Economic Ramifications of Skyrocketing Long-Term Unemployment

By Dirk van Dijk

The big under-reported part of the unemployment situation is the increasing duration of unemployment. Being out of work for three weeks is very different than being out of work for 30 weeks. While over half of the states and more than half the population does have extended unemployment benefits, it is a very scary prospect to not only be without a paycheck, but also having already exhausted your unemployment benefits. That means no income coming in, and given how low the savings rate has been over the past decade, likely no money period.

Economically it further depresses your spending, and psychologically it is just plain depressing. The average length of unemployment rose to 22.5 weeks in May from 21.4 weeks in April, and is up from 16.8 weeks a year ago. The median length of unemployment has also gone up sharply, reaching 14.9 weeks in May versus 12.5 weeks in April and 8.3 weeks a year ago. While the duration of unemployment always goes up during a recession, it has been particularly pronounced in this one (and the last expansion was noteworthy in how little it fell).

Asian Shares Lower, But Techs Helped

By TI Guidance MarketWatch  

SINGAPORE (MarketWatch) -- Asian shares were lower Tuesday, with some markets erasing early gains as investors turned cautious on the near-term outlook, though technology stocks were supported by some upbeat comments from U.S. chip giant Texas Instruments. 
Japan's Nikkei 225 was down 0.2% with Australia's S&P/ASX 200 down 0.2% and South Korea's Kospi Composite off 0.4%. Hong Kong's Hang Seng Index was down 0.2% and Singapore's Straits Times Index down 0.2% in light trade, while Taiwan shares were the worst performers, falling 2.4%. 
The market was at point of indecision, said Phillip Securities economist Joshua Tan in Singapore. "It seems the market no longer wants to hear 'it's not getting any worse' anymore. We have a sneaky feeling it's going to want the economy to 'show me the money' from now on. It could really be wanting clear evidence for the right side of the V-shape recovery before charging ahead any higher". 
Wall Street ended little changed Monday, though off its intraday lows, providing little in the way of strong leads for Asia. U.S. stock futures were a touch higher in screen trade, though, and Texas Instruments climbed 2.1% in late trading after it boosted its second-quarter guidance. ( learn more at )