ABC’s Lisa Chinn and Rick Klein reports:
The White House Council of Economic Advisers issued a report today predicting that the stimulus package will save or create 1.5 million jobs by the end of this year. That’s in line with previous White House estimates.
But there’s a big caveat: Because there is no uniform, reliable reporting formula for states and agencies to use to calculate real jobs saved and created, there is no way to fact-check the projections.
Rather than measuring actual jobs created, the CEA estimate is based on a formula widely used by economists: that a 1 percent increase in GDP equates to approximately 1 million jobs.
The council also makes the assumption that GDP will grow, due to an increase in government purchases, and tax decreases that have only just taken effect.
It is, the report concedes, "an imperfect" measurement.
"The macroeconomic methodology used to derive the aggregate jobs estimates provides only an imperfect way to try to separate out the different types of jobs created by government spending," the report states.
Actual reports of jobs created, while required by Congress for entities receiving stimulus funds, will provide "some independent documentation of jobs created or retained by the Act" — but won’t be the way the White House measures progress, according to the report.
"While such independent documentation is immensely valuable, it is important to be aware of the limitations of the reported jobs numbers," the report states.
The administration continues to defend its initial assessment that the Recovery Act will ultimately create or save 3.5 million jobs. But the new report includes the caveat that the bulk of that increase will be seen at the end of 2010.
President Obama said at a news conference last month that the stimulus bill had already "saved or created over 150,000 jobs."
The Labor Department, meanwhile, reported last week that the economy shed 539,000 jobs last month — fewer than analysts were predicting.
The CEA must also release a report to Congress in August on its analysis of the economic impacts of the Recovery Act.