David J. Lynch and Jeannine Aversa
August 4, 2011
American voters’ calls for deficit reduction are colliding with their demand for job creation.
As governments at all levels face pressure to cut spending, thousands of public-sector workers are joining the ranks of the 13.9 million unemployed. In July, 37,000 government jobs were eliminated, marking the ninth straight month of reduction, a Labor Department report showed today.
Cuts in spending and jobs by state and local governments are among the impediments to economic growth, along with the housing slump and tight credit, Federal Reserve Chairman Ben S. Bernanke has said. The fiscal drag may get worse as the federal government starts reducing deficits after the Aug. 2 agreement to raise the debt limit, said economist Mark Vitner.