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Policy: Labor

Good news regarding long-term unemployment in March

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Jobs,Labor,Entitlements,PennAve,Joseph Lawler,Economy,Minusextra,Unemployment,BLS

There was no evidence in the March employment data released by the Bureau of Labor Statistics of a major bounceback for a jobs market slowed by harsh weather earlier this year, but there were some good signs in the Friday report for the group struggling the most, the long-term unemployed.

The unemployment rate for those out of work for fewer than 26 weeks has fallen to near a pre-recession level.


The rate for those out of work for longer than 27 weeks, making up more than one-third of all people looking for jobs, remains nowhere near normal.


The good news is that the level ticked down in March, as the ranks of the long-term unemployed shrunk by more than 100,000 to 3.7 million.

The long-term unemployment rate is clearly trending down as the recession fades into the past.

A key note is that in the past three months, the rate has come down despite a growing labor force.

Although labor force participation — that is, the share of Americans looking for work, whether employed or unemployed — fell sharply after the recession, from 66 percent before the recession to roughly 63 percent, it has grown in each of the past three months. The size of the labor force grew by 523,000 in January, 264,000 in February and 503,000 in March.

What makes that particularly good news is that many analysts had predicted that the long-term unemployed would drop out of the labor force in huge numbers after the expiration of long-term unemployment insurance in December. There has been controversy regarding what effect the expiration of the benefits would have on the long-term unemployed.

To receive the benefits, those out of work for 27 weeks or longer had to be looking for work. By looking for work, they were also considered in the labor force in the BLS' classification.

Some, especially congressional Democrats, who have pushed for an extension of the benefits, have argued that ending the program would lead to unemployed workers giving up the hunt for work, thereby falling out of the official labor force and putting downward pressure on the labor force participation rate.

That dynamic hasn't come into play in the first three months of 2014.

Even in the case that the net growth in the labor force conceals long-term jobless ending their job searches at a high rate, the overall news is still good for them. The evidence suggests that a growing labor force, especially when accompanied by faster hiring, will bring more workers who have given up during the recession back into the labor market.

Future months could shed further light on the fates of the long-term unemployed, although interpreting the data could become more confusing if Congress re-ups the long-term unemployment program, as a bipartisan group of senators is trying to do.

Nevertheless, March's jobs report is a good sign. The number of Americans out of work for more than 26 weeks has dropped by nearly 20 percent over the past year and continues to fall. Meanwhile, the labor force is growing.

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