Unemployment: June Projection and a Dire Warning of Posts to Come June 30, 2009Posted by geoff in News.
The official unemployment numbers for June should be out on July 2, but Bloomberg compiled an estimate for June based on inputs from 58 economic experts. Their composite prediction was that unemployment would increase by 0.2% in June. Last month they predicted 0.3%, and we got 0.5%, but they were dead on with their April guess. We’ll see how they do this month.
In any case, here is the unemployment vs. stimulus graph, updated with what people think the BLS will say in a few days:
Of course, by now the Obama administration has acknowledged that their initial predictions for the effectiveness of the Stimulus plan were crazily optimistic, but they have mistakenly blamed it on the Bush administration (“the Bush economy was worse than we thought”). As has been pointed out many times before, from the time of the bill’s passage until early June, they claimed that they fully understood the problem and that the Stimulus was working, even though no money had been spent.
I think that none of us believe that spending $787 billion will not create some employment – it certainly must. The question always was: how much benefit will spending the money have compared to the natural cycle of the economy? The answer, I think, is not much.
I’ll apologize in advance for going “all economy all the time” over the next few days, but I got a green light from the other bloggers here to do just that. So tomorrow I’m going to take a look at a second set of predictions from back in January – the Stimulus-supporting predictions of Moody’s Economy.