Unemployment is down. Celebrate that. For those 151,000 people who got jobs in August it was good news. Within the unemployed, however, there is a worrisome trend. Historically, there have always been people who were unemployed for more than a year; about 10% of the unemployed. Now, 17.5% of the unemployed have been unemployed for more than a year. The good news is that this metric has improved from its 2011 peak of 31.4%. The worry, however, is that the cyclical nature of extreme long term unemployment is seeing higher lows. This suggests a fundamental shift in job upheavals. Before 1980, unemployment was far less likely to last long. Now, there are 1.3M Americans who haven’t been able to get a job in a long time. Traditional retraining a hiring practices are possibly not adapting quickly enough to an evolving economy. Until they do, unemployment may remain a trap that some can’t escape.
(Click on the graph for the link.)