Stimulus Spending And Job Growth: Update 12

Well, it's that time again. Time to update Obama's stimulus-driven job creation results. Let's look at the latest picture. In May, there were 431,000 new jobs, but of those new jobs 411,000 were temporary census workers. Not only that, but there is some indication that the 411,000 figure has been inflated. Therefore, in the graph below, I have discounted the temporary census jobs and allowed for a net gain of only 20,000 jobs. The unemployment rate dropped from 9.9% to 9.7% because 286,000 people dropped out of the work force.

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.



I have revised the March and April job figures according to the latest data from the US Dept of Labor. Now, 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 684,444 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 those fortunate 20,000 who found work in May. I should also point out that, in my opinion, the recent upturn in job gains has had little or nothing to do with Obama's Stimulus Package. Rather, it was the result of a 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.

I would go even further and suggest that the policies of this President and this Congress have only acted to slow the recovery.