Despite Friday’s economic report indicating that the deterioration in the labor market is slowing more than earlier this year, policy makers should not conclude that the long-term unemployed no longer need assistance, a non-profit think tank said.
U.S. employers cut 247,00 non-farm jobs for the month in July and the average loss per month from May through July was 331,000, about half the average decline of 645,000 per month from November through April, the U.S. Labor Department reported on Friday.
The labor market has typically recovered many months after the economy begins to emerge from recession, according to a non-profit think tank.
“In the 1990-91 recession, the unemployment rate did not peak until 15 months after the end of the recession. In the 2001 recession, unemployment peaked 19 months after the end of the recession, and job losses did not bottom out for another two months after that,” said Chad Stone, Chief Economist for Center on Budget and Policy Priorities in a released statement.
The total number of unemployed persons was 14.5 million with an unemployment rate at 9.4 percent, a small decrease from 9.5 percent in June.
Investors today reacted positively to the news, which bolsters recent economic figures which show the economy is heading towards recovery.
The Center noted, however that 1 in 3 unemployed are considered long-term unemployed, that is, jobless for 27 weeks or more.