Long-term unemployment's V-shaped bounce
The number of people considered long-term unemployed has made a worrying bounce in recent months, as Friday's jobs report showed 3.8 million people had lost their jobs permanently in September.
Why it matters: That's almost twice as many as at the height of the pandemic in April.
What's happening: When the first waves of layoffs hit in March and April, most of the newly unemployed believed their job losses would be temporary (nearly eight in 10, according to the April nonfarm payrolls report) and reported they were not looking for work.
- The flood of Americans who had just been laid off pushed the percentage of people who had been unemployed for at least 27 weeks to 4.1%, the lowest the rate has been since December 1953.
- But as the pandemic has raged on and the economy has begun to unravel, more people have been sitting on the sidelines for longer.
- Even with an additional 11 million people unemployed than in February, the percentage of unemployed people who have been without a job for more than six months returned to the same level it was at in February.
What's next: As of September, 2.4 million people had been out of work for 27 weeks or more and 4.8 million more had been unemployed for between 15 and 26 weeks.
- Without a mass surge of hiring significantly above the levels seen in September (or even in August), the "tsunami" of unemployment economists warned me about in early August is poised to hit in the next couple months.
- Many of those people could be without unemployment benefits when pandemic assistance programs expire at the end of the year.