Unless something changed in California that we don't know. But prior to covid the pattern seemed to be holding up. Herer is their method:
Our approach to projecting the unemployment rate relies on the monthly flows between unemployment, employment, and out of the labor force (nonparticipation), similar to Şahin and Patterson (2012). In particular, the monthly change in the unemployment rate reflects the difference between the number who enter unemployment (inflows) and the number who exit unemployment (outflows), with employment and nonparticipation as possible initial or subsequent status.They use the aggregate, ignores the variance and skew. So we can expect California to have a much different dynamic then the aggregate. It may not converge at all.
The real number will be closer to seven years for California. In the meantime, he Fed will need to keep pensions well stuffed. California is caught in the boomer retirement quandary, a sudden shift toward the class of nonparticipation. NY has that problem, as does Illinois. This shift will significantly drag out the recovery.
No comments:
Post a Comment