A 800 billion dollar US stimulus package implemented earlier this year is proving fruitful, according to a White House report, with more than a million jobs created and expectations of a three percentage point increase in GDP in the third quarter.
AFP - A massive US stimulus plan has created up to 1.1 million jobs and is expected to lift the economy by three percentage points in the third quarter, the White House said Thursday.
Following implementation of the nearly 800 billion dollar plan early this year, "the trajectory of the economy changed materially toward moderating output decline and job loss," President Barack Obama's Council of Economic Advisors said in a report to the Congress.
As of the end of August, 151.4 billion dollars of the 787 billion dollars allocated in plan had gone to American taxpayers and businesses in the form of tax reductions, said the first quarterly report on the American Recovery and Reinvestment Act (ARRA) to lawmakers.
An additional 128.2 billion dollars "is available to recipients once they make expenditures," said the report on the plan launched by the Obama administration soon after he entered the White House in January.
"There is broad agreement that the ARRA has added between two and three percentage points to baseline real GDP (gross domestic product) growth in the second quarter of 2009 and around 3 percentage points in the third quarter," it said.
"There is also broad agreement that it has likely added between 600,000 and 1.1 million to employment -- again, relative to what would have happened without stimulus -- as of the third quarter," according to the report.
The areas where stimulus has been largest in the first six months are individual tax cuts, state fiscal relief, and aid to those most directly hurt by the recession, it said.
Obama had come under criticism over the stimulus package, with some groups saying it had failed to stem rising unemployment that threatens to hit 10 percent by the end of the year.
A poll last month showed a majority of Americans believed the stimulus package passed has had no effect or even made the US economy worse.
The opposition Republican party on Thursday questioned the White House claims on job creation from stimulus funds, charging that the Obama administration used "smoke and mirrors to mask the failure" of the plan.
"The reality for countless Americans whose jobs have not been 'saved' is they get to join the ranks of the three million neighbors, friends and family members who have become unemployed since President Obama took office," said Republican National Committee chairman Michael Steele.
"We have watched the unemployment rate increase to 9.7 percent and seen more than 216,000 workers lose their jobs in the past 30 days," he said.
Obama's approval rating has slumped to 50 percent, the lowest since his January inauguration, according to a poll released on the eve of his 200th day in office in August.
It was largely a reflection of growing unease over his handling of the economy, which sank into recession in December 2007.
Most forecasters are now predicting that gross domestic product (GDP) will to turn positive in the third quarter after contracting about one percent in the second quarter and a massive 6.4 percent in the first quarter.
Date created : 2009-09-11