Although the unemployment rate has declined, there are still problems in the labor market that don’t appear to be improving. The duration of unemployment — that is, how long it is until people find jobs — rose rapidly during the recession. It peaked and has stayed largely unchanged for the past year, as shown in the chart below.
In March a Wall Street Journal article explained the problems facing the long-term unemployed:
“But some economists argue that in the wake of a severe recession, the lines between cyclical and structural unemployment can become blurred. Workers who lose their jobs because of cyclical factors — a factory that lays off workers, a restaurant that closes, an office that decides to go without a front-desk receptionist — might stay out of work so long that they become effectively unemployable. Their skills erode, they fall behind on the latest technologies and industry trends, or they become stigmatized by employers who assume there must be something wrong with anyone who’s been unemployed so long.”