Published May 09, 2009
President Obama has vowed to create 3.5 million jobs by 2010. But the latest unemployment report shows Obama will have his work cut out for him.
The economy lost another 539,000 jobs in April, bumping the unemployment rate up to 8.9 percent, the highest in 26 years, according to the Labor Department report released Friday.
That figure already exceeds assumptions made by Obama's economic advisers when they pushed for a $787 billion stimulus package -- a measure that they said would be critical in reviving the slumping economy.
To reach his 3.5 million-jobs goal, Obama needs at least 138.6 million people employed by next year, leaving him with a job deficit of nearly 6.2 million jobs, according to the Heritage Foundation, a conservative think tank.
J.D. Foster, a senior fellow in economics at the Heritage Foundation, who performed the analysis, argues Obama's policies will only widen the gap.
"Unfortunately, the president's policies will more likely decrease employment than help to reach his target," he wrote in his analysis.
"Policies like higher tax rates on small businesses, sustained massive budget deficits, doubling the national debt (and the consequent upward pressure on interest rates) and the building threats of government meddling in companies are eroding the foundations of the economy today and for the future," he said.
The White House did not respond to an e-mail seeking an interview for this story.
In pushing to get his stimulus package passed in Congress, Obama's economic team said that without the federal spending jolt, the unemployment rate would hit 8.8 percent by the last fiscal quarter of 2010. With the package, his advisers argued, the unemployment rate would only reach 7 percent.
The advisers acknowledged, though, that there estimates could be off the mark.
"There is the obvious uncertainty that comes from modeling a hypothetical package rather than the final legislation passed by the Congress," they wrote in a memo. "Our estimates of economic relationships and rules of thumb are derived from historical experience and so will not apply exactly in any given episode."
Obama has claimed that his stimulus package has already saved or created more than 150,000 jobs. But the U.S. economy has lost more than 2 million jobs since he took office, according to the Bureau of Labor Statistics, seeming to undercut Obama's claim.
But it's hard to tell exactly where Obama's record stands -- or where he thinks it stands -- because the White House has not yet announced how it intends to count jobs created by the stimulus bill. Obama's number is based on a job-counting formula that his economists have developed but have not made public.
Whatever the formula, economists who study job creation say it will require some creative math. That's because Obama has lumped "jobs saved" in with "jobs created." Even economists for organizations that stand to benefit from the stimulus concede it probably is impossible to estimate saved jobs because that would require calculating a hypothetical: how many people would have lost their jobs without the stimulus.
The Associated Press contributed to this report.