While the seemingly endless fiscal cliff negotiations in Washington fueled widespread economic uncertainty and business pessimism, the workforce added 155,000 jobs in December, meeting analysts’ expectations. The numbers were slightly below the revised gains in November and indicate a lackluster 2 percent economic growth for 2012.
The Labor Department’s December jobs report released Friday morning shows the unemployment rate held steady at 7.8 percent. The biggest gains were in health care, food services, construction and manufacturing.
Most economists expect the U.S. economy will be held back by tax hikes this year as well as by weak spending by households and businesses, which are still trying to reduce their debt burdens. - Read more at The Fiscal Times
MOODY’S: CLIFF DEAL FALLS SHORT
Moody’s rating agency said the fiscal cliff deal -- raising taxes on net income over $400,000, patching the Alternative Minimum Tax, and postponing deep spending cuts for at least two months --fell short of what the country still needs to do in order to maintain its coveted “AAA” rating.
In a note published after the passage of the cliff bill, Moody’s wrote: “Yesterday's package does not address the federal government's statutory debt limit, which was reached on December 31… Lack of further deficit reduction measures could affect the rating negatively.” Read the Moody’s note here
NEW CONGRESS READIES FOR DEBT CEILING BATTLE
Though the makeup of the 113th Congress has changed, you can still count on a brutal, partisan battle over the debt ceiling in the next two months. The Fiscal Times’ Josh Boak writes that “disputes over economic stimulus, the 2011 debt ceiling fight, and the frustration in passing a fiscal cliff deal this week all look like a prelude to the turmoil to come.” - Read more at The Fiscal Times
SPECIAL INTEREST PERKS IN CLIFF DEAL
The 157-page law that narrowly steered the country away from a fiscal catastrophe is stuffed with benefits for special interest groups from Hollywood producers to big time corporations.
The legislation includes $9 billion provision for U.S. corporations doing business overseas, $430 million in tax breaks for Hollywood producers making movies within the U.S, and $4 million in tax breaks for 2-or 3-wheeled electric vehicles like Segways and scooters, among others. - See the list of tax provision at The Washington Post