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The Jobs Search: Obama Wrong on Unemployment Levels, What Else?

July 13, 2009


The Obama Administration famously predicted its so-called stimulus plan would “save or create 3.5 million jobs.”  However, the unemployment rate in June reached 9.5%, well above the 8% level the Administration projected if stimulus passed.  This means 2.5 million more Americans unemployed than the President promised. While the President and Vice President debate whether the Administration “misread how bad the economy was,” it’s worth reviewing how their other employment projections turned out, all of which appeared on page 2 of the Administration’s January 2009 Romer/Bernstein report.  The Administration’s rosy predictions are, not surprisingly, off the mark. 



“More than 90 percent of the jobs created are likely to be in the private sector.”


Not only have no jobs been created in the private sector, in just four months 2 million private sector jobs have been destroyed. Meanwhile government jobs have actually grown, slightly, according to the Bureau of Labor Statistics’ payroll survey.[i] 


 Private Sector employment

• February 2009               111.1 million
• June 2009                      109.1 million (-2,000,000)

Government employment

• February 2009               22.547 million
• June 2009                      22.554 million (+7,000)


The stimulus plan “is also likely to move many workers from part-time to full-time work.”


The past four months have seen a sharp drop in full time workers and a rise in the number of part time workers, according to the Bureau of Labor Statistics’ household survey (which data does not reflect the hundreds of thousands of new entrants into the labor market, many of whom have been unable to find work).[ii]

Full time workers

• February 2009            114.8 million
• June 2009                   112.9 million (-1,900,000)

Part time workers

• February 2009            26.6 million
• June 2009                   27.4 million (+800,000)



“Certain industries, such as construction and manufacturing, are likely to experience particularly strong job growth under a recovery package that includes an emphasis on infrastructure, energy, and school repair.”


Both construction and manufacturing employment are down sharply according to the Bureau of Labor Statistics’ payroll survey, despite the supposed inclusion of “shovel ready” projects in stimulus. [iii]

 Construction employment

• February 2009           6.6 million
• June 2009                  6.2 million (-400,000)

Manufacturing employment

• February 2009           12.5 million
• June 2009                  11.9 million (-600,000)







Close reviewers might wonder why these data appear to show a net decline in private/government employees of approximately 2 million over this period, but a net decline in full-time/part-time workers of only 1.1 million.  First, the two data sets come from separate surveys – the former from BLS’ payroll survey and the latter from its household survey.  Second, the household survey also shows the labor force grew by 700,000, which contributed to unemployment rising more (by almost 2.3 million) than employment fell (down 1.6 million) over the period.