Unemployment Rate Keeps Going Up

Earlier this year (January 21 blog) I reported on the research done by Christina Romer, chair for the Council of Economic Advisors. On January 9 she released a 14-page document on "The Job Impact of the American Recovery and Reinvestment Plan."

Here were the goals--which by the following month lead to the passage of the $787 billion economic stimulus plan:

• Create 3-4 million jobs by the end of 2010.

• Certain industries, such as construction and manufacturing, were likely to experience particularly strong job growth.

• More than 90 percent of the jobs created would be in the private sector.

A graph was produced by this council--and it forms the basis for comparing what was estimated then--and what has occurred now with regard to unemployment in the US. It is not a healthy picture.


In early February, the US unemployment rate stood at 7.6%. Congress and the Obama Administration were working on a stimulus bill that would seek to cap unemployment at 8 percent. Unfortunately for many, many Americans those rosy predictions have not panned out.

Indeed, there was question at the time whether this stimulus package would indeed work. Do you remember the issues??

• 26% of the proposed spending would take place after 2010--probably long after the recession has ended. Now while the current recession has not been declared "over," it appears the US will resume GDP growth--the key indicator that we've exited this latest recession.

• There was considerable pork barrel spending that had nothing to do with job creation.

  I might add that if not technically "pork barrel," there definitely has been spending that does not stimulate job creation in any significant fashion...and also money has been spent just to spend the money, while more legitimate projects will not be shovel ready until engineering work is completed in the future.

  If you would like some documented support, please review my June 30 blog article.

• More time was needed to debate this 1,071 page bill--and it was one of the first in a series of bills in Congress that were never fully read by legislators.

This blog article sets the stage for other articles that I will release in the near future.