Policy Points

20.11.2009 Policy Points Comments Off on Weekend Wonk Out

Weekend Wonk Out

A round-up of policy reports from the week ending on 11/20:

20.11.2009 Policy Points Comments Off on October Employment Report: NC

October Employment Report: NC

October’s employment report from the Employment Security Commission offers more evidence that a jobless recovery is taking shape in North Carolina.

Last month, North Carolina employers added 12,100 more positions than they eliminated. This was the second time in three months in which the state netted some jobs. Nevertheless, the job market is not generating enough positions to absorb new workers or those displaced over the past year.

In October, North Carolina employers added 12,100 more positions than they shed. The public sector added 5,800 positions while the private sector netted 6,300 positions. Among private-sector industries, education and health services posted the largest gain (+5,800) while construction shed the most positions (-6,600). Additionally, a downward revision to the September employment report resulted in the net loss of another 2,500 positions.

Click here to read South by North Strategies’ analysis of the October employment report.

20.11.2009 Policy Points Comments Off on Public Policy Promotes Debt

Public Policy Promotes Debt

Popular discussions about debt often portray the issue in individual terms and make little mention of the economic forces that may lead individuals and firms to incur debt (e.g. flat wages coupled with rising living costs; tight credit) or the the public policies that actually encourage firms and households to borrow.

Writing in The New Yorker, James Surowiecki analyzes how the federal tax code encourages debt by subsiding its costs in various ways. Observes Surowiecki:

The government doesn’t make people go into debt, of course. It just nudges them in that direction. Individuals are able to write off all their mortgage interest, up to a million dollars, and companies can write off all the interest on their debt, but not things like dividend payments. This gives the system what economists call a “debt bias.” It encourages people to make smaller down payments and to borrow more money than they otherwise would, and to tie up more of their wealth in housing than in other investments. Likewise, the system skews the decisions that companies make about how to fund themselves. Companies can raise money by reinvesting profits, raising equity (selling shares), or borrowing. But only when they borrow do they get the benefit of a “tax shield.” Jason Furman, of the National Economic Council, has estimated that tax breaks make corporate debt as much as forty-two per cent cheaper than corporate equity. So it’s not surprising that many companies prefer to pile on the leverage.

19.11.2009 Policy Points Comments Off on Around the Dial – Nov. 19

Around the Dial – Nov. 19

Economic policy reports, blog postings, and media stories of interest:

19.11.2009 Policy Points Comments Off on Unemployment Claims in NC: Week of 10/31

Unemployment Claims in NC: Week of 10/31

For the benefit week ending on October 31st, 18,795 North Carolinians filed initial claims for unemployment insurance, and 180,051 individuals applied for continuing insurance benefits. Compared to the prior week, there were more initial and continuing claims. These figures come from data released today by the U.S. Department of Labor.

Averaging new and continuing claims over a four-week period — a process that helps adjust for seasonal fluctuations and better illustrates trends — shows that an average of 17,715 initial claims were filed over the last four weeks, along with an average of 179,943 continuing claims. Compared to the previous four-week period, initial claims were slightly higher and continuing claims were slightly lower.

weekly claims

One year ago, the four-week average for initial claims stood at   18,613 and the four-week average of continuing claims equaled 118,839.

The graph shows the changes in unemployment insurance claims (as a share of covered employment) in North Carolina since the recession’s start in December 2007.

Although new and continuing claims appear to have peaked for this cycle, the claims levels remain elevated and point to a labor market that remains extremely weak.