Even brief spending cuts could hit US economy hard: Analysis

Pentagon officials have said up to 800,000 of the military's civilian employees would work one less day a week because of the cuts.

The Air Force said it would have to curtail orders for Lockheed Martin Corp's F-35 fighter jet and delay a new version of the MQ-9 Reaper drone being built by privately held General Atomics.

Congress has been scrambling to find a way to postpone the budget cuts, but has shown little sign of progress.

In its report this week, the CBO projected that the economy would grow 1.4 percent this year if the austerity measures kick in. At that pace, the jobless rate would average 8 percent in the fourth quarter, just above the 7.9 percent reading from January.

Most Wall Street banks expect the cuts, know as the "sequester" in Washington parlance, to take effect at least briefly.

Kevin Logan, chief U.S. economist at HSBC in New York, does not. He acknowledges there is a good chance he is wrong and says the cuts could push the United States into a brief recession.

"The full implementation of the sequester over a short period of time could very well be the trigger," he said.

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