The “American Jobs Act” and its effect on US growth | Eurobank
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The “American Jobs Act” and its effect on US growth

• President Obama called on Congress to pass a $447bn package, aiming at stimulating economic growth, by supporting job creation, providing aid to state and local governments and promoting infrastructure development.
• If enacted in its entirety, we estimate that the proposal could boost real GDP growth by about 1.2% in 2012, turning the projected fiscal restraint of -1.0% of GDP in 2012 to a fiscal boost of +0.2% of GDP.
• We view as a more likely scenario the extension of the 2% employee-side payroll tax cut, in combination with the extension of the emergency unemployment compensation. In such a case, we estimate that it could boost real GDP growth in 2012 by about 0.6%.