Remember to move your clocks ahead on Saturday night. Daylight savings time ends at 2 A.M. this Sunday, March 10. Heading into this fast-forward weekend, the U.S. Bureau of Labor Statistics announced the unemployment rate had fallen to a five-year low of 7.7%. The bureau announced 236,000 jobs were created in February, offering a quick, encouraging glance over our shoulder as we head into the weekend and looming sequestration, which could undo all of that and more.
As surprising and encouraging as the February jobs number were (the number would have been even higher, if not for the 10,000 jobs cut from government payrolls), sequestration’s spending cuts could mean a quarter of a million fewer jobs by year’s end, according to the Congressional Budget Office.
Sequestration, or what we were calling the “fiscal cliff” when the opportunity to avoid it still existed, is the result of the Budget Control Act of 2011 (BCA), which we also called the “debt ceiling compromise.” No wonder it’s so hard to keep track of this, when everything has multiple names.
The legislation’s intent was to force the Joint Select Committee on Deficit Reduction (yes, of course, this has another name, too — the “Supercommittee”) to create a plan to cut federal spending over the next 10 years by well over $1 trillion, or the BCA would take effect and do it for them. Well, that’s where we are now — on the brink of losing $85 billion in government spending this year, losing a quarter of a million jobs in a U.S. economy that’s showing signs of recovery, and, oh yeah, losing an hour of sleep on Saturday night.
Should we lose even more sleep, worrying about it? John Walker, chairman of Oxford Economics (www.oxfordeconomics.com), and Ken Mayland, president of ClearView Economics (www.clearvieweconomics.com), see little reason to worry. Both spoke at the MFG Meeting (www.themfgmeeting.com), a gathering of more than 600 manufacturing leaders in Waikoloa, Hawaii, this week. The event is the joint effort of the Association for Manufacturing Technology (www.amtonline.org), National Tooling & Machining Association (www.ntma.org), and Precision Metalforming Association (www.pma.org).
Neither Walker nor Mayland expects the U.S. economy to drop into recession, and both believe manufacturing will remain strong. Because the middle class is growing in other countries, they will transform from producers into consumers. But Walker admits that sequestration creates a shadow of uncertainty, which could slow the economy, but won’t derail it.
So, as you move your clocks ahead this Saturday night before you go to sleep, rest easy. The Japanese recession could be headed for an end, the Eurozone is stabilizing, China just might pull it together, and, if Walker and Mayland are right, sequestration soon will pass as quickly as that hour between 2 A.M and 3 A.M.
Sleep in on Sunday. But remember, when you wake up, that we’ve all moved ahead an hour. Don’t miss your flight. There’s work to be done.
Cool blog! Don't you wish the too big to fail crowd worldwide were working as hard as we are to maintain stability and relevancy?