The White House announced Wednesday that money from the stimulus has successfully saved or created as many as 3.6 million jobs so far and boosted the gross domestic product by more than 3%. The announcement was intended to boost the American people’s confidence in the steps the government has taken to recover from the recession, but it may actually have the opposite effect.
According to CNN Money, the administration claims that the stimulus money has saved or created between 2.5 million and 3.6 million jobs. By comparison, the White House Council of Economic Advisers had initially projected that the stimulus would save about 3.5 million jobs in total as of the end of this year. So, in one sense, we are keeping pace with and possibly exceeding these projections, but despite the millions of employees who have been helped by the stimulus, the job market remains dismal.
Part of the problem is that the White House was not quite as accurate about another projection they made about the stimulus. The Obama administration initially argued that the stimulus money would stop unemployment from rising above 8%. Yet, unemployment currently sits at 9.5%, more Americans are giving up and leaving the labor market and several economists have started to speculate that we are entering a depression. Not surprisingly then, a recent poll by CBS found that just 13% of Americans believe they have been helped by Obama’s economic programs and more than half think the stimulus in particular has had no impact on the economy.
All in all, economists estimate that 8.4 million jobs were lost during the recession, and a quarter of those will never come back. In the face of that, 3 million jobs sounds promising but not nearly substantial enough to make us feel like the country is really improving. What’s more, if the White House was actually accurate in its initial estimate that the stimulus would create about 3.5 million jobs in 2010, that means we’ve pretty much seen the full effect that the stimulus will have this year. So don’t expect the job market to make any leaps and bounds in the next few months.