“We always knew we were not going to get all that much fiscal impact during the first five to six months. The big impact starts to hit from about now onwards.â€
– Obama economic adviser Christina Romer on when the economy will pick back up
And this is true. From the CBO’s projections back in January, the money was always going to ramp up in the second half of 2009 and into 2010.
Still, with unemployment rising…will Americans remember that?
Ms Romer said that stimulus money was being disbursed at almost exactly the rate forecast by the Office of Management and Budget. â€œIt should make a material contribution to growth in the third quarter.â€
But she acknowledged that cutbacks by states facing budget crises would push in the opposite direction.
Ms Romer said the latest economic data were encouraging, following a weaker patch a month ago. â€œI am more optimistic that we are getting close to the bottom,â€ she said.
The CEA chairman, who has forecast a sharper rebound in 2010 than most economists, said she had lowered her estimates for growth this year â€œand also for next year, a bitâ€ since the start of the year. She said the consensus forecast that unemployment would continue to rise for the rest of this year and peak early next year was probably accurate.
If things don’t pick up in 2010, Dems better get ready for some losses in the midterms.
More as it develops…