Long-Term Unemployment Dogs U.S. Economy

Economists baffled

Michelle Hall, 44, hasn't worked since last June, when funding ran out for her administrative job at Peaceful Acres Horses, a sanctuary in Pattersonville, N.Y. She applies for jobs online and usually hears nothing. "It's a feeling of what I'll call emptiness," she says. "I have a lot of skills that are very applicable across the board, from file clerk to middle management."

Hall is the face of a new problem that remains poorly understood: chronic, long-term unemployment that continues even as job growth resumes across the economy. The rate of short-term unemployment—six months or less—is almost back to normal. In January it was 4.9 percent of the labor force. That's only 0.7 percentage point above its 2001-07 average. But the rate of long-term unemployment, 3 percent in January, is precisely triple its 2001-07 average.