What you're not hearing about the end of enhanced unemployment benefits

With the release Friday of state-level payroll data, we have the first opportunity to rigorously observe potential differences in labor market performance between the 25 states that opted-out of federally enhanced unemployment benefits, and those that didn't. Data is still preliminary, because the 25 opt-out states were only opted out on average 19 days in the July jobs survey window. There was only the slimmest advantage for the opt-out states in the rate of payroll growth, and a larger but still small advantage in reducing the unemployment rate. Both are likely swamped by the fact that the opt-out states have been much more re-opened from the pandemic lockdowns than the others, and consequently have much smaller output gaps to fill. With 7 million unemployed and 10 million job openings, first principles demand the cessation of paying people more not to work than to work, as Biden is suggesting to states once the federal benefit subsidy expires on September 6  -- but so far the evidence is barely showing in the data.