…

                                                                               CBPP STATEMENT
                                                                               Friday, September 5, 2008

                                                                               Contact:
                                                                               Shannon Spillane, 202-408-1080, spillane@cbpp.org


820 First Street, NE                             STATEMENT BY CHAD STONE, CHIEF ECONOMIST,
Suite 510
Washington, DC 20002                                 ON THE AUGUST EMPLOYMENT REPORT
Tel: 202-408-1080
Fax: 202-408-1056                Today's extremely disappointing employment report shows that the economy remains mired in a
                                 slump and still waiting for something to jump start a sustainable recovery. Consumer spending
center@cbpp.org
www.cbpp.org                     supported by the stimulus payments that Congress enacted earlier this year helped keep the
________________________         economy growing in the second quarter, but the headwinds from still-high energy prices, a weak
Robert Greenstein                housing market, tight credit markets, and continuing financial market uncertainty will make it
Executive Director               difficult to sustain economic growth as the effects of the first round of stimulus wear off.
Iris J. Lav
Deputy Director
________________________         August was the eighth straight month of job declines, with employers shedding a cumulative
                                 605,000 jobs so far this year. The official unemployment rate jumped to 6.1 percent in August,
Board of Directors
                                 and other indicators show even greater labor market weakness. The percentage of the population
David de Ferranti, Chair         with a job (62.1 percent) is at its lowest level since the fall of 2003 ­ near the bottom of the last
The World Bank
                                 jobs slump. The Labor Department's most comprehensive alternative unemployment rate
Henry J. Aaron                   measure -- which includes people who want to work but are discouraged from looking and
Brookings Institution
                                 people working part time because they can't find full-time jobs -- stood at 10.7 percent in
Ken Apfel                        August, its highest level since June 1994. In addition, 1 in every 5 of the 9.4 million unemployed
University of Maryland
                                 has not been able to find a job despite looking for 27 weeks or more.
Barbara B. Blum
Columbia University
                                 Revised figures show that the economy expanded at a 3.3 percent rate in the second quarter, but
Marian Wright Edelman
Children's Defense Fund          all signs suggest that growth will slow markedly in the coming months. The Federal Reserve's
                                 "Beige Book," which compiles reports from regional Federal Reserve Banks, found widespread
James O. Gibson
Center for the Study of Social   weakness in August. As today's jobs report shows, the labor market is particularly weak. Claims
Policy                           for unemployment insurance jumped unexpectedly this week to 444,000 and the number of
Beatrix Hamburg, M.D.            people receiving unemployment benefits is the highest since November 2003.
Cornell Medical College

Frank Mankiewicz                 The weak growth that is forecast for the rest of 2008 and into 2009 suggests that a well-targeted
Hill and Knowlton                second round of fiscal stimulus would benefit the economy, as well as state governments and
Richard P. Nathan                those individuals who are most feeling the effects of the weak economy. To be most effective,
Nelson A Rockefeller Institute   such a package should provide assistance to those who are experiencing the greatest hardship and
of Government
                                 should go where it will be spent most quickly and thus have the largest stimulus impact.
Marion Pines
Johns Hopkins University
                                 Specifically, a temporary increase in aid to state governments to help them avoid budget cuts and
Sol Price
Chairman, The Price Company      tax increases and a temporary increase in food stamp benefits would have a high fiscal stimulus
(Retired)                        bang-for-the-buck because they would be spent quickly. An increase in low-income home energy
Robert D. Reischauer             assistance (LIHEAP) would be well-timed to keep low-income households from cutting back on
Urban Institute                  other purchases when facing high energy bills. Policymakers have enacted an additional 13 weeks
Audrey Rowe                      of unemployment insurance (UI) benefits for workers exhausting their regular benefits but, given
AR Consulting                    pronounced weakness in the labor market, additional assistance to unemployed workers would
Susan Sechler                    help unemployed workers and be very effective stimulus as well. As with the first stimulus
German Marshall Fund             package, the three T's ­ timely, targeted, and temporary ­ should be the guiding principles in
Juan Sepulveda, Jr.              designing an effective package.
The Common Experience/
San Antonio                                                                           ###
                                 The Center on Budget and Policy Priorities is a nonprofit, nonpartisan research organization and policy
William Julius Wilson            institute that conducts research and analysis on a range of government policies and programs. It is
Harvard University
________________________         supported primarily by foundation grants.
John Kramer
Founding Chair
1937-2006