3 days ago
Long-term unemployment hits 2-year high as hiring slows amid economic uncertainty
When Jessica Chibuzor-Muko graduated from college a year ago, she figured her degree in cybersecurity – one of the hottest fields – would serve as a ticket to a near-certain job at a good salary.
Then she ran into the brick wall known as the 2025 U.S. job market.
After more than 3,000 applications, five interviews and zero job offers, her excitement has congealed into something closer to a beaten-down stupor.
'After your get your first 50 rejections, you're running to your mom crying,' says Chibuzor-Muko, who is 22 and lives in Denton, Texas. 'Eventually, you become very numb to it.'
Recently, she took a break from the job hunt, got a part-time position as a nurse's notetaker and is considering a new career path – medicine.
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'I've always wanted to get a master's,' she said. 'Maybe I should look at medical school.'
Chibuzor-Muko is among the 1.7 million Americans who have been out of work six months or longer – the most in more than two years – classifying them as long-term unemployed, the Labor Department's April jobs report showed. Their growing ranks defy the common perception that the job market remains healthy despite the uncertainty spawned by President Donald Trump's sweeping import tariffs.
The long-term jobless now make up nearly a quarter of all unemployed workers. That's well below their 45% share during the depths of the Great Recession in 2010 and 43% during the COVID downturn in 2021. But it also marks a two-year high and exceeds the 20% of unemployed workers they comprised in early 2020 just before the health crisis.
Economists say that's a concern because long spells of unemployment can affect the course of workers' careers, especially for recent college graduates and other new entrants to the labor market.
'I definitely think there's a stigma to being unemployed for long periods,' said Brad Hershbein, senior economist at the W.E. Upjohn Institute for Employment Research.
Is the job market good or bad now?
It's unusual for so many people to be out of work so long in a seemingly sturdy labor market. Job growth averaged a robust 181,000 in March and April and the unemployment rate is a historically low 4.2%. Friday, Labor is expected to report a solid 150,000 job gains for May, according to estimates by Barclays and Capital Economics.
But forecasters largely attribute the rosy figures to business' continued reluctance to lay off workers following pandemic-related labor shortages from 2021 to 2023. Initial claims for unemployment benefits, a reliable gauge of layoffs, unexpectedly surged the week ending May 24 but remain historically low.
What is going on with hiring right now?
At the same time, companies have pulled back hiring. That trend began more than a year ago as sharp employee pay increases and high interest rates combined with flattening consumer demand to squeeze firms' profits. It intensified this year as Trump's tariffs threatened to reignite inflation, further narrow corporate profit margins and possibly trigger a recession in the months ahead.
'The economy was going to slow regardless' after a post-COVID-19 burst of demand, Hershbein said. "(Tariffs) made the problem worse.'
The 5.4 million U.S. hires in March was down from a peak of 6.8 million in November 2021 and 5.8 million in late 2019 before the pandemic. The upshot: While not many people are losing jobs, those who do are struggling to find new roles as they join a slowly widening river of unemployed job seekers who are vying against each other and employed Americans for a limited stock of vacancies.
'Getting back into employment after you've been unemployed is getting increasingly difficult,' said economist Dante DeAntonio of Moody's Analytics.
In May, the average number of applications job hunters submitted on LinkedIn was 45% higher than the year ago figure, the networking site says.
While companies are replacing employees who leave, 'they're not necessarily adding staff,' said Brandi Britton, an executive director at Robert Half, a recruiting firm. 'Employers are definitely proceeding with caution' amid the uncertainty sparked by trade conflicts.
How is the job market for college grads?
Unemployed job seekers broadly are paying the price but the hiring chill is especially affecting new entrants to the labor force as well as workers returning after leaving to care for a child or other reasons, Hershbein said. So far this year, the number of 20 to 24-year-olds who are long-term unemployed is up 32% compared to the same period in 2019, versus a 19% rise for similarly idled workers of all ages, Labor Department figures show.
During a period of limited hiring and pervasive uncertainty, 'You want people with a track record,' Hershbein said, describing the view of many employers.
'It's just a lot of silence'
Chibuzor-Muko, the May 2024 graduate, said she frequently responds to job ads seeking entry-level candidates but companies later reveal they prefer that applicants have three to five years of experience.
'What really is entry level?' she asked. 'I just graduated.'
Britton, of Robert Half, said many businesses 'want someone with work experience at an entry-level salary' as they try to conserve cash and minimize risk. And because of the cooling labor market, they generally can get what they want, she said, advising job candidates to 'be adaptive and flexible' and drop demands to work remotely or hybrid if necessary.
After she graduated, Chibuzor-Muko said she applied to cybersecurity jobs 'every single day, the second I woke up….I treated it as my job.' But after several months of rejections, her enthusiasm waned, she said, adding she didn't get responses from most employers.
This year, Chibuzor-Muko has taken classes online in the hope of qualifying for the more plentiful crop of openings for data analysts. She snared two interviews but no offers.
What are the side effects of long-term unemployment?
Long-term unemployment can become a self-perpetuating cycle even for experienced workers, Hershbein said, noting some companies believe the skills of long-sidelined job seekers may dull.
The dilemma, he said, is amplified for recent graduates who may take the first offer they receive and find themselves overqualified for the job. 'It can have a long-term impact on the money you're able to earn and the companies you're able to work for,' he said.
DeAntonio downplayed the concern, saying that while that was a big worry during the Great Recession, today's job market is more resilient and should pick up swiftly after tariff-related uncertainty fades. 'I'd think some of those negative effects will be minimized,' he said.
Experienced jobless workers, meanwhile, are also struggling. In mid-May, 1.9 million Americans received ongoing unemployment benefits – indicating they had been laid off – the most since November 2021.
'I had no idea it would take this long'
When Kiersten Ortiz-Cole of Houston lost her marketing job at a recruiting agency last August, she figured she would land a new position within a couple of months. Although her firm was chopping workers, its clients were still spending money, seemingly reflecting a stable economy and labor market.
'I had no idea it would take this long,' said Ortiz-Cole, 37, who has nearly a decade of marketing experience.
At first, Ortiz-Cole sent out five to 10 applications a week, tailoring each to the relevant employer. But she found that companies were being especially selective, requiring candidates not only to have a marketing background but experience in that company's industry.
She also has been frustrated by the job market's seasonal ebbs and flows,
Last fall, many businesses dragged their feet on hiring because of uncertainty related to the presidential election and then because of the holidays. Employer interest picked up in January and February but then slowed again in March due to Trump's tariffs.
'It's just been a rollercoaster,' she said.
Early this year, she decided to focus more on burnishing her skills through online marketing courses, connecting with people she knows on LinkedIn and attending networking events for marketing professionals. But the latter strategy fizzled when most of the attendees turned out to be unemployed themselves.
They 'were in the same boat as I was,' she said.
Ortiz-Cole has notched seven or eight interviews and twice made it to the third round. But one hiring manager told her he still had 600 resumes to review. And when job postings pop up on LinkedIn, they often draw about 100 applications within a couple of hours, she said.
'It's extremely discouraging and deflating because you don't have any control,' she said.
In January, she began several rounds of interviews with a company over three months, feeling confident it would culminate in a job offer. But a candidate who was already working got the position.
'That was my low point,' she said.
'Living day by day'
Ortiz-Cole's unemployment benefits have long run out. She and her husband, who is employed, were already 'living paycheck to paycheck' before her layoff to afford their mortgage and daycare for their 5-year-old son, she said.
She has increasingly excised small pleasures from her life: streaming services, ordering dinner deliveries a few times a week, clothes shopping and a morning coffee from a local shop. She burned through most of her 401(k) money to pay off a car loan and maxed out her credit cards.
'We're constantly having conversations,' she said. 'We're living day by day and prepared to make whatever necessary cuts we have to make.'
She said she's cautiously optimistic hiring will perk up soon but employers don't seem to have any clearer picture.
As recently as early April, myHR Partner, a human resources consulting firm, planned to add nine employees to its staff of 41, said Tina Hamilton, who owns the Bethlehem, Pennsylvania-based company. But after Trump announced global reciprocal tariffs on April 2, demand for her hiring services plunged 50%, she said.
While revenue from its payroll, employee relations and other HR services is up this year, its overall sales are flat because of the hiring pullback, prompting Hamilton to scale back her own hiring plans. She's looking to add just one or two employees in 2025.
'It happened almost suddenly,' she said.
The trade war, meanwhile, has been in near-constant flux. This week, an international trade court struck down most of Trump's reciprocal fees but they remain in place while officials appeal the ruling. And Trump could adopt other legal strategies to impose tariffs, experts say.
'Nobody knows what to believe,' Hamilton said. 'Everyone's delaying… everyone's waiting.'
