Long-term unemployment falls by 357,000 people but is still elevated


A man speaks with a woman about openings at a bakery at the Employers Only Long Island Food, Beverage and Hospitality Job Fair on Oct. 19, 2021 in Melville, New York.
BRYAN R. SMITH | AFP | Getty Images

About 357,000 Americans fell off the long-term unemployment rolls in October, as the labor market’s pandemic recovery gained steam.

That decline continues a steady downward trend since the spring. Almost 2 million people have left long-term joblessness since March 2021, the pandemic-era peak.  

The improvement comes on the back of an October jobs report that beat expectations and marked an acceleration in job growth from August and September. The economy added 531,000 payrolls last month.

“The positive development that is the decline in the long-term unemployment number I think is indicative of the overall labor market recovery,” said Nick Bunker, economic research director for North America at the Indeed Hiring Lab.

“We’re actually seeing employers with very strong demand hiring workers — maybe not at the pace they’d love, but they are making hires,” he added.

In October, 2.3 million people were long-term unemployed, meaning they’ve been out of work at least six months, the U.S. Bureau of Labor Statistics reported Friday.

This period is generally a financially precarious one for households — especially as federal unemployment benefits for the long-term unemployed ended after Labor Day. (States typically don’t pay benefits for more than 26 weeks.)

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There were about 1.2 million more people long-term unemployed in October than in February 2020, before the pandemic upended the labor market.

And the share of long-term jobless remains high relative to other periods in modern U.S. history.

Almost 32% of all jobless Americans have been out of work for at least six months. The aftermath of the 2008 financial crisis was the only other time since World War II that the share breached 30%.

However, the figure — now at its lowest since September 2020 — has steadily declined from the recent 43.4% peak in March 2021.

The percentage may also appear inflated relative to other historical periods because it started from a higher pre-pandemic baseline, Bunker said. Certain structural factors — perhaps government policies or changes in employer recruiting strategies — have generally led the unemployed to be out of work for longer periods, he said.

“Even before the pandemic, the composition of unemployment was more long-term,” Bunker said.

And long-term unemployment is likely to fall further in coming months if job growth remains strong.

“As delta abates, the labor market recovery reaccelerates,” Daniel Zhao, a senior economist at job site Glassdoor, wrote, referring to the Covid strain that fueled a recent spike in cases starting in July. “The October jobs report is a step in the right direction, indicating that the improving public health situation is unlocking faster jobs growth.”

Expanding vaccine access to children ages 5 to 11 and implementing a new federal vaccine mandate, which the Biden administration announced Thursday for larger private companies, will likely lead to faster job growth, Zhao said.

October’s dip in long-term unemployment appears to be for “good” reasons, too, Bunker said.

Unemployment is a measure of Americans who are actively looking for work. That means long-term unemployment numbers could decline if the long-term jobless, perhaps discouraged by their job prospects, stop seeking work and drop out of the labor force.

Here, that doesn’t seem to be the case, Bunker said. While Friday’s data is somewhat fuzzy on that dynamic, recent trends suggest the drop in long-term unemployment is a result of people finding jobs, he said.

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