AMERICA’S labour market boomed in 2014. By December there were 3m more people in work than a year earlier (see chart). Unemployment was 1.1 percentage points lower. The ratio of jobseekers to openings fell from a peak of seven to one in 2009 to two to one in November 2014. What was behind this? The answer in a new study will not please Democrats.*The job market is hot largely because of a cold-hearted Republican reform, it concludes. Before the financial crisis, jobless workers in most states qualified only for 26 weeks of unemployment benefits. In June 2008 that was extended, thanks to a new federal Emergency Unemployment Compensation (EUC) programme. By the end of 2013 the average unemployed American could expect benefits to last 53 weeks; in three states they could get 73 weeks’ worth.The study looks at what happened after Congress refused to reauthorise EUC in December 2013. The average limit on benefits plunged to 25 weeks, cutting off roughly 1.3m Americans immediately. Republicans argued that this would push people back into work. Several economists disagreed. Michael Feroli of J.P. Morgan predicted that many jobless Americans, no longer...
from The Economist: United States http://ift.tt/1BzH4dI
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