Tomahawk, WI 9/28/2011 (PennyPayDay) – President Barack Obama’s $447 billion jobs plan would help avoid a return to recession by maintaining growth and pushing down the unemployment rate next year, according to economists surveyed by Bloomberg News.The legislation, submitted to Congress this month, would increase gross domestic product by 0.6 percent next year and add or keep 275,000 workers on payrolls, the median estimates in the survey of 34 economists showed. The program would also lower the jobless rate by 0.2 percentage point in 2012, economists said.
Economists in the survey are less optimistic than Treasury Secretary Timothy F. Geithner, who has cited estimates for a 1.5 percent boost to gross domestic product. Even so, the program may bolster Obama’s re-election prospects by lowering a jobless rate that has stayed near 9 percent or more since April 2009.
The plan “prevents a contraction of the economy in the first quarter” of next year, said John Herrmann, a senior fixed-income strategist at State Street Global Markets LLC in Boston, who participated in the survey. “It leads to more retention of workers than net new hires.”
Some 13,000 jobs would be created in 2013, bringing the total to 288,000 over two years, according to the survey. Employers in the U.S. added 1.26 million workers in the past 12 months, Labor Department data show.
Obama’s plan, announced on Sept. 8, calls for cutting the payroll taxes paid by workers and small businesses while extending unemployment insurance. It also includes an increase in infrastructure spending and more aid for cash-strapped state governments.
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