Ignoring Economists, Fox Brushes Aside Sequestration's Impact On Labor Market
Blog ››› ››› ALBERT KLEINE
Fox Business host Stuart Varney claimed that any signs of a weakening labor market cannot be explained by sequestration. However, economists have linked the expected slowdown in hiring to sequestration, and note that any negative impacts are likely to be temporary.
Reacting to an unexpected rise in weekly jobless claims, America's Newsroom host Bill Hemmer asked Varney if any of the rise was due to sequestration. Varney responded by claiming, "No...There's no seasonal factors, it's not weather, it's not sequester, it's just weakness in the underlying economy."
Economists do not support Varney's insistence that sequestration has had no impact on the job market. An April 3 Associated Press report noted economists' opinions on the link between sequestration and hiring:
Jim O'Sullivan, chief United States economist at High Frequency Economics, now expects just 160,000 net jobs in the March employment report, instead of 215,000. Jennifer Lee, an economist at BMO Capital Markets, said her group had lowered its forecast to 155,000, from 220,000.
Ms. Lee said businesses might have temporarily suspended hiring because they wanted to see the impact of $85 billion in government spending cuts, which began on March 1.
Furthermore, while Varney used the rise in weekly jobless claims to paint a thoroughly negative picture of the labor market, the same AP report noted that "most economists say any slowdown is likely to be temporary."
Indeed, when a more stable measure of the labor market is examined - such as the preferred four-week moving average of initial jobless claims - a much less negative picture emerges. While the four-week average rose in the April 4 report, the underlying trend of weekly claims has been positive. Since the beginning of 2013, the trend of initial claims has declined greatly, producing four-week averages at levels not seen since 2008.