Consumers, Businesses Brace for 'Fiscal Cliff' Impact |
| CNBC - Dec 27, 2012 |
For much of this year, business managers have blamed uncertainties over the looming "fiscal cliff" for their reluctance to pick up the pace of new hiring.
As the budget deadline nears with no deal in sight, we may be about to find out just how justified those fears are.
Without a deal, the current budget law calls for a half-trillion-dollar package of tax hikes and spending cuts that most forecasters warn would, if left in force for long, send the U.S. economy back into recession.
After strong gains in income in November, American households will see their paychecks shrink a bit when a two-year payroll tax "holiday" expires Dec. 31. The new rate will clip 2 percent from every dollar of wage income, or about $20 a week for someone making the median salary of $50,000 a year.
"People will start to feel it fairly quickly in their paychecks," said Ian Shepherdson, an economist at Pantheon Macroeconomic Advisers. "I don't think the economy will fall apart completely (in the short term). But we've seen already that business confidence is weakening and consumer confidence is weakening. So the uncertainty is a problem."
Read Full Article from CNBC
- Posted: 2012-12-27 16:34:20
| More Stock Investor Place Top Stories |
 |
|
|
|
| Stock Investor Place Top Stories Archive |
|
|
|
