Americans who have lost their jobs now face a tough new problem: It’s getting harder to find another one quickly.
The average unemployment rate hit 27 weeks in October on a seasonal basis, according to Friday’s jobs report from the Bureau of Labor Statistics. It was a nearly seven-month job search, the longest outside of the pandemic period since 2016, when the U.S. labor market finally rebounded after the 2008 financial crisis.
About 2 million Americans are out of work for at least 27 weeks, the BLS reports. People in this category are called “long-term unemployed” and accounted for 27.6% of all unemployment in October, the highest since the end of 2021.
“It’s a series that can get crowded every month,” said Cory Stahle, senior economist at Indeed, a hiring platform. “But if you look longer, there’s no mistaking the trend.”
This is a troubling sign in a stable labor market. Workers stuck on the sidelines are victims of what has become a “low, cheap” labor market, where companies are hesitant to lay off workers, but not to add them either.
Research shows that Americans who experience long-term unemployment face lower savings, lower earning potential over time and decreased mental health.
What’s more, workers who are unemployed for long periods of time are at risk of experiencing a self-perpetuating cycle, researchers at the Federal Reserve Bank of Richmond wrote earlier this year.
“Time spent unemployed may reduce the likelihood of finding a job, possibly due to shrinking skills, thin networks or employers interpreting long unemployment durations as a negative signal,” the researchers said.
Workers stop being able to claim most, if not all, government unemployment benefits after 26 weeks in a year. Because of this, the increase in long-term unemployment may partly explain why initial and ongoing unemployment claims remain low.
“Today, the average unemployed person takes longer to find a job than to earn an income,” Stahle said. “That’s the tipping point for this.”
‘tight’ narrative
While jobless workers seem to be struggling, this week’s employment data showed strength in other areas of the labor market.
Nonfarm payrolls blew past economist forecasts for October and added 165,000 jobs, according to a Friday release. The unemployment rate fell to 4.1%, slightly lower than economists had predicted.
Job openings were higher than economists expected in September, according to a separate report from the BLS released on Tuesday. The number of workers quitting their jobs – a barometer of confidence in getting new jobs – rose to levels not seen since March 2025.
The BLS also said layoffs and discharges fell to their lowest volume in more than a year. However, a new string of high-profile job cuts could throw cold water on the views among workers that the market is heating up.
CNBC reported this week Disney is planning to ax thousands of jobs, the latest of several waves of layoffs at media giants this year. American Express said last month that it was slashing the head count by 5% as it reorients around artificial intelligence.
“It’s hard to separate what’s happening to you or the people around you from the big picture,” says Elizabeth Renter, chief economist at Life360. “When your LinkedIn is full of layoffs and your social circle has several people who have been looking for work for months, the positive narrative about the labor market can seem jarring.”