US / Estimated Impact of the American Recovery and Reinvestment Act

As required by law, CBO prepares regular reports on its estimate of the number of jobs created by the American Recovery and Reinvestment Act of 2009 (ARRA), which was enacted in response to significant weakness in the economy.

CBO develops estimates of ARRA’s effects on output and employment by looking at recorded spending to date along with estimates of the other effects of ARRA on spending and revenues, by using evidence about the effects of previous similar policies, and by drawing on various mathematical models that represent the workings of the economy. Using such analysis, CBO estimates that ARRA’s policies had the following effects in the fourth quarter of calendar year 2012 compared with what would have occurred otherwise:

• They raised real (inflation-adjusted) gross domestic product (GDP) by between 0.1 percent and 0.6 percent,
• They lowered the unemployment rate by between 0.1 percentage points and 0.4 percentage points,
• They increased the number of people employed by between 0.1 million and 0.8 million, and
• They increased the number of full-time-equivalent (FTE) jobs by between 0.1 million to 0.8 million.
• Those ranges reflect the substantial uncertainty that surrounds the broad economic effects of such policies and a range of economists’ views about the magnitude of those effects.

Chosen excerpts by Job Market Monitor 

via CBO | Estimated Impact of the American Recovery and Reinvestment Act on Employment and Economic Output from October 2012 Through December 2012.