White House: Stimulus funded 3 million jobs

chart_romer5.top.jpg By Annalyn Censky, staff reporter


NEW YORK (CNNMoney.com) -- Despite groans from Republicans about high unemployment and the growing national deficit, President Obama's administration continues to say the $787 billion stimulus is working.

In its latest stimulus report released Wednesday, the White House's Council of Economic Advisers said the Recovery Act has already saved or created about 3 million jobs.

That's in line with earlier predictions from Christina Romer, chairwoman of the CEA, who has said since the beginning of the Recovery Act that the stimulus would save a total of 3.5 million jobs by the end of 2010.

The CEA uses two different models, which estimate the number of jobs to be between 2.5 million and 3.6 million, meaning Romer's target may have already been reached.

But the administration's figures are highly criticized by some economists and Republicans in Congress who point out it's derived from mathematical formulas, not an actual headcount of people who've received jobs funded by stimulus money.

"The 3.5 million is a mystical, whimsical number that comes out of models that rest on extremely rosy projections," said Veronique de Rugy, an economist with the Mercatus Center at George Mason University.

She said the actual number of jobs created by stimulus is likely much lower than the Administration reports.

"The administration's new stimulus jobs 'saved and created' claim lacks a basis in reality," said Oversight and Government Reform Committee Ranking Member Darrell Issa, R-Calif., who also pointed to the unemployment rate, which currently stands at 9.5%.

In January 2009, Romer predicted that the stimulus, if passed, would keep the unemployment rate around 7% at the end of 2010. Congress signed the act into law a month after Romer's report.

The administration has since revised its outlook to 9.8% unemployment for the end of the year.

Summer of Recovery?

The Obama administration is pushing the stimulus hard ahead of midterm elections, calling this the "Summer of Recovery." The government paid out the largest chunk of stimulus funds so far in the second quarter of 2010, to the tune of $116.3 billion -- which includes both spending on projects and tax cuts to businesses, Wednesday's stimulus report said.

Republicans have been pointing to the 9.5% unemployment rate as proof that Americans are not seeing a "Summer of Recovery."

Hours after issuing the report, Romer defended the stimulus and discussed her economic outlook before Congress' Joint Economic Committee. She said the U.S. economy has "unquestionably been going through a period of turbulence" recently, with investors wary of both Europe's debt crisis and mixed economic reports that have led some bearish traders to forecast a double-dip recession.

Romer said she doesn't believe a full-blown double-dip recession will occur, but deflation is a risk.

The American economy overall shed 125,000 jobs in June, according to a Labor Department report earlier this month. And since the start of the recession, 8 million jobs have been lost. The government's next job report is due August 6. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 18,081.81 57.64 0.32%
Nasdaq 4,786.71 21.29 0.45%
S&P 500 2,087.05 4.88 0.23%
Treasuries 2.29 0.03 1.51%
Data as of Dec 24
Company Price Change % Change
Bank of America Corp... 18.04 0.12 0.64%
Gilead Sciences Inc 92.34 2.89 3.23%
General Electric Co 25.71 -0.17 -0.66%
Cisco Systems Inc 28.57 0.32 1.13%
Apple Inc 112.22 -0.32 -0.28%
Data as of Dec 24

Sections

JetBlue is offering to fly police to New York for the funeral of slain NYPD officers and is working to have the family of one of the officers flown in from overseas. More

Many Americans are buying more gifts -- and more expensive gifts -- for Christmas. That's squeezing some in the middle class. More

Marriott's plan to block Wi-Fi hotspots in its hotels is being opposed by Google and Microsoft. More

According to data from Google Trends and GrubHub, Chinese food remains the most popular type of food order on Christmas. More

If you're looking to sell your holiday gift cards for cold hard cash... there's an app for that. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.