US long-term unemployment falls as workers leave labor force, signaling trouble

Long-term unemployment fell in July, but economists say the drop is a bad sign because it was driven by workers leaving the labor force rather than finding jobs. The number unemployed 27 weeks or more fell by 64,000 to about 1.8 million. Labor force participation hit its lowest since February 2021. Hiring remains muted, with average monthly job growth of 26,000 over the past year. Discouraged workers risk financial hardship, often losing unemployment benefits after six months and facing lower future wages. Economists note the jobless rate falling for the wrong reasons is not like falling because people found jobs.