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August 5th, 2009

AP: Stimulus Job Stats Are Faulty



Projections can be lofty and statistics can be hard to prove, especially when they pertain to government programs. For that, we have long been skeptical about the White House’s claim that the stimulus will “save and create more than 3.5 million jobs over the next two years.” “Save and create” is an ambiguous phrase, and 3.5 million is an ambitious number for a slow-moving program.

Furthermore, according to the Associated Press, since the president is using a “misused formula” to claim that the stimulus has created 150,000 jobs so far, the numbers are misleading and cannot be verified:

How much are politicians straining to convince people that the government is stimulating the economy? In Oregon, where lawmakers are spending $176 million to supplement the federal stimulus, Democrats are taking credit for a remarkable feat: creating 3,236 new jobs in the program’s first three months.

But those jobs lasted on average only 35 hours, or about one work week. After that, those workers were effectively back unemployed, according to an Associated Press analysis of state spending and hiring data. By the state’s accounting, a job is a job, whether it lasts three hours, three days, three months, or a lifetime.

Kurt Brouwer at FundmasteryBlog.com makes a good point:

I’m sure the stimulus spending covered more than these jobs that only lasted 35 hours, but this sort of fact fudging does not help government’s credibility, which has taken quite a few hits lately.

From the AP:

“At best you can say it’s ambiguous, at worst you can say it’s intentional deception,” said economist Bruce Blonigen of the University of Oregon. “You have to normalize it into a benchmark that everybody can understand.”

Readers: Does it bother you that some of the jobs provided by the stimulus may only last a week? Or do you agree with Oregon’s Senate president Peter Courtney when he says “Sometimes some work for an individual is better than no work.”

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Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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