The Bureau of Labor Statistics announced Friday that May’s unemployment rate soared to 9.4 percent. Once again, Obama administration predictions on the economic impact of the $787 billion stimulus plan have proved wrong.
On Feb. 4, Christina Romer, chairman of the President’s Council of Economic Advisers, warned: “If we fail to act [and don’t pass the stimulus], we are likely to lose millions more jobs, and the unemployment rate could reach double digits.” White House economic adviser Lawrence H. Summers told Americans that the stimulus would start improving the economy “within weeks” of passage.
After the stimulus bill was signed into law on Feb. 17, the Obama administration predicted that the unemployment rate this year would average just 8.1 percent. Even as late as May 11, Ms. Romer didn’t think the unemployment rate would reach 9.5 percent until December.
What is stunning is the speed at which the unemployment rate is increasing. Since January 1990, there have been just three months when unemployment has increased by 0.5 percentage points or more in a month. Two of those months - February and May of this year - have been under the Obama administration.
We have noticed something suddenly missing from media coverage of this recession. Press reports routinely used to qualify unemployment rate measures by noting that many unemployed people may have been discouraged from looking for jobs and thus are not included in the reported rate. That means actual unemployment is higher than what is reported.
Much of the media has focused on the 345,000 jobs that were lost in May, hailing that as amazingly low given the losses in previous months. Yet more than 2.1 million jobs have been lost since February. The job loss for April was just revised upward by 82,000 to 504,000.
The $787 billion stimulus package has failed to slow unemployment, which is closing in on 10 percent - the dreaded double digits the White House promised the stimulus would help avoid. President Obama’s spending binge has made the recession worse and delayed recovery.