ABC News reports that the Congressional Budget Office this week released its latest report on the effects of the Recovery Act and found that it “raised the GDP, lowered unemployment, and increased the number of people with jobs.” According to the report, CBO estimates that the Recovery Act’s policies in the third quarter of the calendar year 2010 had the following effects (emphasis added):
- They raised real (inflation-adjusted) gross domestic product (GDP) by between 1.4 percent and 4.1 percent,
- Lowered the unemployment rate by between 0.8 percentage points and 2.0 percentage points,
- Increased the number of people employed by between 1.4 million and 3.6 million, and,
- Increased the number of full-time-equivalent jobs by 2.0 million to 5.2 million compared with what would have occurred otherwise (see Table 1). (Increases in FTE jobs include shifts from part-time to full-time work or overtime and are thus generally larger than increases in the number of employed workers).
At the same time however, the CBO said that the Recovery Act’s effects “on output peaked in the first half of 2010 and are now diminishing” and that its effect “on employment and unemployment are estimated to lag slightly behind the effects on output; they are expected to wane gradually beginning in the fourth quarter.” The Republican Study Committee and other GOP members of Congress picked up on this latter point on twitter today, presumably acknowledging that the Recovery Act did indeed have a positive impact on the economy?