Podcast: Discussing the July Employment Report and What it Means for the Economy
I’m Shannon Spillane. We’re joined by the Center’s Chief Economist, Chad Stone.
1. Chad, many people looking at the jobs report for July say that it wasn’t as bad as experts were predicting. But I know you found some data in the report that were troubling. What did you find?
A: The jump in long-term unemployment was striking. Labor market conditions remain extremely harsh for job seekers. In fact, there are 14.5 million unemployed Americans. One-third of them have been looking for work for 27 weeks or more. That’s six months, and in many cases, much longer than that without finding a job.
2. How unusual is this?
A: Long-term unemployment has been a growing problem, but this month it jumped to the highest percentage ever recorded in data going back to 1948. That means almost 5 million Americans have been struggling to find jobs for a very long time.
3. The economic recovery package enacted earlier this year included pretty significant unemployment insurance benefits for people who continue to have trouble finding a job. Has that helped?
A: Yes, but about one and a half million people will run out of these benefits by the end of this year, according to the National Employment Law Project. And the temporary unemployment insurance benefits Congress provided in the stimulus bill are scheduled to expire at the end of the year too. Congress should be prepared to keep these benefits from expiring because it’s very likely people will still be struggling to find jobs at that point.
4. But if the economy is recovering by the end of the year, as many experts predict, will this extension be needed?
A: Even if the economy is recovering by then, we should not expect that the long-term unemployed will all-of-a-sudden find it easy to get a job.
5. Why is that the case, Chad?
A: Well, history tells us that the labor market doesn’t turn around immediately when the economy starts to grow. It lags behind. For example, in the 1990-91 recession, the unemployment rate did not peak until 15 months after the end of the recession. In the 2001 recession, unemployment peaked 19 months after the end, and job losses did not bottom out for another two months after that.
6. Any positive signs in the jobs report so that we can end with some good news?
A: The deterioration in labor market conditions has slowed considerably from earlier this year, suggesting an economy recovery may, in fact, be in sight. But that news must be tempered by the ongoing plight of the long-term unemployed.
Thanks for your insight, Chad.