economy
Falling long-term unemployment isn't good news, economists say
Unemployment appears to have fallen due to an exodus of workers from the labor force, which would be bad for household finances and the economy.
TL;DR
- Long-term unemployment decreased by 64,000 people from June to July, falling to 1.8 million.
- The decline in long-term unemployment and the overall unemployment rate is attributed to workers leaving the labor force rather than finding employment.
- This exodus is driven by difficulties in the current 'low hire' labor market and disillusionment among job seekers.
- Workers who stop looking for jobs are not counted as unemployed, which can artificially lower the unemployment rate.
- Long-term unemployed individuals often face financial stress due to loss of benefits and difficulty finding new, comparable employment.
- Employer hiring has been muted since 2024, with job growth averaging 26,000 per month over the last year.
- Hiring is concentrated in specific sectors like healthcare, making it harder for workers in other fields.
- It is currently a good time to have a job but a difficult time to be unemployed.