U.S. job growth likely was moderate in February as higher taxes and fears of deep government spending cuts made employers cautious, suggesting there was still not enough momentum in the economy for the Federal Reserve to scale back its monetary support.
Employers are expected to have added 160,000 jobs to their payrolls last month, barely picking up from January’s 157,000 count, according to a Reuters survey of economists. That would just be enough to hold the jobless rate steady at 7.9 percent.
A 2 percent payroll tax cut ended and tax rates went up for wealthy Americans on January 1, hurting retail sales. In addition, $85 billion in federal budget cuts, known as the “sequester,” started taking hold on March 1, a prospect that may have weighed on hiring decisions.
That’s a precious bit there at the end: “Well, we know the taxes hurt but, HEY, maybe it’s the sequester’s fault!”