January 10, 2020
The average duration of unemployment rose 0.6 week in December to 20.8 weeks after having declined 1.4 weeks in November. This series bounces around from month to month, but it does seem to still be declining slowly.
While the unemployment rate has fallen by 6.5% since reaching a peak of 10.0% in October 2009, the average duration of unemployment has declined far more slowly. It is clear that few of the new hires have been from the ranks of the long-term unemployed. There is a mismatch between the skills that employers need, and the skill set that these long-term unemployed workers seem to have. Employers in today’s world demand their new hires to be tech savvy, and these long-term unemployed workers tend not to have that ability.
The Bureau of Labor Statistics indicates that 1.22 million workers have been jobless for 27 weeks or longer, and that represents 20.5% of all unemployed workers.
The average duration of unemployment should decline slowly in the months ahead as the labor market gets progressively tighter. Firms will have to look just a bit harder to find the workers that they need, and that includes looking at long term unemployed workers and perhaps offering them some sort of training program to improve their skills.
Stephen Slifer
NumberNomics
Charleston, SC
Steve, I want to express my appreciation for your weekly letter. You have so much insight into the numbers and their relationship to each other. I look forward to the letter each week and it serves as my primary source of information regarding the direction of our economy. Thank you very much!
Thanks, George. There is a lot going on, especially now with all these expected changes in Fed policy, central banks going in different directions for the first time in five years, and the huge increase in oil production here in the U.S. It implies lots of volatility going forward in stocks, bonds, currencies, and commodities. I try to look at all the moving parts and come up with some sort of a view. It may not always be right, but I like to think it is at least well thought out. In the end, I want to provide all of my readers with something to think about that perhaps they have not heard elsewhere. If I can do that, I feel like I have done my job.
Steve
Thank you so much for your keen observations and simplified explanations. Your continue to help our management team of metals experts understand the impact of the financial gymnastics of the day. Can’t tell you how many times we count on your Friday letter to make sense of the week behind us and keep us optimistic about the road ahead. Thank you again and ongoing.
Thanks Bruce. Nice to hear from you. Things have certainly gotten interesting lately. While I dislike Trump, at the beginning I thought his tax cuts were good for the country and would help not just that year’s GDP growth but longer-term GDP growth as well. That was good policy. But now his trade policy has gotten out of control. He is undoing a lot of the good he did earlier. He has certainly made the markets nervous, but whether the economy suffers as much as everybody seems to expect currently and the Fed eases aggressively remains to be seen.
All the best.
Steve