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Continuing Jobless Claims Near a Low, and That May Not Be Good

Wall Street Journal (03/19/15) Eric Morath

Although just 2.4 million Americans were receiving continuing state unemployment-insurance payments in the week ended March 7, a historically low share, rosy statistics may be masking slack in the labor market. The number of long-term unemployed is unusually high, and many people are becoming discouraged and dropping out of the labor market. These workers are not accounted for in some of the gauges used to measure the health of the economy.

Of unemployment beneficiaries who were out of work for all of 2013, almost 44% had dropped out of the labor force by March 2014, according to Stephen Woodbury, a labor economist at Michigan State University. For those out of work for all of 2009, just 27% had dropped out by March 2010, when the total number of benefit recipients was near its apex.