A few things of interest this morning. One investment maven on twitter mentioned part of the reason for the huge spike in U-6 (from 16.2% in 16.5%) was a surge in the number of workers working ‘part time for economic reasons’: from ~8.8M to 9.3M. That’s half a million people.
I wonder if this is partly due to the exhaustion of 99 weeks of unemployment benefits finally starting to take hold (remember depths of the job losses were in 2008 and 2009) en masse. Hence people who have been holding out for their old type of job, being forced to take any job.
On another note, in another story I was reading there was a blurb that if the provision to continue the extension of 99 weeks of benefits was not approved (as part of Obama’s jobs plan) 2.2M Americans would lose benefits by mid February.
Please note, I do expect that extension to be approved as part of some ‘bargaining’ with the GOP – but just to show you how much public assistance is contributing to GDP growth, I did a quick run on how much just losing this benefit would hit the economy.
The average weekly benefit across the country is ~$300.
Annualized, if we lose those 2.2M people getting unemployment benefits its
52 weeks x $300 x 2.2M people ~ $34.2 Billion
That’s a quite dramatic ‘anti-stimulus’ if it were to be taken away (which again, I don’t believe will happen)[As an aside, the Obama administration estimates if there is no extension, 6M people would lose benefits by end of year 2012. So you can take that $34B and triple it for the annual hit by end of 2012]