Daily Wisdom

May 09, 2010

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.

14 Comments:

At 5/09/2010 4:00 PM , Anonymous Conserve-a-tip said...

I thought about not accepting the $800 of my money that Obama deigned to give back to me in the Make Work tax credit (made work for a boatload of government employed IRS people). I thought that perhaps we could ask that it be applied to the deficit instead, but I realized that all the government would do would spend it. They haven't seen a dollar they don't love to spend. So, I decided to take MY money that they gave back to ME and I went and stimulated the economy on my own. :-) You did very good work here and it will be useful in a "debate".

 
At 5/09/2010 9:32 PM , Blogger Hawkeye® said...

C-A-T,
Thanks for your kind words. Indeed, they haven't seen a dollar they wouldn't love to spend. They just can't help themselves.

(:D) Best regards...

 
At 5/10/2010 3:38 AM , Blogger camojack said...

"In April, the economy created 290,000 jobs..."

Uh-huh. And of that number, how many were temporary census workers?

 
At 5/10/2010 12:24 PM , Anonymous Anonymous said...

Hawkeye, how many of those "new jobs" are full time jobs from the private sector? I bet a lot of them are either part time work and businesses gearing up for summer temp work ... or they're public sector/government jobs.

I heard only about 80,000 were private sector, full-time jobs. And to use the same argument from the LibDonks when the economy recovered from the Clinton recession under the Bush administration, I wonder how many of these are jobs are minimum wage or less than a living wage job?

Are Obamabots still insisting there's some kind of "jobless recovery" going on when they condemned such a concept under the Bush Administration? Liberals are renown for invoking their double-standards when trying to defend their big spending leftist autocrats.

Hankmeister

 
At 5/10/2010 7:13 PM , Blogger Beerme said...

Sorry to hear you are still among those looking for work. I hope that turns around quickly and that Obama's numbers are actually realized...in spite of his commitment to job destruction!

 
At 5/10/2010 11:04 PM , Blogger radar said...

Your brilliant response to creeper on my blog led to a break in the humbug series to feature your comment as a post onto itself. You really sliced and diced and I was impressed!

 
At 5/10/2010 11:06 PM , Blogger radar said...

Yep, and I do think that census workers are a big part of this. Plus, the rapid growth of government jobs is a false positive so to speak, since every government worker is a DRAG on the economy rather than a boost.

FDR managed to drag out the Great Depression for a decade and got all sorts of socialist programs put into place. Looks like Obama is following the same script.

 
At 5/11/2010 10:51 AM , Blogger Hawkeye® said...

Camo,
You noticed I said "the economy" created jobs. I did not give the credit to Obama. However, you may be correct that Obama actually did create a few temporary positions.

But then again, every 10 years we have a census because the Constitution "mandates" it. So in reality, Obama didn't create those census jobs... our Founding Fathers did.

(:D) Best regards...

 
At 5/11/2010 11:02 AM , Blogger Hawkeye® said...

Hank,
Good questions all. Camo asked about the census workers too. Here's what the Dept of Labor said:

"Manufacturing added 44,000 jobs in April...

Mining added 7,000 jobs in April...

In April, construction employment edged up 14,000...

Employment in professional and business services rose by 80,000 in April...

Temporary help services continued to add jobs (26,000); employment in this industry has increased by 330,000 since September 2009...

Employment also rose over the month in services to buildings and dwellings (23,000) and in computer systems design (7,000)...

In April, health care employment grew by 20,000, including a gain of 6,000 in hospitals. Over the past year, health care employment has increased by 244,000...

Employment rose by 45,000 in leisure and hospitality over the month. Much of this increase occurred in accommodation and food services, which added 29,000 jobs.

Federal government employment was up in April, reflecting the hiring of 66,000 temporary workers for the decennial census...

Over the month, employment changed little in wholesale trade, retail trade, information, and financial activities.

Employment in transportation and warehousing fell by 20,000 in April, reflecting a large decline in courier and messenger services.

In April, the average workweek for all employees on private nonfarm payrolls increased by 0.1 hour to 34.1 hours."

(:D) Best regards...

 
At 5/11/2010 11:14 AM , Blogger Hawkeye® said...

Beerme,
Thanks for your concern. Hopefully I will find something before my unemployment benefits run out and/or my COBRA benefits run out. In the meantime, I keep busy looking for a job, working around the house, and writing comments at the "Radaractive" blog.

(:D) Best regards...

 
At 5/11/2010 11:17 AM , Blogger Hawkeye® said...

Radar,
Thanks for your kind words. Some of that material in my comment came from an article I read years ago about science and religion, so I can't take all the credit.

(:D) Best regards...

 
At 5/12/2010 12:52 AM , Blogger radar said...

And I stole the hide the decline video from your blog...but then I highlighted you so I think that is okay. Hope you come over and check out the Bill Whittle video linked on my site or go to PJ media and find it. Eleven minutes of brilliant dissection of the Animal Farmer Fools in charge of the Federal Government!

Humbuggery was already extant, darn!

 
At 5/12/2010 10:14 AM , Blogger Hawkeye® said...

Radar,
I saw the link, and watched the Bill Whittle piece. Actually, I've seen it before. I have a subscription to PJTV so I get regular e-mails with new stuff every day or two.

(:D) Best regards...

 
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