Thousands of Utahns to lose jobless benefits next week

Published: Friday, Dec. 27 2013 2:35 p.m. MST

Michael Feroli, an analyst at JPMorgan Chase, said ending the extended benefits will lower the unemployment rate by half a percentage point as the long-term unemployed leave the labor force.

While that statistical change may look good on the surface, Feroli cautioned the drop could be accompanied by a similar decrease in consumer spending. That would also hurt clothing retailers, car dealers and other businesses.

Extending the program, on the other hand, would boost GDP growth by some 0.2 percent and increase full-time employment by 200,000 next year, the Congressional Budget Office estimated, but at the price of increasing the government’s debt.

Advocates of extended benefits say communities hardest hit by the recession will feel the sudden loss of cash in circulation the most.

They cite a set of their own troublesome figures: three job seekers still competing for each opening; some 4 million people in the ranks of long-term unemployed; unemployment lasting on average 37 weeks, two months longer than most states provide insurance.

E-mail: jlee@deseretnews.com

Twitter: JasenLee1

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