Stimulus Spending And Job Growth: Update 11
Well, here we go again. Time to update Obama's stimulus-driven job creation results. Let's look at the latest picture. In April, the economy created 290,000 jobs, and the March figures were revised upwards from 162,000 to 230,000 new jobs. Sounds good, right? Well, the bad news is that 800,000 "discouraged" workers decided to come back into the labor force looking for work, so despite these job gains the unemployment rate actually went up from 9.7% to 9.9%.
Barack Obama said his stimulus package would create approximately 4 million "new" jobs over two years. 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 his target, assuming linear job growth. That scenario is shown as violet in the following graph.
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 was somewhat worse than I had predicted -- plotted as yellow and red. The jobless rate continues to generally follow the trajectory I had originally envisioned, despite the recent uptick in job growth.
I have revised the February and March job figures according to the latest data from the US Dept of Labor. It appears that job growth at this point is somewhat stronger than I had anticipated, and if the trend continues job growth may accelerate faster than my slow, steady projection. Only time will tell.
Yet, instead of having to create 166,667 new jobs per month to reach his original target of 4 million new jobs, President Obama now needs to create 615,800 jobs per month -- in order to make up for the more than 2 million jobs that were lost since the stimulus bill was signed. He still has a long way to go to reach his target.
I am sorry to once again report that I was not one of the fortunate 290,000 who found work in April. I should also point out that, in my opinion, the recent turnaround from job losses to job gains has little or nothing to do with Obama's Stimulus Package. Rather, it is the result of natural economic recovery, which would have occurred anyway. In fact, this recovery cycle has been longer than most in history. In other words, we were overdue for a turnaround.