The good, bad, and persistently ugly news about the job market

January 2, 2014

Reuters reports that the number of new claims for unemployment benefits fell for a second straight week. Data released by the Labor Department Thursday showed that for the week ending on December 28, 339,000 Americans filed for state unemployment insurance. That’s a drop of 2,000 from the previous week’s report.

Reuters’ Stephen Culp charts the trend in jobless claims since 2009, the average length of unemployment, the labor force participation rate:

As the number of of new and continuing unemployment claims has fallen since 2009, so has the labor force participation rate has fallen. Meanwhile, the average length of unemployment rose until mid-2011, and has remained steadily elevated since.

Together, these trends suggest that while unemployment is falling, long-term unemployment is still a very serious problem. The rising number of Americans dropping out of the workforce means that the unemployment rate itself is becoming a less instructive indicator of the strength of the job market.

And last week, around 1.3 million Americans lost  emergency federal unemployment benefits. These benefits are available to workers who are no longer eligible for state unemployment benefits, which generally expire after 26 weeks. As this Reuters chart shows, the average length of unemployment is now 37.2 weeks, suggesting that many Americans could face a gap of almost 11 weeks without benefits:





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The question should be why any news organization reports on the unemployment figure when the labor participation rate is available. The unemplyment rate is an awkwardly defined number meant to obscure the problem whereas particpation is as clean a number as the government can provide and not subject (as much) to manipulation

Posted by MarkHouston | Report as abusive

Tell me something I don’t know.
Yet another proof that the Fed’s QE has achieved nothing in the past 2.5 years except hyper-inflation in stock prices.
Lunacy? Idiocy?
Perhaps both combined.

Posted by reality-again | Report as abusive

I am a lawyer who has been homeless and still is borderline homeless. Over the holidays I received two one line text’s from my brothers who are retired military and whose jobs depend on government contracts with one SES with the civil service. Culturally, times have changed since the 1st depression. Families no longer help family members like they used to. It is a battle to get restarted in this economy. The other day I saw a billboard that said “help the homeless.” Having lived in my car cleaning up at rest stops I can relate. I worked day labor for a while. There should be a law against using temporary help to do jobs that workers compensation will not insure. What those people do after they are hurt and cannot work and are afraid to let anyone know is a terrible statement about America. Happy New Year. I pray for better leadership in our country – for everyone who is suffering in this economy.

Posted by ThomasShaf | Report as abusive

“As this Reuters chart shows, the average length of unemployment is now 37.2 weeks, suggesting that many Americans could face a gap of almost 11 weeks without benefits”

This assumes that the length of unemployment doesn’t change. If the Feds do not extend the unemployment, the data could indicate whether the unemployment duration was elevated BECAUSE of the extended length of compensation, or maybe not…

Posted by jyy | Report as abusive