Fwd: Budget Bulletin: Weak Economy, Failed Policies Keep Obama Jobs Deficit High at 7.4 Million

Budget Bulletin Your source for federal budget news and analysis Recent Updates Senate Finally Moves on the Death Tax Bigger Government and More Spending? America Isn't Buying It Commission Should Focus on Bipartisan Solutions to Social Security Reform Featured Research Weak Economy, Failed Policies Keep Obama Jobs Deficit High at 7.4 Million By J.D. Foster, Ph.D. Initial estimates from the Department of Labor (DOL) suggest the U.S. economy lost 125,000 jobs in June while the unemployment rate declined by 0.4 percent from May's highly elevated 9.9 percent. Over the last two months the economy averaged only 58,000 private sector jobs created, suggesting a faltering economic recovery. This data has two other important implications. First, it confirms once again that the $862 billion Obama stimulus legislation—as well as all the subsequent budget-busting legislation Congress has enacted under the rubric of "jobs" bills—has failed, as expected. Second, the weak jobs data means the Obama jobs deficit (the difference between current employment and the jobs Obama promised to create by the end of 2010) now stands at almost 7.4 million workers. A Faltering Recovery Creates Few Jobs The U.S. economy has now grown for three consecutive quarters, and total employment has grown six months in a row. At first glance, this data suggests a recovery with some traction. However, real concerns lurk below the surface. The four-week moving average for initial claims for unemployment insurance has increased steadily in recent weeks, reaching 466,500 in the latest reporting period, a level consistent with a trend growth rate in the economy of less than 1 percent. In fact, though topline Gross Domestic Product (GDP) growth for the first quarter was 2.7 percent, inventory accumulation accounted for 1.9 percentage points, leaving a trend growth of less than 1 percent. Over the past three quarters of reported positive overall growth, trend growth aside from inventory buildup has averaged a paltry 1.4 percent. >> Click here to read J.D. Foster's full report Chart of the Week Get more charts with Heritage's Federal Revenue and Spending Book of Charts About The Heritage Foundation Founded in 1973, The Heritage Foundation is a research and educational institute - a think tank - whose mission is to formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong national defense. The Heritage Foundation | 214 Massachusetts Ave NE, Washington, DC 20002 | 202.546.4400