Long-term unemployment dips by another 70,000 people. Here’s what that means for job seekers

Personal finance

A storefront in Ocean City, New Jersey, on Aug. 18, 2022. Photographer: Al Drago/Bloomberg via Getty Images
Al Drago/Bloomberg via Getty Images

Long-term unemployment declined again in September amid a continued strong labor market for job seekers.

The number of Americans unemployed at least 27 weeks — the official barometer of long-term joblessness — fell by 70,000 last month to about 1.1 million people, according to the September jobs report issued Friday by the U.S. Department of Labor.

The long-term unemployed accounted for 18.5% of all jobless individuals last month, falling from 18.8% in August, according to the department.

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That share has steadily declined from its Covid-era peak — 43.2% in March 2021. Outside of the pandemic era, the share in September was lower than any point since June 2008.

The continued decline in the ranks of the long-term unemployed is good news for workers, according to labor economists. It’s often more difficult for individuals to find a job the longer they’re out of work.

“It is always encouraging to see long-term unemployment decrease,” said Daniel Zhao, lead economist at Glassdoor, a career site. “These are the folks who have the hardest time getting back into employment and are often at risk of falling out of the labor force.”

Falling out of the labor force may occur if workers get discouraged about job prospects and don’t actively look for work.

The typical duration of unemployment among the jobless has steadily declined, too. The median unemployment spell was 8.3 weeks in September, down from 8.5 weeks in August and 13.9 weeks a year ago, according to the Labor Department.

“Unemployment durations keep falling,” said Julia Pollak, chief economist at ZipRecruiter. “It’s way below what it was before Covid.”

“This remains a great job seeker’s market,” Pollak added.

A cooler but still robust job market

The decline in long-term unemployment came as the U.S. economy added 263,000 jobs in September. The gain was a bit lower than expectations and a slight deceleration from August and July, which saw respective monthly gains of 315,000 and 537,000 jobs.

However, September’s pace of job growth is still strong, economists said. It outpaces prepandemic gains, for example, when the labor market was thought to be quite healthy and growth averaged less than 200,000 jobs a month, economists said.

“It’s creating opportunities for people across the labor market, [regardless of] age level or education level, because the economy is still adding so many jobs in so many places,” Pollak said of the state of the job market in September.

However, it’s unclear if and for how long that strength will continue. The Federal Reserve is raising borrowing costs to bring down stubbornly high inflation. That policy measure is expected to cool the labor market and reduce workers’ wage growth, a component that generally feeds into rising prices for consumers.

The U.S. central bank is aiming for a so-called “soft landing,” whereby it’s trying to raise interest rates just enough to reduce inflation to roughly 2% without triggering a recession and a sharp increase in unemployment.

“The job market is slowing gracefully,” Zhao said of the current state of affairs. “It’s not occurring too quickly or unevenly.”

There are other signs of a slightly cooler — though still robust — job market. Job openings slid by 1.1 million from July to August, for example. That’s the second-largest monthly drop on record, next to April 2020 when openings fell by 1.2 million.

However, total job openings — a barometer of employer demand for labor — of 10.1 million in August are still high by historical standards.

Jobseekers can capitalize by signing up for job alerts so they can be notified about positions the minute they’re posted, Pollak said.

“Speed matters a lot in the labor market, especially in this environment,” she said.

Further, individuals should make themselves as “findable” as possible — by updating their LinkedIn profiles, for example — since companies are increasingly depending on outbound recruiting to find candidates, Pollak added.

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