The Debt Ceiling deal is NOT going to start handing out jobs

The deal to raise the debt ceiling may remove the risk of a 2008-like meltdown in financial markets that had made employers very nervous in recent months.
But even if the debt deal is passed by Congress, labor market experts don't expect it to jumpstart hiring growth.
"I would say this will have little effect if any," said Jeff Joerres, Chairman and CEO of staffing firm ManpowerGroup (MAN, Fortune 500). "It's nice to clear one worry off the desk, but there are a lot of other things to worry about.
"At the end of the day, demand trumps all, and right now demand is sluggish, regardless of industry," he said.
The economy added just 43,000 jobs in May and June combined as the debt ceiling debate dragged out in Washington. And economists surveyed by CNNMoney forecast a gain of only 77,000 jobs for July when the latest employment report is released Friday.
A survey last week found many worried about a new recession if Congress failed to reach a deal by the Aug. 2 deadline.

Read the debt ceiling bill

Some economists fear that the $2.1 trillion in spending cuts called for in the agreement to raise the debt ceiling will slow the economy.

The Economic Policy Institute, a liberal think tank, estimates that the spending cuts will cost the economy 323,000 jobs in 2012. It also estimates that allowing the payroll tax holiday and extended unemployment benefits to expire could cost an additional 1.5 million jobs.
But most of the cuts are fairly modest. Only about $21 billion, or 1%, would come in the fiscal year that ends Sept. 30, 2012. Without a deal, there could have been an immediate halt of about $134 billion in government spending in August alone, according to a Bipartisan Policy Center analysis.
Jennie Dede, vice president of recruitment for Adecco Staffing, says while the labor market is better off without that kind of shock, the debt ceiling agreement isn't likely to prompt businesses to hire if they didn't already have plans to do so.
"People are just being conservative in general with hiring," she said. "They want to make sure it's going to make an impact on their business. You have to really fight to get a hire approved inside a business nowadays."
Economists who closely monitor the labor market agree they're not expecting hiring to take off in the wake of the deal.
"It would be wonderful if [the debt ceiling agreement] being resolved had the economy take off like a rocket. But I don't think that'll be the case," said Joel Prakken, chairman of Macroeconomic Advisers, the firm that compiles the closely-watched ADP monthly employment index.
He said while the continuation of a payroll tax holiday or some other kind of fiscal stimulus could help the job market, the debate over the debt ceiling demonstrates Congress is in no mood to take any kind of action to spur growth or hiring.