it’s going to hurt investment, and it’s going to slow economic growth and job creation,” Krueger said.
Leaving the cuts in place would shave U.S. economic growth and cost 750,000 jobs by the fourth quarter, the nonpartisan Congressional Budget Office has said.
“That seems to me to be quite a reasonable estimate,” Krueger said in the interview.
President Barack Obama says he wants to replace the budget cuts with a longer-term fiscal program of revenue increases and more targeted spending cuts. He has begun talking with some Republican senators.
Obama has planned a series of appearances on Capitol Hill next week with lawmakers in both parties to forge an agreement.
The sequester is “bad policy; it is indiscriminate cuts” that don’t “address our long-term deficit problems, and it’s going to hurt the economy over the coming months,” Krueger said.
U.S. stocks pared early gains that sent the Standard & Poor’s 500 Index to within 1 percent of its record as faster-than-forecast growth in payrolls jobs speculation the Federal Reserve will curtail its stimulus efforts.
The Standard & Poor’s 500 Index was up 0.1 percent at 1,545.41 at 10:06 a.m. in New York after rising as much as 0.5 percent to 1,551.65 earlier.
Hiring in construction jumped by the most in almost six years. Payrolls also climbed at retailers, and professional and business services such as temporary help firms.
The Labor Department report showed that jobs in professional and business services rose 73,000, construction jobs climbed by 48,000, health care jobs gained 32,000, leisure and hospitality employment rose by 24,000, and retail trade jobs increased by 23,700.
Manufacturing jobs rose by 14,000. The sector has added more than 500,000 jobs over the last 37 months, the most for any period since 1986, Krueger said in a statement issued by the White House.
House Speaker John Boehner said “any job creation is positive news,” yet unemployment is “still way above levels” that White House projected when the $831 billion stimulus program was enacted.
Boehner said House Republicans next week will consider a budget resolution that has a goal of balancing the budget in a decade and “one focused more on economic growth and more jobs.”