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    October Stimulus Trick, not Treat: Unemployment up to 10.2 Percent

    11/06/2009

    This morning, November 6th, 2009, the American people received a late Halloween trick from the Bureau of Labor Statistics (BLS) as they released unemployment numbers for the month of October.  National unemployment rose 0.4 percentage points to 10.2 percent, the first time joblessness has hit double digits since 1983.  There are now 15.7 million people without jobs and looking for work.  There are another 808,000 people labeled discouraged workers not included in that number because they don’t believe jobs exist for them and are thus not searching for work.  Who can blame them when unemployment has reached a new 26-year high and the Obama administration continues to try to mislead us on the impact of the stimulus rather than seeking ways to free entrepreneurs from the government chains of high taxes and regulations that are keeping them from creating new jobs?

    Moreover, the 0.4 point increase in the unemployed is four times the jump from August to September of this year (0.1%).  The surge in the jobless rate only continues the rollercoaster numbers since June.  At that point, unemployment briefly dropped in July to 9.4 percent before rising dramatically 0.8 percentage points over the next few months.  Since February when the stimulus bill was released, unemployment has risen an unfathomable 2.1 percentage points.  The 10.2 percent unemployment for October is almost 2 percentage points worse than the administration predicted had the stimulus not been put into place.  It is about 2.5 percentage points higher than the forecast with stimulus aid (See graph).

    In total, 190,000 jobs were lost in the month of October after a combined 479,000 were lost in August and September.  That brings the number of jobs lost since the stimulus’ enactment to 2.9 million.  According to calculations by the White House, that stimulus bill has “saved” 640,000 jobs in that same time frame.  But the Associated Press (AP) has reported on several occasions that the White House’s counts are far from accurate.

    In an article from November 5th’s Boston Globe, AP reporters disclosed more miscounts, specifically in a federal program under the Health and Human Services Department (HHS).  Of their 14,506 jobs “saved,” more than two thirds of them were counted as “saved” because the government workers were given pay increases.  A spokesperson for HHS defended the number saying “If I give you a raise, it is going to save a portion of your job.”

    In a Wall Street Journal (WSJ) article from November 4th, reporters cited WSJ analysis that jobs “saved” by the stimulus “could be overstated by at least 20,000 of the 640,000 claimed.”  Ed DeSeve, the President’s senior adviser on implementing the stimulus, replied to the WSJ’s inquires about the inaccuracies saying that the plan was intended “to create jobs, not count them.”  This comes only a couple weeks after the White House promised to “undergo extensive reviews to ensure accuracy,” according to the AP’s November 5th article.

    That kind of statement from an administration official embodies the inability and inefficiency of the oversight of these job counts and distribution of stimulus funds.  This deception in light of the quickly deteriorating unemployment situation is not going to bring us back to prosperity.  Actions speak louder than words and so far the Obama administration has only let the American people down.