‘Fiscal Cliff’ Worries Add to Jobless Woes
(WASHINGTON) -- Manufacturing activity in the U.S. in November shrank to its lowest level since July 2009, according to a report by the Institute of Supply Management (ISM) released Monday.
While Hurricane Sandy contributed to the slowdown, uncertainty over the “fiscal cliff” may be the biggest culprit. Economists and business leaders have been warning Washington lawmakers that going close to the edge of the cliff is bad for the economy.
Scott Davis, CEO of UPS, which employs 325,000 Americans, told ABC News in November that he’s hearing directly from the nine million customers they serve -- most small businesses -- that they are “not investing in their businesses or hiring” because of the looming fiscal cliff. “The needs of the country have to be put ahead of personal or party politics … The country is on an unsustainable fiscal path and the longer we wait, the more difficult our economic problems are to solve,” he said.
Meanwhile, economist Diane Swonk estimates that at least 200,000 fewer jobs have been created in the second half of this year because of fiscal cliff uncertainty.
The Congressional Budget Office has issued warning, estimating earlier this year that 0.5 percent of economic growth will not happen because of uncertainty over fiscal cliff. Slow growth means fewer jobs. In issuing this estimate the CBO said that “quantifying anticipatory effects is difficult.”
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