Stimulus Spending And Job Growth: Update 5
Well, if you've been following this blog at all, then you already know pretty much what I'm going to say. In June I wrote an article called "Stimulus Spending And Job Growth". In the article, I pointed out that Barack Obama said his stimulus package would create approximately 4 million "new jobs" over two years. He also said the unemployment rate would not exceed 8%. In order to create 4 million jobs in 24 months, the Obama administration would have had to create approximately 166,667 jobs per month to reach this target, assuming linear job growth. That scenario is shown as violet in the following graph.
As of June, when I wrote the article, the trend in job growth was actually negative. So I developed a curve showing what I thought might be a more "Likely" scenario -- plotted as light blue in the following graph. As you can see from the graph, the actual trend of job losses is worse than I had predicted -- plotted as yellow and red -- and the unemployment rate is now at 10.2%.
I have revised the August and September job losses according to the latest published figures. The number of jobs lost for the month of October was 190,000.
President Obama has already blown his promise to keep unemployment under 8%. And it looks like his ability to create 4 million new jobs in 24 months is also in jeopardy. Instead of having to create 166,667 new jobs per month, which he originally needed to reach his target, he now needs to create 426,812.5 jobs per month -- in order to make up for the 2,829,000 jobs that have been lost since the stimulus bill was signed.
Hey Obama, how's that "stimulus" thing workin' out for ya?