The US economy created a sluggish 131,000 jobs in February, according to our Data Science team at Bright.com – even fewer than January’s 189,000 jobs, and it doesn’t appear that a recovery is on the way any time soon.
A CNN article reports that $85 billion in federal budget cuts, set to take place today to reduce our deficit, has the potential to cost roughly 800,000 jobs over the next year. Many federal agencies have started to slow or freeze hiring, and some workers that rely on government contracts have already been laid off, contributing to the slower job creation last month.
Depending on how this plays out, we may continue to see a downward trend in job creation over the next 7 months, as the cuts continue to play out. While some jobs are being affected immediately, some programs and agencies may “back end” the cuts and lay people off later in the year.
However, the funding for affected programs and agencies doesn’t actually expire until March 27, so it’s still too early to tell what kind of effect this will have long term. If this potential economic disaster is averted, the government funded programs and agencies that have already begun to slow or freeze hiring could proceed with caution, and likely won’t turn on the hiring switch right away.
Stay tuned to see what the Bureau of Labor Statistics reports on March 8, and check back to stay informed on how the budget cuts affect employment over the next year.