Daily Wisdom

December 04, 2009

Stimulus Spending And Job Growth: Update 6

Well, here we are again. The new jobless numbers are out, so it's time to update my predictions. 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 somewhat worse than I had predicted -- plotted as yellow and red -- and the unemployment rate is now at 10%. However, the jobless rate is generally following the trajectory I had envisioned.

I have revised the September and October job losses according to the latest published figures. The number of jobs lost for the month of November was 11,000.

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 445,400 jobs per month -- in order to make up for the nearly 2.7 million jobs that have been lost since the stimulus bill was signed.

Hey Obama, how's that "stimulus" thing workin' out for ya?


At 12/04/2009 10:39 PM , Anonymous mindknumbed kid said...

Obviously we just don't understand how good we have it with Obama as our supreme leader.

At 12/04/2009 10:50 PM , Anonymous Old UncleWingnut said...

"Pay no attention to the man behind the curtain, I am the Great and powerful O_ ,,,,Obama.
Great chart Hawk. Thanks
Brother L.

At 12/05/2009 1:43 PM , Blogger Hawkeye® said...

Obviously... 'cause I don't understand it.

(:D) Best regards...

At 12/05/2009 1:44 PM , Blogger Hawkeye® said...

Old UncleWingnut,
No, no, no. Thank YOU Brother L.

(:D) Best regards...

At 12/05/2009 10:36 PM , Anonymous Johnny said...

Hawk, you nailed it - and its probably going to get much worse, especially if the dems ram another 1,000+ page spending bill through that no one has read.

We simply cannot afford 'change' when it means 'economic justice' (marxism). Government cannot grow jobs, and if they do, they are government jobs anyway that cost the taxpayer and hurt the private sector.

At 12/07/2009 1:39 AM , Blogger camojack said...

I saw where the "official" unemployment rate improved slighty, but cannot help but wonder it that's merely a reflection of the trick of not counting those who are no longer receiving unemployment benefits, yet remain unemployed...

At 12/07/2009 10:55 AM , Blogger Hawkeye® said...

I'm afraid you may be right. Things could get worse before they get better. Or perhaps they will get better just a tad before getting worse again. Either way, it don't look great.

Thanks for stopping by, and best wishes to you, Amy and family.

(:D) Best regards...

At 12/07/2009 11:00 AM , Blogger Hawkeye® said...

You're probably correct. From what I heard, 100,000 people dropped out of the job market in November, and with only 11,000 net jobs lost, that means that 10 times more people dropped out of the market than lost jobs. Net result... the unemployment rate "appeared" to go down.

The unemployment rate in my house is actually 50%. My wife is working, but I'm not.

(:D) Best regards...

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At 12/09/2009 9:30 AM , Anonymous ben tillman said...

We have a net loss of jobs, but there are some new jobs being created. However, many of these are going to immigrants rather than Americans. When is immigration policy going to be addressed as a cause of increased unemployment?

At 12/09/2009 11:05 AM , Blogger Hawkeye® said...

Ben Tillman,
Got me. When will the Democrats get out of the way and the free enterprise system do its job?

Best regards...


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