Will Long-Term Jobless Stop Looking for Work?

REPLAY VIDEO
Your next video will start in
Pause

Recommended Videos

  • Info

  • Comments

  • VIDEO TEXT

Dec. 30 (Bloomberg) -- JPMorgan Chief U.S. Economist Michael Feroli discusses the impact of the loss of unemployment benefits on the economy on Bloomberg Television's "In The Loop." (Source: Bloomberg)

What effect could this have on consumer spending?

It would be a hit to consumer spending.

A lot of households rely on unemployment benefits for their spending patterns.

In july 2010, extended benefits lasted for a few weeks.

Retail spending sort of fellow there.

If this could last, it could subtract half a percentage point from first-quarter gdp.

Not to be glib about it, but we are talking about 1.3 million americans.

You think this will show up in consumer spending?

It does not take much of a hit in consumer spending to have an impact on growth rates.

$20 billion is not a huge number when it comes to a $16 trillion economy, but when you take that out of one corker, it could have an effect on growth rates.

Have you been doing studies, research about which kinds of companies, industries could see the biggest effect?

Are we talking about big-ticket items, clothes?

It is hard enough to get the right magnitude which -- less, which kinds.

I think nondurable goods will be hurt more here.

Quick question.

The white house council of economic advisors say that these benefits lasting would be the equivalent of losing 240,000 jobs.

I know you mentioned gdp.

Is there any other way that you could quantify what this will mean for the economy, especially in the next couple of months?

There will be some hit on employment.

I think you could see other effects on labor market outcomes.

Labor market participation rates could fall even further.

There is some evidence that people, when they lose jobless benefits, tend to fall out of the workplace altogether and go into other means of paying the bills or whatnot.

You could see that decline in the participation rate if we were to see these benefits expire.

Looking at the larger picture of employment, what do you think this means to the pace of tapering?

One thing this could do, if we were to see these benefits expire, you can see the on implement rate continue to fall at a relatively rapid pace.

I think what you see recently from the fed is stepping away from using the unemployment rate as the sole source of forward guidance.

Where we see jobless benefit issues for the distort the message we get from the unemployment rate, that could be another factor leading the fed to downplay the significance of the unemployment rate, when thinking about the interest-rate hike.

Some republicans on the spoken to point to recent economic data has rationale for not extending the program.

Historically, numbers are high in line with benefits, but they are looking at the jobless rate coming down.

How do you look at that, is that a fair take on things?

It is a difficult call, one for congress to decide.

We have seen good momentum for growth this half of the year.

We could get possibly up to three percent.

I think congress will have to consider this, which i do not envy.

What about all the jobs that cannot be filled by americans?

There are about 3 million of them every month, because we are not strong enough in math or science.

How much does that affect what you see in employment growth?

The main determinant of employment growth is gdp growth.

We need faster demand growth.

No interest rates help that.

The concern of those on the other side of the debate would be that our unemployment benefits having an effect on labor supply, rather than labor demand.

Thank you so much for the time.

Jpmorgan chase u.s. chief economist.

Phil mattingly also because from washington, d.c. from cars to clothes, we live in a sharing economy.

Many of us shared pictures of ourselves with selfies.

Some say that if you have not done them yet, you need to embrace the self-portraits.

This text has been automatically generated. It may not be 100% accurate.

Advertisement

BTV Channel Finder

Channel_finder_loader

ZIP is required for U.S. locations

Bloomberg Television in   change