The long-term unemployed as a percent of the unemployed is much elevated compared to past periods of

[progree]

Last edited Sun Oct 6, 2019, 03:55 AM - Edit history (1)

low unemployment.

One of many factors that former Fed Chair Janet Yellen has cited as indicative of people having trouble finding jobs compared to past times with low unemployment rates. ( https://www.federalreserve.gov/newsevents/speech/yellen20140822a.htm ). Well sadly this percentage is way high -- about where it was at the worst parts of bad labor markets in the past. When it should be way down to what they were in the best parts.

I know, some will say it's just a number that is not supposed to be anything, whatever, its just a number or somesuch. Or that it's good that people are not jumping at the first job offer or whatever. Others, such as myself and Yellen and many economists (one can Google to see many discussions about this), see it as at least in large part a sign that it's taking longer to find jobs, i.e. one of many signs of labor market distress.

Anyway, the OMFG graph of the long-term unemployed (those unemployed 27 weeks or longer) as a percent of the unemployed is at FRED: https://fred.stlouisfed.org/series/LNS1302570



In 9/1/69 the percent of long-term unemployed (as a percent of all unemployed) was 4.9%, whereas in 9/1/19 it was 22.7% (but it wiggles a lot -- the average of the last 6 months is 21.6%)

I can and will hunt for other times with very low overall unemployment rates, but this will do for now. The interested reader can of course contribute data and analysis. These things take an hour or two or more to make/write.

# BLS - Unemployed (aka the overall unemployed) in thousands -- this is the numerator of the official U-3 unemployment rates that the Trumpsters and a few others are gurgling ecstatically about that proves "with evidence" we're in a labor market nirvana:
http://data.bls.gov/timeseries/LNS13000000

# BLS - Unemployment rate (U-3, the official unemployment rate), percent
http://data.bls.gov/timeseries/LNS14000000

# BLS - Long-term unemployed - unemployed for 27 weeks or longer, in thousands
https://data.bls.gov/timeseries/LNS13008636

# BLS - Long-term unemployed - unemployed for 27 weeks or longer, as a percent of all unemployed:
I don't think the BLS has a data timeseries for this, but one can do some spreadsheet work using the BLS data above (the ones expressed in thousands) and calculating percents. Fortunately FRED has it (below). FRED is the Federal Reserve Board of St. Louis

# FRED - Long-term unemployed - unemployed for 27 weeks or longer, as a percent of all unemployed:
https://fred.stlouisfed.org/series/LNS13025703

(I've embedded the graph near the beginning of this post)

The official unemployment level in thousands, and the rate (U-3) is jobless people who have actively sought work in the last 4 weeks (something more than just looking at want ads), say they want a job, and are available to work

The long term unemployed in the above is a subset of the above -- these people meet all the criteria of the above criteria, it's just that they have been unemployed for 27 weeks or longer. So we're basically talking about people who have been out of work for more than 6 months and have also looked for work in the past 4 weeks.

To emphasize, the unemployed in this posting are people who have actively sought work in the past 4 weeks..

# FRED tip - to see the data, one can mouse over a point on the graph. To get a table of ALL of the data, first notice the following on the far left side just above the graph itself:

Observation:
Sep 2019: 22.7 (+ more)
Updated: Oct 4, 2019

Then click on the (+ more) to display the last 5 data points. This pulldown will also have a big blue "View All" button
Click on the "View All" button and it will display a text file with all of the data, currently https://fred.stlouisfed.org/data/LNS13025703.txt

Just to be clear - I don't think the current labor market is bad, I think it is fairly good (though I'm not quite sure what to think about all the gig economy no-benefits jobs and part-time-only jobs). But it is very certainly *NOT* one of the best job markets of the last several decades, even though the official unemployment rate, at 3.5%, is at a 50 year low, last seen in December 1969.

[progree]

1. Prime age LFPR (age 25-54) is below the pre-Great Recession levels, back to 1987

Yes, yes, the unemployment rate is at 50 year lows, but note that the prime age (25-54) labor force participation rate (LFPR) is below the pre-Great Recession numbers, going back all the way to about 1987. I just looked at the September column, starting in September 1988 through September 2008, and ALL of them have prime age LFPR's that are higher than September 2019's 82.6% number. (September 1987 matched the September 2019 number)

(in the years before 1987 the prime age LFPR was considerably less because the female LFPR had not yet ramped up to contemporary levels)

All: http://data.bls.gov/timeseries/LNS11300060
Men: http://data.bls.gov/timeseries/LNS11300061
Women: http://data.bls.gov/timeseries/LNS11300062

As former Federal Reserve Chair Janet Yellen and many others have stated, the unemployment rate is understating the slack in the labor market compared to decades in the past (as evidenced by relatively poor LFPR and U-6 under-employment numbers, part-timers who want full-time work, depressed quit and hire levels, slow real wage growth, elevated long-term unemployment levels (see OP) among other indicators).