President-elect Barack Obama said his two-year plan to boost the US economy will generate as many as 4 million jobs, higher than his previous estimates.
The plan would also result in the US gross domestic product increasing by 3.7 per cent more by the end of 2010 than it would without the stimulus, according to a study compiled by Obama's economic advisers.
The study gives a forecast based on a package of spending and tax cuts totalling "slightly over" the $775 billion ($1.3 trillion) that has been discussed by the transition team with members of Congress.
"The jobs we create will be in businesses large and small across a wide range of industries," Obama said in his weekly radio address yesterday. "And they'll be the kind of jobs that don't just put people to work in the short term, but position our economy to lead the world in the long term."
The address and the forecast are being released together a day after the government reported that the nation lost 2.6 million jobs in 2008, just shy of the 2.75 million decline at the end of World War II. The unemployment rate hit 7.2 per cent in December, the highest since January 1993. Even with the stimulus plan, Obama's advisers say the jobless rate will remain at about 7 per cent by the end of 2010.
Yesterday, companies including Boeing, the world's second-largest commercial planemaker, CSX, the third-largest US railroad, and General Dynamics, the second-largest shipbuilder for the US Navy, announced job cuts.
Around the world some 600,000 British workers will lose their jobs in 2009 and a million could go before the worst is over, according to the Chartered Institute of Personnel and Development, and in New Zealand the Government estimates up to 70,000 could lose their jobs during the next two years.
Obama's report is part of a campaign by him and his transition team to build support for his stimulus plans with Congress and the public. While his advisers have been meeting lawmakers, Obama every day this past week has spoken about the economy and warned that the US faces a deep and prolonged recession unless action is taken.
"It's not too late to change course - but only if we take immediate and dramatic action," Obama said yesterday. "Our first job is to put people back to work and get our economy working again."
Even with the GDP improvement forecast in the report, the unemployment rate is forecast to be about 7 per cent, according to its authors Christina Romer, the President-elect's pick to head the White House Council of Economic Advisers, and Jared Bernstein, economic policy director for Vice-President-elect Joe Biden.
The single biggest job gains would be in construction, according to the report, with 678,000 created by the fourth quarter of 2010. Another 604,000 jobs would be created or saved in the retail sector and 408,000 in manufacturing.
Most of the jobs created by government spending on infrastructure, education, health and energy would come in 2010 and 2011 because of the time it would take to carry out programmes in those areas, the report said.
Thirty per cent of non-residential construction workers could lose their jobs this year without the stimulus investment, the Associated General Contractors trade association said two days ago.
Romer and Bernstein stress that their study's estimates are based on the broad outlines of the Obama plan and may change based on the final legislation passed by Congress.
Obama reiterated some of the details that he originally provided in a speech earlier in the week, saying he would aim to double the production of alternative energy in the next three years, modernise 75 per cent of federal buildings, and improve the energy efficiency of two million homes.
The stimulus plan already has drawn some criticism in Congress from lawmakers of both parties. Some Democrats in Congress have expressed doubt about whether the tax cuts for individuals and businesses would do enough to boost the economy. Republicans have voiced concern about the size of the proposal and its effect on the deficit.
- BLOOMBERG
