Political India: Engaging America

From The Hindu

In positive news that could improve the prospects for the Obama administration the United States Bureau of Labour Statistics announced on Friday that the net addition to jobs in the U.S. economy was 192,000 during the month of February, with the private sector in particular creating 220,000 jobs.

The BLS noted that even as the world’s largest national economy continued to create new jobs, its rate of unemployment also dipped to a two-year low of 8.9 per cent after hovering above 9 per cent for many months. This followed from job gains occurring in manufacturing, construction, professional and business services, health care, and transportation and warehousing.

However despite the progress in job creation the total number of unemployed persons remained near its post-recession highs, at 13.7 million.

Sustained growth, job creation

Reacting to the news Austan Goolsby, Chairman of President Barack Obama’s Council of Economic Advisors, said, “Though unemployment remains elevated, we are seeing signs that the initiatives put in place by this administration — such as the payroll tax cut and the investment tax credit — are creating the conditions for sustained growth and job creation.”

Mr. Goolsby added that while the steep decline in the unemployment rate and the overall trend of economic data in recent months were encouraging, there was still “considerable work to do” to replace the jobs lost during the downturn.

“We will continue to work with Congress to find ways to reduce spending, but not at the expense of derailing progress in the job market, making the investments we need to educate our workers, investing in science, and building the infrastructure our companies need to succeed,” Mr. Goolsby said.

Similarly issuing a caution to his political opposition about the dangers of cutting investment education, science and infrastructure Mr. Obama said in his weekly address, “We need to come together, Democrats and Republicans, around a long-term budget that sacrifices wasteful spending without sacrificing the job-creating investments in our future.”

Commenting on the federal government budget that he recently authorised in order to avoid a government shutdown, the President said that both parties needed to come together around a budget that cuts spending without slowing the U.S.’ economic momentum. “We need a government that lives within its means without sacrificing job-creating investments in education, innovation, and infrastructure,” Mr. Obama said.

Speaker of the House of Representatives Republican John Boehner said, “The improvement seen in this report is a credit to the hard work of the American people and their success in stopping the tax hikes that were due to hit our economy on January 1,” adding that removing the uncertainty caused by looming tax hikes provided much-needed relief for private-sector job creators in America.

However the President emphasised the fiscal austerity dimension of his budget proposals, arguing that they would reduce the U.S.’ deficits by $1 trillion over the next decade. “In fact, the cuts I’ve proposed would bring annual domestic spending to its lowest share of the economy under any president in more than 50 years,” he said.