This is one increase the American people would no doubt welcome with open arms. President-elect Barack Obama, faced with a deepening U.S. recession, is expanding his fiscal stimulus package to achieve the goal of creating or saving 3 million jobs over two years.
Job growth is priority No. 1
Obama has made job growth his first priority, with the new target revised up from the previous 2.5 million-job target, said Christina Romer, Chairman-designate for Obama's Council of Economic Advisors.
Economist Richard Felson told BloggingStocks it's a good thing the Obama Administration is aiming higher.
"The 3 million job creation total over two years is warranted. In fact, it's modest when one considers that the U.S. economy has already lost 2 million jobs since the recession started," Felson said. "Job growth is at the core of reversing negative trends in corporate revenue, earnings, and of course home mortgage foreclosures."
Felson, whose economic research includes studies that measure the correlation between job growth and stock indices, says a net 3 million job gain over two years would produce a minimum Dow level of 10,000 by the end of 2009, and 11,800 by the end of 2010.
Still, Felson cautioned that investors should not expect those type of equity market gains, at least not in 2009. "The economy is projected to lose a net of 2.0-2.8 million more jobs or more in 2009, so we're talking about an enormous reversal in job trend conditions in 2009 for Obama's goal to be reached by the end of 2010," Felson said. "A more modest scenario is to have the bleeding stopped by mid-2009, with steady improvement in net jobs added in the second half of 2009."
Economic Analysis: President-elect Obama's goal is commendable, but as economist Felson noted, strong headwinds exist. The U.S. must reverse negative trends in the housing, auto, industrial, and service sectors to end the job drain, and that means stimulus galore - - fiscal, quantitative (monetary), and otherwise.
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Reader Comments (Page 1 of 1)
12-22-2008 @ 11:54AM
Chuck said...
Obama, up the goal to 20 million new jobs. What difference does it make? You won't make the goal anyway.
12-22-2008 @ 1:32PM
TX CHL Instructor said...
The Chicago Politician with the Blank Resume hasn't comprehended one of the fundamental laws of economics (You get more of what you subsidize, and less of what you tax).
We will see job shrinkage, not growth.
12-22-2008 @ 5:21PM
obama_the_savior said...
read your bibles....this Obama will change America like no othe rpresident ever did! it is so cool to be alive to witness this great man do great things for EVERYBODY!
1-14-2009 @ 2:59AM
Maryann said...
During the Depression times, Franklin Delano Rosevelt had a right time in providing the jobs to the folks that needs them - including Truman, Eisenhower, LBJ, so on.
What else does Obama have to offer us?