Stimulus Anniversary: What the Numbers Say

(Feb. 17) -- So how much did the stimulus help the economy?

President Barack Obama hailed the one-year anniversary of the American Recovery and Reinvestment Act on Tuesday, arguing that the massive stimulus package averted a depression and is "one of the main reasons the economy has gone from shrinking by 6 percent to growing at about 6 percent." The money pumped into the economy last year by the stimulus "is responsible for the jobs of about 2 million Americans who would otherwise be unemployed," he added.

To House Republican leader John Boehner, however, the bill produced a "year of broken promises, bloated government and wasteful spending," and marks a time when more than 3 million Americans lost their jobs.

So which side is right? The answer isn't simple, in part because the $787 billion program is just a drop in a $14.46 trillion economy, and much of the stimulus funds remain unspent. But here are some key numbers indicating where the U.S. economy was before the stimulus package was passed and where it has come.

Size Does Matter
The gross domestic product in the first quarter of 2009, which ended a month and a half after the law was enacted, was shrinking at an annual pace of 6.4 percent. Though the income created by goods-producing industries was up a bit, revenue generated by restaurants, retailers and other sectors of the broad-based services industries were falling, and investment in homes and businesses fell by a whopping 50.5 percent.

In the last quarter of 2009, the economy grew by 5.7 percent, according to the government's initial estimates. The economic output of goods-producing industries was expanding, and gross private domestic investment was up at an annual rate of more than 39 percent.

Bleeding Jobs
The unemployment rate in January 2009 was 7.7 percent. Unemployment last month was at 9.7 percent, and the share of Americans out of work is significantly higher because the lack of jobs has led many to leave the work force. The number of discouraged workers -- people who wanted work but weren't looking because they believe no jobs are available, and who aren't counted among the unemployed -- was at 1.1 million last month, up from 734,000 in January 2009.

The Obama administration argues the stark cutbacks in the jobs market had begun before it took office, and that the slowdown in consumer spending, construction and manufacturing was already prompting employers to consider layoffs for the months to come. The White House says the Recovery Act is, in fact, responsible for saving about 2 million jobs. The nonpartisan Congressional Budget Office is even more bullish about the stimulus, saying it is already responsible for 2.4 million jobs, and private-industry economists have offered similar figures.

Up to Speed?
The Federal Reserve measures how much U.S. industry is producing as a share of its maximum sustainable output, the level a plant and its workers can maintain with a realistic work schedule. This capacity utilization rate is important, because of what it says about the need for more production and workers, or less.

In January 2009, the capacity rate had fallen to 71.1 percent, compared with an average of 80.6 percent from 1972 through 2009. By January 2010, the ratio was rising again, to 72.6.