Length of Unemployment Drops, But It’s Not a Good Sign

Libby Kane
Posted

time unemployed decreasesYou might think the fact that the average length of time an American worker spends unemployed dropped 2.8 weeks in January is a good thing, but you’d be wrong.

This particular decrease isn’t nearly as good as it sounds. CNN Money explains that the seemingly impressive drop in time unemployed isn’t due to the fact that more people are getting jobs, and faster—it’s because people are leaving the workforce altogether.

In order to receive unemployment benefits and be counted as a unemployed person, a would-be worker must be actively looking for work. Once he or she stops looking and steps back, that person stops receiving benefits (which usually last up to 73 weeks, but can last a shorter span of time depending on the state’s jobless rate) and is no longer counted in the stats.

What makes analysts think this is the case? While there’s been a decrease in time unemployed, there hasn’t been an associated increase in employment. The people no longer counted as unemployed didn’t all get jobs. Another sign is that some states curbed their benefits in January due to a rise in their employment rates. And that means that those still unemployed and no longer receiving benefits may have given up and left the workforce.

  • http://mortgage.incomesolutions.com.au/ Amy

    It would be interesting to see those stats again if you took out people who were not “actively” seeking work and were just collecting unemployment to see a better representation again. 

    • Mai

      Oh good, it starts at the very first comment.