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2003 Bush Tax Cuts Prompted Surge in Employment

Created on September 6, 2011

2003 Bush Tax Cuts Prompted Surge in Employment

2003 Bush Tax Cuts Prompted Surge in Employment

From 2001 through early 2003, the U.S. was losing an average of 103,000 jobs per month. A full year after the end of the 2001 recession, job growth was still declining. Then in May 2003, the second Bush tax cuts were passed, lowering income, capital gains, and dividend tax rates. By the end of 2007, employment had risen by 8.1 million—an average of 148,000 new jobs each month.

Chart 2 • B 2601

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MONTHLY CHANGE IN NON-FARM EMPLOYMENT (in Thousands)

MAY 2003: Second Bush tax cuts pass

AVERAGE MONTHLY CHANGE, June 2003–Dec. 2007: 148,000 jobs GAINED/ month

AVERAGE MONTHLY CHANGE, March 2001–May 2003: 103,000 jobs LOST/month

TOTAL NON-FARM EMPLOYMENT (in Thousands)

Sept. 2001: Terrorist attacks

June 2001: First Bush tax cuts pass

Dec. 2007: 2007–2009 recession begins

129,841

137,983

Nov. 2001: Recession officially ends

March 2001: Recession begins

Source: U.S. Department of Labor, Bureau of Labor Statistics, “Employment, Hours, and Earnings–National,” Current Employment Statistics, Seasonally Adjusted, Total Non-Farm, All Employees, at http://www.bls.gov/ces/ (July 12, 2011).