February 28, 2006 (The Editor’s Desk is updated each business day.)

Long-term unemployment in recent recessions

The incidence and persistence of long-term joblessness associated with each of the last four downturns varied.

[Chart data—TXT]

In November 1975, the share of persons jobless for more than half a year peaked at 2.1 percent of the labor force, 8 months after the end of the 1973-75 recession. In June 1983, 7 months after the official end of the 1981-82 recession, the long-term jobless rate peaked at 3.1 percent, the highest recorded in the post-World War II era. 

Although the downturn of 1990-91 more closely resembled that of the mid-1970s in terms of the magnitude of the long-term unemployment rate—just over 2 percent in October 1992—the rate did not peak until 19 months after the official end of the recession (March 1991). Following the 2001 downturn, the long-term jobless rate peaked at 1.4 percent in September 2003, 22 months after the official end.

The most obvious reason for the slow improvement in long-term unemployment following the two most recent contractions was the relatively slower pace of job growth. Following each of the recessions of the mid-1970s and early 1980s, employment rose by 1.5 percent within a year. In contrast, employment was virtually unchanged in the year following the 1990-91 and 2001 recessions.

These data are from the Current Population Survey and are seasonally adjusted. For this analysis, the long-term jobless rate is defined as the proportion of the labor force (rather than of unemployment) that has been unemployed for 27 weeks or longer. For more information, see "A glance at long-term unemployment in recent recessions," (PDF) Summary 06-01, Issues in Labor Statistics, January 2006.