Job Loss and Infrastructure Job Creation Spending During the Recession
"After the long economic expansion that characterized much of the current decade,
the nation entered its eleventh postwar recession in December 2007. The unemployment rate, which is a lagging economic indicator, did not start to rise until May 2008 when it jumped 0.5 percentage points to 5.5%. By December 2008, the
unemployment rate exceeded 7.0% and well over 600,000 jobs were lost—the biggest monthly decrease since December 1974, when another deep recession was taking place. These labor market indicators and comments equating the latest recession to
the Great Depression intensified congressional interest in passage of legislation early in 2009 aimed at encouraging creation of new jobs and warding off further
loss of jobs. (See CRS Report R40655, The Labor Market During the Great Depression and the Current Recession.)
To mitigate all but one recession since the 1960s, Congress chose to increase
federal spending on infrastructure. (See CRS Report 92-939, Countercyclical Job Creation Programs.) But, there are a number of issues associated with using expenditures on public works to quickly create jobs in times of recession.
(See CRS Report R40107, The Role of Public Works Infrastructure in Economic Stimulus.)..."
Saturday, November 14, 2009
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