More Americans are staying unemployed longer — even as the economy grows

The amount of time people spend looking for work is on the rise.

Long-term unemployment is when someone is jobless and actively looking for work for 27 weeks — about six months — or more. Not surprisingly, the number of long-term unemployed tends to rise during recessions and fall during recoveries. Yet during the economic expansion of the past year, the number of the long-term unemployed has still increased. November saw a nearly 12% rise from a year ago, according to data from the Bureau of Labor Statistics, hitting 1.9 million people still looking for work.

“Marketplace Morning Report” host Sabri Ben-Achour spoke with Marketplace’s senior economics correspondent Chris Farrell. The following is an edited transcript of their conversation.

Sabri Ben-Achour: Do we know why that number is going up?

Chris Farrell: So, there are a couple of reasons. But let's take the long-term perspective. First, there are two economists from the Federal Reserve Bank of Minneapolis, and in a recent report, they note that over the past seven decades, it has taken longer for the unemployed to find jobs, and the explanation they favor relates to how people search for jobs. Specifically, the barriers to sending out a resume have fallen sharply with online applications. So, I’ll give you one example: From the 1980s to the 2010s, the number of jobs the typical Unemployed Worker applied to each month, it's gone up for nearly three to seven. So, it takes time, they say, for human resource departments to sift through all those online applications.

Ben-Achour: Yeah, well, at a moment where AI is surging. Does that make it worse or better?

Farrell: My expectation: It’s going to make it worse, because it just makes it ever easier to send out multiple job applications, and employers are likely to find themselves, you know, with more applicants for our posted positions than ever. And the Minneapolis Fed economists, they highlight another impact, which reflects another durable, long-term trend: wage inequality. So the well-documented increase in wage inequality may encourage unemployed workers to pass on low-wage opportunities in the hope of getting a better-paying job, they say.

Ben-Achour: Does this trend, people out of work for longer, tell us that the job market is actually even weaker than we thought?

Farrell: I think so. You look, the job market is not really dynamic right now, economists are taking to calling it the low-fire and low-hire market, with all the uncertainties weighing on business. I mean, think tariffs, companies are slow to hire and people are reluctant to quit their jobs. So, odds are, this lack of vigorous job churn, it's just going to make it that much harder for unemployed workers to land another one quickly. And the worry, of course, is that employers, they look unfavorably at anyone who is unemployed for months on end for a variety of reasons. And I don't need to say this, do I, but being unemployed — being without a job — it takes a financial and mental toll.