Recovery Act Still Lifting Employment Levels
The Recovery Act seems like a long time ago. For many of us, our attention has turned to other federal issues, such as the negotiations to extend the federal debt ceiling. But even though the Recovery Act is no longer making headlines, the stimulus is still creating jobs and increasing the nation’s Gross Domestic Product (GDP), according to a recent report by the Council of Economic Advisors.
Two years after it was enacted in 2009, the Recovery Act raised the level of the GDP in the first quarter of 2011 by between 2.3 and 3.2 percent above what it would have otherwise been, according to the report. The Recovery Act increased employment by between 2.4 and 3.6 million during that same period. If Wisconsin has 1/50th of those jobs, that would mean that the Recovery Act increased employment in Wisconsin by roughly 60,000 jobs in the first quarter of this year.
Through the end of March 2011, a total of $666 billion in Recovery money had been spent, $58 billion in the first quarter of 2011. The biggest categories of spending so far are for individual tax cuts and public investment outlays, which together make up about half of Recovery Act spending. (See chart below.)
The Recovery Act was a temporary stimulus, designed to provide support to the economy in a time of crisis. As the stimulus phases out, the effects on the economy will likewise grow smaller. For now, though, the Recovery Act is still having an impact on economic growth and job creation.