October employment report hides long-term unemployment trends

Americans who recently lost their jobs are facing tough new challenges. That means finding another job quickly is becoming increasingly difficult.

The average length of unemployment for unemployed people exceeded 27 weeks in October, according to employment statistics released Friday by the U.S. Bureau of Labor Statistics. That’s about seven months of job searching, the longest period excluding the pandemic period since 2016, when the U.S. labor market was finally getting back on track after the 2008 financial crisis.

The BLS reports that nearly 2 million Americans have been out of work for at least 27 weeks. People in this category, known as the “long-term unemployed,” accounted for 27.6% of all unemployed people in October, the highest share since late 2021.

“This is a series that can be noisy from month to month,” said Cory Stahl, senior economist at employment platform Indeed. “But over a longer period of time, this trend is unmistakable.”

This is a worrying sign in an otherwise stable labor market. Workers on the sidelines are victims of a “low-hire, low-fire” job market where companies are reluctant to lay off employees, but are unwilling to add them.

Research shows that Americans who experience long-term unemployment face depleted savings, decreased earning potential over time, and decreased mental health.

Additionally, workers who are unemployed for long periods of time are at risk of falling into a self-perpetuating cycle, Richmond Fed researchers wrote earlier this year.

“Time spent unemployed may itself reduce the probability of finding a job, perhaps because skills decline, networks become weaker, or because employers interpret prolonged periods of unemployment as a negative signal,” the researchers warned.

Workers can no longer claim most, if not all, of their government unemployment benefits after 26 weeks of the year. With this in mind, the increasing share of long-term unemployed people may partly explain why first-time and continuing unemployment claims remain low.

“Currently, the average unemployed person is taking longer to find a job than the benefits last,” Stahle said. “That’s really the point of this.”

While unemployment looks tough, this week’s jobs report shows strength in other areas of the labor market.

Nonfarm payrolls exceeded economists’ expectations in October, with payrolls increasing by 165,000, Friday’s report said. The unemployment rate fell to 4.1%, slightly below economists’ expectations.

Job openings in September far exceeded economists’ expectations, according to a separate report released Tuesday by the BLS. The number of job departures, a barometer of confidence in new employment, has soared to levels not seen since March 2025.

The BLS also announced that layoffs and layoffs have decreased to their lowest level in more than a year. But a recent series of high-profile job cuts could put a damper on workers’ views that the market is heating up.

CNBC reported this week. disney plans to cut thousands of jobs, the latest in several waves of layoffs at the media giant this year. american express announced last month that it would cut its workforce by 5% as it pivots around artificial intelligence.

“It’s hard to separate what’s happening to you and the people around you from the bigger picture,” said Elizabeth Renter, chief economist at Life360. “Positive talk about the labor market can seem off-putting when LinkedIn is full of people who have been laid off and your social circle includes people who have been job hunting for months.”