According to the Bureau of Labor Statistics, long-term unemployment fell by 357,000 people last month. This decrease is largely thanks to an improving job market and robust public health measures.
Roughly 32% of all Americans who are out of work are considered long-term unemployed, which means they’ve been out of work for more than 27 weeks. Other than the 2008 financial crisis, this is the first time these figures have exceeded 30% since World War II.
Recent job report shows market gains
In October, 2.3 million people were long-term unemployed and had been out of work for over six months. This lapse has caused financial difficulties for many households, especially since federal unemployment benefits ended after Labor Day.
But the recent report from the Bureau of Labor Statistics indicated this trend might be turning around. Total unemployment is at 4.6%, and it continues to trend down month over month. At the peak in March 2021, long-term unemployment reached 43.4%.
In addition, the U.S. added 531,000 new jobs last month, with the most significant gains happening in the leisure and hospitality sectors. These industries also experienced the largest losses when the pandemic began.
Restaurants added 119,000 new employees, and hotels hired 23,000 workers. Manufacturing and professional and business services also saw significant gains last month.
Wages also increased in October as many employers have increased compensation to attract new employees. Over the past year, the average hourly earnings have increased by 4.9%.
According to Nick Bunker, economic research director at the Indeed Hiring Lab, all of these factors indicate the labor market is on the road to recovery. “We’re actually seeing employers with very strong demand hiring workers — maybe not at the pace they’d love, but they are making hires.”
Increased vaccine access for children between the ages of 5 and 11 could also help job growth increase. If job growth continues to increase, long-term unemployment numbers should continue to fall.
Small businesses continue to struggle with hiring
Despite the recent job gains, the labor force participation rate stayed stuck at 61.6%, which is where it’s been for most of the year. This figure indicates that while jobs are available, millions of workers are waiting to return to work.
Many small businesses have struggled to hire for the majority of 2021. According to a Bloomberg report, 42% of companies have positions they are unable to fill.
If you’ve struggled to fill specific positions, it may be helpful to revise your job posting. Poorly worded job postings can be a significant barrier for potential employees.
And many businesses have been offering hiring bonuses to attract new workers. Taking out a small business loan or line of credit can help you fund this one-time expense.