Long-term unemployment is surging in the U.S., costing workers and the economy

In recent weeks, Parker Taylor has reached a terrifying milestone in its labor history.

The 29-year-old man had been working constantly since his youth; he first worked in the factory and lastly in medical sales. However, St. The St. Petersburg, Florida resident was unable to start a new job after losing his job shortly before the 2025 Thanksgiving holiday.

Taylor became part of a group of more than 1.8 million Americans who were classified as long-term unemployed, which the government defines as being unemployed for at least 27 weeks in a given month this year. That’s up nearly 45% from 2019 and 55% from 2023, according to a CNBC analysis of Bureau of Labor Statistics data.

“This can’t go on any longer without a catastrophic change in my life,” Taylor said. “That this period of my life could impact my long-term future (my family’s future, my future children’s future) is something I go to sleep thinking about.”

Without a steady income, Taylor’s retirement planning and long-term investment strategy “came to a complete halt.” To make ends meet, he dramatically reduced spending on everything from food to social experiences. Taylor said he applied to about 100 jobs and went through many interviews unsuccessfully.

On a macro level, the growing number of Americans in this boat is raising red flags about the strength of the labor market and the overall economy. For the long-term unemployed, this can have financial, emotional, and family health consequences that persist even after rejoining the workforce.

“This tells us a lot about economic health,” said Cory Stahle, an economist at Indeed. “This tells us how good a job the labor market is doing of assimilating people.”

The long-term unemployed make up roughly one in four unemployed workers, according to the latest available U.S. government data. Friday’s nonfarm payrolls report will offer a new read on the makeup of the U.S. workforce. Reports published this week Job opportunities and private payrolls came in stronger than economists expected.

Wages for long-term unemployed workers were about 32% lower than those who had not lost their jobs after a decade, according to one labor document. Boston Federal Reserve. Those who were unemployed for a shorter period received a 9% cut over the same time period.

Research also shows that there may be a link between long-term unemployment and depression. Pew Research report shows that long-term unemployed more than twice as likely Seeking professional help for depression or other mental health problems compared to those who have been unemployed for less than three months.

“Other than the death of a family member or close friend, this is one of the most devastating things people face,” said Carl Van Horn, director of the Heldrich Center for Workforce Development at Rutgers University. “This is a very serious health problem and an economic problem.”

Research also shows how unemployment (especially long-term) can negatively impact families and communities.

Parent’s job loss, child’s repeat the note Approximately 15% of the worksheet was found. A study of Wisconsin state data found that displaced workers in their best years less likely to participate at social and community events. Crime and violence rates are higher in communities with a larger percentage of long-term unemployed people, Urban Institute reported.

Ana Febres-Cordero said her mental health has worsened since she lost her social media job a year ago. The 29-year-old has given up trips with friends to preserve her savings and relies on her boyfriend to cover housing costs. The Chicago resident took up hobbies like dog walking and painting to get out of the house and keep her routine.

“I don’t think people realize how much it affects the individual,” said Febres-Cordero, who estimates she has completed more than 300 job applications. “That would break your trust.”

Hundreds of miles away, Lindsay Acker of Asbury Park, New Jersey, fell behind on student loan and credit card payments after losing her job in the healthcare industry last year. The 38-year-old said he switched to a Medicaid health plan for which marketplace insurance was no longer eligible.

He deposited money into his retirement account to meet his needs after unemployment benefits ended. Acker said she is postponing discussions about family planning because it is now financially out of reach.

“I’m not the same person I was when I lost my job,” Acker said. “I lost my spark. I lost my happiness. I lost my ability to see joy.”

The long-term unemployed are no longer eligible for most unemployment benefits, which are typically limited to 26 weeks, according to William Congdon, a labor economist and senior fellow at the Urban Institute. Even if these workers are actively looking for work, they face stigma from employers because of gaps in their resumes, he said.

A feature of this situation is the increasing number of long-term unemployed people. It’s a “low hiring, low firing” labor market, according to Indeed’s Stahle. Federal workforce data show new job openings and hiring rates are declining from pandemic-era peaks, signaling job opportunities are dwindling.

The long-term unemployed group also includes recent college graduates who are struggling to land their first positions, Stahle said. The unemployment rate among recent college graduates was 5.6 percent, surpassing the overall average of 4.2 percent. New York Fed.

Stahle said the national economy could suffer as a result of more people being unemployed for so long because they would likely cut spending. Consumer spending accounts for nearly two-thirds of the U.S. gross domestic product.

Even for those rejoining the workforce like Deborah Yu, the stress of being unemployed for so long still manifests itself in ways big and small.

The San Francisco Bay Area resident said he once bought lunch during the workweek without a second thought, but now feels like it’s an unnecessary expense. He postponed the idea of ​​buying a house out of fear that he would be saddled with a monthly mortgage if he became unemployed again.

“This has been a transformative experience,” said Yu, who started a new job in March after being laid off in mid-2025. “I think about money on a deeper level now.”