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Obama Advisers Offer Rosier Jobs Outlook

New York Times (02/09/12) Jackie Calmes

Economic advisers to President Obama have updated their forecasts in recent days and now project that the economy will create two million jobs this year if stimulus measures are extended, which could reduce the unemployment rate to about 8% by the end of 2012. Alan Krueger, chairman of the president’s Council of Economic Advisers, says the forecast was updated because the projection that will be published in the president’s annual budget is already “stale and out of date.”

The budget will project an average unemployment rate of 8.9% for 2012 and 8.6% for next year, based on economic conditions that prevailed in mid-November. Krueger notes the unemployment rate has declined “by an impressive 0.8 of a percentage point over the last six months and other job market indicators have improved” since November. “Private sector forecasters have shaved about half a percentage point from their 2012 unemployment rate forecast in response to the improvement in the job market since we made our forecast,” he states. Kreuger says the administration’s new outlook depends on the passage of Obama’s economic stimulus proposals, chiefly an extension through the year of a temporary payroll-tax cut and assistance for the long-term unemployed.