The Bureau of Labor Statistics’s (BLS) February employment report showed solid labor market growth. Employers added 236,000 net new jobs, and the unemployment rate dropped to 7.7 percent from 7.9 percent. However, the labor market is weaker than the headline numbers suggest. The drop in unemployment, in particular, occurred largely because people left the labor market. However, policymakers should not worry that sequestration will disrupt growth. Economic research shows that spending-based deficit-reduction plans, unlike tax-based plans, do not damage the economy. Sequestration is an imperfect first step toward the spending reductions necessary to balance the budget. Congress should reject any proposal to replace part of sequestration with tax increases.