Bank of America Merrill Lynch economists say the ending of benefits for the so-called “99ers”—those who have exceeded their normal benefit allotment and are on an emergency compensation program through the end of the year—will slow the economy even further. The term comes from a previous extension to 99 weeks of eligibility for benefits.
When the long-term unemployed hit the same point several months ago, Congress stepped in with an extension. But that may not come now.
“We do not expect them to get extended,” BofAML economist Joshua Dennerlein wrote in a note to clients. “This will act as a hit to income, hurting consumption growth in the first half of the year.”
More importantly, this “hit” comes at a time when BofAML thinks the economy—already battered by rising unemployment and a Depression-level housing market—is very fragile. Another shock, the bank argues, could send it into recession.
Read more here: Recession Seen Looming as Jobless Benefits End
http://www.cnbc.com/id/44019660