In his speech at the Brookings Institution yesterday, Vice-President Joseph Biden claimed credit for saving between five hundred thousand to one million jobs. There is no way to measure the number of jobs saved by the stimulus bill. A better way to judge these figures is by the Administration’s own predictions of what the stimulus bill would to do to job growth and the unemployment rate. This chart shows the Administration’s projections for unemployment if Congress passed the stimulus, and the actual unemployment rate since then.
The unemployment rate is already one-fifth higher than the Administration predicted. It is now expected that the peak of unemployment rate will be one-fourth higher than their predictions. Even worse, the promised job creation that was expected to lower the unemployment rate in the upcoming months has not materialized.
According to Bureau of Labor Statistics data, jobs continued to disappear in August with the unemployment rate increasing to 9.7 percent, the highest level since the summer of 1983. The unemployment rate for men was 10.1 percent, far exceeding the 7.6 percent unemployment rate for women. While 216,000 people lost jobs, this was the least amount of lost jobs of the year, an indication that the rate of job losses has greatly slowed.
Job losses continued to be broad with manufacturing (-63,000), construction (-65,000), and the service sector (-80,000) all cutting employment. While automobile dealers increased employment as a response to cash for clunkers (5,000), the automotive manufacturing industry continued to shed jobs (-14,800). Employment in the financial industry (-28,000) also continued to decrease, led by the insurance market (-12,800) and real estate (-8,000). Health care and educational services (52,000) again were the bright spots in the labor market.
Job losses are now predicted to continue for the rest of the year with the unemployment rate topping 10 percent.
The further deterioration of the labor market flatly contradicts the promises of the Obama Administration that the stimulus bill would halt unemployment and lead to a labor market recovery by the third quarter.