Sept. 7, 2009— -- It was nearly seven months ago that President Obama signed the $787 billion stimulus package to jump-start the receding economy. But more than 200 days later, only a fraction of the hefty package has been spent and unemployment continues to plague the country.
On this Labor Day, unemployment stands at 9.7 percent, the highest it has been in 26 years. Nearly 216,000 jobs were lost last month, and in some states, unemployment figures have reached double digits.
The Obama administration says the stimulus money has helped curb layoffs and offered more help to those who are unemployed in the form of extended benefits.
"We've only been actually implementing the stimulus program for the last six months, so it's a two-year program, so we still haven't fully seen the effects of the stimulus plan," Secretary of Labor Hilda Solis said on "Good Morning America." "We are rolling our moneys out. We're also providing incentives for job training opportunities, and also helping to expand the safety net for people who've lost their jobs."
"There are things that are happening. Some people may not understand that we actually help to keep jobs, to keep police officers, teachers, people working in clinics on their jobs," Solis said.
Only about 10 percent of the stimulus package has been distributed by the federal government thus far. Since Feb. 17, when the president signed the bill put together quickly by Congress and the White House, the rate of job losses has slowly declined, but the high unemployment figure remains troubling to many.
"We continue to lose manufacturing jobs, government jobs, retail jobs, financial services jobs. The economy continues to contract," Peter Morici, an economist at the University of Maryland, told ABC News.
More than 2.3 million Americans have lost their jobs since the stimulus went into effect, and that's a big chunk of the 6.9 million jobs that have been lost since the recession started last year.
Many economists believe unemployment is a lagging indicator during a recession and is often the last part of the economy to recover.
Vice President Joe Biden said last week the stimulus is working better than the administration had hoped, and federal money is being filtered down to states for construction and other projects and while things haven't improved fully, the economy is improving.
"The Recovery Act has played a significant role in changing the trajectory of our economy, and changing the conversation in this country," Biden said in a speech at the Brookings Institution, Sept. 3. "Instead of talking about the beginning of a depression, we are talking about the end of a recession."
"The Recovery Act is, in fact, working. Don't just take my word for it. Analysts from Moody's to IHS Global Insight, [an economic forecasting company] to the Economic Policy Institute and others all estimate the Recovery Act has created or saved between 500,000 to 750,000 jobs. As a matter of fact, some notable economists suggest the number is as high as a million," Biden added.
Will Stimulus Have Long Term Benefits?
But not all economists are painting a rosy picture.
"I find it very difficult to believe that 750,000 jobs have been created by stimulus money that's mostly gone unspent," Morici said. "If 750,000 jobs were created, say, in the last 2-3 months, we would see it in the employment statistics. There would be an appreciable movement in places like construction and state and local government employment. ... It's an absolute fantasy that 750,000 jobs have been created."
Morici, a critic of Obama's economic policies, said the stimulus will only provide a temporary fix and that the economy will tank once all the money has been spent.
"If there were no stimulus, things would be worse, but the stimulus package was very poorly conceived," Morici said. "There will be some impact. In 2010 and 2011 we'll likely have about 2.5 to 3 million temporary jobs, but we've lost permanently 7 million private sector jobs. As a consequence, this is simply not repairing what's broken in our economy. This is not fixing what's broke -- the dysfunctions in the banks, and the huge trade deficit."
It remains to be seen what the long-term impact of the stimulus will be, but outside of the job market, there are some signs that the economic tide may be turning. The stock market has rebounded, banks are starting to lend more robustly again and real estate has rebounded, with home sales up, rising steadily month to month.
Solis said Americans should not be disheartened by the gloomy numbers, but instead look to move into careers that are growing, such as green technology and high tech.
"We don't want people to be discouraged. I know things are hard," she said. "[I] have also seen some inspired people looking at a new career change, getting involved and taking advantage of the training programs."