News & Insights

More than one in five unemployed Americans have been out of work for more than half a year, a post-pandemic high (The Washington Post, subscription).

What’s going on: “In all, more than 1.9 million Americans had been unemployed ‘long term’ in August, meaning they have been out of work for 27 weeks or more, a critical cliff when it comes to finding a job. That’s nearly double the 1 million people who were in a similar position in early 2023.”

• While the likelihood of losing one’s job has not increased substantially, the probability of remaining unemployed in the event of a job loss has risen, according to the Post.
• The past two months have shown job market cooling, with weaker-than-anticipated jobs numbers leading “policymakers to voice concerns that the labor market could continue deteriorating.”
• Recent weekly unemployment insurance claims were at their highest in nearly three years.

Why it’s significant: “Six months of unemployment often signals a turning point in a person’s job search, according to economists. They’ve probably run out of unemployment insurance benefits and severance payments by then, leaving them on shakier financial ground.  People who have been unemployed for more than six months are also more likely to become discouraged and stop looking for work altogether.”

• Although the unemployment rate is near historic lows, many employers have paused hiring as they wait to see the effect of tariffs and other trade-related policies.

Confidence tanks: Now, for the first time in four years, there are more unemployed people in the U.S. than there are open jobs—and job-seeker confidence is crashing.

• In a recent Federal Reserve Bank of New York survey, respondents gave themselves less than a 45% chance of finding work in the next three months in the event they were to lose their current jobs. That’s the lowest reading in more than 12 years.
• Finding work has been especially difficult for recent college graduates, as there are fewer entry-level positions available.

An economist’s view: “As reflected in the previous four months of job losses, the manufacturing industry has faced challenges,” said NAM Chief Economist Victoria Bloom. “We’re now seeing that weakness spread to other industries and through the broader economy, a cautionary signal.’”