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Did the stimulus help?

With ugly economic news raining down on us like a monsoon, I think it is important to ask if the stimulus helped. Was it worth it?

First the badness:

Sales of newly built homes dropped to their lowest level since the government started tracking the numbers more than four decades ago, with demand for home purchases down in all four regions of the country.

The Commerce Department reported Wednesday that new homes sold in July at an annual rate of 276,000, down 12.4 percent from June and down 32.4 percent compared with the same time last year.

First, I would like to say what everyone knows. The housing sector was overbuilt. There are too many houses that are sitting empty now. New houses are not going to sell with so many old houses sitting idle. Loans for new houses are going to be harder to get and this isn’t necessarily a bad thing. The housing sector is not going to be our economic engine in the next decade. It can’t be.

Unfortunately, it is hard to cheer up a man who is watching his house burn by reminding him that at least he has your health. The Stimulus has saved millions of jobs. The American auto industry is selling cars again. Mark Zandi, chief economist for The Economiststated:

Former McCain economic adviser, and longtime stimulus defender, Mark Zandi took issue today with House Minority Leader John Boehner’s criticisms of President Obama’s economic policies, and with multiple GOP calls for Obama’s top economic advisers to resign.

“I think we’d be in a measurably worse place if not for the stimulus,” Zandi said at the Christian Science Monitor breakfast this morning. “If we had not had the stimulus…we’d have fewer jobs today than we actually have.”

Zandi was responding to Boehner’s contention yesterday that stimulus spending “has gotten us nowhere.” Asked whether he agreed with Boehner, Zandi said “no.”

“Without the stimulus spending,” Zandi insisted, “instead of a 9.5 percent unemployment rate, we’d have an 11.5 percent unemployment rate.”

In addressing questions about the size of the stimulus he stated:

“I would have made it larger,” Zandi said. “I think we underestimated — significantly underestimated — the severity of the situation that we were in and still are in. And that that would have argued for a larger stimulus package.”

By |2010-08-25T21:06:23-04:00August 25th, 2010|Economy|Comments Off on Did the stimulus help?

July jobless numbers (Updated)

I’ll have more later but here’s the numbers.  It looks better but…

From NYT:

The rampant pace of job losses slowed in July, an encouraging sign that the labor market is nearing a bottom as the broader economy struggles to recover, the government reported on Friday.

The American economy shed 247,000 jobs last month, the smallest monthly toll since last August. While businesses are expected to keep cutting positions through the rest of the year, the Labor Department’s latest figures offered hopeful signs for the American worker and a measure of relief to the Obama administration, which has faced rising criticism as unemployment blew past its earlier projections.

“The trend lines are positive,” said Mark Zandi, chief economist at Moody’s Economy.com. “We are going from massive job losses to just big job losses on our way to a stable job market, I think by next spring.”

The length of the workweek increased, albeit slightly, for the first time since August, a sign that businesses were not scaling back hours to cut their payroll costs. The government said fewer jobs were lost this spring than it had initially estimated, revising June’s lob losses to 443,000 from 467,000. (more… )

From EPI:

This recession is continuing to shatter records for long-term unemployment;  with roughly six unemployed workers per job, job seekers are not finding work. In July, the number of workers who have been unemployed for over six months increased by 584,000 to 5 million, so that now 3.2% of the labor force has been unemployed at least six months, far surpassing the record high of 2.6% set in June of 1983. Currently over one-third (33.8%) of this country’s 14.5 million unemployed workers have been unable to find work for over half a year, an all-time high. While the pace of layoffs is slowing, unemployed workers are not finding jobs. (more… )

It should be clear to everyone that this recession is going to take a while to ride out.  Hold on tight!!

By |2009-08-07T10:03:40-04:00August 7th, 2009|Economy|Comments Off on July jobless numbers (Updated)

Special Edition of the Errington Thompson Show – The Economy

Jobs, Jobs, jobs

If president Barack Obama has any thoughts of becoming a two-term president, he has got to create jobs.  The jobs numbers for June were not abysmal but they weren’t good either.  I talk with Dr. Heidi Shierholz from the Economic Policy Institute.  She is a Masters and Ph.D. in economics.

The American economy has now lost 6.5 million jobs since the start of this recession.  Last month we lost 467,000 jobs.  During the first quarter of this year we lost an average of 691,000 jobs per month.  So the jobs market may be improving.  I mean were losing jobs at a slower rate.  This is of little comfort to those were losing jobs.

Most of the job losses are being suffered in those areas of the economy that are cyclical — construction and manufacturing.  Unfortunately, men tend to gravitate to these types of jobs.  Men have been particularly hurt by this economic downturn.  The unemployment rate for all men is 10.6%.  For women it is 8.3%.  The unemployment rate in the Black community is 14.7%, the Hispanic community – 12.2% and the white community – 8.7%.

We heard lots of happy talk last month when the economy lost only 345,000 jobs in May (I still find it weird to say that we lost ONLY 345,000 jobs).  The New York Times quoted chief economist at PNC Financial Services Group, Stuart Hoffman as saying, “The freefall in the job market does appear to be tapering off.  If the prelude to an economic and job recovery later this year.”

We, as progressives, must watch this new climate change Bill.  It has to have plenty of money for green jobs.  This has to act as a second stimulus, in my opinion.  Dr. Shierholz mentions that this economic downturn is far from over.  We will begin to see increases in our GDP and in the stock market before will see significant job creation.  Significant job creation may not be until the third quarter of next year.

In spite of the depressing news, this is an excellent interview on the economy.  Enjoy.

The Errington Thompson show airs every Saturday morning at 9 a.m. (EST).  Live streaming.  Podcasts can be heard on iTunes and here.

By |2012-05-07T15:09:25-04:00July 8th, 2009|Economy, Energy, Obama administration, Podcasts|Comments Off on Special Edition of the Errington Thompson Show – The Economy
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