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Big changes on the margin in the jobs market

Although first-time claims for unemployment have been basically flat so far this year, the big change that is visible in the labor market is that the number of people receiving unemployment insurance has dropped by almost one third so far this year (green line in the chart above). This may reflect the fact that more people are finding jobs, but it also may reflect the fact that more people are getting desperate to find a job since they no longer are receiving jobless benefits. In any event, this is a significant change on the margin that deserves to be highlighted. It may lose some potency, however, since Congress has once again decided to extend eligibility for unemployment benefits. Whatever the case, the incentive to find a job has definitely increased year to date, and this is probably a good thing for the economy as a whole.

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