Long-Term Unemployment Rises In Worrying Sign For U.S. Labor Market

Yahoo

a day ago

WASHINGTON – Signals of labor market weakness go beyond the headline numbers that prompted President Donald Trump to fire the government's head statistician last week.
The jobs report released Friday showed a slowdown in hiring, a slight uptick in the national unemployment rate, and a few other clues that the economy is softening — including an increase in long-term unemployment.
The number of people jobless for six months or more increased from 1.6 million to 1.8 million in July, representing 24% of the unemployed. It's the most people experiencing long-term joblessness since the end of 2021 and the highest percentage since February 2022, when the economy was still recovering from coronavirus lockdowns.
Valerie Wilson, a labor economist at the liberal Economic Policy Institute, said the modest rise in long-term joblessness could reflect employers getting pickier about hiring as President Donald Trump's tariff regime changes the cost of doing business.
'People who have been unemployed for longer have clearly had some challenges in getting back into the labor market,' Wilson told HuffPost. 'I think that as things have softened, and employers are facing more uncertainty given the sort of chaotic nature of economic policy in this country, that it would be harder for those people to find new jobs.'
The president's tariffs on goods imported from other countries are tantamount to a $1,219 tax increase on American households this year, according to an estimate by the conservative Tax Foundation.
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Persistently high long-term joblessness was a hallmark of slow recovery from the Great Recession that officially ended in 2009. It disproportionately affected older workers, becoming a self-perpetuating problem as employers sought job applicants with minimal or no gaps on their resumes.
Some economists worry another recession could be around the corner. The overall unemployment rate remained low in July, at just 4.2%, and the economy has continued to add jobs, albeit at a slower pace than previously estimated. Bureau of Labor Statistics data suggest the last three months were the weakest for job growth since the pandemic. Trump fired the BLS commissioner on Friday, claiming without evidence that the numbers were somehow 'rigged' to make him look bad.
The labor force shrank slightly in July, helping hold down the unemployment rate even as the number of employed workers declined. Wilson noted the unemployment rate for Black Americans rose to 7.2%, up from a recent historical low of 4.8% in April 2023.
'Over the last two months, we're seeing the black unemployment rate pick up, which is another one that as that starts to rise, we start to look for signals of a broader slowing in the economy,' Wilson said.