The unemployment rate may fall artificially by August or September if Congress doesn’t extend unemployment benefits, reports CNBC.com, making for a false sense of security or optimism.
Why? Because if a frustrated jobseeker who’s only applying for jobs in order to qualify for unemployment checks no longer has that carrot, applications go down, and that person will no longer be counted as “unemployed” (funny but true). Or if an unemployed person has been holding out for a “real” job and now is forced to take a low-wage part-time job just to make ends meet, s/he will no longer count as unemployed. This could lower the unemployment rate by a point or more, reports CNBC.
If the unemployment rate “looks” better, what policy decisions won’t be made?