USA TODAY: Amid the gains in last Friday’s jobs report, one sour note stood out — state and local governments are still shrinking.
Economists had predicted that with the housing bust over, grass-roots governments would begin replacing some of the 1 million workers they’ve cut since 2008. Indeed, that was one reason economists thought the economy could withstand federal cuts and tax hikes this year, Moody’s Analytics chief economist Mark Zandi said.
Since they’re not — state and local governments cut another 3,000 workers in April, even as the economy added 165,000 jobs in all — that’s adding to concerns that the economy could slow at midyear as the federal sequestration cuts begin to bite. That’s especially true since budget-stressed states such as Illinois expect to add few if any jobs, said Abdon Pallasch, assistant budget director for Illinois Gov. Pat Quinn… (more)
