Just weeks ago, economists and financial analysts were dismissing Washington as largely irrelevant to the economy’s course in coming months, if only because it chose to be. They are not dismissing it anymore.
The possibility of major parts of President Obama’s $447 billion jobs bill becoming law, and of further steps next week by the Federal Reserve, have forecasters saying that the decisions Washington makes in the weeks ahead could have a substantial effect on economic growth and unemployment. At a minimum, the stimulus could be insurance against the headwinds blowing from Europe’s debt crisis and the impact of the recent government spending cuts in this country.
The jobs package of tax cuts and spending initiatives could add 100,000 to 150,000 jobs a month over the next year, according to estimates from several of the country’s best-known forecasting firms; the potential Fed actions could add 15,000 more jobs a month over two years.