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Long-Term Unemployment Now a Thing of the Past?

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The long term unemployed in the U.S are having an easier time finding jobs, while the chronic problem of long-term joblessness may disappear in the months ahead, according to a study released Monday from the Federal Reserve Bank of San Francisco.

The jobless rate in the U.S. is currently at 7.9 percent, with some 12.3 million people out of work, according to the Bureau of Labor Statistics. Of that, some 4.7 million are considered long term unemployed — meaning they have been jobless for 27 weeks or more.

(Read More: What the Jobs Report Means for Bonds)

Using BLS numbers, the report stated that in December 2012, the share of workers who were jobless six months or longer dipped below 40 percent for the first time since late 2009. The portion of unemployed Americans out of work for 99 weeks or longer fell to 11.2 percent in January — the lowest level in two years.

"This is a trend for the long term," said Rob Valleta, research adviser to the Federal Reserve Bank of San Francisco and author of the report.

"The number of long-term unemployed finding jobs has risen over the years and assuming job growth continues, this trend will keep going," Valleta said. "They are still struggling for sure but the long-term picture is getting better for them."

"One of the reasons the long-term unemployed numbers are going down is that more short-term unemployed are finding work," said Mark Zandi, chief economist with Moody's. "That just means there's fewer people having to face long term unemployment because they're finding jobs faster."

Zandi pointed to several key job markets that have picked up in the last two years and are putting more people on payrolls.

"Manufacturing, transportation, retail, as well as hotel and leisure have all seen upticks in job growth and more people are taking those jobs," Zandi said.

Other reasons for the decline in the long-term unemployed aren't so positive, however. It's estimated that some 7 million people have dropped out of the labor force because they've just given up looking for work and are no longer part of the official statistics.

"It's true that a lot of people have just given up, so that's part of the reason the long-term unemployed numbers have gone down," Valetta admitted.

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"Long-term unemployment is tricky, it's not a static group," said David Lewin, head of the Berkeley Research Group's Labor and Employment Practice. "A lot of people just stop looking because they get discouraged. And most of them tend to be lesser skilled, minority groups so until areas like housing pick up, it will be hard for them."

Another reason long-term unemployed number are decreasing is the end of long term unemployment insurance programs in many states that are forcing many to take jobs they might not have taken before.

"Jobs that weren't so attractive in the past because of lower pay or fewer benefits are being taken now as unemployment checks are running out," Zandi said. "People are just doing what they have to do to survive."

As for the jobs picture — for both the short-term or long-term unemployed — Zandi and Lewin point to a stronger housing recovery before many of the jobless who've been out of work for so long get a paycheck again.

And Lewin ties any help for the long-term unemployed to a growing economy.

"Until our gross domestic product is growing at a good rate, meaning people are spending and consumer demand is up, the long-term unemployed will have a hard time finding work," Lewin argued.

There's a more immediate concern for anyone employed or not, said Lewin.

"Just think if those sequester budget cuts go through next month," Lewin said. "That will put the economy in a recession. Those spending cuts will stop growth and cut jobs."

(Read More: Budget Cuts Could Force Economy Into Recession)

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