Despite Strong Job Growth, Long-Term Unemployment Is on The Rise
November 9, 2020
The unemployment rate fell to 6.9% last month, a full percentage point drop from the month before. While this is a promising sign that the labor market is bouncing back much faster than had been anticipated, it masks a worrying trend. Long-term unemployment, defined as being out of work for more than six months, is on the rise.
Out of the 11 million unemployed workers in October, nearly one-third were considered long-term unemployed, according to the Bureau of Labor Statistics. The number of long-term unemployed jumped by1.2 million in October, bringing the total to 3.6 million.
Economists say long-term unemployment is an important metric because these are the people most likely to be financially insecure. In addition to having run through their savings, these out of work individuals may see their unemployment benefits expire. Many states only provide benefits for 26 weeks. Furthermore, those who have been out of work for more than six months have a harder time finding new work, as many employers are wary of such a large gap in work history.