In December, 6.1 million people – some 40 percent of the people who were unemployed – had been out of work for six months or longer, the Department of Labor reports. This represents the largest pool of the long-term unemployed since the Bureau of Labor Statistics started keeping track in 1948.
On a median basis, the typical duration of unemployment is 20.5 weeks – double the amount of time in the 1982-83 recession.
Long-term unemployment has broader ramifications for the economy. For one thing, consumers are concerned that if they lose their jobs, they'll be unemployed for a long time. Such concerns have led to relatively weak readings for consumer confidence, says Mark Zandi, chief economist at Moody's Economy.com. Weak confidence means that consumers spend less money – not a good thing for a consumer-driven economy.
In addition, long-term unemployment is an indicator that permanent, structural changes have taken place in the economy. Structural changes can make it much harder for the economy to recover – and for job seekers to adjust.