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Early reports: Job gains signal stimulus impact

States have reported using economic stimulus money to create or save more than 388,000 jobs so far this year, buttressing the Obama administration's claim that the $787 billion plan has had a significant impact on the economy.

That total, based on a USA TODAY review of reports from 33 states and Puerto Rico, includes teachers, construction workers, and others whose jobs were funded by stimulus money awarded to states. The administration plans Friday to release reports from all 50 states, providing the broadest accounting yet of the stimulus plan's impact.

Until now, the administration has relied on economic estimates to assess national job creation. The states' reports were meant to actually count the jobs, though that gauge has proved to be imprecise — particularly for jobs saved. "The numbers ... should be taken with a grain of salt," said Ethan Pollack of the Economic Policy Institute.

Still, Frank Lichtenberg of the Columbia Business School says the figures show a significant economic impact. Obama's Council of Economic Advisors estimated that the stimulus had saved or created 600,000 to 1.1 million jobs. Lichtenberg said the states' reports "make that sound like a reasonable estimate."

Kevin Hassett, once an economic adviser to President George W. Bush, said the reports "vastly overstates" job gains. He said the USA would have shed more than the 2.7 million jobs lost since March without the stimulus, "but just how many is impossible to know."

Elizabeth Oxhorn, an administration spokeswoman,said the reports show governors credit the stimulus for "creating jobs across the economy."

Data released last week showed federal contractors created or saved 30,000 jobs with stimulus funds. Friday's report also will provide jobs created by more than 103,000 federal grants and loans.

The states' reports suggest the biggest impact has been at schools. Twenty-three states that have reported school job numbers said more than 156,000 jobs had been created or saved.

Carol Bingham, director of fiscal policy for the California Department of Education, estimated the stimulus saved about 20,000 teaching positions. But she and others warn that precisely counting saved jobs has proved almost impossible. "It was intended to be a count. The way it was done, I think it's going to end up being an estimate," she said.

Indiana officials reported that the stimulus had created or saved about 13,000 school jobs. Asked whether he had any idea how many layoffs the plan had prevented, state Education Department spokesman Cam Savage replied: "I really don't."

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Stimulus and jobs: What the fight's all about

One of the most important questions surrounding the stimulus program is also one of the most controversial: How many jobs has it created?

The Obama administration credits the American Recovery and Reinvestment Act with turning around the economy and bringing America out of the worst downturn since the Great Depression. Without it, things would have been a lot worse.

Critics, particularly congressional Republicans, say that stimulus has done little to help the economy. They point to the high unemployment rate and to pork-barrel projects they say have done little good.

CNNMoney takes a closer look at the jobs debate.

How many jobs has stimulus funded?
There are two numbers floating out there, depending on how you count the jobs.

The White House says 640,000 jobs were created or saved through Sept. 30. This counts only jobs funded directly with stimulus money -- such as the teacher who kept her job because of federal aid to the states or the teen who got a summer job through a stimulus-funded program.

The administration is reporting this figure every three months. The next update is due at the end of January.

But the White House recently changed the criteria for counting jobs. The administration initially asked funding recipients to tally jobs that were created or "saved," meaning positions that were at risk of disappearing without stimulus. Going forward, officials just want recipients to add up the total number of jobs funded with stimulus money.

The White House also says the Recovery Act has created 2 million jobs. This figure covers all positions that were touched by stimulus money, not only the 640,000 directly funded by it.

How do they know how many jobs were funded?

Included in the jobs count is the worker in the asphalt plant who is on the job because his employer got orders stemming from stimulus-funded road improvements. Also counted are the retail workers still getting paychecks because the unemployed have more money to spend after getting a $25 boost in weekly jobless benefits.

The recipients required to file reports will receive about 35% of the $787 billion stimulus package. The other 65% is going toward increased Medicaid payments to states, tax cuts and the like.

As for the 2 million jobs figure, that's calculated by the president's Council of Economic Advisers. It's based on mathematical formulas and economic models that estimate how many jobs were created based on how much stimulus money has been spent.

Why is unemployment still rising?
Unemployment remained at a stubbornly high 10% in December 2009, up from 7.4% a year earlier. While this is a smidge lower than the 10.1% recorded in October, it's still the highest unemployment level since the early 1980s recession.

Businesses are still not hiring, despite the billions of stimulus dollars being pumped into the country.

And with 15.3 million people out of work, job seekers still outnumber openings by more than six to one, the greatest differential since the Labor Department began tracking job openings in December 2000.

What do Obama and his critics say?
The administration says the unemployment would be much worse if the stimulus program didn't exist. A year ago, the economy was losing 691,000 per month, on average, in the first quarter. In December, the number was down to 85,000 jobs lost.

"It's because the downward trend was so severe that you can say you are two million jobs higher than you otherwise would have been, but you still have a very high unemployment rate, said Christina Romer, chairwoman of the president's Council of Economic Advisers.

Romer predicts the economy will stop losing jobs in the spring. But the employment situation won't really improve until the private sector starts adding to payrolls again, she said.

Republicans, however, argue that the stimulus has largely been a waste of money.

"The administration has no idea how many jobs have been 'saved or created,' but we do know that roughly three million Americans have lost their jobs since the 'stimulus' was enacted," said Ohio Rep. John Boehner, the House Republican Leader.

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