(Corrects GDP figure to 4.2 percent from 4.6 percent and employment figure to 2.8 million from 3.4 million in paragraph 1; corrects the change in unemployment rate to between 0.7 percentage point and 1.5 percentage points from 0.8 percentage point and 1.9 percentage points in paragraph 5; corrects employment numbers to 1.2 million and 2.8 million from 1.4 million and 3.4 million in paragraph 6; corrects GDP figure to 4.2 percent from 4.6 percent in paragraph 7)
(Adds Biden reaction)
WASHINGTON, May 25 (Reuters) - The massive U.S. stimulus package put up to 2.8 million people to work and boosted GDP by up to 4.2 percent in the first three months of 2010, the nonpartisan Congressional Budget Office said on Tuesday.
CBO’s latest estimate does not differ significantly from its previous assessments of the impact of the $893 billion package, passed in 2009.
But it is sure to cheer congressional Democrats as they struggle to advance a smaller package of safety-net spending, tax cuts and other measures to boost the sluggish economy and bring down the 9.9 percent unemployment rate.
Vice President Joe Biden issued a statement saying the CBO report “is important validation that the action we took to rescue the economy last year has not only pulled us back from the brink, but put us on a firm path toward economic recovery.”
The American Reinvestment and Recovery Act, as the stimulus package is formally known, lowered the unemployment rate by between 0.7 percentage point and 1.5 percentage points in the first quarter of 2010, CBO estimated.
That translates to somewhere between 1.2 million and 2.8 million jobs, CBO said.
The Recovery Act boosted GDP by between 1.7 percent and 4.2 percent, CBO said.
Its impact will peak later this year before tailing off in 2011 and 2012, CBO said.
Reporting by Andy Sullivan, Editing by Stacey Joyce