With the June employment report, we are now 26 weeks past the end of EUI. As I mentioned last month, the faster exit rates of the cohorts of workers newly unemployed since the normalization of unemployment insurance have now worked their way through all of the shorter duration categories, so that the remaining decline in unemployment will come from the ">26 weeks" category - both from the continuing extension of the more normally behaving unemployment cohorts into the longer durations and from the continued slow decline in the number of very long duration unemployed workers who had timed out of EUI.
This evolution is apparent in this month's numbers. Here is a graph of the numbers of unemployed, by duration. The arrival of the post-EUI cohorts in the ">26 weeks" category has accelerated the decline in this category in the last couple of months while the declines of the lower duration categories started accelerating last fall and have now leveled off.
My measure of the percentage of long term unemployed workers (15 weeks +) who exit unemployment over the following three months also continued to improve in June, jumping to 43%. This measure has persistant cyclical behavior, and if this levels off at 45% between now and December, this should correspond to a drop of 0.4% in the ">26 week" category by December. So, this indicator also points to a mid-5% range rate by year end, simply from inertia in employment trends.
Here is a graph of actual ">26 weeks" unemployment (blue) and the predicted level of long term unemployment, modeled as a linear combination of lagged short term unemployment durations. We can see here the continued expected decline of long term unemployment to healthy levels (as cohorts with faster exit rates extend through the longer durations) as well as the convergence of actual long term unemployment to the expected level (as very long term unemployed workers continue to exit unemployment).