Today, the Bureau of Labor Statistics released the monthly employment and unemployment numbers. The numbers for January showed 113,000 more jobs than the previous month and an unemployment rate of 6.6%. The business press treated this announcement as a huge disappointment. For example the Wall Street Journal’s lead sentence was “The labor market in January registered weak gains for the second straight month, a slowdown that could heighten fears about the economic recovery.”
The actual report (if you are reading this months or years from now look for Feb. 2014 here) has many different tables and figures beyond the two headline numbers mentioned above. One of the numbers I worry about are the number of long-term unemployed. People who lose their job and then get another one in a few weeks are not a societal problem. People who lose their job and then spend years looking for work are a huge problem.
The current report shows last month the number of long-term unemployed dropped by 1/4 million people. Below is a graph since the late 1970s for the number of people unemployed for more than 1/2 a year (27 weeks), which is the formal definition of long-term.
The graph shows during a recession the number of long-term unemployed soars. However, the most recent economic downturn broke all previous records with more than 7 million people unemployed for at least a 1/2 year! The numbers though are coming down fast. Today’s report show there 3.7 million long-term unemployed. This amount is still exceptionally high and we need policies to fix the problem. Nevertheless, it represents a huge improvement over 7 million and the trend shows a rapid decline.
Compared to the slow decline in long-term unemployment that occurred during the 1990s I find the numbers released today to be very encouraging news. While the headline numbers of jobs created and the unemployment rate failed to impress reporters, the hidden numbers shows great improvement in the labor market. While the U.S. economy still has a way to go, the direction and speed are looking good to me right now.