White House Warns of ‘Self-Inflicted’ Wounds for a Recovering Economy

Photograph by Paul Sancya/AP Photo

Job seekers at a job fair in Southfield, Michigan.

The White House is taking today’s employment report as a sign that the economy is healing from “the wounds inflicted” by the worst downturn since the Great Depression, while warning Congress against creating any “self-inflicted wounds.”

Such as the looming sequestration that threatens defense and other discretionary spending — following a fourth-quarter 0.1 percent annualized decline in the gross domestic credit blamed on slowed defense spending at year’s end.

The U.S. economy added 157,000 jobs in January, the Labor Department reported today, following a revised gain of 196,000 in the prior month and 247,000 in November. The unemployment rate rose to 7.9 percent in January from 7.8 percent in December.

That holds the jobless rate below 8 percent, a benchmark reached two months before the presidential election, yet Alan Krueger, chairman of the Council of Economic Advisers, cautioned today that “more work remains to be done.”

“Today’s employment report provides further evidence that the U.S. economy is continuing to heal from the wounds inflicted by the worst downturn since the Great Depression. It is critical that we pursue the policies needed to build an economy that works for the middle class as we continue to dig our way out of the deep hole that was caused by the severe recession that began in December 2007.”

“Today’s report is a reminder of the importance of the need for Congress to act to avoid self-inflicted wounds to the economy,” Krueger said in a statement released by the White House. “The administration continues to urge Congress to move toward a sustainable Federal budget in a responsible way that balances revenue and spending, and replaces the sequester, while making critical investments in the economy that promote growth and job creation and protect our most vulnerable citizens.”

The economy has added 6.1 million jobs over the past 35 straight months, he noted. In 2012, private businesses added 2.2 million jobs. Overall, an average of 181,000 jobs were added each month in 2012.

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