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Economic News, Data and Analysis

Unemployment Claims

According to the labor department, unemployment benefits are running out for many people.
It looks like the economy is not yet roaring back from the recession – rather, we are crawling out. Would additional fiscal stimulus be helpful?
The Fed seems to be on the edge of rate reductions. Many argue that the fed should not reduce rates so as to “keep the powder dry” – just in case another adverse shock to the economy requires another strong move.
Instead of the rate reduction, maybe an extension of unemployment benefits would be helpful.
First, this kind of policy would provide an immediate benefit since those receiving the benefits would likely spend the money right away (since they’ve been unemployed for a while).
Second, this kind of fiscal policy stimulus would be temporary – as the economy got better, the UI benefits would automatically be scaled back as the number of unemployed drop. The temporary nature would minimize the long-term cost of the policy.
Sounds good to me…

Number of Workers Who Have Exhausted Federal Unemployment Insurance Benefits Passes the One Million Mark, 9/25/02
The number of unemployed workers who have run out of the additional weeks of unemployment benefits that this year’s stimulus legislation provided has now passed the one million mark and continues to climb. New Labor Department data show that by the end of August, more than 1.1 million workers had exhausted their additional weeks of federal benefits without finding work.

CQ.com Midday Update: DASCHLE TO SEEK NEW EXTENSION OF UNEMPLOYMENT BENEFITS
Senate Majority Leader Tom Daschle, S.D., continuing a Democratic effort to highlight the failing economy, is pressing for Senate passage of
another extension of unemployment benefits. Daschle planned to introduce a bill today calling for a 13-week extension of unemployment benefits. States with higher than average jobless rates would be able to extend benefits for up to 20 weeks, said a Daschle aide. The Majority leader will seek a vote next week, but Republicans have already said they will object to any effort to pass an extension of benefits without debate. Citing new statistics showing that the number of unemployed Americans rose by 2.2 million since last year, Daschle said it was essential to help those whose unemployment benefits were running out. Workers who are laid off from their jobs are usually entitled to 26 weeks of unemployment benefits.

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