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Written by Wayne Pugh
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Wednesday, 08 July 2009 00:00 |
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When the administration’s top economic advisors, Christina Romer and Jared Bernstein, released their projections in early January, they estimated that the unemployment rate would reach 9 percent in 2010 unless massive amounts of government funding were allocated to stem the loss of jobs. If the $787 billion economic stimulus was approved, they said, the unemployment rate would likely peak just shy of 8 percent in the middle of 2009.
Now, half-way through the year, the unemployment rate has reached 9.5 percent – and President Obama says it will likely rise above 10 percent. 
Source: Bureau of Labor Statistics and “The Job Impact of the American Recovery and Investment Plan”
Click to Enlarge.
Originally we were told that fast-acting treatment was needed to bandage the economy and “create or save” 3.5 million jobs. What we received was a slow-acting, time-release injection of money. Only 6 percent of the stimulus has been spent so far, and only 23 percent is slated to be spent before 2010. According to the Congressional Budget Office, the bulk of the spending (nearly $400 billion) will actually occur next year, with 91 percent of the spending having taken place by 2012. The July 2 release from the Bureau of Labor Statistics shows a decline in the rate of job loss from last quarter. Though payroll employment has fallen 6.5 million since December 2007, the rate of job loss has declined from an average of 691,000 per month in the first quarter of 2009 to 436,000 per month in the second quarter. If this trend continues, the bulk of the stimulus money could hit in the midst of the recovery – generating another artificial boom.
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