Expect the Average Duration of Unemployment to Skyrocket for Years

Mish

The average number of weeks people remain unemployed is on the rise and it will get much worse.

Sudden Layoffs

So many people were suddenly laid off in March and April that the average number of weeks people were unemployed plunged to 6.1. That was an all-time low. 

Longer-term charts show more ominous trends. 

Weeks Unemployed 1999-2020

Of Those Unemployed 1999-present for 2020-09

The average number of weeks someone is unemployed tends to peak long after a recession has ended. 

A long-term chart shows this more clearly.

Weeks Unemployed 1948-2020

Of Those Unemployed 1948-present for 2020-09

Related Ideas

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  3. Death of the Department Stores and the Alleged Retail Recovery
  4. Little Progress on Unemployment Claims but Checks Grind to a Halt

Trends suggest the average duration of unemployment will skyrocket for years.

Mish

Comments (32)
No. 1-11
IA Hawkeye in SoCal
IA Hawkeye in SoCal

It depends both on the career field, and a willingness to relocate. Some fields are still in demand while others are gone or close to being gone, and people need to adapt if they want to remain successful. It's not easy to up and sell everything and relocate but casting a nationwide net is more fruitful than a local net. Learning a new trade at the local Community College is also a valuable path, and regardless of what someone chooses these all take time. That's why recoveries take time. But I've also seen wayyy to many people (after 07/08) not do anything except wallow in their own misery and watch their standard of living deteriorate. That's on them, guess it depends how hungry they are.

PecuniaNonOlet
PecuniaNonOlet

It is interesting times, I imagine the workforce will all turn into a gig economy for many. The rate of change in technology, automation, and re-invention is amazing.

And as the population around the world continues to grow, that will only drive down wages. Most politicians and people are not even thinking about the new realities attempting to cling to things that worked 30 or 40 years ago.

It does not help that the people governing this country are mostly over the age of 65.

27 days till election.
9 days till Boris Brexit Bonanza.
6 days for Trump to end up on ventilator?

Realist
Realist

Trends suggest that the job market, and type of jobs available, has been changing for the last few hundred years. And the rate of this change keeps accelerating. As human ingenuity continues to advance, jobs, and the skills needed to perform them, keep increasing in complexity and training needed. The natural result of this is that as old jobs are eliminated, and new jobs are created, it will take longer and longer to train the old worker to perform the new job. This trend will continue as long as humans keep coming up with new and better ways to do things.

Casual_Observer2020
Casual_Observer2020

It will become increasingly difficult for people to stay employed. More automation is coming the likes of which we've never seen with the next tsunami of computing power. Now if we could only prevent that same power from being used for nefarious things like hacking, election interference and fake news then we might be better off. The innovators never thought of downside of innovation.

Maximus_Minimus
Maximus_Minimus

The malaise is the result of kicking the can for decade, and now it's payback time.
Unmanageable budget deficits, zero interest rates, debt out the wazoo, and the economy in the toilet.
In clear view, this is a systemic failure.
Maybe if there was intelligent life, they wouldn't give the central banking cartel the triple mandate, when it can barely manage one.

njbr
njbr

Powell says the danger of doing too little outweighs the costs of doing too much.

WTF is going on with additional funding...

....“The expansion is still far from complete,” Mr. Powell said in remarks to be delivered at a virtual economics conference Tuesday. “At this early stage, I would argue that the risks of policy intervention are still asymmetric. Too little support would lead to a weak recovery, creating unnecessary hardship.” By contrast, the risks of providing too generous relief are smaller, he said. “Even if policy actions ultimately prove to be greater than needed, they will not go to waste,” he said....

Eddie_T
Eddie_T

Powell is right as far as the need for more stimulus......he's been fairly consistent on that....trouble is Mitch M. is in his austerity mode.

Biggest problem with stimulus is that it tends to get sucked into a black hole by insiders....all these stories about poor people defrauding the government...I never read much about Mnuchin's buddies and Trump's buddies and family...but I know how bail-outs work. More pork to be carved for the insatiable top .01%.

America is running on fumes.....Mish's reports lead me to believe that...and we can bail people out or we can watch the real economy crater.

Carl_R
Carl_R

It makes a lot more sense to increase the duration that people can get unemployment than to increase the amount they get, and especially it makes mores sense than increasing the amount they get to a level higher than what they earned while working.

Fast Falcon
Fast Falcon

Mish, do you think UBI (or whatever it is called) will be normalized in the next 4-6 years?

Jojo
Jojo

The big picture problem is that population keeps increasing while automation/robots continues to eat away at human job availability.

The problem is that the economic models of virtually every country depend on more workers working at more jobs while paying more taxes.

These two situations are at odds with each other.

What do we do to resolve these problems? Tax robots/automation based on human equivalent jobs they do? Ban robots/automation? Or reduce the world population by say 7/8's?

RonJ
RonJ

"The average number of weeks people remain unemployed is on the rise and it will get much worse."

Disneyland has been closed for 6 months or more. Last week there was a clip of the Mayor of Anaheim, begging Governor Newsom to do something about it.


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