By Ian Swanson - 08/07/09 03:21 PM EDT
While many of those defending the stimulus predicted the unemployment rate will increase this fall, they said it’s clear that without the stimulus bill, far more people would have lost their jobs.
“Today’s better-than-expected news on job losses and a slight drop in the unemployment rate is evidence that the recession is slowing and that our economic policies — such as the economic recovery act passed earlier this year — are beginning to take a positive effect,” Pelosi said in a statement.
Pelosi and others pointed to the number of job losses to bolster their point.
Between November and April, monthly job losses averaged 645,000, but that figure has been cut in half over the past three months, when they averaged 331,000, according to Labor Department data.
“Most of that is the stimulus,” said Larry Mishel, president of the Economic Policy Institute.
“The July job figures would have been much worse without the stimulus, which has helped to slow the pace of job loss to less than half of what it was just six months ago,” said John Sweeney, president of the AFL-CIO.
President Barack Obama has promised the stimulus would create or save 3.5 million jobs, but the country’s economy has continued to shed jobs since the bill was signed into law in February.
That’s allowed Republicans to hammer on Obama and the stimulus, which they’ve described as a failure. The difficulty in quantifying the number of jobs “saved” by the stimulus has helped the GOP, and at times made it more difficult for Democrats to defend the package.
Friday’s jobs report, and particularly the significant decline in the monthly average of job losses, offered the left some evidence to put behind their argument that things would be much worse without the stimulus.
Aid to states funneled through the stimulus have kept state government from laying off workers and cutting off vendors, and spending by those people has saved jobs in the private sector, Mishel said.
It’s “ridiculous” for Republicans to suggest there’s no evidence the stimulus is having an impact, said Mishel, who singled out House Majority Leader John Boehner (R-Ohio) for criticism.
Boehner on Friday released a statement that said the stimulus “has fallen woefully short of creating the jobs the administration promised.”
Boehner’s statement noted that the administration predicted earlier this year that the unemployment rate would top out at 8 percent. Instead, unemployment hit 9.5 percent in June.
The Department of Labor on Friday reported that rate dipped in July to 9.4 percent, but that cut was attributed to workers dropping out of the workforce. Such people are no longer counted among the unemployed.
The economy lost 247,000 non-farm jobs in July, according to Labor. Still, forecasters had predicted more than 300,000 jobs would be lost for the month, and the actual losses were far fewer than just a few months ago.
Unemployment is widely expected to increase through this fall and into next year. The unemployment rate did not begin to fall for more than a year after the last two recessions ended. The economy also must add about 127,000 jobs per month just to keep up with increases in the labor force.
Still, the Obama administration has said the stimulus will have a bigger impact on the economy in the second half of the year, which could moderate job losses. Relatively little of the package has actually been spent, particularly on infrastructure projects expected to create public works jobs.