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On The Unemployment Line, Unable To Move - Us

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UNEMPLOYMENT in the United States has risen to its highest level since the Great Depression, as those who have lost jobs have found it difficult to find new ones.

The government reported last week that the overall unemployment rate rose to 9.5 percent of the labor force in June, the highest since 1982, when the rate peaked at 10.8 percent.

The long-term unemployment rate — the proportion of the labor force that has been out of work for at least 15 weeks — climbed to 5.1 percent. Until this year, the post-Depression high for that rate had been 4.2 percent.

June was also the first month since the government began collecting the data in 1948 that more than half of the unemployed people had been out of work for at least 15 weeks.

The proportion of workers without jobs for at least 27 weeks rose to 2.8 percent, which is also the highest since World War II.

The figures reflect an economy where the pace of layoffs and firings has slowed this year, so that fewer people are being added to the unemployment rolls. But the pace of new hiring is now even lower than it was when layoffs were peaking.

A decline in labor mobility may help explain some of the failure of workers to find jobs even after they have been unemployed for months. In previous downturns, some regions remained relatively strong, and attracted workers from other areas. This time, the credit crisis has damaged job prospects almost everywhere, and plunging home prices mean that some who would like to move cannot afford to do so because they owe more than their house is worth.

Another factor is that workers now are less likely to be able to return to their old employers when the economy recovers. At the height of unemployment in 1982, one of every five unemployed workers was on a temporary layoff, with the expectation they would be recalled, sooner or later. Today the comparable figure is 1 of 10.

The average unemployed person now has been out of work for 24.5 weeks, or nearly half a year. That is also the longest period on record, and is a full six weeks longer than the average when total unemployment peaked in 1982.

The final chart shows the number of people who have been unemployed for more than 15 weeks, a figure that is now up to 7.8 million. That figure has more than tripled over the last 24 months, a rate of increase that had not been seen since the severe downturn of the mid-1970s.

There are limited signals that the deterioration in the labor market has slowed. The government estimates that there was a net loss of 1.3 million jobs in this year’s second quarter, compared with a loss of 2 million jobs in the previous quarter.

If that continues, it will be taken as a sign that the economy is stabilizing, and will encourage economists who think the economy will turn up soon. But even if that happens, the challenge will be to find jobs for people who have been out of work the longest. So far, there is no indication that much progress has been made.

Debt is a killer.

Over inflated house prices have trapped many.

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  • 404 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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