Fed Governor Janet Yellen is bragging about the number of jobs the Fed is going to create because of its Quantitative Easing programs. Please consider Yellen Says Fed Asset Purchases Create 3 Million Private Jobs
The Federal Reserve’s two rounds of asset purchases totaling $2.3 trillion will have helped boost private payrolls by about 3 million jobs by 2012, said Fed Vice Chairman Janet Yellen, citing research by four central bank economists.
Policy makers’ November decision to start a second round of asset purchases of $600 billion through June “is intended to support economic recovery from an exceptionally deep recession,” the 64-year-old central banker said in the text of a speech today in Denver. “I believe it will be effective in fostering maximum employment and price stability.”
Should we add those three million jobs to the 3.5 million jobs Obama wanted to create or save? By the way what happened to those 3.5 million jobs anyway?
I am glad you asked. I was going to figure it out, but a quick search led me to Tracking the 3.5 million jobs President Obama will save or create
This post will track the 3.5 million jobs. There are a number of ways to measure jobs in the US. Some people work several different jobs at a time while others change employers frequently, so measuring jobs is not as simple as it might seem. Obama’s economic team define jobs as use the payroll data (see The Job Impact Of The American Recovery And Investment Plan for their original report).
Just before the stimulus bill passed, the Department of Labor [Employment Situation Report For January 2009 Table B1] shows the number of people working was 134,580,000. Using the Obama team methodology, without the stimulus bill employment would be expected to fall by around 1,613,000 jobs during the next two years so that without the stimulus bill we would expect employment to be 132,967,000 in January 2011.
With the revised estimate of 3,500,000 jobs “saved or created”, employment should be 136,467,000, creating 1,887,000 in addition to the 1,613,000 jobs saved.
Here is a table from the above link.
|Tracking Jobs Created or Saved|
|Date||Number of Jobs||Change in Jobs
|Number of Jobs needed
to reach target by Jan 2011
Some of the data in the table has been revised. For example, the BLS Employment Situation Report for December 2010 (see Table B1) shows that December 2009 has now been revised down to 129,588,000.
The key number however, is December 2010. Drum roll please…….
The just released report shows 130,710,000 jobs.
Let’s do the math. 130,710,000 – 134,580,000 = -3,870,000. The president expected to create or save 3.5 million jobs. Instead he lost 3.87 million jobs. That is a whopping deficit of 7.37 million jobs.
Now Janet Yellen thinks the Fed is going to create 3 million jobs by the end of this year. Let’s do that math, too. 3 million divided by 12 is 250,000 jobs a month. Does anyone believe that?
Should we add that total to the current deficit of 7.37 million jobs? If by some miracle we do create 250,000 jobs a month does the Fed get credit for them, President Obama, or the man in the moon?
More importantly where does she start? A year ago? It really does not matter because there is technically no way to prove her wrong. No matter what happens to jobs, she can say it would have been 3 million jobs worse without QE. President Obama can twist his words and say the same thing “It would have been 3 million worse”.
That is the problem with bullsweet statements pulled out of one’s ass, like Yellen made and Obama before her.
Mike “Mish” Shedlock
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