Stimulus Spending And Job Growth: Update 7
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. The unemployment rate remains steady at 10%, but only because 661,000 people dropped out of the job market in December. The jobless rate continues to generally follow the trajectory I had envisioned in June
I have revised the October and November job figures according to the latest data from the US Dept of Labor. The number of jobs lost for the month of October was revised upwards from 111,000 to 127,000. In November, the job loss of 11,000 was revised into a job gain of 4,000.
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 483,357 jobs per month -- in order to make up for the nearly 2.8 million jobs that have been lost since the stimulus bill was signed.
"Stimulus", my butt.