The US barely generated any private sector jobs in May. Is the $787 billion economic stimulus not big enough, or is it not working at all?
Melanie Stetson Freeman/staff
The tepid job numbers raised a sobering question: Is that $787 billion stimulus not big enough, or is it not working at all?
The answer may be neither of those extremes. For now, Congress is moving toward neither a massive new boost in federal stimulus nor a retreat from the Recovery Act that President Obama signed early in 2009.
But the debate about what to do – and whether other options should be considered – is a loud one for both economic and political reasons.
Politically, Mr. Obama's approval ratings and this fall's elections hinge crucially on jobs and the federal budget, not just on things like oil-spill response or health-care reform. Among economists, there's uncertainty both about where the economy is headed and about what policies might help.
What's at stake is whether the recovery from recession will be so weak that unemployment remains high for years. The economy appears to be starting to add jobs after two years of decline. But in May, some 411,000 new jobs were temporary census positions. In the private sector, small employers are still largely on the sidelines.
The economy could even fall back into recession later this year, although most economists don't expect such a "double dip" to occur.
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