North Carolina has been without long-term unemployment benefits since last Summer, and so they might offer a glimpse of what happens when the unemployment insurance is not extended.
The answer? A gigantic drop in the unemployment rate....
Of course, this only answers one question, which is what happens to the rate of unemployment.Business Insider
It doesn't tell us whether people are finding jobs or just totally dropping out of the workforce. But even if this is mostly a function of people dropping out of the labor force, the actual unemployment rate does still matter for Fed policy. So if you think this has any predictive value for the national number (which could be debated) ths number still matters.
Look How The Unemployment Rate Is Plunging In The One State That Already Canceled Long-Term Unemployment Benefits
Joe Weisenthal
From the Charlotte Observer:
North Carolina’s unemployment rate took a sharp turn downward in December, suggesting a dramatic economic turnaround is well underway, but economists warned that the statistics are distorting a more sober reality....
Economists are not so sanguine about North Carolina’s employment statistics for December and for all of 2013....
In reality, however, North Carolina created fewer jobs in 2013 than it did in 2012. Last year’s jobs gain was 64,500, roughly two-thirds of the 89,900 jobs created in 2012.
Just as disconcerting, the state’s labor force shrunk last year, eliminating nearly 111,000 people from the pool of those who are working or looking for work. Such a shrinkage artificially reduces the jobless rate because legions of jobless people don’t show up in the data....
N.C. State University economist Mike Walden said the shrinkage of the labor force is a national problem that suggests discouraged job applicants are giving up finding work.
Wells Fargo economist Mark Vitner expects the 2013 jobs gain to be revised to at least 80,000, but he estimated that December’s unemployment rate is probably closer to 8 percent than the official 6.9 percent....
East Carolina University economist James Kleckley said the December jobless rate is the statistical equivalent of an optical illusion.
He said the state has recovered about 75 percent of the jobs it lost in the recession and estimated that North Carolina’s real jobless rate is probably at least 9 percent.
Charlotte Observer
John Murawski
It is high time to stop using the unemployment rate. People should shift to using the emratio (employment to population ratio) as the main measure of unemployment. This can be done nationally as well as state by state.
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