The Importance of Addressing Long-Term Unemployment for Economic Recovery

Sarah Miller and Katherine Townsend
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Katherine Townsend: https://www.atlantafed.org/community-development/about-us/staff/kiernan-townsend-katherine.aspx

No 2021-06, Workforce Currents from Federal Reserve Bank of Atlanta

Abstract: In April 2020, the U.S. unemployment rate skyrocketed to 14.8 percent from a low of 3.5 percent because of stay-at-home orders and fears over the COVID-19 pandemic. Following the initial lockdown in April and May 2020, the unemployment rate declined rapidly, reaching 5.9 percent in June 2021. Nonetheless, many workers, a large fraction of whom have been out of work for a long time, face challenges. According to the U.S. Bureau of Labor Statistics (BLS), fewer workers had been laid off or fired in June 2021 than in the previous month, and 850,000 new jobs had been added. However, the number of workers considered to be long-term unemployed (LTU)— jobless for longer than 26 weeks—has hovered around 4 million since the beginning of 2021. This suggests there is still much work to be done to ensure that long-term unemployment continues to decrease as the country recovers from the global COVID-19 pandemic. Currently, the long-term unemployed account for around 40 percent of the total number of unemployed workers—a fraction similar to what we saw in the wake of the Great Recession and double the fraction in 2019, prior to the pandemic.

Keywords: COVID-19 (search for similar items in EconPapers)
Pages: 8
Date: 2021-08-05
Note: The numbering of this paper is 2021-06, but the previous paper in the series is 2021-04. No 2021-5 exists in this series.
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Persistent link: https://EconPapers.repec.org/RePEc:fip:a00034:99397

DOI: 10.29338/wc2021-06

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