Just so we’re clear on the problem

From the Bureau of Labour Statistics

Series Id:           LNS11300000
Seasonally Adjusted
Series title:        (Seas) Labor Force Participation Rate
Labor force status:  Civilian labor force participation rate
Type of data:        Percent or rate
Age:                 16 years and over
Civilian Labour Force Participation Rate
US Civilian Labour Force Participation Rate

The above graph is possibly the most important number.  How much economic activity are we losing because US citizens simply aren’t working? The unemployment rate is depressed because those discouraged workers who give up searching for work do not count as part of the labour force, thus not factoring into unemployment rate calculations.

The downtick in the unemployment rate looks to be in danger of being reversed, in spite of this “discouraged worker” bias.

Series Id:           LNS14000000
Seasonally Adjusted
Series title:        (Seas) Unemployment Rate
Labor force status:  Unemployment rate
Type of data:        Percent or rate
Age:                 16 years and over
US National Unemployment Rate
US National Unemployment Rate

It almost looks the following graph shows good news (it doesn’t, keep reading for the punchline.)

Series Id:                       LNS13008756
Seasonally Adjusted
Series title:                    (Seas) Number Unemployed for 5-14 Weeks
Labor force status:              Unemployed
Type of data:                    Number in thousands
Age:                             16 years and over
Duration : unemployed/laid off:  5 to 14 weeks
Unemployed for 5 to 14 weeks
Unemployed for 5 to 14 weeks

The reason this isn’t good news is that it’s not so much that those unemployed are returning to work, lowering the number of unemployed in this band, but rather there has been an inexorable march towards long-term unemployment.  People are falling out of this band not into employment but into the 15+ weeks and ultimately the 27+ weeks band.

Series Id:                       LNS13008636
Seasonally Adjusted
Series title:                    (Seas) Number Unemployed for 27 Weeks & over
Labor force status:              Unemployed
Type of data:                    Number in thousands
Age:                             16 years and over
Duration : unemployed/laid off:  27 weeks and over
Unemployed for more than 27 weeks
Unemployed for more than 27 weeks

All this translates to an ever-increasing average weeks unemployed.

Series Id:           LNS13008275
Seasonally Adjusted
Series title:        (Seas) Average Weeks Unemployed
Labor force status:  Unemployed
Type of data:        Number of weeks
Age:                 16 years and over
Average Weeks Unemployed (US)
Average Weeks Unemployed (US)

This is ugly stuff.  Being unemployed for 27 weeks, let alone 40 and beyond starts to have longer term impacts on “employability” and therefore structural unemployment.