Why the job market is worse than you think

An unemployment rate of 5% is low by historic standards. But the number of people out of work for long stretches is rising dramatically.

Ahead of Friday's January employment report, there is a lot of concern about the weakening job market, even as the unemployment rate stands at a relatively modest 5%.
The Federal Reserve cited evidence of a "softening in labor markets" when it announced both of its rate cuts this month. Congress is rushing to pass a $150 billion stimulus package that the Bush administration said should add 500,000 jobs to the economy.
The worries about the job market are widely shared on Main Street, Wall Street and inside the beltway.
The Conference Board's latest consumer confidence survey found that twice as many people believed there would be fewer jobs available six months from now than those who expected more jobs.
And a survey conducted for Fortune magazine from earlier this month found that just over one in four Americans are somewhat worried or very worried about losing their job in the next 12 months.
Economists surveyed by Briefing.com are forecasting that the unemployment rate will remain at 5% in Friday's report. However, it's worth a reminder that this is up from just 4.7% in November. And economists expect an addition of 70,000 jobs in the month, only a modest increase.
But the jobs numbers may be even worse than they first appear. That's because the number of Americans who have been out of work for six months or longer is on the rise.

Harder to find a new job - The number of long-term unemployed stood at a seasonally-adjusted 1.3 million in December, up about 22 percent from year-earlier levels. The full-year average for 2007 was 1.2 million long-term unemployed, nearly double the reading for 2000 -- just before the last recession. more...http://money.cnn.com/2008/01/31/news/economy/longterm_unemployment/index.htm?postversion=2008013115

Problem could get worse As the stimulus package makes its way through the Senate, there have been pushes to extend unemployment benefits beyond six months. more...http://money.cnn.com/2008/01/31/news/economy/longterm_unemployment/index.htm?postversion=2008013115

Older work force playing a role The CBO report didn't have any easy answers for this trend. But it suggested that the aging of the work force might be a major contributing factor. more...http://money.cnn.com/2008/01/31/news/economy/longterm_unemployment/index.htm?postversion=2008013115

Employers and workers getting more picky Officials in job outplacement firms, hired by firms to work with employees who have lost their jobs, say they're seeing some increase in the time it takes to find new positions even for those generally better educated workers with whom they work. more...http://money.cnn.com/2008/01/31/news/economy/longterm_unemployment/index.htm?postversion=2008013115